[2024] UGCA 313

⁵ THE REPUBLIC OF UGANDA

#### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

#### CIVIL APPLICATION NO. 0285 OF 2024

(Arisingfrom High Court Miscelloneous Cause No. 0043 2020 Consolidatedwith Company Cause l{o. of 2020)

#### BETWEEN

JOMAYI PROPERTY CONSULTANTS LIMITED ....... APPLICANT

AND

NC BANK UGANDA LIMITED. RESPONDENT

lt

I

## RULING OF CHRISTOPHER GASHIRABAKE. JA (SINGLE JUSTICE)

#### Introduction

- 1l This application was brought under Rules 2(2), 6(2Xb), and 44 of the - Judicature (Court of Appeal) Rules SI l3-10, for Orders that; - a. Execution of the Ruling and orders of the High Court Miscellaneous Couse No. 0043 of 2020 consolidated with Company Cause No.05 of 2020, be stayed pending the disposal of the Applicant's appeal. - b. In the alternotive, an orderfor stay ofwinding up proceedings and appointment of a liquidator, arising from the orders of the High Court in Miscellaneous Cause No. 0043 of 2020, consolidatedwith Company Cause No.5 of 2020, pending the disposal of the Applicant's appeal. - c. Costs of this Application be providedfor. - 2l The application is premised on the grounds as follows: - 1) The Applicant has filed a Notice of Appeal in this Honourable Court and the Court of Appeal following determination of Mtscellaneous


| 5 | | Cause No. 0043 of 2020 consolidated with Company Cause No.5 of<br>2020. | |----|-------------------------------------------------------------------------------------|---------------------------------------------------------------------------| | | | 2) The Applicant's appeal has a reasonable likelihood of success as | | | | there are matters of substance and merit arising.from Miscellaneous | | | | Cause No. 0043 of 2020 consolidated with Company Cause No. 05 of | | 10 | | 2020. | | | | 3) Respondent seeks to execute the orders of this court in Miscellaneous | | | | Cause No. 0043 of 2020, consolidatedwith Company Cause No.05 of<br>2020. | | | | 4) The Respondent seeks to commence winding up proceedings and | | 15 | | appoint a liquidator for the Applicant Company following the orders | | | | of the High Court in Miscellaneous Cause No.0043 of 2020 | | | | Consolidated with Company Cause No. 5 of 2020. | | | | 5) That in the event that the application is not granted, the appeal will | | | | be rendered nugatory. | | 20 | | 6) The Applicant will suffer substantial loss if the Ruling and orders in | | | | Miscellaneous Cause No. 0043 of 2020 consolidated with Company | | | | Cause No. of 2020, ore executed while the appeal is pending disposal | | | | in the Court of Appeal. | | | | 7) That there exists a threat of execution as the Respondent is going to | | 25 | | wind up or liquidate the Applicant's company. | | | | 8) That this application has been brought without unreasonable delay. | | | | 9) h is in the interest ofjustice, that the Application be allowed. | | | | 3] The application was opposed by an affidavit sworn by Mr. Brenda | | | Kyokwijuka, on grounds that the application is not in the best interest of the | | | 30 | general body of creditors nor in public interest. That the application has not | | | | | met the condition for grant of the application. | | | 4] In rejoinder it was averred that the Applicant will suffer substantial loss if a | | | | | | | | | liquidator is appointed to wind up or liquidate the Applicant Company. |

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#### ⁵ Brief facts

5l The brief facts are that the Applicant filed Miscellaneous Cause No. 0043 of 2020 on the 20th Febru ary 2020, against the Respondent seeking to extend the time within which to make an application to set aside the statutory demand dated 23'd January 2020. This was a result of a statutory demand served on him on 23'd January 2020 for payment of the sum of Ugx. 868,250,000/: to the Respondent.

