[2020] UGCA 2183

#### THE REPUBLIC OF UGANDA

## IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

# CIVIL REFERENCE NO. 182 OF 2016 AND CIVIL APPLICATION NO. 366 OF 2018

(Arising from Civil Application No. 88 of 2016)

(Arising from Civil Appeal No. 51 of 2016)

(Arising from H. C. C. S No. 318 of 2002)

# CONCORP INTERNATIONAL LTD:::::::::::::::::::::::::::::::::::

#### **VERSUS**

# **UGANDA MUSLIM SUPREME COUNCIL::::::::::::::::::::::::::::::::::::** CORAM: HON. JUSTICE F. M. S EGONDA NTENDE, JA

HON. JUSTICE STEPHEN MUSOTA, JA

HON. JUSTICE REMMY KASULE, Ag, JA

#### **RULING OF COURT**

The applicant filed Civil Reference No. 182 of 2016 against the decision of Hon. Justice Cheborion Barishaki, JA, sitting as a single Justice, in which His Lordship ordered that the applicant herein deposits within thirty days, security for the respondent's costs in the High Court and the Court of appeal which order was made on 04.08.2016 in Court of Appeal Civil Application No. 88 of 2016.

Page $| 1$

Thereafter, the respondent after the expiry of the thirty days without the deposit of the security for costs having been effected, filed in this Court of Appeal Civil Application No. 366 of 2OL8 under Rules ²¹²¹¹43,44 and lOS (31 of the Judicature (Court of Appeal Rules) Directions seeking for orders that Civil Appeal No. 51 of 2O16 (Concorp International Ltd vs Uganda Muslim Supreme Council| be struck out for failure by the respondent (now applicant) to deposit the said securit5r for costs as ordered by this Court in Civil Application No. 88 of 2016 within the stipulated time.

By way of backgroutd, the applicant herein had earlier sued the respondent in the High Court Commercial Division in HCCS No. 318 of 2OO1- dernanding for payment of over \$5,000,000 (five million dollars) arising out of a building contract with the respondent. The suit was dismissed and the respondent was ordered to refund \$ 2,024,442 to the Government of Uganda being the amount paid to it by the Uganda Government in excess of tJle contract amount. The responclent was also orclerecl to pay the tared costs of the suit which were taxed at Ug. sh s 626,920 ,569 f = .

Dissatisfied with the High Court decision in HCCS No. 318 of 2OOi, the applicant appealed against the same to this Court through Court of Appeal Civil Appeal No. 51 of 2C16. The respondent then lodged Court of Appeal No. 88 of 2OL6 seeking an order of this Court that Concorp International Ltd, tJ e applicant herein, grve security for taxed costs and those yet to be incurred

a

Page | 2

The Civil Application No. 88 of 2016 was determined by Hon. Justice Cheborion Barishaki, JA, sitting as a single Justice. The learned Justice only pafily allowed the application. He ordered Concorp International Ltd to deposit in Court Ug. shs. 626,920,5691= as security for the taxed costs. He declined to grant the ord.er for further security for costs. The applicant was dissatisfied with the Ruling of His Lordship the single Justice, bY lodging civil Reference No. 182 of 2OL6 to the fuIl bench of this Court. It is the reference which is now before us. The sarne is being considered together with the already stated Civil Application No. 366 of 2OL8, seeking dismissal of court of Appeal No. 51 of 2016.

#### Representation

At the fiearing, Learned Counsel Salim Makeera and Timothy Lugayizi appeared for the applicant while Kakooza Shamir appeared for the respondent.

#### Preliminary Objection

The respond.ent's Counsel raised a prelirninary point of law that the Civil Reference No. 182 of 2Ot6 was filed out of time. Counsel submitted that a Reference filed under Rule 55 of the Court of Appeal Rules should be filed informally to the Justice at the time the d.ecision, the subject of the Reference is given; or in writing to the Court Registrar \Mithin seven (7) days from the date of delivery of the said decision

frr

Learned Counsel argued that the decision of Hon. Justice Cheborion Barishaki, JA in Civil Application No. 88 of 2016 was delivered on 4.08.2016 and the grounds of the Reference had been filed in Court on 18. 72.2O19. The Reference was accordingly Iiled out of time, learned Counsel so submitted.

In reply, learned Counsel for the applicant to the Reference contended that the Reference had been filed by way of a letter on the 11.08.2016 within the slipulated time and that what was fi.led on L8. L2.2O19 contained elaborate grounds that would be argued before the Court entertaining the Reference.

## Rule 55(U pf of the Court of Appeal Rules provides that;

"55. Reference from decision of a single Judge

(1) Where under section 12(2) of the Act, ang person dissatisfied uith the dectsion of a single Judge of the Court

(b) in ang ciuil matter wishes to haue ang order, direction or decision of a single Judge uaied, discharged or reuersed bg the Court, the applicant mag applg for it informally to the Judge at the time uhen the decision is girrcn or bA uiting to the reqistrar uithin seuen daus afi,er that d.ate". (Emphorsis add.ed)

The letter to the Registrar of the Court of Appeal on page 1 of the record of the Reference is dated and was filed in Court on 1 L. 08.2016 which was within tirne. Counsel for the respondent did not challenge the authenticity of this letter. This Court accordingly accepts the saime as an authentic one. It follows therefore that this Reference was

Page | 4


e/\o

lodged in time of the requisite 7 days on 1 1.08.2016 against ^a decision of the single Justice delivered on 04.08 .2016. The objection through a preliminary point of law of the Reference being lodged out of time has no merit. The same is thus over ruled.

