[2025] UGCA 93

# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT KAMPALA crvrL APPLICAT|oN NO.300 0t 2023

(Arising from Civil Appeal No. 299 of 2023) (Arisingfrom CivlSulf No. 112Bof 2019)

JOSEPH MUBIRU KIZITO :APPLICANT

### VERSUS

AFRICAN FORWARD CHRISTIAN MINISTRIES RESPONDENT

## BEFO RE: HON. LADY JUSTICE HELLEN OBURA JA

## RULING

### lntroduction

This application was brought by Notice of Motion under rules 2O A (2) and 5 of the Judicature (Court of Appeal Rules) Directions Sl 13-10 (the Rules of this Court). The applicant is seeking for an order for stay of execution of the decree/orders of the High Court in Civil Suit No.1 1 28 of 2019 delivered on 29th June, 2023 and provision for the costs of the application. 15

## Background Facts

The brief facts giving rise to this application are that on 29th June 2023, the learned trial Judge of the High Court (Land Division) Tadeo Assimwe, J delivered judgment in favour of the respondent ordering the applicant to give vacant possession of the suit property and hand over the Certificate of Title thereof to the respondent. Being dissatisfied with the decision of the High Court, the applicant lodged an appeal and this application in this Court seeking for a stay of execution of the orders of the High Court. 20

- The grounds upon which this application is premised are set out in the Notice of Motion as follows: - 25 - 1. "The applicant has appealed against the Judgement of His Lordship Hon. Justice Tadeo Asiinwe delivered on the 29u June 2023.

@tr

- 2. The respondent is in the process of executing the orders of the judgment of the High Courl - 3 The Applicant was directed to surrender vacant possession of the suit premises within 30 days of the judgment and the certificate of title.

4. That the Trial hul having found that there was a substantial amount of the loan outstanding exceeding US\$ 55,000 was unpaid and was pal ol the purchase price could not gtft the suit premise to the Respondent and order the Applicant to pay cost of the suit, hand over the uacant possession and the celificate of title.

- 5. That the Applicant only accessed a signed copy of the judgment almost 2 weeks after receiving only a ruling relating to its orders and thuswas denled access fo apply for stay of the execution in the trialcourl which was going in Couft Vacation, - 6, That the application has been filed without delay.

)5

- 7. That the Applicant lodged a Notice of Appeal in the High Coud against the decree - ²⁰ 8. THAT the Respondent has threatened execution of the Order - 9. THAT the Applicant will suffer ineparable /oss and or damage of the execution if the said Order is not stayed and the decision of the application aforesaid will be rendered nugatory if execution is allowed to proceed. - ¹⁰. TH AT the execution will inteiere with the activities of the Applicant and thereby resufting into substantia/ loss which cannot be remedied in any way by award of damages or otheruise if the execution is not slayed as the Respondent is a church and the sull premlses is a commercial propeiy.

## 30 11, THATthe Applicalion and Appeal hasahigh chance ofsuccess

- 12. THAT it is in the interest of justice thatthe execution of the decree be stayed pending the hearing and determination of the Application for stay pending Appeal." - 35 The application is supported by the affidavit of Joseph Mubiru Kizito, (the applicant) who deposed, inter alia, that judgement was entered against him on the 29rh of June 2023 in which the learned trial Judge ordered him to give vacant possession of the suit property and the Certificate of Title to the respondent. Further, that he is very aggrieved with the judgement as he is the registered proprietor of the said property that was mortgaged to the 2.0 Defendant and - the respondent failed to fulfil their sales obligations by paying off the loan obligations as required by the sales agreement. The applicant stated further that the respondent ls a church and the 40

premise on the suit property is a commercial structure and in the event he sunenders vacant possession, the damage to the property shall be irreparable in that it might not revert to its original use. He added that he has lodged an appeal against the said judgment but the respondent is in the process of executing the orders of the trial court and if this application is not granted, his appeal would be rendered nugatory. The applicant averred that if the lower court order is executed and vacant possession is given it shall cause substantial loss to him as the respondent intends to change the user purposes of the suit property and ineparable damage would be occasioned to him. The applicant also reiterated what was stated in the Notice of Motion that the appeal has a high likelihood of success and that the application for stay has been filed without delay.

The respondent filed an affidavit in reply sworn by Kaweesa Richard, its Board Secretary who, inter alia, averred that the applicant's application was brought in bad faith and it was intended to deny the respondent enjoyment of the proceeds of its litigation. He further averred that the learned trial Judge rightly found that the respondent is the lawful owner of the suit property since the applicant admitted that there was a valid sale agreement between him and the respondent. Further, that the subsequent orders were consequential in support of the lower court's finding that the respondent is the lawful/rightful owner of the suit land and therefore the appeal has no merit or likelihood of success.

