[2024] UGHC 1102

**THE REPUBLIC OF UGANDA**

**IN THE HIGH COURT OF UGANDA AT KASESE**

**HCT-25-LD-MA-0013-2024**

**(FORMERLY HCT-01-LD-MA-0110-2023)**

**(ARISING FROM HCT-25-LD-CS-0040-2024 FORMERLY HCT-01-LD-CS-0042-2023)**

1. **LARRY AGABA** 2. **ATACO FREIGHT SERVICES CO. LTD========================APPLICANTS**

**VERSUS**

**SILVERIUS WEKESA========================================RESPONDENT**

**BEFORE JUSTICE DAVID S. L. MAKUMBI**

**RULING**

**REPRESENTATION:**

Applicants represented by M/S Kaahwa, Kafuuzi, Bwiruka & Co. Advocates and M/S Alliance Advocates.

Respondent represented by M/S PENN Advocates.

**BACKGROUND:**

This application is brought by way of Chamber Summons under Section 98 of the Civil Procedure Act and Order 26 Rules 1 and 2 of the Civil Procedure Rules by which the Applicants seek orders that:

1. The Respondent furnishes security for payment of all costs that are likely to be incurred by the Applicants in Kasese High Court Circuit Civil Suit No. HCT-25-LD-CS-0040-2024 which was formerly Fort Portal High Court Circuit Civil Suit No. 042 of 2023 and Fort Portal High Court Circuit Civil Miscellaneous Application No. 66 of 2023 dismissed by the High Court. 2. Costs of the application be paid by the Respondent.

The grounds of the Application as laid out in the Affidavit in Support sworn by the 1st Applicant who is also Director of the 2nd Applicant are briefly that the Applicants were sued by the Respondent in the above-mentioned civil suit pending before this Court. In the suit the Respondent claimed ownership of land comprised in Leasehold Register Volume 1057, Folio 20, Plot 26 Stanley Street in Kasese and sought cancellation of the transfer of the land to the late Atalyeba John among other remedies. The Respondent further sought a temporary injunction in the matter vide Miscellaneous Application No. 66 of 2023 which was dismissed on 31st October 2023 with costs in the cause.

The Applicants contend that the Respondent sued the 1st Applicant in the main suit as an Administrator of the Estate of the late Atalyeba John which capacity the 1st Applicant did not possess and that furthermore the 2nd Applicant was not a registered proprietor of the suit land. It was therefore contended that the Applicants were wrongly sued and that their defence in the main suit stood a high chance of success and yet the Respondent being a foreigner had no known property in Uganda upon which the Applicants could base a claim for costs in the event that they proved successful in the main suit.

It is upon the background above that the Applicants filed the present application before this Court.

In response to this Application the Respondent Silverius Wekesa swore an Affidavit in Reply by which he contended that the 1st Applicant was a son to the late Atalyeba John and a beneficiary to his estate and that furthermore the 1st Applicant was a director of the 2nd Applicant overseeing rent collection from the property.

The Respondent also contended that he was the lawful proprietor of the suit property. In 1981 he left Uganda for Kenya due to prevailing insecurity and entrusted the suit property to his friend John Murita. He further contended that the late Atalyeba John had fraudulently transferred the suit property into his own names.

It was also contended by the Respondent that there were a number of legal and evidential issues meriting determination by this Court which made the Application for security for costs unnecessary among other contentions. The Respondent further submitted in supplementary Affidavit in Reply that he had various properties in Kenya worth the equivalent of UGX 736 Million.

The 1st Applicant Larry Agaba swore an Affidavit in Rejoinder by which he disputed the Respondent’s claim to the suit property and maintained that the Respondent being a foreigner had failed to show that he had any properties in Uganda against which the Applicants could base a claim for costs in the event of their success in the main suit.

**Applicants’ Submissions:**

Counsel for the Applicant submitted that the main issue for determination in the Application was whether this was a proper case for the Court to grant the Applicants security for costs.

