[1990] UGSC 28

#### IN THE SUPREME COURT OF UGANDA

#### AT MENGO

CORAM: WAMBUZI, C. J., PLATT, J. S. C. & SEATON, J. S. C.

#### CIVIL APPLICATION NO. 6 OF 1990

**BETWEEN**

DELIA ALMEDA

AND

DR. CARMO RUI ALMEIDA ::::::::::::::::::::::::::::::::: RESPONDENT

<pre>1:1:1:1:1:1:1:1:1:1:1:1:1:1:1:1:1:1:1:

(Appeal from the decision of the High Court of Uganda at Kampala (Mr. Justice Okello) dated $14/3/90$ )

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### HIGH COURT CIVIL SUIT NO. 595 OF 1987

RULING OF THE COURT

There are two applications before the Court, an application for stay of execution under Rule $5(2)(b)$ of the Court of Appeal Rules being No.6 of 1990, and secondly an application to strike out the notice of appeal under Rule 80 of the Rules being No. 12 of 1990.

The situation is that if the notice of appeal must be struck out the application for a stay of execution must fail. Rule $5(2)(b)$ requires that an application for stay must be founded upon a notice of appeal having been lodged. If therefore the notice is struck out, the application for a stay cannot be maintained.

The facts are that judgment was given in this matter on 14th March 1990. Notice of appeal was given on 21st March 1990. The intending appellant then had 60 days within which to lodge the record of appeal under Rule 81 of the Rules. In order to prepare the record, of course, the proceedings have to be prepared by the High Court, and to initiate that process, the intending appellant must apply to the High Court for of that written application for proceedings to the respondent as laid down in the provisio to Rule, 81(1) and Rule 81(2) respectively. If the intending appellant does not apply within 30 days and copy that request to the respondent then the time taken by the Court to prepare the proceedings cannot be deducted from the time taken to obtain proceedings.

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Unfortunately, the intending appellant did not copy his request for proceedings dated 20th March, 1990 to the respondent. No further application was made within the 30 days period. Other proceedings took place in June 1990. That was after the record should have been lodged on 20th May 1990. Consequently an essential step in the proceedings has not been taken in time as provided by Rule 80 of the Rules, and the notice of appeal stands to be struck out.

Mr. Kateera consequently asked the Court to strike out the notice. Mr. Kutesa has asked that the substance of the matter and not the form should be considered. The proceedings have not yet been sent to him. Mr. Kateera knew all along that Mr. Kutesa had called for proceedings and was content on appealing.

Looking at both sides, it is apparent that the intending appellant ought to have applied to extend time as soon as the mistake of not copying the application or proceedings to the respondent became known. There can be no doubt that Rule 81(2) is mandatory. It is in fact part of the procedure for allowing a delay because of the slowness of the Court in providing copies of the proceedings. This Court would probably take into account the situation of a blameless applicant faced with delay by the Court, according to the particular circumstances, but it cannot aid an applicant who is at fault.

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proceedings within 30 days of the decsions, and send a copy

The result must therefore be that the notice of appeal must be and is struck out with costs. It follows that the application for a , $\,$ stay must fail and it is dismissed with costs.

.

Delivered at Mengo this 4th day of October, 1990.

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Signed:

S. W. W. WAMBUZI CHIEF JUSTICE

H. G. PLATT JUSTICE OF THE SUPREME COURT\_

E. E. SEATON JUSTICE OF THE SUPREME COURT

$\frac{1}{2}$ and $\frac{1}{2}$ proceedings within 30 days of the decsions, and send a copy ... ... ugn Court for

## THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA MISCELLANEOUS CIVIL APPLICATION NO.07/98

## (CORAM: C. M. KATO, J. A.; A. E. MPAGI BAHIGEINE, J. A.; J. P. BERKO, JA.)

NATIONAL ENTERPRISES CORPORATION APPLICANT

# - VERSUS -

MUKISA FOODS LIMITED ..................... RESPONDENT

# RULING OF THE COURT

This is a second application for stay of execution of the decree in HCCS No.746 of 1992 pending disposal of Civil Appeal No.42 of 1997 already filed in this court.