Mr. Kaweesa also avened that the respondent took possession of the suit property and even executed a four-year tenancy agreement with a third party and therefore the application for stay of execution in this respect is overtaken by events. He added that all the applicant's grievances could be addressed by monetary compensation in the unlikely success of his appeal and that the applicant was not likely to suffer any ineparable damage if this application is not granted since the subject of the appeal is for compensation and does not challenge the fact that the subject property was sold to the respondent. 20 25

The applicant filed a rejoinder to the respondent's reply in which he reiterated his averments in the affidavit in support and added that he is still the registered owner of the suit property. He further stated that the said tenancy agreement which was made after the res pondent had been

served with this application was calculated to pervert the cause of justice. Further, that the respondent is not a legal entity with perpetual existence and that it might cease any moment.

### Representation

5 At the hearing, Mr. Wagubi lvan held brief for Mr. Yesse Mugenyi for the applicant while Ms. Namawejje Sylivia Ebitu represented the respondent. Both Counsel filed written submissions which has been considered in this ruling.

### Applicant's Submissions

Counsel submitted that there is a pending appeal vide Civil Appeal No. 299 of 2023 which has a high likelihood of success, is not frivolous or vexatious and establishes a prima facie case. He

- 10 added that the grounds in the Memorandum of Appeal raise serious questions of law that require determination by this Court. Further, that the applicant will suffer irreparable loss since the suit property is a commercial property which cannot accommodate a church and its usage by the respondent might cause its serious depredation which might render it unusable or in a condition which the applicant cannot sustain. Counsel asserted that the respondent is not a legal entity - 15 with perpetual succession and in the event that the suit property is disposed of, it would render his appeal nugatory.

20 He further submitted that an order for stay of execution ought to be granted as the balance of convenience lies on the applicant's side since he stands to lose his property and USD 269,000,000/= in the event the outstanding balance is not paid. Lastly, counsel submitted that the application was made without unreasonable delay. ln support of his submissions, counsel relied on a number of authorities that discussed the principles and conditions for grant of an order for stay of execution. They include: - Hon. Theodore Ssekr?ubo E Others vs the Attorney General & Others, Constitutional Application No. 06 of 2013; Beeline Travel Limited & Alinda John vs Finance Trust Bank Limited, Civil Application No. 67 of 2023 which cited the decision of the Court of Appeal of Kenya in the case ol Stanley Kang'ethe Kinyanjui vs Tonny Kefter and 5 Others, 2013 KLR; Suliman Muwonge vs Aftorney ey 25 General, Constitutional Application No.07 of 2012; Legal Brain Trust Ltd vs Attorn

General, Civil Application No. 56 of 2023; and JaydraKumar Devechand Devani vs Harisas Vallabhas Bhadresa & Another, Civil Appeal No. 21 of 2017. He prayed that the application for stay of execution be granted.

#### Respondents' Submissions

5 10 ln response, counsel for the respondent submitted that the applicant's grounds have no merit and are not substantiated. She argued that the respondent acquired vacant possession of the premises and cunently they are under use by a third party who entered into a tenancy agreement with the respondent. She added that the appeal has no likelihood of success owing to the fact that the major question at the trial was ownership of the suit property and the applicant admitted that he sold it to the respondent which resulted in judgment being made in favour of the latter. Counsel submitted that this application has been over taken by events and that the applicant has not satisfied the condition that the appeal has a likelihood of success.

Regarding substantial loss, counsel submitted that the applicant will not suffer any loss if the application is not granted because the respondent has no intention of changing the use of the premises since it has already entered into a tenancy agreement with a third party who is occupying them. She added that there is no foreseeable loss of real worth that is not nominal in nature which the applicant will suffer. Counsel therefore concluded that this condition had not been satisfied.

20 On undue delay, counsel submitted that judgment in Civil Suit N0.1128 of 2019 was delivered on 29t June 2023 and this application was filed on 1sr August 2023 which was more than a month later. She contended that the applicant failed to exercise due diligence to file the application within reasonable time which implies that he did not satisfy this condition.

As regards security for due performance of the decree, counsel submitted that the applicant has not satisfied this condition which defeats the interest of justice. She prayed that this Court so finds. Counsel also submitted that grant of this application would cause great hardship to the respondent and antagonise a third party who has already contracted with the respondent for usage of the suit property. W

On the whole, counsel submitted that the applicant has not satisfied the conditions for grant of an order for stay of execution and prayed that the application be dismissed with costs to the respondent.