#### Applicant's submissio ns

Learned Counsel for the applicant submitted that the learned single Justice of Appeal erred in awarding the respondent security for costs yet the applicant company was and is in receivership. Counsel maintained that when a company is impecuniou.s, it could be ^a ground for granting security for costs; but if such a grant will stifle the applicant company from further carrying out its litigation in a case that has prospects of success, then an application for security for costs should not be granted.

Learned Counsel further submitted that if the security for costs is maintained, the applicant company will not be able to pursue this appeal which has a possibility of success since the lcarned High Court trial Judge made a gross error of ordering the applicant, who was plaintiff in HCCS No. 318 of 2OO1. to pay US \$ 2,O24,442 to the Uganda Government, when the Government was never a party to the said suit. Learned Counsel thus prayed this Court to allow this Reference and to dismiss the application seeking to strike out Civil Appeal No. 51 of 201.6.

Page | 5

7p

### Respondent,s submissions

i

I

I l

In reply, learned Counsel for the respondent submitted that this Reference is against an exercise of discretion by a single Justice wherein jurisprudence is clear that this d.iscretion c€ur only be revisited if in fact the singre Justice acted on a wrong principle. Counsel contended that the Hon. Single Justice considered quite pertinently the key factor, that the respondent was a foreign entity with no assets \Mithin this jurisdiction. Learned. Counsel also submitted tJ:at whereas the applicant company is in receivership, its impecuniosity was not caused by the actions of the respondent. Accordingly learned counsel prayed this court to dismiss the Reference a,d also to allow civil Application No. 866 of 2o1g by striking out Civil Appeal No. 51 of 2C16.

## Consideration of Court

We have considered the submissions by both learned Counsel as to the merits and de-merits of this Reference. Application No. gg of ²⁰¹⁶is in the nahrre of an appeal and therefore the duty of this Court is akin to that of a first appellate Court determining an appeal from a decision made by a trial Court. That duty is to re-appraise all the evidence and materials availed. to the single Justice who determined the application from which this Reference is made, d.raw inferences and then arrive at an independent decision. See: RuIe 3o(U (af of the Judicature (court of Appeal Rules) sr lg\_ro.


%, Rule 1O5 (3) of the Judicature (Court of Appeal Rules| Directions grants this Court discretion to order paJrment of further security for costs and security of past costs. The Rule states that;

"105. Secuitg for costs in ciuil appeals.

(S) The Court ffiaA, at ang time if it thinks -frt, direct that further secuitg for costs be giuen and mai direct that seatitg be giuen for payment of past costs relating to the matters in question in the appeal."

See also; Kifiamunte Henry vs Uganda; S. C Crim. Appeal No. 1O of Lgg7. We shall bear this duty in mind while resolving the issues before us.

In the case of Noble Builders (U) Ltd and Another Vs Jabal Singh Sandhu S. C. C. A No. 12 of 2OO4, Justice Mulenga, ,. ISC (RIP) citecl De Bry Vs Fitzgerald and Another (19901 1 ALLER 560 on the rationale for the d.iscretionarlr grant of an order for security for costs, to the effect that;

"a defend.ant should. be entitled to seanitg if there is reason to belieue that, in the euent of his succeeding and being awarded costs of the action, he wilt haue real dffiatltg in enforctng that order. If the ddficttW would aise from the impeanniositg of the plainttff, the Court ytilt of course lmue to take an account of the likelihood of his succeeding in his claim, for it utould be a total denial of justice that pouertg should bar him from puttirg fontard uhat is pima facie ^a good claim. If, on the other hand, the problem is not that the plaintiff is impecunious but that, bg reason of the wag in uhich he orders his



affairs, including uhere he chooses to liue and tuhere he chooses fo keep his assefs, an order for cos/s against him is likelg to be unenforceable onlg bA a significant expenditure of time and money, the defendant should be entitled to seanitA."

Further, in the case of Sir Lindsay Parkinson & Co. Ltd Vs Triplan Ltd,ll973J QBl 611 at page 626, Lord Denning M. R stated that;

"if there is a reason to belieue that the companA cannot pag the costs th.en secuity maA be ordered. The Court has discretion uhich it ttill exercise considering all the ciranmstances of that particular case".