However, before the trial Court could dispose of Miscellaneous Cause No. 43 of 2020, the Respondent filed Company Cause No. 5 of 2020,on 04th May 2020, seeking various orders among others that the Applicant be wound up and a liquidator be appointed over its assets. Both Miscellaneous Cause No. 43 of 2020 and Company Cause No. 5 of 2020 were consolidated by Hon. Justice Elubu when they came up for hearing.

On the 27th of April 2024, the High Court delivered its decision in Miscellaneous Cause No. 0043 consolidated with Company Cause No. 05 of 2020, in favour of the Respondent. 20

#### Representation

6] Mr. Bazira represented the Applicant. The Respondent was represented by Mr. William Kasozi. The parties filed wriuen submission.

### Submissions for the Applicants

- 71 In resolving this application, counsel raised two issues, namely; - l. ll/hether there are grounds for stay of execution/ Insolvency Proceedings pending determination of the appeal. - 2. What remedies ore available to the Applicant?

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- ⁵ 8] Counsel restated the law on the jurisdiction of this Court in granting such applications as set out in Rule 2(2),6(2)(b), and 42(l) of the Judicature (Court of Appeal) Rules. The Court has wide discretion to stay execution in terms it thinks fit all aimed for attaining the ends of justice or preventing abuse of Court process. Counsel cited Tropical Africa Bank Limited vs Grace Were Muiiwana Civil Application No.87 of 2007, (unreported) where the Court stated that the purpose of the stay of execution is to preserve the status quo. 10 - 9] On the first issue, counsel cited Hon. Theodore Sekikubo & 3 others v Attorney General & 4 Others, Constitutional Application No. 06 of 2013, [2013] UGSC 21, (10 October 2013) and Gashumba Maniraguha v Sam Nkundiye, Civil Application No. 24,2015, [2015] UGSC 7, (23 April 2015). The Supreme Court stated the conditions for granting of stay of execution as follows: - l. T'he Applicant must establish that his appeal has a likelihood of success; or a primafocie case of his right of appeal. - 2. The Applicant will suffer irreparable damage or the intended appeal will be rendered nugatory if a stay is not granted; - 3. lf I ctnd 2 above have not been established, the Court must consider where the balance of convenience lies. - 4. The Applicant must also establish that the applicationwas instituted without delay.

101 Counsel for the Applicant submiued that the appeal has a high likelihood of success. Following the decision of the trial Court in Miscellaneous Cause No. 0043 of 2020 Consolidated with Company Cause No. 5 of 2020, the Applicant filed a Notice of Appeal and a Memorandum of Appeal. Counsel submiued that the Memorandum of Appeal raises triable issues. Arguing further that at this point the court does not have to delve into the merits of the application.


- ⁵ l1] On whether the Applicant will suffer irreparable damages, counsel for the Applicant submitted that the orders of the trial Court in Miscellaneous Cause No. 0043 of 2020 consolidated with Company Cause No. 5 of 2020 represent an existential threat to the Applicant. The Court ordered that the Applicant Company be wound up or liquidated, counsel argued that this amounted to substantial loss. He submitted that substantial loss does not mean any particular size or amount but refers to any loss, great or small that is of real worth, that is distinguishable from merely nominal loss. counsel cited Tropical Commodities Ltd & Ors v International Credit Bank Ltd (in Liquidation) [20041 2 EA ³³¹ 10 - 12) It was submitted for the Applicant, that once the liquidator is appointed, the existence of the Applicant is highly threatened. Counsel citing Gashumba Maniraguha (supra) submiued that if the application is not granted then the appeal will be rendered nugatory. 15 - 13] On the balance of convenience, counsel submitted that it lies with the Applicant who is at threat of being wound up if the application of stay is not granted. Counsel argued that the Respondent can pursue execution of its judgment in the ordinary manner and is therefore not inconvenienced in any manner by an order of stay of winding up proceedings. - 14] Counsel submitted this application was instituted without undue delay. The Applicant's Counsel first filed an application for stay Miscellaneous Application No. 0043 of 2024, but it has never been heard. - l5] Counsel prayed that this court be pleased to grant the following reliefs; - l. Execution of the Ruling and Orders of the High Court Miscellaneous Cause No. 0013 of 2020 consolidatedwith Company Cause No. 5 of 2020, be stayed pending the disposal of the Applicant's appeal. - 2. An order staying winding up proceedings ond appointment of a liquidator, arising .from the orders of the High Court in

