[2024] UGCommC 221

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) MISCELLANEOUS APPLICATION NO. 406 OF 2024 (ARISING OUT OF CIVIL SUIT NO.128 OF 2024)** 10 **MBUGA SULAIMAN T/A TRAVERSE CARGO & MINERAL LINK :::::::::::::::::::::::::: APPLICANT/DEFENDANT VERSUS RAW GOLD FZ-LLC ::::::::::::::::::::::::::::::::::: RESPONDENT/PLAINTIFF**

# **BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA**

# 15 **RULING**

## Introduction

This application was brought by way of Chamber Summons under **Section 33 of the Judicature Act, Section 98 of the Civil Procedure Act** and **Order 26 rules 1, 2 and 3 of the Civil Procedure Rules SI 71-1**, seeking 20 orders that:

- 1. The Respondent herein, being the Plaintiff in Civil Suit No.128 of 2024, be ordered to pay security for costs of USD 10,000 (United States Dollars Ten Thousand Only) to the Applicant in Civil Suit No. 128 of 2024. - 25 2. Costs of this application be provided for.

## Background

The background of the application is detailed in the affidavit in support by Haji Sulaiman K. Mbuga, the Applicant herein, and is summarized below:

- 5 1. That the Applicant is the Defendant in High Court Civil Suit No.128 of 2024 instituted by the Respondent/Plaintiff at the Commercial Division. - 2. That the Respondent is not incorporated nor registered in Uganda 10 and has no known address and business in Uganda as it is incorporated in the United Arab Emirates where it also carries out its business. - 15 3. That the Respondent has no known assets or physical address of service within the jurisdiction of this Court. - 4. That the Respondent's suit against the Applicant is frivolous and vexatious and the Applicant has a good defence to the head suit with 20 a high likelihood of success. - 5. That the Respondent entered into a Contract with Traverse Cargo and Mineral Link Ltd which is very different from the Applicant's 25 registered business name of Traverse Cargo and Mineral Link. - 6. That the Applicant has never dealt with the Respondent in the stated transaction and he is not privy to the said Contract. - 7. That the Applicant is being put to undue expenses by defending a frivolous and vexatious suit and he will not be able to recover the costs incurred. - 8. That in the event of the Respondent losing the said suit, the Applicant shall have nothing to attach to recover his costs of the suit. - 9. That unless the Respondent is ordered to deposit security for costs 40 amounting to USD 10,000 (United States Dollars Ten Thousand Only) with the Court, they will just vanish back to their Country of residence after inconveniencing the Applicant.

- 5 In reply, the Respondent through its Director Mr. Omar Westerberg, opposed the application contending that: - 1. The Respondent's known address for the purpose of this suit, is DIT Advocates, a firm duly registered and authorized to practice law and carry on business in Uganda. That the said address is well known to 10 the Applicant and it was through the said address, that the Applicant served his Written Statement of Defence and Chamber Summons onto the Respondent. - 2. The Respondent has a serious case against the Applicant with high 15 chances of success as the Respondent entered into a Contract with Traverse Cargo and Mineral Link, a duly registered business name vide registration No.80020000021950. - 20 3. The Applicant in his Written Statement of Defence admitted that he is the owner of the registered business name of Traverse Cargo and Mineral Link. - 4. The Applicant, as a sole proprietor of Traverse Cargo and Mineral 25 Link represented to the Respondent that James Magambo is a Manager duly authorized to deal with the Respondent on behalf of the Applicant. - 30 5. The Applicant is well aware of the Contract between him and the Respondent Company and was a beneficiary of the monies being claimed by the Respondent having received the same directly in his USDT account. - 35 6. The Respondent has already spent substantial money to smoke out the Applicant from his hideouts and its pursuing this case against him.

- 5 7. The Respondent Company is financially sound to meet all the costs of the suit. - 8. Furnishing security to the Applicant who has no defence to the matter will be further burdening the Respondent who has already 10 lost a lot of money to the Applicant. - 9. Under the United Arab Emirates civil laws, foreign judgments/decrees or orders are freely executed and that the 15 Respondent Company is financially sound to meet all the costs of the suit. - 10. The Applicant's application is intended to prevent the Respondent from pursuing its case against the Applicant and cause a miscarriage 20 of justice.

