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UGANDA GINNERS & COTTON EXPORTERS ASSOCIATION L T D & ORS v MUDDU AWULIRA ENTERPRISES L T D (Civil Appeal No. 28 of 2015)

Court of Appeal · [2015] UGCA 96 · 2015 Application Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Application for leave to appeal to the Court of Appeal against a High Court ruling refusing leave to appeal in respect of a security for costs application, together with an application to stay the main suit.
Decision
Application for leave to appeal dismissed with costs; main suit (HCCS No. 222 of 2013) to proceed to hearing in the High Court.

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Holding

The Court of Appeal dismissed the application for leave to appeal, finding it frivolous, vexatious and an abuse of process. It held that the dismissal of a security for costs application supported by false affidavits raised no appealable issue. The adequacy of filing fees was irrelevant to a security for costs application under Order 26 of the Civil Procedure Rules, and there is no legal principle requiring claimed interest to be added to the principal to compute court fees, which are governed strictly by statute. Impecuniosity is not a ground for ordering security for costs. The grant of security for costs is discretionary, and no basis existed to interfere with the trial Judge's exercise of discretion.

Facts

The respondent sued the applicants in the Commercial Division of the High Court (HCCS No. 222 of 2013) claiming a liquidated sum of about Shs. 2.6 billion plus 25% compound interest from 1999. Before scheduling, the applicants applied under Order 26 of the Civil Procedure Rules for security for costs of Shs. 500,000,000, contending the respondent was impecunious, the suit had no likelihood of success and that insufficient filing fees rendered the suit a nullity. The application was supported by affidavits of Adam Bwambale and Asaba Arthur. On cross examination Asaba admitted he was not a qualified accountant and disowned an annexure, while Bwambale admitted he lacked authority and evidence of the respondent's financial difficulties. The Assistant Registrar dismissed the application on the basis of false affidavits. A reference to the Judge was dismissed, as was a subsequent application for leave to appeal. The applicants then applied to the Court of Appeal for leave to appeal and a stay of the suit.

Issues

  1. Whether leave to appeal should be granted where the intended appeal arises from the dismissal of an application for security for costs.
  2. Whether the adequacy of court filing fees is a relevant ground for granting or refusing an order for security for costs.
  3. Whether court filing fees should be computed by adding claimed interest to the principal sum to determine the value of the subject matter.
  4. Whether impecuniosity of a plaintiff company is a ground for ordering security for costs.
  5. Whether the trial Judge wrongly exercised her discretion in refusing security for costs and refusing leave to appeal.

Orders

  • Application for leave to appeal dismissed.
  • Application dismissed with costs.
  • Parties directed to pursue the hearing of High Court Civil Suit No. 222 of 2013.

Key headnotes

Civil Procedure — Security for Costs — Discretion under Order 26 CPR and Appellate Interference
The grant of an order for security for costs is discretionary, and an appellate court will not interfere with the trial court's exercise of that discretion unless it acted on a wrong principle.
Civil Procedure — Security for Costs — Impecuniosity Not a Ground
The impecuniosity of a party is not by itself a ground for ordering it to furnish security for costs, as to hold otherwise would deny equal access to justice contrary to Articles 21 and 126(2)(a) of the Constitution.
Civil Procedure — Court Fees — No Nullity for Insufficient Fees
Failure to pay sufficient court filing fees does not render a suit a nullity, since section 97 of the Civil Procedure Act permits the court in its discretion to allow payment of the deficiency at any stage.
Statutory Interpretation — Taxing and Revenue Statutes — Strict Literal Construction
Court fees constitute government revenue determinable only by law and, like taxing statutes, must be construed strictly with no room for implication; there is no requirement that claimed interest be added to the principal to compute filing fees.
Company Law — Security for Costs Against Limited Company — Section 404 Companies Act
Where a limited company is plaintiff, a court may under section 404 of the Companies Act order security for costs only upon credible evidence that the company will be unable to pay the defendant's costs if successful.
Civil Procedure — Rejection of Plaint — Limitation and Insufficient Fees under Order 7 r.11
An objection that a suit is time barred or that the plaint is undervalued must be raised by preliminary objection or application under Order 7 rule 11, and cannot be determined within an application for security for costs under Order 26.
Civil Procedure — Abuse of Process — Successive Interlocutory Applications to Delay Trial
Successive interlocutory applications brought to delay or derail the hearing of the main suit are frivolous, vexatious and an abuse of court process warranting dismissal with costs.

Legislation cited (15)

  • Civil Procedure Rules Order 26
  • Civil Procedure Rules Order 50 r.7
  • Civil Procedure Rules Order 50 r.8
  • Civil Procedure Rules Order 44 r.4
  • Civil Procedure Rules Order 7 r.11
  • Civil Procedure Act s.26
  • Civil Procedure Act s.97
  • Companies Act (Cap 110) s.404
  • Judicature (Court Fees) Rules SI 13-1
  • Judicature Act (Cap 13)
  • Civil Procedure and Limitation (Miscellaneous Provisions) Act (Cap 72) s.3
  • Civil Procedure and Limitation (Miscellaneous Provisions) Act (Cap 72) s.4
  • Limitation Act
  • Constitution of Uganda Article 21
  • Constitution of Uganda Article 126(2)(a)

Cases cited (5)

  • Attorney General v Virchard Mithalal and Sons Ltd (Civil Appeal No. 20 of 2007)
  • Uganda Revenue Authority v Siraje Hassan Kajura (Civil Appeal No. 26 of 2013)
  • Cape Brady Syndicate v IRC (1921) K.B 64
  • Development Finance Company of Uganda v Uganda Polybags Ltd (Civil Appeal No. 24 of 1999)
  • Kabandize and 20 Others v Kampala Capital City Authority (Civil Appeal No. 28 of 2011)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.