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5 Miscellaneous Couse No. 0043 of 2020, consolidated with Company Cause No. 5 of 2020, pendingthe disposal of the Applicant's appeal. 3. Costs of this Application are providedfor

#### Submissions for the Respondent

- 16] Counsel for the Respondent raised a preliminary point of law regarding the competence of this application to be heard in this Court. It was submitted for the Respondent submitted that the Applicant ought to have applied to the High Court according to Rule 42(2) of the Rules of this Court. Counsel cited P. K Sengendo v Busuulwa Lawrence & Male Abdu, CACA 207 OF 2014, 120141UGCA 17 (04 June 2014). Counsel submiued that the application was improper before this court as no special or rare circumstances have been demonstrated by the Applicant to bring this application within the exception set in Lawrence MusiitwaKyazze v Eunice Busingye, Civil Application No. 18 of 1990. 10 15 - 17) Counsel for the Respondent submitted that the Applicant has not satisfied the conditions tbr the grant of this application under Rule 6(2)(b) of the Rules of this Court. Counsel further submiued that the Applicant did not satisfu the common law rules applicable to the stay of winding up orders as envisaged under section 264 of the Insolvency Act 2011. Counsel argued that the Applicant is insolvent and that it is not in the interest of the creditors or in the public interest to allow an insolvent company to continue trading. - 18] Counsel for the Respondent submitted that the common law rules applicable to stay of winding up orders as set out in the decided case are as follows, - 1. Although the court has jurisdiction to grant o stay as a matter of practice as stay is never granted (counsel cited A&BC Chewing Gum Ltd fi975| I WLR 593)


- ⁵ 2. An Applicantfor a stay must make a convincing case and tf Court is ibn doubt o stay should not be ordered (Calgary and Edmonton Land Company Ltd [ 1995] I ALL ER 1046 fi9751 I WLR 355) - 3. On an applicationfor stay, three closses of persons ore to be taken into account namely, the liquidators. The creditors and the members (Re Colgary and Edmonton Land Company Ltd(Supra) - 4. The Applicant must show that the trading operations of the company have been fair and above boord (Re Telescriptor Syndicate Ltd p903J 2 Ch. 174 at 182) - 5. The court has to consider not only whether what is proposed is for the benefit of the creditors but also whether the rescission or annulment will be conducive or detrimental to commercial morality and lo the interests of the public at large. (Re Telescriptor Syndicate Ltd pe03J2 Ch. t74 - 6. A stay will be refused if there is evidence of misfeasance or irregularities demanding investigotion 9 re Calgary and Edmonton Land Compony Lrd [1975J I ALLER 1046 fi975J I ALL ER ¹⁰⁴⁶ - 7. The curuent trading position and general solvency of the company should be demonstrated. Solvency is of significance when a stay of proceedings in the winding up is sought. (Re A Private Company [1935J NZLR 120, Re Mascot Home Furnishers Pty Ltd [1970J v 535 at 598 - 19] Counsel submitted that the law under the common law as a matter of practice, a stay of winding up proceedings is never granted. Counsel cited A.&B. C Chewing Gum Ltd. Topps Chewing Incorporated v Coakley [197511 W. L. R. that explained the reasons for granting a stay in winding up of companies. - 2011 On the rights of creditors, counsel submitted that the insolvent company's right of appeal must be weighed against the interest of the general body of creditors, the liquidator and the members to ensure that their interest