The Applicant swore an affidavit in rejoinder reiterating some of the earlier averments and added that:

- 1. The Applicant is aware that the Respondent's address therein is only for service for purposes of this suit and not an address for 25 carrying on business in Uganda. - 2. The Applicant is the owner of the registered sole proprietorship trading as Traverse Cargo and Mineral Link which is not an incorporated Company and has never dealt with the Respondent. - 3. The Applicant's address on annexure "**D**" to the affidavit in reply is still his current address since 2016 when he registered his business name as proved by the affidavit of service of the 35 Respondent and it is different from the one on the purported Contract between the Respondent and Traverse Cargo and Mineral Link Ltd.

- 5 4. The Applicant has never been a beneficiary of the said money and he does not have any USDT account as the same is illegal in Uganda. - 5. The Applicant does not know the Respondent's financial capacity, 10 and depositing USD 10,000 with the Court is small money to such an allegedly financially sound Company after all the money shall be returned to them in the unlikely event that they become successful in the main suit.

### Representation

15 The Applicant was represented by **M/s Mudiobole & Co. Advocates** while the Respondent was represented by **M/s DIT Advocates**.

Both parties were directed to file their written submissions which they did and the same have been considered by the Court.

### Issue for Determination

20 Whether there are sufficient grounds for the grant of an application for security for costs to the Applicant/Defendant against the Respondent/Plaintiff?

Submissions

# Applicant's submissions

5 25 In his submissions, Counsel for the Applicant referred to the law under which this application was brought and submitted that security for costs is granted at the Court's discretion. He relied on the case of *Anthony Namboro and Another Vs Henry Kaala [1975] HCB 315*, which laid down the main considerations to be taken into account by the Court before

- 5 granting such an application to include; whether the Applicant is being put to undue expenses by defending a frivolous and vexatious suit and whether the Applicant has a good defence to the suit which is likely to succeed. - Counsel contended that the Respondent does not have a cause of action 10 against the Applicant and that the suit was filed against the wrong party. That according to paragraph 6 of the affidavit in support, the Respondent contracted with Traverse Cargo and Mineral Link Ltd which is different from the Applicant's sole proprietorship of Traverse Cargo and Mineral Link. To support the above contention, Counsel referred to page 26 of the 15 application which contains a certificate of incorporation of Traverse Cargo and Mineral Link Ltd and page 27 containing a copy of the passport for the person who represented the said Company. Counsel argued that the above documents separate the Applicant who trades as a sole proprietor from the said Company. - 20 Counsel further contended that, the Respondent under paragraph 5 (c) of the affidavit in reply avers that it entered into a Contract with the Applicant whose business name was duly registered vide Reg. No.8002000021950 as evidenced by annexure "**D** and **E**" to the affidavit in reply. That the said documents prove that the Applicant is a sole proprietorship. - 25 Counsel also contended that there is no proof of any money exchanging hands or transacting between the Applicant and the Respondent. He also submitted that the Respondent's averment under paragraph 6 (d) of the affidavit in reply, that the Applicant is well aware of the Contract between him and the Applicant Company and was a beneficiary of the monies being 30 claimed by the Respondent having received the same directly in his USDT - account, points to an illegality as USDT accounts were outlawed in Uganda

5 by the Bank of Uganda Circular dated 29th April, 2022 and the same was confirmed in the case of *Silver Kayondo Vs Bank of Uganda, Misc. Cause No.109 of 2022*. He also quoted the case of *Makula International Vs His Eminence Cardinal Nsubuga Wamala [1982] HCB 11*, which laid down the principle that a Court cannot sanction an illegality and once 10 it is brought to the attention of the Court, it overrides all questions of pleadings including admissions made therein.

