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Uganda Revenue Authority v Roche Transport & Logistics Uganda Limited (Miscellaneous Application 2926 of 2023)

High Court · [2024] UGCOMMC 60 · 2024 Application Granted (Conditional) AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for stay of execution of judgment in Civil Appeal No. 20 of 2021 pending determination of appeal to Court of Appeal (Civil Appeal 798 of 2023)
Decision
Stay of execution granted conditional on provision of security of UGX 739,970,131.74 within 30 days; stay lapses if security not provided

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court granted a conditional stay of execution against enforcement of the judgment in Civil Appeal No. 20 of 2021 pending determination of the appeal to the Court of Appeal. The court held that a threat of execution existed based on the respondent's letters seeking compliance with the judgment, that the appeal raised triable issues on retrospective application of Section 88(5) of the Income Tax Act, but that the balance of convenience favoured the respondent. Stay was granted conditional on the applicant providing security by paying 70% of the sum already collected (UGX 739,970,131.74) within 30 days, failing which the stay would lapse.

Outcome

Stay of execution granted conditional on provision of security of UGX 739,970,131.74 within 30 days; stay lapses if security not provided

Facts

URA conducted a tax audit of Roche Transport following the latter's application for a tax refund. URA raised additional withholding tax assessments totalling UGX 4,643,671,219 for the periods 2016-2018, asserting that Roche was obliged to withhold tax on payments made to its sub-contractor Ultra Eureka Farm Limited. Roche objected and commenced TAT Application No. 94 of 2020 seeking interpretation of Section 88(5) of the Income Tax Act. The TAT found for URA. Roche appealed to the High Court (Civil Appeal 20 of 2021), which on 3 April 2023 overturned the TAT decision and ordered refund of the assessed sum. URA collected UGX 1,510,143,126 via agency notice before the High Court judgment. URA appealed to the Court of Appeal (Civil Appeal 798 of 2023) and filed this application for stay of execution, alleging that Roche was seeking to enforce the High Court judgment through letters to the Ministry of Finance.

Issues

  1. Whether the applicant satisfied the conditions for a stay of execution pending appeal.
  2. Whether there was a threat of execution by the respondent.
  3. Whether the applicant demonstrated sufficient grounds for grant of stay (likelihood of success, irreparable harm, balance of convenience).
  4. What quantum of security, if any, should be provided as a condition for stay of execution.

Orders

  • The Applicant is granted a stay of execution against the enforcement of judgment and orders in HCCA 20/2021 conditional on compliance with the condition in (b) below.
  • The Applicant shall make payment of 70% of the sum collected, to wit UGX 1,057,100,188.2 which for the avoidance of doubt is UGX 739,970,131.74 as security for the performance of the judgment within sixty (30) days from the date of this ruling.
  • In the event that the Applicant does not comply with the condition in (b) above within the stipulated timeframe, the stay of execution granted shall immediately lapse.
  • Costs of this application shall abide the outcome of the Applicant's appeal.

Rules and key headnotes

Stay of Execution — Applicable Legal Framework — High Court Stay Pending Appeal to Court of Appeal
Where an appeal is pending from the High Court to the Court of Appeal, the proper legal basis for an application for stay of execution is Order 22 Rule 26 of the Civil Procedure Rules, not Order 43 Rule 4 which is confined to appeals to the High Court. Rule 42 of the Court of Appeal Rules requires the application for stay to be made first in the High Court. The considerations under Order 22 Rule 26 are similar to those under Order 43 Rule 4: pendency of an appeal, existence of a threat of execution, and sufficient grounds for the relief sought.
Stay of Execution — Pendency of Appeal — Effect of Filing Notice of Appeal
Once a notice of appeal is filed in accordance with the Court of Appeal Rules, it can be said that there is an appeal pending for purposes of a stay of execution application. A memorandum of appeal need not have been filed and served for an appeal to be considered pending.
Stay of Execution — Threat of Execution — What Constitutes Sufficient Threat
A threat of execution exists where it is reasonably certain to place the applicant's interests in direct peril and is immediate and impending, not merely remote, uncertain, or contingent. Execution proceedings need not have been formally commenced or matured. It is sufficient if there is a real and reasonably held fear of execution arising from circumstances demonstrating a real and reasonable threat. Letters from a judgment creditor requiring compliance with a judgment to the judgment debtor's statutory supervisor can constitute evidence of a threat of execution.
Stay of Execution — Likelihood of Success on Appeal — Test for Triable Issues
To demonstrate likelihood of success on appeal, the applicant must show that the appeal reveals at least one matter warranting adjudication by the court. A triable issue is a material proposition of law or fact between parties that is capable of and warrants determination by court. Where a memorandum of appeal has not yet been filed, the applicant should annex a draft memorandum or particularise the proposed grounds of appeal in the affidavit in support.
Stay of Execution — Irreparable Harm — Monetary Judgments and Evidence of Inability to Repay
As a general rule, where execution is based on a claim for payment of money, a stay should not be granted except if the application is for interim stay, if the judgment creditor is unlikely to repay the judgment sum if they lose the appeal, or if there are exceptional circumstances warranting the grant of stay. An applicant asserting that a judgment creditor will be unable to repay must produce real evidence of such inability, such as volatility in the party's financial position, market control issues, evidence of previous unjustified refusal to pay creditors, or other serious doubts on the party's ability to pay. Mere assertion without supporting evidence is insufficient.
Stay of Execution — Security for Performance of Judgment — Purpose and Quantum
The purpose of security in stay of execution applications is to achieve a balance between the need to preserve the essence of the appeal and the need to give the respondent comfort that the judgment will be performed. The quantum of security should not discourage the appeal by creating a larger than necessary burden on the appellant, but should be a sizeable amount of the sum that the respondent is entitled to. The provision of security need not occur before determination of the stay application; rather, the court should determine the applicable amount and timeframe for provision, make the order conditional on compliance, and grant interim stay until the deadline for providing security.
Stay of Execution — Equality Between Government and Private Parties
At law, there is equality between the Government (including its agencies) and private persons, including private corporations. An application for stay of execution by a government agency will be assessed against the same threshold as that of a private person. There is no justification for special treatment of government or private persons except if there is a clear legal basis which meets the constitutional threshold.