⁵ are equally protected and are not prejudiced by an order staying the winding up proceedings. Counsel argued that the High Court decision was to the effect that the Applicant was unable to pay its debts and was insolvent. The burden is on the Applicant to prove that it is solvent and can pay its debts as and when they fall due. Counsel submitted further that solvency is of significance when a stay of proceedings in the winding up is sought as Re- A Private Company [ 19351 NZLR 120, Re Mascot Home Furnishers Pty Ltd [19701 v R 535 at 59S). The Applicant has not adduced any evidence to prove his solvency or ability to pay its debts. Counsel argued that the Applicant was still indebted to Brenda Kyokwijuka to the tune of Ugx 868,250,000. Counsel argues that the stay for all intents and purposes will end the winding-up process. That this Court must protect the interest of the generai body of creditors.

2l) Counsel also argued that a stay of execution will be refused where there is evidence of misfeasance or irregularities demanding investigation. (Re Calgary and Edmonton Land Company Ltd ll975l I ALL ER ¹⁰⁴⁶ U9751 I Counsel argued that there is evidence that the Applicant company has engaged in Misfeasance, improper and illegal practices in the conduct of its business which warrant investigation by the liquidator. Counsel argued that it was the evidence of Brenda Kyokwijuka testified that the Applicant operates a Ponzi scheme in which it purchases land, pays for it panially, takes possession, subdivides it and on sales the sub divided pieces of land to unsuspecting buyers.

22) Counsel for the Respondent submitted that there is no serious threat of execution. Counsel submitted that the judgment was issued on27th April 2024 and that to date there is no signed decree which can be used to effect execution. That there is no evidence has been adduced to prove the threat of



- ⁵ execution save for the speculation by the Applicant. He cited Advocates Coalition for Development & Environment & Others v AG & Anor, Constitutional Petition No. 14 I 2011. Counsel submitted that there is no liquidator and that since there is no liquidator there is no threat to execute. Counsei cited Kyambogo University v Prof Isaiah Omolo Ndiege Civil Application No.341 of 2013. 10 - 231 Counsel argued that the ground of appeal is not arguable and has no likelihood of success. Counsel argued that the decision of the Court was not based on the court decree in H. C. C. S No. 234 of 2019, it was rather based on the failure by the Applicant to comply with a Statutory Demand served on it. Counsel argued that the appeal has no prospects ofsuccess and that there are no serious questions of law to be determined on appeal. That the intended appeal is an abuse ofthe court process - 24) That the Applicant does not demonstrate anywhere that it shall suffer irreparable/substantial loss. Counsel cited Dr. Ahamed Muhammed Kisuule Greenland Bank (in Liquidation) Misc. Application No. 07 of 2010, where the court denied the grant of stay because the Applicant failed to demonstrate that he would suffer irreparable damages. Counsel argued that the court found that the Applicant was insolvent so it cannot suffer irreparable loss through winding up. That the Applicant has not adduced any cogent evidence to disprove its insolvency and cannot genuinely claim that it shall suffer substantial loss. - 251 On balance of convenience counsel for the Respondent submitted that it is favourable for the Respondent. Counsel argued that it is in the interest of the creditors and the public if the stay is denied. That the evidence of the Respondent is to the effect that there are several purchasers who have bought plots of land from the Applicant and the Applicant have refused to avail them


M ⁵ with title deeds. That the balance of convenience is in favour of the Respondent.

- 26) Counsel submitted that the Applicant should be ordered to pay security for due performance. That the indebtedness of the Applicant is not in doubt. Counsei argued that since the Applicant is insolvent, he should be ordered to pay securiry for due performance. Counsel relied on Noble Builders (U) Limited & Anor v Jabal Sing Sandhu Supreme Court Civil App. No.15 of 2002, where the court found that a defendant should be entitled to security if there is reason to believe that, in the event of his succeeding and being awardeo costs of the action, he will have real difficulty in enforcing that order. - 27) Counsel concluded by submitting that the grant of an order of stay of winding up proceedings is not in the best interest of the general body of creditors nor in the public interest. That the stay of the proceedings would resurrect a commercially insolvent company to the detriment of creditors in particuiar and the business community in general which would be contrary to public interest and commercial morality. Counsel prayed that this court denies the grant of this application and costs awarded to the Respondent.

