Wakilii

Tropical Commodities Suppliers Ltd & Ors v International Credit Bank Ltd(in liquidation) (Misc.App.No. 379 of 2003)

High Court · [2003] UGHC 80 · 2003 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for stay of execution of consent judgment pending appeal to the Court of Appeal
Decision
Stay of execution granted conditional on payment of security for costs within specified timeframe

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court has inherent jurisdiction to stay execution of its own orders pending appeal to higher courts. While Order 39 Rule 4(3) of the Civil Procedure Rules technically applies only to appeals to the High Court (not from it), Supreme Court authority requires the three criteria in that rule to be applied as rules of practice. The security required is security for costs only, not the entire decretal amount. Stay granted conditional on applicants paying 10% of the decretal amount as security for costs.

Outcome

Stay of execution granted conditional on payment of security for costs within specified timeframe

Facts

Applicants entered a consent judgment for UGX 200,000,000 against them and paid UGX 72,000,000. They subsequently applied to review the consent judgment on grounds that their lawyer had no instructions to consent. The High Court refused the review application on 21 May 2003. Applicants filed an appeal to the Court of Appeal against that refusal and then applied for a stay of execution of the consent judgment. The Registrar granted an interim stay on 22 July 2003 pending determination of this application. The respondent bank is in liquidation.

Issues

  1. Whether the High Court has jurisdiction to grant a stay of execution of its own judgment pending appeal to the Court of Appeal.
  2. Whether Order 39 Rule 4(3) of the Civil Procedure Rules applies to applications for stay of execution pending appeals from the High Court to the Court of Appeal.
  3. Whether the applicants satisfied the conditions for granting a stay of execution.
  4. What quantum of security is required under Order 39 Rule 4(3): security for costs only or security for the entire decretal amount.

Orders

  • Application granted.
  • Applicants to pay into Court a total sum of UGX 20,000,000 as security for the costs of the appeal.
  • Security to be paid not later than 14 December 2003.
  • Interim stay of execution granted by the Registrar to continue in force until that date.

Rules and key headnotes

Civil Procedure — Stay of Execution — Statutory Lacuna — Applicability of Order 39 Rule 4(3) to Appeals from the High Court
Order 39 of the Civil Procedure Rules applies only to appeals to the High Court from lower courts, not to appeals from the High Court to higher courts. This creates a statutory lacuna, recognised by the Supreme Court in Lawrence Musiitwa Kyazze v Eunice Busingye. However, the High Court possesses inherent jurisdiction under section 98 of the Civil Procedure Act to stay execution of its own orders.
Civil Procedure — Stay of Execution — Practice and Procedure — Application of Order 39 Rule 4(3) Criteria as Rules of Practice
Notwithstanding the statutory lacuna, Supreme Court authority in Kampala Bottlers Ltd v Uganda Bottlers Ltd establishes that applications for stay of execution pending appeals from the High Court are governed by Order 39 Rule 4(3) as rules of practice. Applicants must satisfy three conditions: (a) substantial loss may result unless the stay is made; (b) the application has been made without unreasonable delay; and (c) security has been given.
Civil Procedure — Stay of Execution — Substantial Loss — Judgment Creditor in Liquidation
Substantial loss does not represent any particular amount or size and cannot be quantified by mathematical formula. It is a qualitative concept referring to any loss, great or small, that is of real worth or value, as distinguished from a loss that is nominal. Where the judgment creditor is in liquidation, applicants are likely to suffer substantial loss if execution proceeds, as recovery from the liquidation would be difficult if the appeal succeeds.
Civil Procedure — Stay of Execution — Security for Costs — Quantum Required Under Order 39 Rule 4(3)
Despite the plain language of Order 39 Rule 4(3)(c) requiring security for due performance of the decree, Supreme Court authority in Kampala Bottlers Ltd v Uganda Bottlers Ltd establishes that only security for costs is required, not security for the entire decretal amount. Insistence on security for the entire decretal amount would stifle appeals, especially in commercial matters involving colossal sums. A figure of approximately 10% of the decretal amount is adequate as security for costs.
Statutory Interpretation — Conflicting Supreme Court Precedents — Reconciliation of Lawrence Kyazze and Kampala Bottlers Decisions
A conflict exists between the Supreme Court decision in Lawrence Musiitwa Kyazze v Eunice Busingye (holding that Order 39 does not apply to appeals from the High Court) and Kampala Bottlers Ltd v Uganda Bottlers Ltd (holding that the matter is clearly governed by Order 39 Rule 4(3)). The position requires restatement by the Supreme Court or amendment of the Civil Procedure Rules by the Rules Committee to resolve the uncertainty in the law.

Legislation cited (9)

  • Civil Procedure Act Cap.71 s.98
  • Civil Procedure Act Cap.71 s.68
  • Civil Procedure Act Cap.71 s.74
  • Civil Procedure Act Cap.71 s.77
  • Civil Procedure Rules O.39 r.4(3)
  • Civil Procedure Rules O.39 r.1(1)
  • Civil Procedure Rules O.39 r.9
  • Civil Procedure Rules O.40
  • Court of Appeal Rules r.5(2)(b)

Cases cited (8)

  • Kampala Bottlers Ltd v Uganda Bottlers Ltd (Supreme Court Civil Application No. 25 of 1995)
  • DFCU Bank Ltd v Dr Ann Persis Nakate Lusejjere (Civil Application No. 29 of 2003)
  • Lawrence Musiitwa Kyazze v Eunice Busingye (Supreme Court Civil Application No. 18 of 1990)
  • Ujjagar Singh v Runda Coffee Estates Ltd [1966] EA 263
  • Mugenyi & Company Advocates v National Insurance Corporation (Supreme Court Civil Application No. 13 of 1984)
  • Joanita Kaggwa v Olive Amelia Kawalya-Kaggwa (Administration Cause No. 21 of 1972) [1972] L/LR 129
  • Tahar Fourati Hotels Ltd v Nile Hotel (Int'l) Ltd (Misc. Application No. 614 of 2003)
  • Wilson v Church (1879) 12 Ch.D 454

Full judgment

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Tropical Commodities Suppliers Ltd & Ors v International Credit Bank Ltd(in liquidation) (Misc.App.No. 379 of 2003) [2003] UGHC 80 (13 November 2003)
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