Wakilii

Reliable Cargo Centre Limited & 2 Others v Statewide Insurance Company Limited (Miscellaneous Application 1021 of 2024)

High Court · [2024] UGCOMMC 354 · 2024 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for stay of execution of decree pending appeal to the Court of Appeal
Decision
Application dismissed with costs to the respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court Commercial Division dismissed an application for stay of execution pending appeal. While the court overruled a preliminary objection regarding the incorrect citation of Order 22 rule 23 instead of Order 43 rule 4(2) of the Civil Procedure Rules, it found that the applicants failed to satisfy the essential requirements for granting a stay. The court held that there was no imminent threat of execution, no substantial loss demonstrated beyond ordinary loss to judgment debtors, and no security for costs deposited.

Outcome

Application dismissed with costs to the respondent

Facts

The respondent filed Civil Suit No. 678 of 2014 against the applicants. Judgment was entered against the applicants on 24 August 2022. The applicants filed a notice of appeal to the Court of Appeal (Civil Appeal No. 90 of 2024) against the entire decision. The respondent filed a bill of costs on 9 January 2024, which was taxed at UGX 9,000,000 on 11 July 2024 with consent of the parties. The applicants filed this application on 4 June 2024 seeking to stay execution of the decree pending determination of their appeal.

Issues

  1. Whether the application was brought under the correct legal provision
  2. Whether the execution of the decree in Civil Suit No. 678 of 2014 should be stayed pending determination of the applicants' appeal to the Court of Appeal

Orders

  • Preliminary objection overruled.
  • Application for stay of execution dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Civil Procedure — Stay of Execution — Proper Legal Provision
Order 22 rule 23 of the Civil Procedure Rules applies only where a decree has been transferred from the court that passed it to another court for execution. Where no such transfer has occurred, the applicable provision for stay of execution pending appeal is Order 43 rule 4(2) of the Civil Procedure Rules.
Civil Procedure — Preliminary Objections — Substantive Justice over Technicalities
Where an application is filed under the wrong legal provision, a court may exercise its inherent powers under sections 33 and 98 of the Judicature Act and the constitutional mandate to administer substantive justice without undue regard to technicalities by determining the application under the correct law rather than dismissing it on procedural grounds.
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, demonstrated by unequivocal evidence of unconditional steps such as extracting the decree, presenting and having a bill of costs taxed, applying for issuance of a warrant of execution, or issuing a notice to show cause why execution should not issue. The mere taxation of a bill of costs without evidence of further steps towards execution does not constitute an imminent threat.
Civil Procedure — Stay of Execution — Substantial Loss
For purposes of stay of execution, substantial loss must mean something in addition to and different from the ordinary loss to which every judgment debtor is necessarily subjected when losing a case and being deprived of property in consequence. The applicant must specify the kind of loss with details and satisfy the court's conscience that such loss will really ensue. Execution of a money decree is ordinarily not stayed since satisfaction of a money decree does not amount to substantial loss or irreparable injury where the respondent is not impecunious and the remedy of restitution is available if the appeal is allowed.
Civil Procedure — Stay of Execution — Security for Costs
Security for costs or due performance of the decree operates as an insurance cover meant to indemnify the judgment creditor in the event the appeal fails without recourse to vigorous processes of recovering such costs. Courts have been reluctant to order security for the entire decretal amount as this is likely to stifle appeals, and have instead been keen to order security for costs. Payment of security for costs is intended to operate as a shield against the filing of frivolous and vexatious appeals which may never succeed yet have an effect in escalating trial costs.
Civil Procedure — Stay of Execution — Cumulative Conditions
All the conditions laid down by Order 43 rule 4(3) of the Civil Procedure Rules must be fulfilled before execution can be stayed. These conditions are: that substantial loss may result to the party applying for stay unless the order is made; that the application has been made without unreasonable delay; and that security has been given by the applicant for due performance of the decree or order as may ultimately be binding upon him or her. The rationale for these conditions is to maintain the status quo, to ensure the purpose of the application is not to defeat justice by delaying tactics, and to prove that the judgment debtor is serious with the application.

Legislation cited (11)

Cases cited (12)

  • Lawrence Musiitsa v Itobu Margret (HCMA No. 0160 of 2022)
  • Ntega Mayambala v Christopher Mwanje (HCMA 721 of 1991)
  • Theodore Ssekikubo and Others v Attorney General and Others (Constitutional Application No. 03 of 2014)
  • Kyanbogo University v Prof Isiah Omolo Ndiege (Civil Appeal No. 341 of 2013)
  • Formula Feeds Ltd v KCB Bank Ltd (HCMA No. 1647 of 2022)
  • Baguma Paul T/A Panache Associates v Eng Karuma Kagyina (HCMA No. 460 of 2020)
  • Orient Bank Ltd v Zaabwe and Others (HCMA No. 19 of 2006)
  • Tanzania Cotton Marketing Board v Cogecot Cotton Co SA [1995-1998] 1 EA 312
  • Bansidhar v Pribhu Dayal AIR 41 1954
  • Kisaalu Joseph and 10 Others v Nakintu May and Another (Miscellaneous Application No. 105 of 2020)
  • Shem Mpanga Mukasa and Another v Kizza Clesey Barya (Miscellaneous Application No. 479 of 2021)
  • Wandera Micheal v Baguma Samalie (Miscellaneous Application No. 36 of 2021)

Full judgment

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

Reliable Cargo Centre Limited & 2 Others v Statewide Insurance Company Limited (Miscellaneous Application 1021 of 2024) [2024] UGCommC 354 (4 November 2024)
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.