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Mohammed Ssebaggala and Another v Diamond Trust Bank Limited (Civil Application No. 724 of 2024)

Court of Appeal · [2025] UGCA 218 · 2025 Application Granted ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Application by notice of motion to a single Justice of the Court of Appeal for a stay of execution pending the hearing of a civil appeal
Decision
Application granted; execution of the decree in HCCS No. 333 of 2015 stayed pending determination of Civil Appeal No. 136 of 2019

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Holding

On an application to a single Justice for a stay of execution pending appeal, the Court held that the applicants had satisfied the established conditions: a notice and memorandum of appeal had been lodged, the appeal raised substantive arguable grounds (including non-consideration of their loan-servicing defence and the size of a UGX 400,000,000 decree), and the application was brought without unreasonable delay. The Court found that execution of a judgment debt exceeding UGX 1,028,000,000 against individuals — by sale of property or arrest — would cause hardship disproportionate to any prejudice to the respondent bank, rendering a successful appeal nugatory. The respondent's financial means to refund was not decisive. The application was granted and costs ordered to be in the cause.

Facts

The respondent bank obtained a High Court judgment in HCCS No. 333 of 2015 against the applicants, ordering them jointly and severally to pay UGX 400,000,000 with interest at 19% from 14 April 2014 plus costs; with taxed costs of UGX 22,000,000, the judgment debt exceeded UGX 1,028,000,000 by February 2023. The applicants, dissatisfied, lodged Civil Appeal No. 136 of 2019, which had advanced to the conferencing stage. Their earlier High Court application for a stay (Misc. Application No. 213 of 2021) was dismissed as filed inordinately late and without security. After the respondent moved to execute, the applicants applied to the Court of Appeal for a stay, contending the appeal raised serious questions — notably the trial court's failure to consider their defence that the loan had been serviced and a tri-partite settlement agreement involving Hood Sentongo. The respondent argued the applicants had structured their affairs to evade recovery and came with unclean hands, and that as a regulated bank it could refund any sum if the appeal succeeded.

Issues

  1. Whether the applicants satisfied the conditions for the grant of a stay of execution pending the hearing of their appeal.
  2. Whether the applicants' alleged antecedents and unclean hands constituted special circumstances warranting refusal of a stay.

Orders

  • Stay of execution of the judgment and decree in HCCS No. 333 of 2015 granted pending the hearing and determination of Civil Appeal No. 136 of 2019.
  • Costs shall be in the cause.

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 a notice of appeal has been lodged, that substantial loss may result unless the stay is granted, that the application was made without unreasonable delay, and that security for the due performance of the decree has been or will be given; where these are not all established the court considers where the balance of convenience lies.
Civil Procedure — Stay of Execution — Preservation of Status Quo and Right of Appeal
The primary purpose of a stay of execution is to preserve the status quo and safeguard the appellant's right of appeal so that, if the appeal succeeds, it is not rendered nugatory.
Civil Procedure — Stay of Execution — Respondent's Ability to Refund Not Decisive
That a successful respondent has the financial means to refund the decretal sum should the appeal succeed is not invariably decisive; whether the success of an appeal would be rendered nugatory must be assessed within the particular circumstances of each case, including the magnitude of the sum and the prospect of execution by sale of property or arrest of the applicants.
Civil Procedure — Stay of Execution — Merits of Appeal Not to be Pre-determined
On an application for a stay of execution the court should not say anything indicating a concluded view on the merits of the appeal, whether on fact or law, since those questions are the subject of the appeal to be heard and determined thereafter; it is enough that the appeal raises substantive, non-vexatious grounds meriting consideration.

Legislation cited (8)

  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.2(2)
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.6(2)
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.42
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.43
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.76
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.83(1)(d)
  • Civil Procedure Act Cap 71 s.27
  • Evidence Act s.102

Cases cited (13)

  • Gashumba Maniraguha v Sam Nkudiye (Supreme Court Civil Appeal No. 24 of 2015)
  • Hon. Theodore Ssekikubo & Ors v Attorney General & Anor (Constitutional Application No. 06 of 2013)
  • Attorney General v Eddie Kwizera (Supreme Court Constitutional Application No. 01 of 2020)
  • Tropical Commodities Supplies Ltd & 2 Ors v International Credit Bank Ltd (2004) 2 EA 331
  • Margaret Kato & Anor v Nuulu Nalwoga (Supreme Court Civil Appeal No. 11 of 2011)
  • Editor in Chief the New Vision Newspaper v Justice Herbert Ntabgoba (Civil Application No. 63 of 2004)
  • Francis Sembuya (Supra)
  • Kampala City Council v National Pharmacy Ltd [1979] HCB 215
  • Somali Democratic Republic v Anoop Sunderlal Treon (Supreme Court Civil Appeal No. 1 of 1998)
  • China Henan International Cooperation Ltd v Justus Kyabahwa (Court of Appeal Civil Application No. 100 of 2021)
  • Lawrence Musiitwa Kyazze v Eunice Busingye (Supreme Court Civil Application No. 18 of 1990)
  • Sanyo Ltd v Doima Bank Ltd (Nairobi Court of Appeal Civil Application No. 45 of 2001)
  • Reliance Bank Ltd v Norlake Investments Ltd [2002] 1 EA 227
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.