Wakilii

Junaco (T) Limited and 2 Others v DFCU Bank Limited (Miscellaneous Application 27 of 2023)

High Court · [2023] UGCOMMC 37 · 2023 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for stay of execution of partial judgment pending appeal arising from summary suit for debt recovery
Decision
Application for stay of execution dismissed; applicants have filed notice of appeal but stay refused pending determination of the main appeal

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the application for stay of execution pending appeal. The applicants failed to satisfy the majority of the requirements under Order 43 rule 4(3) of the Civil Procedure Rules. They did not demonstrate that the appeal had a reasonable likelihood of success, failed to provide security for due performance of the decree for UGX 5,478,421,071, and did not establish that they would suffer substantial loss beyond the ordinary consequences faced by every judgment debtor. Satisfaction of a money decree does not ordinarily render an appeal nugatory where the respondent is not impecunious and restitution remains available.

Outcome

Application for stay of execution dismissed; applicants have filed notice of appeal but stay refused pending determination of the main appeal

Facts

The respondent bank sued the applicants for recovery of UGX 12,817,499,272 arising from three credit facilities. The court granted partial judgment for UGX 5,478,421,071 being the principal amount agreed by both parties at a meeting on 24 August 2022, while allowing the applicants to defend the residue of the claim. The applicants filed a notice of appeal. The respondent subsequently applied for a garnishee order on 22 December 2022 and an application for attachment of debt on 3 January 2023. The applicants then filed this application on 10 January 2023 seeking to stay execution of the partial judgment pending determination of their appeal, arguing that execution would render the appeal nugatory and that they dispute the quantum of the debt. They did not furnish security for the decretal sum.

Issues

  1. Whether a stay of execution should be granted pending appeal where the applicant challenges the quantum of a partial judgment for debt recovery.
  2. Whether the applicants satisfied the requirements under Order 43 rule 4(3) of the Civil Procedure Rules for a stay of execution pending appeal.
  3. Whether the appeal has a likelihood of success.
  4. Whether the appeal would be rendered nugatory if a stay is not granted.
  5. Whether there is an imminent threat of execution of the decree.
  6. Whether the applicants would suffer substantial loss if execution proceeds.
  7. Whether the applicants furnished security for due performance of the decree.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Civil Procedure — Stay of Execution Pending Appeal — Requirements under Order 43 rule 4(3)
An applicant seeking a stay of execution pending appeal must satisfy several cumulative requirements: a notice of appeal must have been filed; the application must be made without unreasonable delay; the appeal must not be frivolous and must have a likelihood of success; the appeal would be rendered nugatory if a stay is not granted; there is a serious or imminent threat of execution; substantial loss may result unless the stay is granted; and the applicant must furnish security for due performance of the decree.
Civil Procedure — Stay of Execution — Likelihood of Success on Appeal
To satisfy the requirement that an appeal has a likelihood of success, the applicant must demonstrate that there is a realistic chance of success, not merely a remote possibility. There must be a sound, rational basis founded on the facts and law justifying the conclusion that the appellate court will differ from the trial court. Where an applicant fails to provide a draft memorandum of appeal and only adverts to arguments during submissions, the court cannot assess whether there is an arguable case on appeal.
Civil Procedure — Stay of Execution — Appeal Rendered Nugatory — Money Decrees
Satisfaction of a money decree does not ordinarily pose the danger of rendering a pending appeal nugatory where the respondent is not impecunious, as the remedy of restitution is available to the applicant in the event the appeal is allowed. The presumption is that payment made to the respondent in execution of the decree will be reversible in the event of the applicant succeeding on appeal.
Civil Procedure — Stay of Execution — Substantial Loss
Substantial loss does not mean the ordinary loss to which every judgment debtor is necessarily subjected when deprived of property in consequence of losing a case. The applicant must establish factors showing that execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant. The loss must be of a nature which cannot be undone once inflicted. Execution of a money decree ordinarily does not amount to substantial loss where the respondent is not impecunious and restitution is available.
Civil Procedure — Stay of Execution — Security for Due Performance of Decree
In granting a stay of execution pending appeal, the court must balance the respondent's right to be protected from the risk that the appellant may not be able to satisfy the decree with the appellant's right to access the courts. While courts have been reluctant to order security for due performance of the decree as an absolute condition, in the case of a money decree, furnishing security for due performance denotes depositing the disputed amount. The court has a duty to balance the equities and ensure no undue hardship is caused to a decree holder due to stay of execution.
Civil Procedure — Stay of Execution — Imminent Threat of Execution
An order of stay will issue only if there is actual or presently threatened execution. There must be a direct and immediate danger of execution of the decree. Unequivocal evidence showing unconditional steps that convey gravity of purpose and imminent prospect of execution must be demonstrated. Steps demonstrating serious expression of intent include extracting the decree, presenting and having a bill of costs taxed, applying for issuance of a warrant of execution, and issuing a notice to show cause why execution should not issue. Filing of an application for a garnishee order and an application for attachment of debt constitutes evidence of imminent threat.

Legislation cited (6)

Cases cited (11)

  • Theodore Sekikubo and Four Others v Attorney General (Constitutional Application No. 3 of 2014)
  • China Henan International Corporation Group Company Limited v Kyabahwa (Court of Appeal Civil Application No. 101 of 2020)
  • Mabu Commodities Limited v Nakitende (High Court Miscellaneous Application No. 530 of 2020)
  • Andrew Kisawuzi v Dan Oundo Malingu (High Court Miscellaneous Application No. 467 of 2013)
  • Twinamasiko Onesmus v Agaba Aisa and Another (High Court Election Petition No. 702 of 2021)
  • Lawrence Musiitwa Kyazze v Eunice Businge (Supreme Court Civil Application No. 18 of 1990)
  • Kyambogo University v Prof. Isaiah Omolo Ndiege (Court of Appeal Miscellaneous Civil Application No. 341 of 2013)
  • Tropical Commodities Supplies Ltd and Others v International Credit Bank Ltd (in Liquidation) [2004] 2 EA 331
  • Alice Wambui Nganga v. John Ngure Kahoro and another, ELC Case No. 482 of 2017 (at Thika); [2021] eKLR
  • DFCU Bank Ltd v Dr. Ann Persis Nakate Lussejere (Court of Appeal Civil Appeal No. 29 of 2003)
  • Erinford Propertied Ltd. v. Cheshire County Council [1974] 412 All ER 448

Full judgment

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Junaco (T) Limited and 2 Others v DFCU Bank Limited (Miscellaneous Application 27 of 2023) [2023] UGCommC 37 (27 February 2023)
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.