Wakilii

Development Finance Company of Uganda Ltd and Ors v N.G. General Ltd (High Court Miscellaneous Application No. 1527 of 1999)

High Court · [2000] UGCOMMC 3 · 2000 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for security for costs arising out of a civil suit challenging appointment of receivers
Decision
Application for security for costs refused

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

An application for security for costs against a company under receivership was dismissed where the receivers held property worth one billion shillings. The court held that where receivers possess sufficient assets to cover likely costs, security for costs should not be ordered despite the company being under receivership and indebted to other creditors.

Outcome

Application for security for costs refused

Facts

The applicants, Development Finance Company of Uganda Ltd and others, were appointed as receivers of N.G. General Ltd in October 1996 following failure to repay a loan of US$182,000 plus interest of US$54,403.99. The respondent challenged the appointment in Civil Suit No. 950/96, resulting in a consent judgment on 6 November 1996 that allowed the respondent to operate its ginnery while making monthly repayments. Disputes arose in implementing the consent judgment, leading to numerous applications and suits. The applicants sought security for costs totaling not less than Shs. 90,000,000, arguing that the respondent was under receivership, indebted to other entities including the Non-performing Assets and Recovery Trust, had all its assets pledged, and had engaged the applicants in costly litigation. The respondent's affidavit evidence stated that the ginnery in the hands of the receivers was worth over one billion shillings.

Issues

  1. Whether the respondent company should be ordered to furnish security for costs on the grounds that it was under receivership and indebted to other entities.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Civil Procedure — Security for Costs — Company Under Receivership — Receivers Holding Sufficient Assets
Where receivers appointed over a company hold assets of sufficient value to satisfy any costs order that may be made, the court will not order the company to furnish security for costs, notwithstanding that the company is under receivership and indebted to creditors.
Civil Procedure — Security for Costs — Grounds for Application — Sufficiency
The fact that a respondent company is under receivership and indebted to other entities is not in itself sufficient ground for ordering security for costs where the receivers possess property from which costs can be recovered.

Legislation cited (3)

Full judgment

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Development Finance Company of Uganda Ltd and Ors v N.G. General Ltd (High Court Miscellaneous Application No. 1527 of 1999) [2000] UGCommC 3 (6 March 2000)
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.