## Rejoinder

28) In response to the preliminary objection, counsel for the Applicant submitted that there are exceptional circumstances for the court to hear this application. Counsel argued that this court is seized with concurrent jurisdiction to stay execution under rule 6(2) (b) of the Rule of this Court. Counsel cited Lawrence Musiitwa Kyazze(supra). Counsel submitted that the Applicant filed Miscellaneous Application No. 483 of 2024, however, it was not scheduled for hearing, yet there was an order to wind up the Applicant which was a serious threat. Counsel submitted that Misc.

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- ⁵ Application No. 483 of 2024 was withdrawn for the pu{pose of hearing this matter - 291 In response to the applicability of the common law principles in granting a stay in winding up proceedings, counsel to the Applicant submitted that the cases cited by the Respondent can only be persuasive as this Honourable Court has a wide range of cases regarding stay of execution. Counsel ret-erred this coun to section l4 of the Judicature Act which explains the hierarchy and applicability of laws in Uganda. - 301 Counsel submitted that all applications for a stay of execution in this court are govemed by rule 6(2) (b) of the Judicature (Court of Appeal Rules) Directions S./ 13-10, and a wealth of decided cases. No reason has been given by the Respondent as to why this court should depart from the already existing jurisprudence as regards the parameters for granting a stay of executlon - 3ll Counsel addirionally submitted that the common law doctrine relied upon by the Respondent is a general law that cannot prevail over specific law, in this case, the Judicature (Court of Appeal Rules) Directions as per the case of Dovid Sejjako Nslima versus Rebecca Musoke CACA No. 12 of 1985, where the court stated that where a specific law conflicts with the general law, the fbrmer prevails. The common law principles relied on by the Respondent regarding stay of execution are from foreign jurisdictions and therefore not binding to this court but merely persuasive as per the case of Rosemury Nalubega & others v Jackson Kokayira CACA NO. 40 of 2004, page 14. - 30

321 With regard to the rights of the creditors being prejudiced counsel contended that evidence of solvency or proof that the Applicant can pay its' debtors is not one of the grounds for grant of an application for a stay of

- ⁵ execution at this stage. Counsel argued that at this stage, it is premature to delve into the merits of the appeal. The essence of a stay of execution is to preserve the Applicant's right of appeal. So that the appeal is not rendered nugatory. - 10

,

33] In relation to Misfeasance and Irregularities counsel submitted that the Applicant has never operated a Ponzi scheme, A Ponzi scheme is defined in the Black's Law Dictionary, 7th Edition, by Bryan A. Garner atpage I180, as follows;

> "a .fraudulent investment scheme in which money contributed by later investors generates artificially' high dividends.for the original investors, v'hose example attracls even larger investments. Money from the new inttestors is used directly to repav or pay interest to old investors, without any operation or revenue producing actively other than the continual raising of new funds. "

- 34) Counsel argued that there was no documentary evidence adduced by the Respondent to suggest that it entered into an investment scheme with the Applicant for the purposes of generating dividends for original investors. Counsel submiued that to the contrary the Applicant rightly and legally purchased mortgaged property comprised in Busiro Block 410 Plot 20, land at Sissa from the Respondent, who accepted that the same should be subdivided. - 35] in response to the submissions regarding the grant of stay of execution, counsel reiterated the earlier submissions on substantial loss. Concerning the likelihood of success, counsel disagreed that the insolvency proceedings were based on failure to comply with a statutory demand. Counsel submitted that the insoivency proceedings arose from consent judgment entered by both parties vide HCCS No. 234 of 2019; NC Bank Uganda Limited v Jomayi

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- ⁵ Property Consultants Limited. Counsel maintained the fact that the appeal raises triable issues. - 36] Counsel maintains the argument that the balance of convenience is in its favour. - 371 On security for due perforrnance, counsel submitted that security for due perfonnance is not a condition precedent to grant of stay of execution as per Imperial Royale Hotel Ltd & 2 Others v Ochan Daniel Misc. Application No. lll of 2012.

