Wakilii

Exim Bank (Uganda) Ltd v Westwinds Trading C.O Matco Ltd (Misc. Application No. 251 of 2025)

High Court · [2025] UGCOMMC 182 · 2025 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for security for costs arising from Civil Suit No. 1250 of 2024
Decision
Application for security for costs dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed an application for security for costs brought by a bank against a foreign plaintiff. The court held that the applicant failed to establish that the respondent's suit was frivolous or vexatious, as a prima facie case existed regarding whether a banker-customer relationship arose from the respondent's representative being appointed joint signatory to an account. The court further held that poverty of a plaintiff is not by itself grounds for security for costs, and the applicant had not led evidence of the respondent's impecuniosity. Mere lack of knowledge of assets cannot amount to evidence of inability to pay costs.

Outcome

Application for security for costs dismissed

Facts

The respondent filed Civil Suit No. 1250 of 2024 against the applicant bank alleging breach of fiduciary duty and illegal transfer of USD 95,841 to Wamimbi & Co. Advocates from Account No. 0050012771. The respondent had entered into a sales purchase agreement with MarkAfrica (U) Ltd for supply of soya beans. On the bank's advice, MarkAfrica opened an additional dollar account with the bank to receive the contract sum. The respondent's agent in Uganda was appointed joint signatory to the account together with MarkAfrica's director. The respondent transferred USD 238,000 to the account. In May 2022, USD 95,841 was transferred to Wamimbi & Co. Advocates pursuant to garnishee proceedings in Civil Suit No. 0267 of 2022. The respondent alleged the transfer occurred on 11 May 2022 before the garnishee order absolute was issued on 12 May 2022. The bank applied for security for costs on grounds that the respondent had no known assets in Uganda and no banker-customer relationship existed.

Issues

  1. Whether there are sufficient grounds for the grant of an application for security for costs to the Applicant/Defendant against the Respondent/Plaintiff?
  2. Whether there are any remedies available to the parties?

Orders

  • Application dismissed.
  • Costs of this application shall be in the cause.

Rules and key headnotes

Security for Costs — Discretionary Power — Considerations for Grant
The power to grant an application for security for costs under Order 26 rule 1 of the Civil Procedure Rules is discretionary and must be exercised judiciously after the court is satisfied that it deems fit to do so. The main considerations are whether the applicant is being put to undue expenses by defending a frivolous and vexatious suit, whether the applicant has a good defence to the suit, whether the applicant is likely to succeed, and whether the respondent is unable to pay the costs.
Security for Costs — Frivolous and Vexatious Suit — Prima Facie Case
A suit is not frivolous and vexatious where a prima facie case has been established on the pleadings. Where the question is whether a contractual relationship existed that would impose a duty of care, and the pleadings of both parties establish a prima facie case, the suit cannot be dismissed as frivolous at the interlocutory stage.
Security for Costs — Impecuniosity — Burden of Proof
The poverty of a plaintiff is not by itself a ground to warrant an order for security for costs. The applicant must lead evidence of the respondent's impecuniosity. Lack of knowledge on the part of the applicant cannot amount to evidence of the respondent's inability to pay costs. A claim of impecuniosity without supporting evidence is speculative and insufficient.
Banker-Customer Relationship — Joint Signatory — Duty of Care
The question whether a banker-customer relationship arises where a person is appointed joint signatory to an account held by another party, with powers to jointly operate the account and authorize transactions, is a question that goes to the merits of the case and must be reserved for trial at the interlocutory stage.

Legislation cited (5)

Cases cited (10)

  • Speke Hotel 1996 Limited (T/A Speke Hotel Apartments) v Sheila Nadege (Misc. Application No. 456 of 2022)
  • John Bosco Muwonge & Another v Goldsmith Peter (Misc. Application No. 3018 of 2023)
  • Anthony Namboro & Another v Henry Kaala [1975] HCB 315
  • Iwa Kizito (Administrator of the Estate of the Late Felix Charles Maku) v Equity Bank & Another (Civil Suit No. 36 of 2013)
  • Standard Chartered Bank Kenya Limited v Intercom Services Limited & 4 others [2004] KECA 163 KLR
  • G.M. Combined (U) Ltd v A.K. Detergents (U) Ltd (SCCA No. 34 of 1995)
  • Noble Builders (U) Ltd & Another v Jabal Singh Sandhu (SCCA No. 15 of 2002)
  • De Bry v Fitzgerald and Another [1990] 1 All ER 560
  • R v Ajit Singh S/o Vir Singh [1957] EA 822
  • Bank of Uganda v Joseph Nsereko & 2 Others (Civil Application No. 7 of 2002)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Exim Bank (Uganda) Ltd v Westwinds Trading C.O Matco Ltd (Misc. Application No. 251 of 2025) [2025] UGCommC 182 (24 June 2025)
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.