Furthermore, Counsel submitted that in determining whether the two conditions as stated in the case of *Anthony Namboro and Another Vs Henry Kaala (supra)* have been proved, **Oder JSC** in the case of *G. M.* 15 *Combined (U) Ltd Vs A. K Detergent Ltd SCCA No.34 of 1995*, observed 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 have not yet taken place at that stage, an assessment of the merit of the* 20 *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 that stage*."

Counsel submitted that in deciding whether the Applicant is being put to 25 undue expenses by defending a frivolous and vexatious suit, the Court has to consider the strength and weakness of the Plaintiff's and Defendant's cases. Although the Court does not normally conduct a detailed examination of the merits of the case, it does consider on the face of the materials before it, whether the Plaintiff or Defendant has a good chance 30 of succeeding.

- 5 Counsel relied on the case of *R Vs Ajit Singh S/o Vir Singh [1957] EA 822* at page *825* which defined a frivolous and vexatious suit as one that is paltry, trumpery, not worthy of serious attention, having no reasonable ground or purpose. He also quoted the case of *Speke Hotel 1996 Ltd (T/A Speke Hotel Apartments) Vs Sheila Nadege AKA Don Zella Misc.* - 10 *Application No. 456 of 2022*, for the proposition that there is no cause of action against the Applicant.

In further submission, Counsel contended that they are alive to the fact that the impecuniosity of the Respondent/Plaintiff is not a basis on which the Court would order security for costs, however, that in the instant case,

15 the Respondent is a foreign Company incorporated and carrying on business outside Uganda. That it has not attached any resolution allowing its Counsel to file this case in Uganda nor the documents for its registration in Uganda.

Counsel insisted that it is only prudent that the Respondent pays or 20 deposits in Court security for costs for this matter which will be returned to it in the unlikely event that it is successful in the main suit.

### Respondent's submissions

Referring to **Order 26 rule 1 of the Civil Procedure Rules**, Counsel submitted that the grant of an order for security for costs is discretional 25 and this is one of the applications where the discretion can be exercised to deny the application. He also referred to the considerations in exercising this discretion as laid out in the case of *Anthony Namboro and Another Vs Henry Kaala (supra),* as cited by the Applicant's Counsel.

Counsel for the Respondent submitted that in determining whether the 30 considerations have been met, the Court considers the *prima facie* case of

5 both parties by assessing the merits of their cases based on their pleadings, affidavits to the application for security for costs and any other material available at this stage.

As to whether the Respondent has a *prima facie* case against the Applicant, Counsel for the Respondent referred to paragraph 5 (a) and (b) of the 10 affidavit in reply, wherein Mr. Omar stated that the Respondent has a *prima facie* case with high chances of success against the Applicant and that the Applicant has no defence to the suit. To that, he relied on annexures "**F"** and **"A**" (copies of the plaint and Agreement respectively). Counsel submitted that according to the Agreement, as attached to the 15 plaint, it is shown that the Respondent entered into a Sale and Purchase Agreement with Traverse Cargo and Mineral Link, in which the Applicant is a sole proprietor, for the sale and purchase of gold bars.

That as per the Agreement, the Respondent paid a sum of USD 12,000 (United States Dollars Twelve Thousand Only) to the Applicant for the sale 20 and delivery of the gold bars however, the Applicant in total breach, failed to perform its obligations which the Respondent now seeks to recover. Counsel argued that whereas the Applicant denies knowledge of the Agreement with the Respondent, paragraph 5 (c) of the affidavit in reply states that the Respondent dealt with Traverse Cargo and Mineral Link, a 25 business name duly registered vide registration No.80020000021950. He added that paragraph 5 (d) thereof, states that the Applicant is a sole proprietor of Traverse Cargo and Mineral Link and one James Magambo was presented to the Respondent as a Manager of the Applicant's business. Counsel referred to paragraph 4 of the affidavit in rejoinder, 30 wherein the Applicant admits being the sole proprietor of Traverse Cargo

5 and Mineral Link. In evidence, Counsel relied on annexures "**D"** and "**E**", to the affidavit in reply.

