Wakilii

Diamond Trust Properties v Yoka Rubber Industries Limited (Civil Application 6 of 2013)

Supreme Court · [2015] UGSC 128 · 2015 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application before the Supreme Court for an order that the respondent furnish security for the costs of a pending second appeal and for past costs of the lower courts
Decision
Application for security for costs dismissed with costs to the respondent

Observed later treatment

Cited — treatment unverified cited in 1 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 1 time with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

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 Supreme Court (Arach-Amoko, JSC) dismissed the applicant's application for further and past security for costs against the respondent company. Although Rule 101(3) of the Supreme Court Rules and section 404 of the Companies Act empower the court to order security against a company plaintiff, the power is discretionary and the burden lies on the applicant. The court held that non-payment alone was insufficient (there being a consent not to execute), the respondent in fact had assets held by the applicant, the pending appeal raised pertinent legal issues and was not frivolous, and the application was brought after an inordinate three-year delay without proof of non-prejudice. The applicant failed to make out a case.

Outcome

Application for security for costs dismissed with costs to the respondent

Facts

The applicant and respondent were landlord and tenant respectively on premises at Luzira, where the respondent re-treaded tyres. In 1999 the applicant re-entered for non-payment of rent arrears and distressed the respondent's plant, machinery and a motor vehicle, which it stored. The respondent challenged the distress in the High Court, which found for the respondent and awarded general damages. The applicant successfully appealed to the Court of Appeal, which set aside the High Court judgment with costs in both lower courts to the applicant. The respondent then appealed to the Supreme Court, an appeal pending hearing. The applicant was awarded shs. 11,824,000 costs in the High Court and shs. 29,277,000 in the Court of Appeal, which remained unpaid. The applicant applied for further and past security for costs, asserting the respondent had no assets, was not trading, and that its appeal had no prospect of success. The parties had earlier consented in 2010 to stay execution of the Court of Appeal decree.

Issues

  1. Whether the applicant established sufficient grounds for an order that the respondent company furnish further security for the costs of the pending second appeal and past security for the costs of the lower courts.
  2. Whether the respondent's alleged non-payment of past costs, impecuniosity, the prospects of the respondent's appeal, and delay in bringing the application justified an order for security for costs.

Orders

  • Application dismissed.
  • Costs of the application awarded to the respondent.

Rules and key headnotes

Civil Procedure — Security for Costs — Discretionary Nature of the Power
The power to order security for costs under Rule 101(3) of the Supreme Court Rules and section 404 of the Companies Act is discretionary and, like all judicial discretion, must be exercised judicially in all the circumstances of the case; the burden lies on the applicant to show cause why the relief should be granted.
Civil Procedure — Security for Costs — Non-payment of Prior Costs
Mere non-payment of costs already ordered in the courts below is not by itself sufficient to ground an order for further security for costs; the applicant must furnish evidence of inability or refusal to pay, such as a failed execution or an admission, and a consent not to execute negates any inference of failure or refusal to pay.
Civil Procedure — Security for Costs — Poverty and Impecuniosity
Mere poverty or impecuniosity of a litigant is not by itself a ground for ordering security for costs, for otherwise poor litigants would be deterred from enforcing their legitimate rights through the legal process.
Civil Procedure — Security for Costs — Prospects of Success of the Appeal
A determining consideration in an application for security for costs is whether the appeal has a reasonable prospect of success; where the appeal raises pertinent legal issues it cannot be characterised as frivolous and the application will be refused.
Civil Procedure — Security for Costs — Delay in Making the Application
Delay in bringing an application for security for costs is a material consideration; an application brought three years after the notice of appeal constitutes inordinate delay, and the onus is on the applicant to show that the delay has not been prejudicial to the respondent.
Company Law — Security for Costs Against a Corporate Plaintiff — Companies Act s.404
Where the plaintiff is a limited liability company, section 404 of the Companies Act empowers the court, if credible testimony shows reason to believe the company will be unable to pay the defendant's costs if successful, to require sufficient security; the power is discretionary and not mandatory.

Legislation cited (6)

Cases cited (11)

  • Noble Builders (U) Ltd & Anor v Jabal Singh Sandhu (Civil Appeal No. 15 of 2002)
  • Namboro v Kaala [1975] HCB
  • G.M Combined v A.K Detergents (U) Ltd (Civil Appeal No. 34 of 1995)
  • Kakooza Jonathan & Anor v Kasaala Cooperative Society Ltd (Civil Application No. 13 of 2011)
  • Lali Gangji v Nathoo Vassanjee [1960] EA 315
  • Noormohammed Abdulla v R. J. Patel and Another [1962] EA 447
  • Lindsay Parkinson Ltd -Vs- Triplan Ltd (1973), 1 QB. 609
  • Goodman Agencies Ltd v Hassa Agencies (K) Ltd (Civil Application No. 1 of 2011)
  • De Bry V Fitzgerald & Anor (1990)1 ALL ER 560
  • Uganda Commercial Bank v Multi Constructors Ltd (Civil Appeal No. 29 of 1994)
  • Premchand V Quarry Services Ltd [1971] EA

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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Diamond Trust Properties v Yoka Rubber Industries Limited (Civil Application 6 of 2013) [2015] UGSC 128 (11 September 2015)
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.