Worldwide Logistics Limited v Rainbow Logistics Limited (Miscellaneous Application 760 of 2021) [2022] UGCommC 194 (10 May 2022)

Full Case Text

### THE REPUBLIC OF UGANDA

### IN THE HIGH COURT OF UGANDA AT KAMPALA

### [COMMERCIAL DIVISION]

### M. A No. 760 of 2021

### (Arising from M. A No. 759 of 2021)

# (Arising from Civil Suit No. 359 of 2010)

WORLDWIDE LOGISTICS LIMITED::::::::::::::::::::::::::::::::::::

#### **VERSUS**

# RAINBOW LOGISTICS LIMITED::::::::::::::::::::::::::::::::RESPONDENT

# **BEFORE: HON. JUSTICE DUNCAN GASWAGA**

#### **RULING**

- This is a ruling on an application brought under Section 98 CPA, $[1]$ Section 33 of the Judicature Act, Orders 52(1) & (2) and O.22 rule (20) (2) and (23) CPR for orders that execution of the judgments and decree in Civil Suit No. 359 of 2010 be stayed pending the hearing and final determination of an application seeking leave of court to set aside the exparte decree in M. A No. 759 of 2021; proceedings arising from Civil Suit No. 359 of 2010 be stayed pending the determination of M. A No. 759 of 2021 and costs of the application be provided for. - The grounds upon which the application is premised were stated in the $[2]$ affidavit of Mr. Kutosi Jimmy in support of the application and they are that; the respondent filed HCCS No. 359 of 2010 against the

applicant in the High Court Commercial Division however the applicant's company was never served with summons in the summary suit on the plaint. The respondent through its former lawyers Med Kaggwa & Co. Advocates made an application for a default judgment on 01/12/2010 which was granted by this court. That the affidavit of service dated 28/03/11 is defective and contains falsehoods as no service was effected upon the applicant's company. On the same day however a decree was extracted and endorsed by this court and a bill of costs was also filed but was never served upon the applicant. The applicant later found out about the bill of costs when the notice of the same and the decree were served on it through its lawyers M/s KATS on $11/05/21$ . That the applicant has sufficient cause for setting aside the exparte decree since service of the summons was not effective and the applicant is not indebted to the respondent and further denies having entered into a bilateral business transaction of supplying tents to the Commonwealth Head of Governments meeting with the respondent and as such the respondent is not entitled to the claim of USD 59,970. That the respondent filed a hearing notice under Taxation Application No. 311 of 2021 and has commenced execution process by filing and scheduling the taxation of a bill of costs and as such there is imminent threat of execution of the decree issued by this court in Civil Suit No. 359 of 2010 if this application is not granted. The application for setting aside the exparte decree and seeking leave to appear and defend the suit is in this court pending determination which also has a high chance of success. That this application if not granted will hinder the applicant's right to a fair hearing and it is equitable that this application be granted.

$[3]$ This application raises one issue to wit:

# Whether the applicant has satisfied the grounds for the grant of a stav of execution

The principles guiding an application for stay of execution are listed in $[1]$ Order 43 CPR and also espoused in a number of cases but notably in Lawrence Musiitwa Kyazze Versus Eunice Busingye SC Civil Application No. 18 of 1990 that;

> "Substantial loss may result to the party applying for stay of execution unless the order is made; that the application has been made without unreasonable delay and that security for due performance has been given by the applicants."

Order 43 rule 4(3) CPR enjoins this court to grant an order for stay of $[2]$ execution upon the applicant's fulfillment of all the required conditions therein. These grounds were outlined in the case of **Hon. Theodore** Ssekikubo & Others Vs. The Attorney General and Another, **Constitutional Application No.06 of 2013 as follows;**

> "In order for the court to grant an application for stay of execution;

- The applicant must establish that his appeal has a likelihood of $i$ success; or a primafacie case of his right to appeal - It must also be established that the applicant will suffer ii) irreparable damage or that the appeal will be rendered nugatory if a stay is not granted - If 1 and 2 above has not been established, Court must consider iii) where the balance of convenience lies - that the applicant must also establish that the application was $iv)$ instituted without delay

#### **Substantial loss**

- $[4]$ It was submitted for the applicant that it stands to lose substantially if this application is not granted since the respondent claims USD 59,970 being payment for a bilateral agreement to supply tents for CHOGM. The respondent rather contested this assertion and stated that the process of execution has not even started and the only process ongoing is that of taxation of the bill of costs. That the cases relied on by the applicant speak to specific special circumstances wherein the applications for stay of execution were granted. That an application for stay of execution is premature before commencement of execution. See Baguma Paul t/a Panache Associates & Anor Vs Kagyina, **H. C. M. A** No. 460 of 2020. That there is nothing in the motion to demonstrate substantial loss which ought to go beyond mere allegation. The applicant in rejoinder stated that since it contends that it has never entered into any bilateral agreement with the respondent, then substantial loss would be occasioned to it if this application is not granted. - I am in agreement with the respondent that indeed the applicant has $[5]$ not labored to demonstrate what substantial loss will be occasioned to it if this application is not granted. A decretal sum and costs to which the applicant is generally subjected to as judgment debtor cannot amount to substantial loss. The applicant ought to have known that in a court case there is a loser and a winner and that the one who loses has to pay costs and the decretal sum as adjudged against them. See Tanzania Cotton Marketing Board Vs Cogecot Cotton Co. SA (1995-1998) 1 E. A 312 and China Communications Construction Co. Ltd Vs Justus Kyabahwa M. A No. 692 of 2019.