Counsel for the Respondent also referred this Court to page 1 of the Agreement in issue, contending that among the details which were required of each party, was a mobile telephone number. That on the part 10 of Traverse Cargo and Mineral Link, despite that a one James Magambo allegedly represented as its Manager, the number 0740-000028 which was

availed to the Respondent belongs to the Applicant himself.

That under paragraph 5 of his affidavit in rejoinder, the Applicant admits to the details of his address as contained in the affidavit of service of the 15 plaint and summons on him. Counsel contended that according to the affidavit of service, Ms. Nakigudde Grace Ketrauh stated that she was able to serve the Court process on the Applicant through his mobile number 0740-000028 given to her by Mr. Ddamulira Innocent, Counsel in personal conduct of the matter. That the Applicant does not deny the said number

20 in any of his affidavits.

Counsel further submitted that it is trite that where facts are sworn to an affidavit, the burden to deny them is on the other party. That failure to do so, is presumed to be acceptance as seen in the case of *RO/10224 Retired Lieutenant Ali Nangosha Kundu Vs Attorney General of Uganda Misc.* 25 *Application No.229 of 2018*, wherein the cases of *Prof. Oloka Onyango & Others Vs Attorney General Constitutional Petition No.6 of 2014* and *H. G. Gandesha & Another Vs G. J. Lutaaya SCCA No.14 of 1989* were quoted.

Counsel further submitted that in the present application, the Applicant 30 does not deny the said telephone number, hence he is estopped from - 5 denying that he does not know the Agreement between the Respondent and Traverse Cargo and Mineral Link. Counsel argued that save for the stamp used by Traverse Cargo and Mineral Link which bears the word "LTD", the entire Agreement maintains Traverse Cargo and Mineral Link as a party to the Agreement. In evidence, Counsel referred to the certificate - 10 of registration/incorporation availed by the Applicant with Registration No.80020000021950 (annexure **"A"**) to the affidavit in support of the application.

Furthermore, Counsel for the Respondent contended that the Applicant wanted to confuse the Respondent by availing and accepting his 15 representative to stamp the Agreement with a stamp bearing the word "LTD" to denote that the Respondent dealt with a different Company, not Traverse Cargo and Mineral Link whereas not.

As to whether the Applicant has any defence to the suit, Counsel disputed the Applicant's defence that he never dealt with the Respondent 20 contending that it is false as highlighted above. He also disputed the fact that Traverse Cargo and Mineral Link was registered as a Company and also under the Business Names Registration Act with the same Registration No. 80020000021950. He contended that the above shows that the Applicant might have intended to defraud the Respondent from 25 the beginning and it also portrays that the certificate of incorporation of the alleged Company is altered and forged. That if the alleged Company is said to have been registered in 2016, then it would have been registered under the Companies Act, 2012 and the certificate would portray the Companies Act, 2012 and not the Business Names Registration Act.

30 Referring to the case of *Speke Hotel 1996 Ltd T/A Speke Hotel Apartments Vs Sheila Nadege Aka Don Zella (supra*), Counsel for the

- 5 Respondent argued that the case is distinguishable from the present application as the facts and evidence shown in the preceding submissions show that the Applicant was behind the transaction with the Respondent and he was the beneficiary of the monies claimed and thus there is a *prima facie* case. - 10 Counsel also submitted on the legality of the suit as raised by the Applicant's Counsel. Counsel submitted that the case of *Silver Kayondo Vs Bank of Uganda (supra)* cited by Counsel for the Applicant is not applicable in this case because it was a public interest case, wherein the Applicant was challenging the Bank of Uganda Circular of 29th April, 2022 - 15 wherein, the Bank as the regulator warned its licensees, the mobile money payment Companies, to stop liquidating or converting crypto assets into mobile money owing to the risks posed to the customers because they (mobile money customers) were not protected under the National Payment Systems Act, 2020. - 20 Counsel argued that the United States Dollar Tether (USDT) is convertible into Uganda currency just like the way the USD operates. That dealers in USDT have accounts just like the way one would have a bank account which would be used to transact. That in the present case, Traverse Cargo and Mineral Link is duly registered under the Digital Assets Transfer 25 System. That its account details are stated under clause 9 of the Agreement at page 18 as attached to the affidavit in support of the application and the payment was completed using the said details as the system indicated the payment to have been successful. That this is in proof of payment and that more evidence shall be adduced at trial. - 30 Regarding the assertion of impecuniosity of the Respondent, Counsel submitted that this is resorted to by Court after the key considerations as