Legislation cited (9)

Cases cited (32)

  • Lawrence Musitwa v Eunice Busingye (Supreme Court Civil Appeal No. 18 of 1990)
  • Tropical Commodities Supplies Ltd and Others v International Credit Bank Ltd (In Liquidation) (Miscellaneous Application No. 379 of 2003)
  • Transtrack Ltd v Damco Logistics (U) Ltd (Miscellaneous Application No. 608 of 2012)
  • DFCU Bank Ltd v Ann Persis Nakate Lussejjere (Miscellaneous Application No. 78 of 2003)
  • UMEME v Irene Nankabirwa (Miscellaneous Application No. 154 of 2021)
  • Peter Mulira v Mitchell Cotts (Miscellaneous Application No. 715 of 2009)
  • Rebecca Nabunya Iga v Senteza Kabali Bunya (Miscellaneous Application No. 948 of 2020)
  • Beeline Travel Care Limited & Anor v Finance Trust Bank (Miscellaneous Application No. 296 of 2023)
  • Donati Kananura v Tribet Rujugiro (Miscellaneous Application No. 1782 of 2022)
  • Uganda Debt Network v Edward Ronald Sekyewa (Miscellaneous Application No. 1657 of 2023)
  • Malinga Noah & Ors v Akol Henry (Court of Appeal Civil Appeal No. 203 of 2015)
  • Elizabeth Batabaire v Ngobi Siraj & Ors (Court of Appeal Civil Appeal No. 36 of 2017)
  • Formula Feeds Limited & Ors v KCB Bank (Miscellaneous Application No. 1647 of 2022)
  • Maria Odido v Barclays Bank (Miscellaneous Application No. 645 of 2008)
  • Children of Africa v Sarick Construction Limited (Miscellaneous Application No. 134 of 2016)
  • Ssalongo Kakumba Bonny v Nyombi Eric (Miscellaneous Application No. 761 of 2021)
  • Hajji Mohammed Katoto v Justus Kyabahwa (Miscellaneous Application No. 875 of 2023)
  • Geralldine Busingye Begumisa v EADB & Ors (Miscellaneous Application No. 1043 of 2023)
  • Proline Soccer Academy v Commissioner Land Registration (Miscellaneous Application No. 494 of 2018)
  • UMEME Limited v Jane Nankabirwa (Miscellaneous Application No. 154 of 2021)
  • Luwa Luwa Investment v URA (Miscellaneous Application No. 1336 of 2022)
  • Fuelex Uganda Limited v Attorney General (Constitutional Court Constitutional Petition No. 3 of 2009)
  • Moses Kasozi v Muhammad Batte & Ors (High Court Civil Appeal No. 24 of 2020)
  • GAPCO Uganda Ltd v Kaweesa & Anor (Miscellaneous Application No. 259 of 2013)
  • Vision Empire Ltd v Uganda Communications Commission (Miscellaneous Application No. 1141 of 2020)
  • Luwa Luwa Investments v Uganda Revenue Authority (Miscellaneous Application No. 1336 of 2022)
  • Stanbic Bank Limited v Kesacon Services Limited (Miscellaneous Application No. 724 of 2023)
  • Ropani International Limited & Ors v DFCU Bank Limited (Miscellaneous Application No. 1919 of 2023)
  • Attorney General v Osotraco Limited (Court of Appeal Civil Appeal No. 32 of 2002)
  • Christopher Martin Madrama v Attorney General (Supreme Court Civil Appeal No. 1 of 2016)
  • Beeline Travel Care (U) Ltd & Anor v Finance Trust Bank Uganda Limited (Miscellaneous Application No. 296 of 2023)
  • Ahairwe Dennis v Standard Chartered Bank (Miscellaneous Application No. 1851 of 2023)

Full judgment

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Uganda Revenue Authority v Roche Transport & Logistics Uganda Limited (Miscellaneous Application 2926 of 2023) [2024] UGCommC 60 (23 January 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.