The applicant's ground upon which this Reference is based is that;

- 1. The learned single Justice of the Court of Appeal erred in the exercisc of his jurisdiction when he granted to tlte respt;ndent security for past costs after having found that; - ) The appeal is bona-{ide and not a .sham and that it has a reasonably good prospect of success. - b) The applicant company is in receivership and therefore unable to pay its debts

From the Reference record, it is unclisputecl that the applicant company is a foreign company and is not engaged in any known economic activity and neither has it any known income or assets. It was also submitted that tJ:e applicant company is under receivership and an order to pay costs will stifle its appeal, which appeal has reasonable good prospect of success.


In Civil Application No. 88 of 2o16, the applicant sought payment of 1Oo/o of the Ug. shs 52 bitlion as security for costs, which the learned Justice of Appeal found would stifle the respond.ent's right to appeal. The learned Justice held that;

"In conclusion, the application succeeds in part, I direct the respond.ent to deposit in Court ucx 629,920,562/=, within thirty dags from the date of this Ruling as sestitg for pasf costs (taxed cosfs/. Each partA should bear their costs for this application."

Having considered all the submissions, the pleadings and the legat authorities both statutory and case law, we find no reason to interfere with the learned single Justice's exercise of discretion when he held that the now respondent, Uganda Muslim Supreme Council was entifled to have securit5r for the past costs awarded. in HCCS No. 318 of 2OOl only and declined to grant an order for further security for future costs.

Whereas the applicant company is alleged to be in receivership, no evidence was led to show that the respondent caused the financial problems of the applicant forcing the applicant company to go into receivership. From the authority of Noble Builders (Ul Ltd and Another Vs Jabal Singh Sandhu (supra), regard has to be weighed on both sides. Should the claim of the respondent succeed, the respondent should be able to enforce the award of costs ald other reliefs against the applicant. But also likewise, a"n award of security for costs should not stifle the applicant's appeal which is already


pending in this Court. A balancing act must be made so as to ensure justice in the matter.

We have analyzed both considerations and find that the order to deposit in Court UGX 629,92O,569/= as securit5r for the taxed costs in HCCS No. 318 of 2OOl was judiciously arrived at by the learned single Justice of this Court. We find no reason to interfere with it. V/e also find no convincing reason advanced for us to order the applicant to deposit further security for the yet to be determined costs that are likely to arise out of the yet to be determined, still pending in this Court, Civil Appeal No. 5l of 2oL6. We uphold the decision of the learned single Justice of not ordering the applicant, Concorp International Ltd, to further deposit more money by way of more security for future costs Iikely to arise from Court of Appeal Civil Appeal No. 51 of 2OL6.

As to striking out Civil Appeal No. 51 of 2016 by reason of the applicant's failure to deposit in this Court the ordered security for costs of ug. shs. 629,92o,569f =, we appreciate the fact that the applicant, the appellant in the said appea], has been pursuing the matters of Civil Application No. 88 of 2016 and also those of this very Reference, all relating to the Court ord.ers as to payment of that very securit5r of costs.

We accordingly Iind it appropriate not to strike out Civil Appeal No. 51 of 2OL6 by reason of the applicant, having tailed to deposit the said security within the thirty days.from 4tr, August 2016 as ordered by the learned single Justice in Civil Application No. 88 of 2016.

Page | 10


Accordingly Civil Application No. 366 of 2o18 for striking out Civil Appeal No. 51 of 2o16 is disallowed. The applicant is hereby given an opportunity by way of extension of time of thirty (30) days within which to make that deposit of security for costs.

In Conclusion, we hold that:

- 1. The Civil Reference No. 182 of 2o16; Concorp International Ltd Vs Uganda Muslim Supreme Council is hereby dismissed and the orders made by the learned single Justice in Court of Appeal Civil Application No. 88 of 2016 are hereby upheld. - 2. Court of Appeal Civil Application No. 366 of 2O18; Uganda Muslim Supreme Council vs Concorp International Limited, is hereby disallowed and Court of Appeal Civil Appeal No. 51 of 2OL6 is to remain on the Register of the Court of Appeal subject to the appellant in that appeal complying with the orders herein given. - 3. The applicant, Concorp International Limited is hereby ordered to deposit in this Court the securit5r for costs of Ug. shs. 629,92O,569 f = within a period of thirty days (30) from the date of delivery of this Ruling. - 4. In case of failure by Concorp International Limited to deposit the said security for costs in full and within the stated period of thirty (30) days from the date of this Ruling, as ordered in number 2 above, then, in such a case, unless this Court orders otherwise, Civil Appeal No.51 of 2o16; Concorp International Limited vs Uganda Muslim Supreme Council,

x

Page | 11

shall automatically stand struck out of the Register of the court of Appeal with costs, by reason of the appellant, Concorp International Limited, having failed to comply with the order of this Court to deposit in this Court the ordered security for costs.

As to costs of this civil Reference No. r82 of 2oL6 and civil Application No. 366 of 2o18, each party shall bear its own costs in each cause.

Dated this s-lst day of. 2020.

aalaaaaaaa aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa.

HON. JUSTICE F. M. S EGONDA NTENDE, JA

## HON. JUSTICE STEPHEN MUSOTA, JA

aaaaaaaaaaaaaaaa

HON. JUSTICE REMMY I(ASULE, Ag. JA

J t I

I