Wakilii

Solomon Champlain Lui and Another v Stanbic Bank (U) Limited and Another (Civil Miscellaneous Application 587 of 2021)

High Court · [2021] UGCOMMC 174 · 2021 Application Partly Allowed 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
Stay of execution granted subject to deposit of security; if security not deposited within thirty days, the stay lapses automatically

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court granted a conditional stay of execution pending appeal. The applicants satisfied most requirements for a stay: they filed a timely notice and memorandum of appeal, the appeal was not frivolous, there was imminent threat of execution, and eviction from their matrimonial home risked rendering the appeal nugatory. However, the court found that granting an unconditional stay would inflict greater hardship on the respondents than it would avoid. The stay was therefore conditioned on the applicants depositing one quarter of the decretal sum (US$220,888) with the first respondent within thirty days.

Outcome

Stay of execution granted subject to deposit of security; if security not deposited within thirty days, the stay lapses automatically

Facts

The applicants jointly obtained two loan facilities from the first respondent in 2012 and 2013 for purchasing and developing land at Munyonyo, Kampala, secured by mortgage. Upon default, the first respondent foreclosed and sold the mortgaged property to the second respondent. The applicants sued, challenging the foreclosure and sale. On 16 April 2021, the trial court found the mortgages valid and the sale lawful, but ordered the first respondent to pay the applicants the difference between forced sale value and actual sale price (UGX 621,600,000). Judgment was entered on the counterclaim in favour of the first respondent for US$883,551.14, less the amount decreed to the applicants. The court granted leave to evict the applicants from the property and directed them to vacate within fourteen days. The applicants filed a notice of appeal on 19 April 2021 and a memorandum of appeal on 19 May 2021, raising sixteen grounds. They then applied for stay of execution, arguing the property was their matrimonial home and eviction would render the appeal nugatory.

Issues

  1. Whether the applicants have satisfied the legal requirements for the grant of an order of stay of execution pending appeal.
  2. Whether the appeal has a likelihood of success and is not frivolous.
  3. Whether the appeal would be rendered nugatory if the stay is not granted.
  4. Whether the application has been made without unreasonable delay.
  5. Whether there is a serious or imminent threat of execution of the decree.
  6. Whether substantial loss may result to the applicants unless the stay of execution is granted.
  7. Whether refusal to grant the stay would inflict more hardship than it would avoid.
  8. Whether the applicants have given security for due performance of the decree.

Orders

  • Application for stay of execution allowed, conditioned on the applicants depositing US$220,888 with the 1st respondent within thirty (30) days of this order.
  • If the applicants fail to deposit the said sum within thirty days, the order shall automatically lapse.
  • Costs of the application shall abide the outcome of the appeal.

Rules and key headnotes

Civil Procedure — Stay of Execution — Requirements for Grant
An application for stay of execution pending appeal must satisfy several requirements: a notice of appeal must have been filed; the applicant must provide proof that substantial loss may result unless the stay is granted; the application must be made without unreasonable delay; and the applicant must give security for due performance of the decree as may ultimately be binding upon him.
Civil Procedure — Stay of Execution — Additional Considerations
In determining whether to grant a stay of execution, the court must consider whether there is serious or imminent threat of execution of the decree; whether the appeal is not frivolous and has a likelihood of success; and whether refusal to grant the stay would inflict more hardship than it would avoid.
Civil Procedure — Stay of Execution — Frivolous Appeals
An appeal will be considered frivolous if prima facie the grounds intended to be raised are without any reasonable basis in law or equity and cannot be supported by a good faith argument. The court must be satisfied that the prospects of the appeal succeeding are not remote but that there is a realistic chance of succeeding, with a sound, rational basis founded on the facts and the law justifying the conclusion that the appellate court will differ from the trial court.
Civil Procedure — Stay of Execution — Nugatory Appeals and Matrimonial Homes
An appeal may be rendered nugatory if what is sought to be stayed, if allowed to happen, will not be reversible or if damages will not reasonably compensate the party aggrieved. Where the decree affects a matrimonial home, there is a real danger of not being able to recover possession once the occupants are evicted, and courts afford special treatment to matrimonial homes on equitable grounds as they represent the largest and most significant asset for many couples and are places of great emotional and personal significance.
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 direct and immediate danger of execution of the decree, demonstrated by unequivocal evidence showing unconditional steps that convey a gravity of purpose and imminent prospect of execution, 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. Inviting a judgment debtor to a pre-taxation meeting for consideration of a draft bill of costs constitutes a serious expression of intent to enforce the decree.
Civil Procedure — Stay of Execution — Undue Hardship and Matrimonial Homes
To merit a stay of execution of a decree involving a matrimonial home, the applicant must satisfy the court that eviction will occasion undue hardship, meaning significant difficulty, expense or disruption that is excessive or disproportionate in all the circumstances. The court will consider factors including the nature of the transaction that exposed the spouses to eviction, the size of the family, the period of occupation, availability of alternative accommodation, unique qualities of the home, safety or health issues, and whether loss of accommodation will substantially affect the applicant's viability as a cohesive family. Where exposure to eviction arises from a mortgage over the property, the equitable basis for staying eviction upon default is at its weakest because a property owner who mortgages property has advance notice that it may be sold off in the event of default.
Civil Procedure — Stay of Execution — Security for Due Performance
Courts have been reluctant to order security for due performance of the decree as an absolute requirement, as insistence on security for the entire decretal amount is likely to stifle appeals. The court may in its discretion direct deposit of a part of the decretal sum so that the decree holder may withdraw the same without prejudice and subject to the result of the appeal. Such direction for deposit of part of the decretal sum is not for the purpose of furnishing security for due performance of the decree but an equitable measure ensuring part satisfaction of the decree without prejudice to the parties and subject to the result of the appeal as a condition for stay of execution.

Legislation cited (7)

Cases cited (6)

  • 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
  • Erinford Propertied Ltd v Cheshire County Council [1974] 412 All ER 448
  • DFCU Bank Ltd v Dr. Ann Persis Nakate Lussejere (Court of Appeal Civil Appeal No. 29 of 2003)

Full judgment

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

Solomon Champlain Lui and Another v Stanbic Bank (U) Limited and Another (Civil Miscellaneous Application 587 of 2021) [2021] UGCommC 174 (24 August 2021)
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.