## Consideration of Court.

- 39] ^Ihave carefully perused the Notice of Motion, the supporting affidavits, and the affidavits in opposition to the application. I have also considered the submissions of counsel of both parties. 15 - 401 Before I consider the merits of this application I think I should deal with the issues of the applicability of the common law principles vis -a vi provisions of the municipal law as raised by counsel for the Respondent. The law on the hierarchy of the law is stated in section 14 of the Judicature Act. The section states as follows;

"Section 14. Jurisdiction of the High Court.

(1) The High Court shall, subject to the Constitution, have unlimited original jurisdiction in all matters and such appellate and other jurisdiction as may be conferred on it by the Constitution or this Act or uny other low.

(2) The subiect to the Constitution and this Act, the jurisdiction of the High Court shall be exercised-

(a) In conJbrmitywith the written law, includingany law inforce immediately bejbre the commencement of this Act;

(b) Subject to any written lwv and insofar as the written law does not extend or apply, in conformity with-

(i)The common law and the doctrines of equity;

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⁵ (ii) Any estoblished and current customer or usage; ond

(c) where no express law or rule is applicable to any matter in issue before the High Court, in conformity with the principles of iustice, equity, and good conscience.

(3) The applied law, the common low, and the doctrines of equiv shall be in .force only insofar as the circumstances of Uganda and o.f its peoples permit. and subject to such qualifications as circumstances may render necessory. "

4ll Even when the above provision applies to the High Court, the hierarchy in the application of the law applies to this court. Where there is written law on a particular mafier, it takes precedence over common law. In the circumstances of this case, the grant of stay of execution in all civil matters is provided for under rules 2 and 6 of the Rules of this Court.

421 ,Lules 2 provicies thus;

2. Application

/1) The practice and procedure of the court in connection with appeals and intended appeals from the High Court to the court and the practice and procedure of the High Court in connection with appeals to the court sholl be as set out in these Rules.

Q) Nothing in these Rules shall be tal<en to limit or otherwise affict the inherent power of the court, or the High Court, to make such orders as may be necessary.for attaining the ends ofjustice or to prevent abuse of the process of any .such court, and that power shall extend to setting aside judgments which have been proved null and void after they have been possed and shall be exercised to prevent abuse ofthe process ofany court coused by delay 25 30

> 431 In addition to the above rule, the jurisdiction of this Court to grant ^a stay of execution is set out in Rule 6(2) (b) of the Rules of this Court which provides that:

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⁵ "2. Subject to sub-rule (l), the tnstitution of an appeal shall not operale to suspend any senlence or stay execution but the Court may:

> b1 in any civil proceedings, where a notice of appeal has been lodged in accordance with rule 76 of these Rules, order a stay of execution.........on such terms as the Court may think just".

441 The above two rules, Rules 2 and6 of the Rules of this Court, empower this Coun in Civil Procedure where a Notice of Appeal has been lodged per Rule 76 the rules of this Court to grant a stay of execution on the terms it deems fit. Granting a stay of execution is a discretionary power. Like all judicial discretion, it must be exercised on well-established principles. 10