Counsel cited Section 98 of the Civil Procedure Rules and Order 26 Rule 1 of the Civil Procedure Rules as the basis for the Application arguing that this Court was clothed with the discretion to grant security for costs. Counsel further cited the decision of His Lordship J. N. Mulenga JSC in the case of **Noble Builders (U) Ltd and Another v Jabal Singh Sandhu – Civil Application No. 15 of 2002 (2004) UGSC 12 (3rd March 2004)** as further basis for this Court to award security for costs as the Respondent had no known properties in the Ugandan jurisdiction.

Counsel further contended that the Applicants were wrongly sued and that furthermore the suit was barred by limitation and on these grounds the suit was frivolous and vexatious.

**Respondent’s Submissions in Reply:**

Counsel for the Respondent submitted in response that in considering whether to grant security for costs this Court should be mindful not to prevent parties with just claims from accessing the seat of justice and cited the case of **Paul Nyamarere and 3 Others v Dison Okumu and 6 Others – Civil Application No. 35 of 2020 (2021) UGSC 49 (20th August 2021).**

Counsel further cited the decision in **Namboro v Kaala (1975) HCB 315** and invited Court to consider the following in determining whether costs for security should be granted.

1. Whether the Applicant is being put to undue expenses by defending a frivolous and vexatious suit; 2. Whether he has good defence to the suit and it is likely to succeed; and 3. The mere poverty of the Plaintiff is not by itself a ground for ordering security for costs or if it were so, poor litigants would be deterred from enforcing their legitimate right through the legal process.

As concerns whether the Applicants were being put to undue expenses defending a frivolous and vexatious suit Counsel cited the case of **G. M Combined v A. K Detergents (U) Ltd – SCCA No. 34 of 1995.** Based on the said case Counsel argued that the Respondent being the rightful owner of the suit land which was fraudulently transferred, an order for security for costs was tantamount to preventing the Respondent from presenting his claim and accessing justice despite having a prima facie case.

With regard to whether the Applicants had put forward a good defence Counsel for the Respondent argued that they had not done so as a forgery had been demonstrated and furthermore the 1st Applicant was a son and beneficiary of the estate of the late Atalyeba John as well as being a director of the 2nd Applicant overseeing rent collection from the suit property.

Concerning the fact that poverty of the Plaintiff alone is not a ground for ordering costs, Counsel argued that on the basis of the decision in **Anthony Nambaro Fabiano Waburo-Lio v Henry Kaala (1975) HCB 215** the financial situation of the Respondent should not be used to deter the Respondent from enforcing his legal rights.

Counsel further argued that the ordering of security for costs is purely discretionary and it is in the interests of justice that this application is dismissed as the application is incompetent and an abuse of court process among others.

**Applicants’ submissions in Rejoinder:**

By way of rejoinder Counsel for the Applicants reiterated their previous submissions with particular emphasis on the fact that the suit property was transferred as far back as 1st June 1983 and that the late Atalyeba John had passed on in January 2018. Counsel therefore argued to the effect that that limitation was a major factor and furthermore that there was no legal nexus between the Applicants and the Respondent’s claim over the suit property.

**ANALYSIS:**

As concerns the question of security for costs required from a Plaintiff, Section 98 of the Civil Procedure Act grants the High Court inherent power to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court. Furthermore, Order 26 Rule 1 of the Civil Procedure Rules specifically provides that the Court may if it deems fit, order a Plaintiff in any suit to give security for the payment of all costs incurred by any Defendant.

The granting of security for costs as an interlocutory remedy therefore finds its origins in the wide discretion of the High Court to grant the same. However in the exercise of this discretion the Court is expected to act judiciously (see **Bank of Uganda v Nsereko & 2 Others – SCCA No. 7 of 2002**). The Court is also expected to exercise its discretionary power in this regard in special circumstances taking into account the nature, purpose and circumstances of the case (see **GM Combined (U) Ltd v AK Detergents (U) Ltd – SCCA No. 7 of 1998**).

In the judicious determination of this Application this Court shall be guided by the following time-honoured legal considerations.

1. Whether the Applicant is likely to succeed in the substantive case. 2. Whether the Respondent is resident in the jurisdiction of Uganda.