- 5 laid out in the cases of *Anthony Namboro and Another Vs Henry Kaala (supra)* and *G. M. Combined (U) Ltd Vs A. K Detergent Ltd*. However, that in the instant case, they have established the existence of a *prima facie* case and that the Applicant has no defence. Counsel also added that the Respondent is not impecunious as confirmed under paragraph 6 (e)-(i) of - 10 the affidavit in reply. Furthermore, that the Applicant requested for a figure without elaborating on the expenditure as portrayed under **Order 26 rule 1 of the Civil Procedure Rules**.

In conclusion, Counsel submitted that the Applicant has come with dirty hands which does not merit the justice he seeks. He prayed for the 15 dismissal of the application with costs.

#### Analysis and Determination

**Section 98 of the Civil Procedure Rules** empowers this Court to make such orders as may be necessary for the ends of justice.

### **Order 26 rule 1 of the Civil Procedure Rules** stipulates that:

20 "*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."*

I am mindful that it is a fundamental principle that a person who asserts a claim should have access to justice, however, **Order 26 rule 1 of the Civil Procedure Rules** together with several decisions, provide that there 25 are particular circumstances in which he/she can be required to provide security. (See: the cases of *Peter Katutsi Vs Sulaiman Mukasa and Sons Limited & Another Misc. Application No.268 of 2021* and *Bukaalamye David and Another Vs Sensuwa Hanny (Administrator*

## 5 *of the Estate of the Late Yakobo Sekubwa Nsanja) Misc. Application No.3868 of 2023)*.

The power to grant such an application is discretionary and the Court exercises the same judiciously after satisfaction that it deems fit to do so. In the case of *Noble Builders (U) Ltd Vs Jabal Singh Sandhu SCCA* 10 *No.12 of 2004*, **Hon. Justice Mulenga, JSC (RIP)**, quoted the case of *De Bry Vs Fitzgerald and Another [1990] 1 All ER 560*, on the rationale for the discretionary grant of an order for security for costs to the effect that:

"*A Defendant should be entitled to security if there is reason to* 15 *believe that, in the event of his succeeding and being awarded costs of the action, he will have real difficulty in enforcing that order. If the difficulty would arise from impecuniosity of the Plaintiff, the Court will of course have to take an account of the likelihood of his succeeding in his claim, for it would be a total* 20 *denial of justice that poverty should bar him from putting forward what is prima facie a good claim. If, on the other hand, the problem is not that the Plaintiff is impecunious but that, by reason of the way in which he orders his affairs, including where he chooses to live and where he chooses to keep his assets, an order for costs* 25 *against him is likely to be unenforceable only by a significant expenditure of time and money, the Defendant should be entitled to security*."

As relied upon by both Counsel, **Ssekandi Ag. J**, in the case of *Anthony Namboro and Another Vs Henry Kaala (supra),* held that the main 30 considerations to be taken into account in an application for security for costs are:

- 5 *i. Whether the Applicant is being put to undue expenses by defending a frivolous and vexatious suit;* - *ii. That the Applicant has a good defence to the suit; and* - *iii. That the Applicant is likely to succeed.*

After these factors have been considered, the Court may then consider the 10 Plaintiff's ability to pay. It is trite that mere poverty of the Plaintiff is not by itself a ground for ordering security for costs. If there is a strong *prima facie* presumption that the Defendant will fail in his defence to the action, the Court may refuse him security for costs. It may be a denial of justice to order the Plaintiff to give security for costs for a Defendant who has no 15 defence to a claim.

