Wakilii

Non -Performing Assets Recovery Trust v General Parts Uganda Limited (Civil Appeal 45 of 1998)

Court of Appeal · [1999] UGCA 45 · 1999 Reference Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Reference to the full Court of Appeal from the ruling of a single Judge ordering additional security for costs of appeal
Decision
Reference allowed; order of single Judge for additional security for costs set aside and application for additional security dismissed

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

On a reference from a single Judge, the Court of Appeal held that the burden of proving an appellant's inability to pay costs, and thus the necessity of additional security for costs of appeal, lies on the party seeking the order. Placement of a company under receivership for failure to pay its debenture holders is not, per se, evidence of impecuniosity, since mere failure to pay does not amount to inability to pay. Where security required by law has already been deposited, more stringent conditions apply before additional security may be ordered. The single Judge wrongly shifted the burden onto the appellant. The reference was allowed and the order for additional security set aside.

Outcome

Reference allowed; order of single Judge for additional security for costs set aside and application for additional security dismissed

Facts

General Parts (U) Ltd obtained a loan from Uganda Commercial Bank secured over certain properties. Upon default, the bank appointed receivers and managers over the mortgaged properties. General Parts sued in the High Court to stop the receivers' activities; the High Court held the receivers were properly appointed. General Parts appealed. It also sought a stay of execution; the High Court refused, and the Court of Appeal granted a stay on condition that statutory security for costs of Shs. 200,000/- was deposited, which was done. On the respondent's application, a single Judge of the Court of Appeal ordered General Parts to deposit an additional Shs. 40 million as security for costs before its appeal could be heard, on the basis of uncertainty as to its ability to pay costs and its placement under receivership. General Parts sought a reference of that order to the full Court.

Issues

  1. Whether the single Judge misdirected herself on the burden of proof by shifting to the appellant the onus of proving its ability to pay the costs of the appeal.
  2. Whether there was evidence from which the single Judge could justifiably order additional security for costs.

Orders

  • The application (reference) is allowed.
  • The order of the single Judge is set aside and substituted with an order dismissing the application for additional security for costs.
  • The respondent shall pay the appellant's costs of this reference.

Rules and key headnotes

Civil Procedure — Security for Costs of Appeal — Burden of Proof on Applicant
A party seeking an order for additional security for costs of an appeal bears the burden of proving that the appellant is unable to pay the costs of the appeal; that burden does not lie on the appellant.
Company Law — Receivership — Not Per Se Evidence of Inability to Pay Costs
The placement of a company under receivership for failure to pay its debenture holders is not, by itself, evidence that the company is impecunious or unable to pay the costs of an appeal, since mere failure to pay does not equate to inability to pay and may reflect unwillingness.
Civil Procedure — Additional Security for Costs — More Stringent Conditions Where Statutory Security Already Deposited
Where the security for costs required by law has already been deposited, the conditions for ordering additional security for costs of appeal are more stringent; a mere assertion that the deposited security is inadequate is no ground for ordering additional security.
Evidence — Burden of Proof — Onus on Party Asserting a Fact
Under section 101 of the Evidence Act, the burden lies on the party asserting a fact; where an applicant seeks additional security by alleging the appellant's inability to pay, he must prove that inability rather than requiring the appellant to disprove it.

Legislation cited (5)

Cases cited (3)

  • Non-Performing Assets Recovery Trust v General Industries (U) Ltd (Civil Application No. 25 of 1996)
  • Melchia Kironmi v Horace Building Materials Ltd [1953] E.A.C.A 651
  • G.B. Combined (U) Ltd v T.K. Delary (U) Ltd (Civil Appeal No. 43 of 1995)

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

Non -Performing Assets Recovery Trust v General Parts Uganda Limited (Civil Appeal 45 of 1998) [1999] UGCA 45 (4 March 1999)
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.