As concerns the prospects of success, the Supreme Court has previously held that it is considered a denial of justice to order a Plaintiff to give security for costs of a defendant who has no defence to the claim (see **GM Combined (U) Ltd v AK Detergents (U) Ltd – SCCA No. 23 of 1994**). In this matter the Applicants have clearly indicated that they have valid defences based upon limitation and suing of wrong parties in the matter. These in my view are competent defences to a suit and are not on face value frivolous or vexatious.

In considering the prospects of success, I am further guided by the reference by Counsel for the Respondent to the holding in **GM Combined (U) Ltd v AK Detergents – SCCA No. 34 of 1995.** In that case the late Oder JSC held that,

*“In a nutshell in my view, the Court must consider the prima facie case of both the Plaintiff and the Defendant. Since a trial will not yet have taken place at this stage, an assessment of the merits of the respective cases of the parties can only be based on the pleadings, on the affidavits filed in support of or in opposition to the application for security for costs and any other material available at this stage.”*

When I consider the pleadings of the Applicants and the Respondent both in this Application and in the main suit I note the following:

1. The cause of action in the main suit is founded on an alleged fraud dating back to 1983. 2. The person allegedly most directly responsible for the fraud Atalyeba John is deceased. 3. The parties sued on account of the aforementioned fraud are the 1st Applicant in capacity of Administrator of the Estate of the late Atalyeba John and the 2nd Applicant through whom rent is collected for the suit property. 4. The Applicants argue that the cause of action is barred under the law on limitation. 5. The Applicants argue that they are wrongly sued as there is no legal nexus between themselves and the claim before the Court in the main suit.

In light of the above, it is my considered view that the Applicants have demonstrated that in the absence of valid arguments to the contrary there is a likelihood of their defence succeeding. This is because by my assessment of the merits in the respective cases of the parties in this matter there is nowhere in the Respondent’s pleadings and submission in reply to this Application that they demonstrate how he intends to rebut the defences intended to be raised by the Applicants beyond largely arguing that there are triable issues in the main suit. I am alive to the fact that at this stage this Court is not determining the merits in the main suit. My view in this regard therefore is limited to a prima facie perspective derived from the pleadings of the parties in this Application.

With regard to whether the Respondent is resident in the jurisdiction of Uganda, the late Musoke-Kibuka J when considering an application for security for costs held in the case of **Jubilee Insurance Co. Ltd v Krediet Geneve Inc – HCMA 338 of 2001** that it was a special circumstance in that case that the Respondent was a foreign company without any known assets in Uganda. In this matter, I find that this Court is similarly confronted with a situation where the Respondent in this Application is by his own admission in Paragraphs 1 to 5 of the supplementary Affidavit in Reply a Kenyan citizen whose physical assets are entirely based in Kenya.

Given the defences to the main suit that the Applicants are relying upon, I find that the fact that the Respondent/Plaintiff is neither resident in Uganda nor possessing assets within the Ugandan jurisdiction, the Applicants/Defendants will face something of a legal challenge in terms of enforcing costs against the Respondent/Plaintiff in the event that the Respondent/Plaintiff is unsuccessful in the main suit.

To me it is only just and fair especially given the passage of time in relation to the cause of action claimed in the main suit that the Respondent does provide security for costs in this matter. Counsel for the Respondent argued that mere poverty of the Plaintiff alone (or in this case the absence of substantial assets in jurisdiction) should not serve to fetter the Respondent’s right of access to justice. However, as already explained above, this matter is not limited only to the fact that the Respondent lacks any assets in jurisdiction. It is also apparent to me that the Applicants do have substantial prima facie defences to the claim.

It is on the basis of the above that I find that this Application succeeds and the Applicants are entitled to security for costs from the Respondent with respect to Civil Suit HCT-25-LD-CS-0040-2024 and any matters arising therefrom.

**ORDERS:**

1. The Respondent Silverius Wekesa shall deposit in Court a sum of UGX 30,000,000 (Thirty Million Uganda Shillings only) being security for costs in Civil Suit HCT-25-LD-CS-0040-2024 and any matters arising therefrom. 2. Costs of this application shall be in the cause.

I so order.

Ruling delivered this 10th day of December 2024.

**David S. L. Makumbi**

**JUDGE**