- 45) I'he Supreme Court has in several cases laid down principles goveming the excise of this discretion like Hon. Theodore Sekikubo & 3 others v Attorney General & 4 Others, Constitutional Application No. 06 of 2013' [20131 trGSC 21, (10 October 2013) and Gashumba Maniraguha v Sam Nkundiye Civil Application No. 24,2015, [20151 UGSC 7, (23 April 2015), as cited by counsel fbr the Applicant. 15 20 - 461 lt is a requirement under Rule 42 of the rules of this Court that if an application can be taken in this court and the High Court, the application should oe filed in the High Court first. However, there are circumstances when this court will entertain the application of stay to preserve the status quo. In Lawrence Musiitwa Kyazze(supra), the Supreme Court set the exceptionai circumstances under which this application can be accepted in this Court. Among these, where the High Court is unabie to deal with the applicarion in good time to the prejudice of the parties to the suit this Court can enterrain the application for stay. The purpose is to have a speedy hearing without any delays.'fhe Applicant averred in paragraph 11 of the affidavit in suppon of the applicarion that the lawyers had filed a similar application in

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⁵ the High Court and they are still pursuing a hearing date in the face of an order to liquidate the Applicant. The Applicant averred that if the application is not granted the appeal would be considered nugatory. I am satisfied that the circumstances of this case demonstrated the urgency of the matter which the High Court has not been able to address.

- 471 The first condition the Applicant has to prove before this Court can grant a stay of execution is the likelihood of success. It is trite that where a party to a suit is exercising its unrestricted right of appeal the appeal has a likelihood of success. It is the dury of this Court to make such orders that will prevent the appeal if successful from being nugatory. A perusal of the Memorandum of Appeal marked "JM" raises a triable issue concerning insolvency orders issued by the trial Court based on a decree in HCCS No. 234 of 2018. I am satisfied that the Memorandum of Appeal raises a triable issue and need not go in the merits of the case. - 48] The second consideration before granting the application for stay is whether the Applicant will suffer irreparable damages in Giella v Gassman Brown & Co. ll973l E. A 358, it was held that irreparable damage means damage or injury that is substantial and cannot be adequately atoned for in damages. In this particular case the evidence of substantial loss is found in paragraphs 13 and 14 which state that;

"That the Respndent seel<s to commence winding up proceedings and .tppoinr a liquiclu:oi'./itr thc Applicant Companyfollowing the orders of the Iirgh Court in I'tiscellaneott:: Cuuse No. 0043 of 2020 consolidated with Company Cause No. of 2020.

'lhat the orders in l4isc'ellaneou.e Cause No. 004 of 2020 consolidatedwith ('orupany Causc No. 5 of 2020, are sef'executing and dnol stayed by this court, the Respondent shall commence proceedings to wind up or Iiquidate the Applicanl Companv."

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- s 491 Applying the law to the facts before this court, I find that the Applicant is under threat of being wound up. Once the Liquidator is appointed, then the existence of the applicant is threatened. This cannot be atoned for in damages. The winciing up of a company has other implications that go beyond financial compensation. I therefore find rhat the Applicant has demonstrated that it 10 would suffer irreparable loss. - 50] The balance of convenience is in favour of the Applicant. This Court declines to make an order for security for due perforrnance because the Respondent has not demonstrated how it will fail to enforce the judgment if it succeeds. As a matter of fact, in case it succeeds, it can claim among the 1s creditors as a judgment creditor. Since the Applicant is exercising its unrestricted right of appeal and meets the conditions for the grant of stay of execution, it is the ciuty of this Court to ensure that their appeal if successful is not rendered nugatory.

## Decision

20 1. The application is granted.

- (a) Execution of the Ruling and Orders of the High Court Miscellaneous Cause No. 0043 of 2020 consolidated with Company Cause No.5 of 2n20, be stayed pending the disposal of the Applicant's appeal. - (b)An order staying winding up proceedings and appointment of ^a zs riquidator, arising from the orders of the High Court in Miscellaneous Cause No. 0043 of 20?\*,onsolidated with Company Cause No. 5 of fu2U2o,pendingthedisposaloftheApplicant,sappea1. - 2. Cosis will follow the outcome of the appeal.

³⁰ I so order.

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Dated signed and delivered at Kampala this .................................... $\mathsf{S}$ 2024

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**C. GASHIRABAKE**

**JUSTICE OF APPEAL**

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