The first application which was before the High Court was granted conditionally upon the Applicant depositing security into court within a specified period.

The Applicant has found it impossible or inexpedient to fulfil that condition. Hence the application to this court.

It is brought by way of Notice of Motion under Rules 5(2)(b) and 42 of the Rules of this court.

The grounds as set down in the application are that:-

The decree was passed in the High Court on 29th May 1996 (i) and an application to set it aside was made and rejected.

The application for stay of execution was allowed with a condition to pay into court the decretal sum and the costs.

- (ii) The Applicant has failed to raise the decretal sum and costs to deposit into court because the amount involved is colossal and the Respondent is about to execute the decree. - iii) The Applicant has already filed a record of appeal vide Civil Appeal No. $42/97$ and a deposit for security for costs paid. - (iv) If the execution is not stayed the appeal will be made nugatory. - There has been no delay in bringing the application. $(v)$

The application is supported by an affidavit deponed to by Mr. Vincent Kamigisha, Legal officer of the Applicant Corporation. According to this affidavit and for purposes of this application an ex-parte decree in HCCS No.974/92 was entered against the Applicant on $29/5/96$ for a sum of Shs.360,000,000=. The application to set it aside was dismissed with costs on $15/10/97$ . On $14/11/97$ the application for stay of execution pending appeal was granted by the High Court on condition that the Applicant deposits the decretal amount of Shs.360,000,000= and costs amounting to Shs.9,868,950= in Court as security for its due performance by 15/12/97 which deadline the Applicant failed to meet as it could not obtain money from the Treasury being a Government Corporation. It is averred that the only option was for the Applicant to sell off the suit machinery to get the money to deposit into court but this would render the appeal nugatory since the basis of the appeal is to retain the machinery.

The learned Judge rejected the Applicant's offer to avail the machinery as security for due performance of the decree.

$\cdot$ $\mathcal{L}^{\ast}$ It is contended for the Applicant that there is merit in the appeal in that the Judge held that the Applicant/Defendant had not entered appearance in the suit when the fact was apparent on Further that the learned Judge erred in proceeding on record. an amended plaint which was never served on the Applicant who had entered appearance. It was contended that the Applicant was prevented by sufficient cause from attending the hearing and had a good cause. That the Applicant is likely to suffer irreparable loss by the sale of the suit property which is situated in the Industrial Area, a prime and strategic location. That the appeal has a high probability of success.

An affidavit in reply was deponed to by Mr. Mubiru Kalenge. It is dated $23/02/98$ . According to him the order of stay $of$ execution was adjudicated upon on its merits and finalised. It is therefore res judicata.

At the hearing, Mr. Bwanika opposing the application contended that both parties consented to the order by the High Court on 14/11/97. The Applicant was to deposit the decretal amount into court. Having failed to meet the condition the Applicant did not appeal against the order. He argued that the Applicant never delivered the machine and the Respondent failed to accept delivery. He urged the court not to ignore 0. 39, r. 4(3) of the C. P. Rs. which makes furnishing of security a necessary precondition. He maintained that the appeal was unlikely to succeed and invited the court to reject it. Alternatively should stay be granted, he prayed the court to order security to be given.

Mr. Muhwezi countered that the Applicant only consented to the stay of execution but not to the deposit of security. He reiterated that they had proposed to surrender the machinery as security which suggestion was rejected by the Judge.

Starting with the issue of consent, as to whether the Applicant agreed to the deposit of security, the learned Judge's order reads inter alia:

II ORDER

I

II iS EEREBY ORDERED ThAE ..

(a) By consenE of Ehe Respondent's CounseL, stsay of execution is granEed pending Ehe appeal to the Courts of Appeal .

o

- (b) The ApplicanE deposiEs in courE. by 15th Decemlcer 1997 Ehe decreE.al sum and costs aa securit.y for the performance of the decree in the main auit. - (c) Costs of this application abide the resul-Es of Ehe appeal .