To support her submissions, counsel relied on the following authorities that elaborate on the conditions for grant of an order for stay of execution and what amounts to substantial loss. Kyambogo University vs Prof. lsaiah Ndiege, Civil Application No. 341 of 2013; lsmael Allibhai and Others vs Nandallar Harvijan Karia & Another SCCA IVo. 53 of 7995; Tropical Commodities Supplies Ltd and others vs lnternational Credit Bank Ltd (in liquidation) [200q 2 EA 331; DFCU Bank Ltd vs Dr. Ann Nakate Lusejjere CACA No. 29 of 2002.

## 10 Applicant's Rejoinder

ln rejoinder, counsel submitted that all the seven conditions necessary for grant of an order for stay of execution as discussed in Kyambogo University vs Prof. lsaiah Ndiege (Supra) are substantially fulfilled. He reiterated his earlier prayer for grant of this application. Regarding the respondent's submission that there was undue delay, counsel submitted that the applicant lodged this application on 1Oth July 2023 and it was given draft numbers 389 and 388 of 2023

which was later validated in August 2023 when the applicant had lodged the record of appeal.

## Court's Finding and Decision

I have carefully perused the court record and considered the submissions of both counsel together with the authorities cited in support. The law governing applications for an order of stay

20 of execution in this Court is rule 6(2) (b) of the Rules of this Court which provides that;

> 'SubTect lo subru/e (1 ) of this rule , the institution of an appeal shall not opercte to suspend any sentence or to stay of execution but the couft may-

(a) ...... ...

(b) in any civil proceedings where a notice of appeal has been lodged in accordance with rule 76 of these Rules, order a coutl may think just." slay of execution, an injunction, or a stay of proceed such lerms as lhe

This Court and the Supreme Court have succinctly stated the conditions that an applicant for an order for a stay of execution must satisfy to justify grant of the order. The summary of those conditions as gleaned from the Supreme Court decisions in Lawrence Musiitwa Kyazze vs Eunice Besigye, Civil Application No.18 of 1990; Dr. Ahmmed Muhammed Kisuule vs Greenland Bank (in liquidation) S. C. C. A No. 7 of 2010 and Hon. Theodore Ssekikubo & 3 others vs The Aftorney General & 4 Others, Constitutional Application No.03 of 2014 are that: -

- ¹. The applicant must show that that he/she has lodged a Notice of Appeal in accordance with the relevant provisions ofthe Ru/es oflhe Couft in which the application is lodged; - 2. The applicant has to salisfy coutthathis/her appeal has a high like/ihood of success; - 3. The applbant must demonstrate that he/she will suffer irreparable /oss lf a stay is not granted; - 4. The applicant must show that substantial loss may result to him/her unless the order is made; - 5. The applicant must show that the application was instituted without unreasonable delay; - 6. That the applicant has given security for due performance of the decree or order as may ultimately be binding upon him. - ⁷. lf 2 and 3 above have not been established, Couft must consider where the balance of convenience /les

The issue for determination by this Court is whether the applicant has satisfied the above conditions to justify grant of the orders sought. As regards the requirement for a Notice of Appeal pursuant to rule 72 of the Rules of this Court, I note that it is not contested that the applicant lodged a Notice of Appeal on 4th July, 2023 and served it upon the respondent. This condition has therefore been satisfied 20

On whether the applicant's appeal has a prima facie case with a likelihood of success, I am persuaded by the decision of the Court of Appeal of Kenya in Stanley Kangiethe Kinanjuivs

zs Tonny Kefter and 5 ors (supra) that an arguable appeal is not one which must necessarily succeed but one which ought to be argued fully before a court, one which is not frivolous.

I have perused the judgement of the lower court and the 6 grounds of appeal and the prayers davit in support of the set out in the Memorandum of Appeal which are attached to the a

application and the rejoinder to the affidavit in reply respectively. The grounds of appeal and the prayers are as follows: -

"1 . The Trial Judge ened in law and fact when he held l defendant breached the contract of sale and his action of taking over the loan payment rescheduling was wrthout the knowledge of the plaintiff and was done in bad faith.

2. The Trial Judge erred in law and fact when he held that an acknowledgment of receipt tendered in as exhibit could not be interpreled as an addendum to vary the timelines and terms of the contract of sa/e.

3. That the Trial Judge erred in law and fact having established that Respondent had an obligation to pay the interest failed to make a finding that thei refusal to pay the interesf fhaf was outstanding was in breach of the Contract.

4. The Trial Judge erred in law and fact when he granted an order of specific peformance to the Plaintiff against the Appellant

5. That the Tial Judge failed to properly evaluate the evidence on record when he insisted that a sum of US\$ 55,375 was outstanding as on 23/10D023 which was instead almost the amount paid by the Appellant toward the loans leaving a balance of US\$ 14,647.03.