In ascertaining whether the above considerations have been proved, **Oder JSC** in the case of *G. M. Combined (U) Ltd Vs A. K. Detergents (U) Ltd* **(***supra)* observed that Court must consider the *prima facie* case of both parties based on their pleadings and any other material available at this 20 stage.

Considering **Section 101 of the Evidence Act**, **Cap.8** that is to the effect that he who asserts must prove, while relying on a book titled; **Civil Procedure and Practice in Uganda" by M & SN Ssekaana page 280**, **Hon. Justice Ssekaana Musa** in the case of *Peter Katutsi Vs Sulaiman* 25 *Mukasa & Sons Limited and Another (supra),* stated that:

"*The Applicant has a duty to persuade the Court that there is reason to believe that the Plaintiff will be unable to pay the costs of the Defendant if ordered to do so. There must be genuine lack of good faith with regard to the proceedings. The Applicant must* 30 *equally prove the facts which establish the Plaintiff's intention to*

5 *evade the payment of costs due to lack of address or intentional change of address*."

In view of the above principles, I shall therefore proceed to analyze each party's case; however, being cautious not to delve into the merits of the main suit.

## 10 i. Whether the Applicant is being put to undue expenses by defending a frivolous and vexatious suit?

According to the plaint annexed to the application marked as **"A"**, the Respondent sued the Applicant vide Civil Suit No.128 of 2024 for recovery of USD 12,000 as money had and received by the Applicant, payment of 15 USD 58,500 for loss suffered due to the breach of contract by the Applicant, general damages, interest and costs of the suit. The above claims are based on the background that, on 21st December, 2023, the Respondent entered into a Sale and Purchase Agreement (SPA) with the Applicant for the sale and purchase of gold bars. That under the said 20 Agreement, the Applicant was to sell and deliver a total of 53kgs of gold bars to the Respondent as per the delivery schedule to wit; 3kgs, 10kgs, 40kgs and a minimum of 10kgs per order on demand as per the seller's commercial invoice at an agreed purchase price at USD 40,000 per kg. It was also agreed that the Respondent would make an advance payment of 25 USD 12,000 to the Applicant for the first delivery of 3kgs of gold bars and

the Applicant was to deliver the same within 10 days of payment. That the Respondent duly paid the said sum however, the Applicant in total breach failed or declined to deliver the gold bars to the Respondent.

5 The Applicant's grounds are premised on his averments that the suit is vexatious and frivolous because there is no cause of action against him as the Respondent did not contract with him and that the suit is illegal.

A frivolous and vexatious suit as defined in the case of *R Vs Ajit Singh S/o Vir Singh* **(***supra)* is one that is paltry, trumpery not worthy of serious 10 attention; having no reasonable ground or purpose.

The Applicant herein contends that he did not contract with the Respondent. That the Respondent rather contracted with Traverse Cargo and Mineral Link Limited as opposed to Traverse Cargo and Mineral Link a registered business name. In evidence he referred to the said Agreement 15 annexed to the application.

On the other hand, the Respondent insists that it contracted with the Applicant. To rebut the Applicant's assertions, the Respondent pointed to the contact telephone number 0740-000028 provided in the Agreement as the same that was used to trace the Applicant for service. He relied on the

20 affidavit of service and the Agreement for evidence.

Counsel for the Respondent also pointed out that Traverse Cargo and Mineral Link was referred to throughout the Contract except for the stamp that had Traverse Cargo and Mineral Link Limited. I have considered the Registration No.80020000021950 as submitted upon by Counsel for the

25 Respondent to be the same for both the business name and the Company in issue. The said number is reflected on both the certificate of registration and in the Agreement. (See: annexures **"D"** and **"E"** to the affidavit in reply and the Agreement in issue).

I have looked at the said Agreement as annexed to the affidavit in support 30 and noted that it is between Traverse Cargo and Mineral Link and the

5 Respondent. However, it bears a stamp of Traverse Cargo and Mineral Link Limited. Further, the Applicant has not denied the telephone number used in the Agreement. In the foregoing, as portrayed by the pleadings of both parties, I find that a *prima facie* case has been established and my considered view is that the Applicant is not being put to undue expenses 10 by defending itself in the main suit.