## Sqd . Iudqe.

In considering whether an order is entered by coneent., iE is noE. essent.ial that. such an order be in any parEicular form. Its should however clearLy indicate tshe facE of agreemenE and t.he terms agreed upon and t.he courE's order should folLow the stipulaEion or agreement.

As a general rule an order Eo Ehe rendiE.ion of which the parties have agreed should show on its face that it was entered by consent, though such a showing is not indispensable and the fact may be established by ot.her evidence.

An order by consent is a conEract.. In absence of fraud it operaEe as res judicata in a second action aE leasL where compromise on which it is based is validly entsered inEo. can Ehe

Be that as it. may Lhe learned ,Judge's order as it sEands does not or cannoL supporE Mr. Bwanika's argument. that. the ent.ire order was consent.ed Eo. we therefore had t.o call for t.he record of the proceedings leading to Lhe order in order to satisfy ourselves. It is dated tz/rt/9't.

According Eo this record when the applicat.ion came up for hearing Mr. Mubi.ru Kalenge t.old t.he court. t-hat he did not opoose it in

subsEance and sE.ated that he would only pray thaE. the Applicant complies wit.h t.he provisions of O.39, r.4(3) of tshe CPRE Eo provide securiEy into court. for due performance of Ehe decree togeEher with costs. He cit.ed Lawrence M. Kyazze vs Eunice ^a II 90 and Misc, Appl i ca t. ion No.446-195 - Kisusu Quarries Lt-d. vs AEt.orney ceneral , where the fpplicants were ordered the decrees. to pay securit.y for due performance of

-V^( Mr. Muhwezi rejectsed Lhis argument onr ground that the application was noL under o.39 which refers to appeals t'o the High Court.; the application concerns an appeal from Ehe High Court. Such appeals are governed by Ehe Rules of this Court, especially, Rule 5(2) (b) under which security is not required. A11 that is necessary is a Not.ice of Appeal to the CourE of Appeal .

Mr. Muhwezi submit. E.ed before the learned ,Judge that securiEy is noE laid down under the Court oE Appeal Rules except where the Respondent. proves Ehat the Applicant will fail to perform Ehe Eerma of the decree in Lhe event of bhe appeaL failing and only then the court could order a atsay of execution on such terms as it may t.hink justs.

It is therefore clear from the foregoing that Mr. Muhwezi never consented Lo t.he order of depositing security as claimed by Mr. Bwanika. He only consenE.ed Eo Ehe order to sEay execuEion. The order regarding security was Ehe . Iudge's order as a result of submissions by Mr. Mubiru Kalenge. The question of res judicata would Eherefore not arise.

we now t.urn to Ehe merits of t.he application. Mr. Bwanika submiLted in t.he alternative that. the court should order the Applicant to deposiL securiLy as it is a precondition for sEay of execution under O,39 r.4(3). We find iE raEher strange that Mr. Bwanika could opc to proceed under O.39 of Ehe CPR when it is clear EhaL Ehis order refers to appegls to t.he High Court and not from it. This is manifest. from it.s titsle which reads:

o

## "Order XXXIX Appeals to the High Court"

This procedure insisted on by Mr. Bwanika is specially surprising in view of the fact that the Court of Appeal Rules are in existence. This position was made clear in Lawrence M. Kyazze vs Eunise Busingye (supra) where the Supreme Court observed:

"There is no provision in any of this legislation for a stay of execution, and when one looks at Order XXXIX one finds with some surprise that these rules only govern appeals to the High Court and not from the High Court. This is made more poignant because there are the usual rules concerning a stay of execution relating to appeals to the High Court....."

There is therefore no ambiguity. The application before this court can only be entertained under Rule 5(2)(b) of the Rules of this court and not under 0.39 of the Civil Procedure Rules.

authorities cited are important as to the respective 7.'he jurisdiction of the High Court and this court regarding filing and disposal of the applications for stay of execution but are not particularly so for depositing of security.

The powers of the Court of Appeal under Rule 5(2)(b) are wider than those of the High Court under 0.39 of the Civil Procedure Rules though in practice the Court of Appeal may set the same terms as the High Court is enjoined to set and has to be satisfied that they are met before granting the order, whereas the Court of Appeal may set such terms as it may think just.