#### **Unreasonable delay**

In the case of **Ujagar Singh v Runda Coffee Estates Ltd [1966] EA** $[6]$ 263 Sir Clement De Lestang, Ag. V. P stated

> "... It is only fair that an intended appellant who has filed a notice of appeal should be able to apply for a stay of execution . . . as soon as possible and not have to wait until he has lodged his appeal to do so. Owing to the long delay in obtaining the proceedings of the High Court it may be many months before he could lodge his appeal. In the meantime, the execution of the decision of the court below could cause him irreparable loss."

- $[7]$ The applicant hereunder stated that this application was brought without delay since it was informed of the same on $11/05/2021$ when the respondent's lawyers served on the applicant's lawyers a notice for taxation of a bill of costs. The respondent stated that the applicant was duly served with summons on 24/03/2011 and both the applicants and respondents managing directors talked about having the decretal sum paid on 24/03/2011. That as such a whole decade is clearly unreasonable delay especially without a plausible explanation. - It should be noted that the judgment in Civil Suit No. 359 of 2010 was [8] delivered in 2010. Since then, till 2021, there has been no action. The applicant insists that service was not duly effected and as such seeks setting aside the proceedings and the decree in C/S No. 359 of 2010 vide M. A No. 759 of 2021. This however leaves the court wondering why the same application was not filed 10 years ago. The same serves for the current application to stay execution. As per the above captioned authority, this is a kind of application that requires the vigilance of a party that is dissatisfied with a decision of the court. This

was not in any way exhibited by the applicant. Clearly, there was unreasonable delay in filing the said application.

# **Likelihood of success**

- $[9]$ It was submitted for the applicant that the pending application for leave to appear and defend the suit has meritorious grounds for setting aside the default judgment and decree such as the non-service of summons to appear and defend the suit as well as a good defence to the suit since the applicant denies having had a bilateral agreement with the respondent for supply of tents for CHOGM. That allowing execution of the exparte decree without giving the applicant a chance to defend itself would amount to condemning it without a fair hearing since there is an imminent threat of execution of the decree. The respondent on its part insisted that the applicant was duly served through its managing director. - I still do not find this explanation meritorious since the applicant has $[10]$ taken such a long time to file this application. The only message this sends across is the applicant's desire to waste the courts time thereby denying the respondent its fruits of litigation. Even if we are to say that there was non-service of court process, the applicant ought to have made the application for setting aside the decree the moment this judgment was delivered. I am unable to agree with the applicant on the assertion that the said decree was only brought to its attention in 2021 when there were admittedly earlier talks between the Managing Directors of both companies (parties) towards the settlement of the decretal sum in 2011. Merely disputing the respondent's affidavit of service dated $28/03/2011$ that it was defective and full of falsehoods without substantiating is not enough. For the respondents stated that

service was effected through the Managing Director of the applicant company. Although no other evidence regarding service of court process has been adduced, this admission regarding the discussion of a settlement of the decretal sum by the Directors of the litigating companies is enough to prove that the applicant was and has always been very much aware of this claim against it and must have been therefore served with court process. This ground too must fail.

### **Security for costs**

- It was submitted for the applicant that payment of security for costs is $[11]$ not mandatory and that court has discretion under Section 33 Judicature Act to stay execution without a condition for security for costs and that since the applicant disputes the entire sum, it would be unfair to grant a conditional stay of execution. The respondent stated that the reluctance of the applicant to deposit security for costs demonstrates the bad faith with which the application was filed. The respondent prayed that the application be dismissed with costs. - In the case of Amon Bazira Vs Maurice Peter Kagimu. K M. A $[12]$ No.1138 of 2016 it was held by court that; "It has been trite that due performance of the decree can only be secured by the provision of security for costs." The applicant has however not demonstrated any willingness to furnish the security for costs. - Perhaps I should note that a close perusal of the applicant's case $[13]$ indeed reveals that there could be execution once the bill of costs is taxed. In as much as that may be true, the court is left wondering why the applicant took 10 years from when Civil Suit No. 359 of 2010 was concluded in order to file an application to set aside the judgment and decree and also to stay execution. This I must say, points to the lack

$\overline{7}$

of vigilance on the part of the applicant and the utter disregard of this court's time and resources. Equity as we know, aids the vigilant. Such applications are also common with litigants that keep filing frivolous and vexatious pleadings just for purposes of delaying proceedings of course to the detriment of the successful party. Courts ought to protect judgment creditors/ decree holders from this kind of injustice.

Be that as it may, considering that this is a very old matter now at execution level and with such unique facts, and in the interests of fairness and justice, I shall reluctantly allow the application and grant a conditional order on the following terms:

> a) that the applicant deposits in court 50% of the decretal sum (USD 29,985) within sixty (60) days before the order of execution of the decree in H. C. C. S No. 359 of **2010** can be stayed failing which the said order shall expire; and

b) that the applicant bears the costs of this application.

電性網絡的複創 2000年

THE THEIR

### I so order

Dated, signed and delivered this 10th day of May 2022.

Duncan Gaswaga

**JUDGE**

$\mathbf{8}$

$[14]$