# ii. Whether the Applicant has a good defence?

I shall consider the application together with the Written Statement of Defence. In the application, the Applicant raises a defence that the Respondent dealt with Traverse Cargo and Mineral Link Limited while the 15 Applicant is a sole proprietor whose business name is registered as Traverse Cargo and Mineral Link and thus he was wrongly sued. The Applicant in the Written Statement of Defence denied knowledge of the transaction and Magambo James the person who allegedly dealt with the Respondent on behalf of Traverse Cargo and Mineral Link. The Applicant 20 further states that he even filed a complaint at Kabalagala Police Station vide GEF/025/2024.

I have examined the Sale and Purchase Agreement (SPA) of Non-Refined Gold (AU) Bars which is attached to the plaint and marked as annexture **"A".** The aforementioned Agreement indicates the seller as Traverse Cargo 25 and Mineral Link and the buyer as Raw Gold FZ-LLC. However, the seller's stamp reads, "Traverse Cargo and Mineral Link Limited." This notwithstanding, the Agreement is on the letterhead of Traverse Cargo and Mineral Link with the initials of TCML which is similar to the logo in the stamp that has the word "Limited" at the end. Given the above, my view is 30 that both the Applicant and Respondent have raised issues that merit determination by Court and, at this stage it is difficult to determine

5 whether the Applicant has a good defence since both the Applicant and Respondent have raised arguable points of law and fact for their respective assertions which can only be resolved upon trial of the case.

#### iii. Whether the Applicant is likely to succeed?

The Applicant does not deny that the name; Traverse Cargo and Mineral 10 Link is his business name and from the Agreement adduced, this name appears as a contracting party though the Agreement bears the stamp of Traverse Cargo and Mineral Link Limited. At this stage, a number of questions are still unresolved like; whether the person who signed on behalf of Traverse Cargo and Mineral Link was authorized to do so and 15 whether there is a binding Contract between the Applicant and Respondent? These questions among others shall be determined in the main suit. In the circumstances, the Respondent's case has not been shown to be so devoid of merit as to render it probable that it will not succeed.

20 Furthermore, regarding the issue of the legality of the transaction in issue, I have reserved it for the trial because it involves consideration of the merits of the case.

The Applicant also argues that the Respondent has no postal address within this jurisdiction and that it has no known assets in Uganda. The 25 Respondent however, argues that for the purpose of this suit, its lawyers' postal address is to be used. The Respondent further conceded that it is incorporated outside Uganda and went on to state that it is financially sound and that foreign judgments, decrees and orders against it can be executed in the United Arab Emirates. The above submission was not 30 rebutted by the Applicant. In addition, no evidence has been provided to

5 this Court that a foreign judgment cannot be executed in the United Arab Emirates. Further, the Applicant has not shown proof of the Respondent's inability to pay the costs of the suit.

It is trite law that poverty of a Plaintiff is not by itself a ground to warrant an order for security for costs. (See: *Anthony Namboro and Another Vs*

10 *Henry Kaala* **(***supra*). In the instant application, the Applicant has not led any evidence to the impecuniosity of the Respondent. As was held in the case of *Bank of Uganda Vs Joseph Nsereko & 2 Others Supreme Court Civil Application No.7 of 2002*, lack of knowledge on the part of the Applicant cannot amount to evidence of the Respondent's inability to 15 pay costs. In the circumstances, I find the Applicant's claim speculative.

Having considered that the Respondent is seeking recovery of money had and received, the fact that the Applicant's registered business name Traverse Cargo and Mineral Link is reflected on the Agreement for Sale and Purchase Agreement and given that the Applicant has failed to 20 convince this Court that he will be unable to recover the costs of the suit from the Respondent, this application fails and the same is dismissed. The costs of the application shall be in the cause.

It is so ordered.

Dated, signed and delivered electronically this **16th** day of **July, 2024.**

Patience T. E. Rubagumya **JUDGE** 16/07/2024 7:50am

30