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Victoria Apartments Limited & 2 Others v Gaming East Africa & Entertainment Limited & 3 Others (Miscellaneous Application 521 of 2023)

High Court · [2023] UGCOMMC 185 · 2023 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Interlocutory application for attachment before judgment and security for claim arising from summary suit for recovery of rent arrears and loans
Decision
Conditional attachment order granted; security ordered; matter pending full hearing

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Court granted a conditional order of attachment before judgment where a defendant company resolved to dispose of all its assets before trial, but declined to attach a statutory security bond held by a regulatory authority under the Lotteries and Gaming Act 2016 s.40(2), as the applicants' claims for rent and loans did not fall within the statutory purposes for which the bond could be used. Court ordered defendants to furnish security of UGX 300,000,000 pending disposal of the main suit.

Outcome

Conditional attachment order granted; security ordered; matter pending full hearing

Facts

The applicants filed a summary suit seeking USD 73,500 in rent arrears and USD 44,000 plus UGX 140,000,000 in interest-free loans from the 1st and 2nd respondents. The 1st respondent's Board of Directors passed a resolution in February 2023 authorizing the sale and disposal of all the company's assets. The 1st respondent held a security bond of UGX 500,000,000 with the 3rd respondent (National Lotteries and Gaming Regulatory Board) pursuant to the Lotteries and Gaming Act 2016, which was provided by the 4th respondent bank and set to lapse on 31st December 2023. The 1st respondent disputed the debts and claimed that assets listed in the Board resolution had already been sold to third parties, though no documentary evidence was adduced. The applicants sought to attach the security bond and other assets before judgment to prevent frustration of their recovery.

Issues

  1. Whether the application discloses grounds for the issuance of an order of attachment before judgment.
  2. Whether the 1st and 2nd respondents have shown sufficient cause why they should not furnish security.
  3. What remedies are available to the parties.

Orders

  • A conditional order of attachment before judgment is issued directing that should the 1st respondent's security bond remain uncashed at 5:00 p.m. on 31st December 2023, the money in the 1st respondent's FDR account Number 340140200001732 and all accumulated recurring deposits in A/c No. 340144100000141 held with the 4th respondent shall be frozen pending disposal of the main suit.
  • In the event that the security bond was cashed or there are no available funds in the 1st respondent's accounts, the 1st and 2nd respondents shall jointly and severally furnish court with security in cash or bank guarantee to the tune of UGX 300,000,000 within 45 days from the date of this ruling, pending disposal of the main suit.
  • Costs of this application shall abide by the outcome of the main suit.

Rules and key headnotes

Attachment Before Judgment — Grounds for Issuance
An order for attachment of property before judgment will be granted in exceptional cases where the applicant has a prima facie case likely to succeed, there is evidence that the defendant is removing or dissipating assets to render nugatory any future judgment, and the intrusion on property rights is proportionate to the need to preserve the ends of justice.
Attachment Before Judgment — Mandatory Requirement to Specify Property and Value
Order 40 rule 5(2) of the Civil Procedure Rules requires a plaintiff seeking attachment before judgment to specify the property to be attached and its estimated value, and this requirement is mandatory to ensure that the property can sufficiently satisfy the claim and that the plaintiff does not attach property of excessive value.
Clear and Unambiguous Statutory Language — Natural and Ordinary Meaning
Where the language of a legislative provision is clear and unambiguous, it must be given its natural, literal and ordinary meaning, which is a conclusive determinant of the legislative intent behind that provision.
Gaming Regulation — Security Bond — Statutory Purpose and Scope
A security bond deposited pursuant to section 40(2) of the Lotteries and Gaming Act 2016 may only be used to pay taxes, employees of the licensee, or persons participating in any activity organized or provided by the licensee in case of default. The phrase 'persons participating in any activity organized or provided by the licensee' refers to customers who partake of gaming, betting or casino services and does not extend to landlords or other commercial creditors.
Security for Claim — Grounds for Ordering Defendant to Furnish Security
A defendant may be ordered to furnish security under Order 40 Rule 1 of the Civil Procedure Rules where the court is satisfied that the defendant intends to obstruct or delay execution by selling or removing property from the jurisdiction of the court, and evidence of a Board resolution authorizing disposal of all assets is sufficient to establish such intent.

Legislation cited (7)

Cases cited (4)

  • Coil Limited v Transtrade Services Ltd (High Court Miscellaneous Application No. 6 of 2016)
  • Ssengendo Paul and Another v Pio Crypto Centre Investment Limited (High Court Miscellaneous Application No. 345 of 2021)
  • Hon. Theodore Ssekikubo and Others v The Attorney General and 4 Others (Supreme Court Constitutional Appeal No. 1 of 2015)
  • Evelyn Bachwenkojo Karugaba v Shengli Engineering Construction Co. (U) Ltd (High Court Miscellaneous Application No. 44 of 2022)

Full judgment

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

Victoria Apartments Limited & 2 Others v Gaming East Africa & Entertainment Limited & 3 Others (Miscellaneous Application 521 of 2023) [2023] UGCommC 185 (22 December 2023)
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.