6. The Trial Judge ened in law and fact when he dlsmrrssed lhe 1st defendant's counter clain and condemn him to pay cost of the suit.

Wherefore the appellant prays to our Lordships that

a) This appealbe allowed.

- b) That the appellant's prayers in thei wnften statement and/or counter claim be allowed. - c) The order of specific peiormance be sel astde. - d) That the Appellant refunds the amount outstanding and due to Applicant (sic). - e) The respondent to pay the cost of the appeal and the high Cout - f) Any further such relief as thls couft may deemll."

I am alive to the fact that at this stage I am not required to delve into the merits of the appeal. All that is required is to establish that the grounds of appeal raise arguable issues that show a prima facie case which merit consideration by the appellate court. With that in mind, I have perused the above grounds of the applicant's appeal and I find that they raise arguable issues 30 with a prima facie case that merit consideration by the appellate court. I therefore find that the

applicant has satisfied this condition.

On wtrether the applicant will suffer irreparable damage or that the appeal will be rendered nugatory if the stay is not granted, I am persuaded by the decision in Tropical Commodities Supplies Ltd and others vs lnternational Credit Bank Ltd (in liquidation) (supra) where the court stated what amounts to substantial loss as follows: -

"Substantral /oss refers to that loss th at cannot be quantified by any paticular monetary compensation, or that there is no exact nathematical formula to compute subslantla/ /oss. "

It is pertinent to note that it is not enough for an applicant seeking for a stay of execution to assert that he/she will suffer substantial loss if the application is not granted, He/she must demonstrate how that loss will result and the inability to quantify it by any particular monetary 10 compensation or to compute it with exact mathematical formula. ln effect, the applicant must show cogent reasons to deny the respondent enjoyment of his/her success from the lower Court.

Turning to this application, the applicant deposed in paragraph 4 of his affldavit in support of the application that the respondent is a Church and the suit premises is a commercial structure and that in the event the applicant sunenders vacant possession, the damage to the property shall

- be irreparable as the property might not revert to its original use. lt is not disputed that the applicant sold the suit property to the respondent and a sale agreement was executed between the two parties. What was contested before the lower court was the issue of specific performance of the contract. Each of the parties accused each other of breaching the contract. The court found for the respondent and ordered the applicant to give vacant possession of the suit property 15 - to the respondent upon the outstanding balance being paid by the latter. The applicant is challenging that decision in this Court. From my understanding of the 6 grounds of the appeal and the prayers reproduced above, the applicant is seeking, among other things, grant of the prayers in his counter claim that was dismissed. He is also seeking an order setting aside the order for specific performance and, a refund of the money the respondent had paid to him as 20

part of the purchase price. He also seeks costs of the appeal and the suit in the High Court.

It is noteworthy that the applicant's prayers in the counter claim were as follows: -

" 1. Special damages of US\$ 1 44,500.

- 2. lntercst onthe IJS\$ 144,500 continues to accrue at the daily bank rate provided for asfrom 18'h August 2016 to date of judgnent. - 3. Generaldamages. - 4. Punitive/Exemplary damages. - 5

5. Or in the Alternative but wrthout prejudice to the foregoing the defendant refunds to the plaintift the sum of tJShs. 433'000'000h and Ushs. 185, 815,000t- being the amount paid by the plaintiff in clause 7 (a) and (b) under the sale agreement.

6. CosfsoftheSulf.'

Considering the applicant's prayers in the appeal before this Court and in the counter claim where the refund ofthe purchase price is an alternative prayer to the other prayers that include completion of payment of the purchase price by the respondent, I find that there is no substantial loss the applicant will suffer if this application is not granted. The outstanding balance on the purchase price, if any, and the accrued interests on his loan account which is the point of contention are capable of being computed and the exact amount ascertained if he is the successful party in the appeal. I therefore find that the applicant has failed to satisfy this condition. 10 15

Most importantly, it was averred in paragraphs 6 and 7 of the affidavit in reply that the respondent was granted vacant possession and took possession of the suit property within 30 days after the judgment and has since executed a tenancy agreement with a third party. Further, that consequently, the application for stay of execution in respect to possession is overtaken by events. A tenancy agreement between the respondent and one Fathi Juma Manis made on 7rh August 2023 was attached and marked "A".

ln rejoinder, it was averred that the person the responded purpo(s to have signed a tenancy agreement with was actually renting the said property from the applicant. A tenancy agreement made on the 1't day of October 2013 and a letter addressed to Joseph signed by one Juma Fathi Manies dated 21't August 2023were attached as proof of the tenancy and marked "C" and "D". It is noteworthy that the tenancy agreement, first of all, was between John Ssebbana Kizito and Kazinova Bar & Restaurant Limited. Secondly, according to paragraph 1 of the tenancy agreement, the tenancy was for a period of 5 years commencing on the 1s day of October 2013

\

and lapsing on the 30th day of September 2018. I have perused all the paragraphs of that that tenancy agreement and I failed to see any provision for renewal.

