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WK's Hardware Limited & 4 Others v Diamond Trust Bank (U) Limited (Civil Application 40 of 2023)

Court of Appeal · [2024] UGCA 71 · 2024 Application Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Application to a single Justice of the Court of Appeal for a stay of execution pending the determination of a civil appeal, arising from a summary judgment of the High Court (Commercial Division).
Decision
Application for stay of execution dismissed with costs to the respondent; the decree of the High Court remains executable.

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AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions — always read the source judgment before relying on it.

Holding

The Court of Appeal dismissed the applicants' application to stay execution of a UGX 8.4 billion summary decree obtained by the respondent bank. Applying the conditions in Lawrence Kyazze and Theodore Ssekikubo, the single Justice found no imminent threat of execution (the notice to show cause had lapsed without further steps), that the intended appeal disclosed no likelihood of success given the trial judge's careful refusal of leave to defend, and that the notice of appeal had been filed out of time and appeared to be an afterthought. Although the application was not brought with inordinate delay, the balance of convenience lay with the respondent, which held an unsatisfied decree. The application was accordingly dismissed with costs.

Facts

In 2019 the first applicant company took out credit facilities exceeding UGX 8 billion from the respondent bank. Upon default, the bank filed a summary suit under Order 36 in the High Court (Commercial Division), Civil Suit No. 652 of 2021, to recover UGX 8,445,259,566 plus interest and costs. The applicants applied for leave to appear and defend (Miscellaneous Application No. 1430 of 2021), but it was heard in their absence and dismissed, the trial judge finding the proposed defence raised no arguable basis in law or fact. Summary judgment was entered for the bank on 13 April 2022 with interest at 17% per annum. The applicants filed a notice of appeal in the High Court on 17 June 2022, about two months after judgment and outside the 14-day rule, and sought to validate it. They also unsuccessfully sought a stay of execution in the High Court before applying to the Court of Appeal. The bank had served a notice to show cause why execution by arrest and committal should not issue, returnable 4 October 2022, but took no further execution steps.

Issues

  1. Whether the applicants would suffer irreparable damage or the appeal would be rendered nugatory if the stay of execution were not granted.
  2. Whether the intended appeal had a likelihood of success or disclosed a prima facie case of the right to appeal.
  3. Where the balance of convenience lay between the applicants and the respondent bank.
  4. Whether the application for stay of execution was made without unreasonable delay.

Orders

  • The application for stay of execution is dismissed.
  • Costs of the application are awarded to the respondent.

Key headnotes

Civil Procedure — Stay of Execution Pending Appeal — Conditions to be Satisfied
An applicant for a stay of execution pending appeal must show that substantial or irreparable loss will result or the appeal will be rendered nugatory if the order is not made, that the appeal has a likelihood of success or a prima facie case of the right to appeal, that the application was made without unreasonable delay, and, where the first conditions are not established, that the balance of convenience favours a stay.
Civil Procedure — Stay of Execution — Substantial Loss — Imminent Threat of Execution
Where a notice to show cause why execution should not issue has lapsed and the judgment creditor has taken no further steps to execute over a long period, there is no imminent threat of execution sufficient to establish substantial loss or that the appeal will be rendered nugatory.
Civil Procedure — Stay of Execution — Likelihood of Success of Appeal
An applicant who fails to identify any ground of appeal or to point to any error in the trial court's reasoning, relying only on a bare assertion that the appeal has a high chance of success, does not satisfy the court that the intended appeal has any likelihood of success.
Civil Procedure — Stay of Execution — Balance of Convenience — Unsatisfied Decree
Where a judgment creditor holds an unsatisfied decree and the debtor, having taken the money, shows no genuine intention to pay, the balance of convenience lies in favour of the creditor and against the grant of a stay of execution.

Legislation cited (13)

  • Civil Procedure Act s.98
  • Judicature Act s.38
  • Judicature (Court of Appeal Rules) Directions rule 2(2)
  • Judicature (Court of Appeal Rules) Directions rule 6(2)(b)
  • Judicature (Court of Appeal Rules) Directions rule 42
  • Judicature (Court of Appeal Rules) Directions rule 43
  • Judicature (Court of Appeal Rules) Directions rule 44
  • Judicature (Court of Appeal Rules) Directions rule 53(2)(b) and (d)
  • Judicature (Court of Appeal Rules) Directions rule 76
  • Civil Procedure Rules Order 36 rules 1 and 2
  • Civil Procedure Rules Order 36 rule 5
  • Civil Procedure Rules Order 9 rule 22
  • Civil Procedure Rules Order 6 rule 30(1)

Cases cited (7)

  • Kansiime Andrew v Himalaya Traders Ltd & 6 Others (Civil Appeal No. 279 of 2017)
  • Luwalira Martin Deogratious & Another v Lwanga Enock and Another (Civil Application No. 201 of 2021)
  • Tropical Commodities Supplies Ltd & 2 Others v International Credit Bank Ltd (In Liquidation) [2004] 2 EA 331
  • Uganda Revenue Authority v National Social Security Fund (Civil Application No. 43 of 2023)
  • Theodore Ssekikubo & Others v Attorney General (Constitutional Application No. 6 of 2013)
  • Herbert Semakula Mwooke & Another v Lawrence Nabamba & 2 Others (Civil Application No. 22 of 2019)
  • Lawrence Musitwa Kyazze v Eunice Busingye (Civil Application No. 18 of 1990)
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.