Noble Builders (U) Limited and Anor v Jabal Singh Sandhu (Civil Application 15 of 2002)

Supreme Court · [2004] UGSC 12 · 2004 Application Granted ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Application for an order that the respondent furnish further security for costs and security for past costs of a pending appeal under rule 100(3) of the Supreme Court Rules, 1996

Decision

Application for further security for costs allowed; respondent ordered to deposit shs.40,000,000 in court within thirty days

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Holding

On an application under rule 100(3) of the Supreme Court Rules, a single judge held that security for costs is the norm rather than the exception in civil appeals, and that inability to pay is not the only ground for ordering it. The burden lies on the applicant to show sufficient cause. Where a respondent ordinarily resides abroad and has no assets within the jurisdiction, so that a successful party would face real difficulty enforcing a costs order, sufficient cause is shown. The respondent having failed to demonstrate that Ugandan judgments are readily enforceable in Canada, the court ordered him to deposit further security of shs.40,000,000 for the costs of the appeal and past costs.

Facts

The respondent had petitioned the High Court to wind up the first applicant company and to declare the second applicant a delinquent director, and obtained the orders sought. The applicants successfully appealed to the Court of Appeal, which set aside the High Court judgment and awarded them costs of the appeal and of the High Court proceedings. The respondent then appealed to the Supreme Court, where the appeal remained pending. The applicants' taxed costs in the lower courts totalled about shs.34,164,400, with further costs anticipated. The respondent was a foreigner ordinarily resident in Canada since the early 1990s with no property or investments in Uganda, a factor he did not deny. Only the statutory sum of shs.400,000 stood as security. The applicants feared they would be unable to recover their costs should they succeed in the pending appeal.

Issues

Whether the applicants showed sufficient cause for the court to order the respondent to furnish further security for costs and security for past costs over and above the statutory sum fixed by the rules.
Whether inability to pay is the only ground on which security for costs may be ordered.
Whether the respondent's foreign residence and absence of assets within the jurisdiction, coupled with the prospect of difficult foreign enforcement, justified an order for further security for costs.

Orders

Application allowed.
Respondent to give further security for costs of the appeal and for payment of past costs by depositing in court shs.40,000,000 within thirty days from the date of the ruling.
Applicants to have the costs of the application.

Key headnotes

Civil Procedure — Security for Costs — Security as the Norm in Civil Appeals

An appellant is generally expected to provide security for the costs of an appeal unless exempted by the court for inability to pay, and the court may in appropriate circumstances direct increased security and security for past costs; security for costs in civil appeals is therefore the norm rather than the exception.

Civil Procedure — Security for Costs — Burden and Sufficient Cause for Further Security

The burden lies on an applicant seeking further security for costs over and above the statutory amount to show sufficient cause, and what amounts to sufficient cause is a matter for the court's discretion depending on the circumstances of the case.

Civil Procedure — Security for Costs — Inability to Pay Not the Sole Ground

Inability to pay is not the only ground on which an order for security for costs may be made; security may be ordered even where the paying party is able to pay.

Civil Procedure — Security for Costs — Foreign Residence and Difficulty of Enforcement

Where a party ordinarily resides outside the court's jurisdiction and has no assets within it, so that a costs order against him would be unenforceable or enforceable only by significant expenditure of time and money, the opposing party is entitled to security for costs.

Civil Procedure — Security for Costs — Reliance on Reciprocal Enforcement Statutes

A party resisting security for costs on the basis that a Ugandan costs order would be readily enforceable abroad must lay a foundation for that submission by showing that the Minister has extended the Judgments Extension Act or the Reciprocal Enforcement of Judgments Act to that country and that reciprocal enforcement is in fact available.

Legislation cited (5)

Supreme Court Rules, 1996 r.100
Supreme Court Rules, 1996 r.100(3)
Supreme Court Rules, 1996 r.108
Judgments Extension Act (Cap. 12)
Reciprocal Enforcement of Judgments Act (Cap. 21)

Cases cited (5)

Atul Kumar Patel v American International Banking Corp (Civil Application No. 9 of 1989)
Uganda Commercial Bank v Multi Constructors Ltd (Civil Appeal No. 29 of 1994)
Bank of Uganda v Joseph Nsereko and Others (Civil Application No. 7 of 2002)
Porzelack KG v Porzelack (UK) Ltd [1987] 1 All ER 1074
De Bry v Fitzgerald and Another [1990] 1 All ER 560

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.