It is not disputed that the sale agreement that gave rise to this suit was also signed by John Ssebbana Kizito on behalf of the applicant and so I do not find any problem with the fact that he

- 5 was the one who signed the tenancy agreement attached to the affidavit in rejoinder. However, I note that the said tenancy agreement was not executed by the same tenant as the one in the tenancy agreement the respondent attached to the affidavit in reply who was stated to be one Fathi Juma Manis whereas the tenant in the tenancy agreement attached to the applicant's affidavit in rejoinder was Kazinova Bar & Restaurant Limited. - Thirdly, the tenancy agreement the applicant is relying on lapsed in 2018 as per paragraph ¹ thereof. ln the circumstances, the applicant cannot claim to have a tenancy agreement with the same tenant based on an agreement that lapsed 5 years earlier. I have seen the letter signed by one Juma Fathi Manies which the applicant relies on as further proof of the tenancy but I do not find it useful because even without subjecting it to a handwriting expert's analysis and opinion, the signature thereon is glaringly different from the one on the agreement attached to the respondent's affidavit in reply. 10 15

I have also considered the applicant's contention that the respondent entered into a tenancy agreement after it had been served with this application to pervert the cause of justice. While it is true that the tenancy agreement was made after the respondent was served with this application, I find no basis to conclude that the purpose of doing so was to pervert the cause of justice. The respondent is a decree holder who was entitled to take vacant possession of the suit property as ordered by the trial court. This Court cannot therefore conclude that whatever action the respondent took in respect of the property was done to pervert the cause of justice. ^I am unable to accept the applicant's contention since there was no court order restraining the respondent from dealing with the suit property in any way. 20 25

For the above reasons, I find that the respondent already took possession of the suit property and entered into a tenancy agreement with a third party. I therefore accept the respondent's

submission that the application for stay of execution in respect to vacant possession was overtaken by that event.

On whether the applicant has brought this application without any delay, it was submitted in paragraph 3 of the submissions in rejoinder that the application was lodged on 10tt' July 2023 and validated in August 2023. I note from the court record that judgment in the lower court was delivered on 29th June 2023, and the applicant filed the notice of appeal on 3'o July 2023. I was also able to verify from the court record on the ECCMIS filing system, that indeed the applicant filed this instant application on 1Oth July 2023 at 11:45am and the Court Registrar validated it on 2nd August 2023 at 12:33pm. ln accordance with rule 76 of the Rules of this Court, I find that this application was instituted without undue delay and in the premises, this condition has been satisfied.

On security for due performance of the decree or order as may ultimately be binding upon the appellant, I am aware that it is imperative for the court to balance the need to uphold the respondent's right to be protected from the risk that the appellant may not be able to satisfy the decree, with the appellant's right to access the courts. Courts have been reluctant to order security for due performance of the decree because the requirement is likely to stifle appeals. See: DFCU Ban k Ltd vs. Dr. Ann Persis l/akate lussejere (supraJ. The reason as to why the courts order for security for costs on an appeal is to ensure that a respondent is protected from costs incurred for responding to the appeal and defending the proceeding. At any rate, it is a requirement under rule 105(1) of the Rules of this Court which provides thus: - 15 20

> 'Subject to rule 113 of these Rules, there shall be lodged in courl on the institution of a civil appeal, as secur/y for costs of the appeal, the sum of two hundred thousand shillings.'

ln this application, the applicant has not demonstrated that he has paid security for due performance of the decree in the event the appeal fails or his readiness to do so. For that reason, the applicant has also failed to fulfil this condition.

I have also considered the balance of convenience in this application and I find that it lies in not granting it since the applicant will not suffer substantial loss if the application is not grant. ln any

event, I have already found that part of what is sought to be stayed has already taken place by the respondent taking vacant possession ofthe suit premises. Consequently, it is the respondent who will suffer if this application is granted.

ln the result, I find no merit in this application and it is accordingly dismissed with costs to the respondent.

'l so order.

| €<br>2025<br>Dated at Kampala this<br>day of | | |----------------------------------------------|--| | I | | | | | | Hellen Obura | | | JUSTICE OF APPEAL | |

5