The other issue taken by Mr. Bwanika was that the Applicant should have appealed the High Court order instead of filing another application. This point was dealt with by this court in Francis Sembuya vs Allports Freight Service Ltd. Civil Application No.11 of 1997 whose facts were all on fours with the

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instant application. This court relied on Kyazze vs Eunice where the Supreme Court reiterated Busingye (supra) t.he principles laid down by Cotton, J. in Cropper vs Smith (1883) 24 Ch. D. 305 and had gone further to state:

"In cases where the High Court has doubted its jurisdiction or has made some error of law or fact, apparent on the face of the record which is palpably wrong, or has been unable to deal with the application in good time to the prejudice of the parties or the said property, the application may be made to this court.

It may however be that this court will direct that the High Court should hear the application first or that an appeal be taken against the decree of the High Court, bearing in mind the interests of the parties and the costs involved. The aim is to have the application for stay speedily heard and delays avoided."

In our view significance must be attached to the words "application...speedily heard, and delays avoided", delay being a permanent feature of appeals. We are satisfied that the Applicant acted reasonably in coming to this court to seek relief by way of the same application instead of filing an appeal. An appeal would have entailed unnecessary delay.

We finally come to consider whether we should grant the application.

The court has power in its discretion to grant stay of execution where it appears to be equitable so to do with a view to temporarily preserving the status quo.

As a general rule the only ground for stay of execution is for the Applicant to show that once the decretal property is disposed of there is no likelihood of getting it back should the appeal succeed. Mr. Muhwezi cited Wilson v Church (No.2) 1878 w.81 Ch. D. $454$ where the proper rule of conduct for the exercise of this discretion was stated to be that where the right of appeal exists, the court as a general rule ought to exercise its best

discretion in a way so as not to prevent the appeal, if successful from being rendered nugatory. It was held that this rule must be acted upon unless it is an exceptional case.

For the sake of clarity we shall briefly repeat the history of the matter. An ex-parte judgment was entered against the Applicant who claims that its lawyer entered appearance but failed to attend the hearing. An amended plaint subsequently filed was never served on the Applicant before ex-parte judgment was entered. It is quite true from the record of the High Court that the Applicant foresaw the impracticability of obtaining the colossal decretal sum of Shs.366 million together with the costs of Shs. 9 million within the deadline set. The Applicant hereupon sought the indulgence of the court to deposit the machinery which is the subject matter of the suit, which suggestion was rejected by the learned Judge. We have failed to grasp the rationale behind the Judge's refusal to accept the suit machinery as security. The Respondent's insistence on cash in $\mathbb{R}$ preference of the machinery seems rather oppressive bearing in mind that the Respondent had sued for the return of the machinery or its value. We do not believe this is an exceptional case where we cannot exercise our discretion in the Applicant's favour. At this stage we do not have to consider whether the appeal stands a chance of success. The Applicant is exercising his undoubted right of appeal. But we have to take into account substantial loss that might result to the applicant the notwithstanding that the decree may perhaps ultimately be set aside. This is precisely one of the situations for which, in principle, the granting of stay of execution may be granted, subject, if necessary, to the applicant effecting a reasonable measure of security for the judgment creditor against any loss which, in the event of appeal not proceeding or not succeeding he may suffer by reason of stay. By depositing this suit property into court there is no doubt it would be well preserved and the fear of non performance of the decree by the Applicant in case of the appeal not succeeding will be alleviated. No party will therefore be prejudiced. We therefore do consider the Applicant is quite entitled to the usual protection in case the appeal is successful.

The application is therefore granted as prayed. The respondent is hereby restrained from selling, alienating or otherwise disposing of the suit machinery till final disposal of the appeal.

The Registrar is directed to list the appeal for hearing soonest so as to minimise business operational costs.

We are of the view this is a proper case where each party should bear its own costs.

We so order.

Dated at Kampala this . 29. C. day of Poul, 1998.

Alim C. M. Kato JUSTICE OF APPEAL . E. Mpagi Bahigeine JU\$TICE Berko J. P. **JUST**

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