THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
COMMERCIAL COURT DIVISION
(ARISING FROM HCT-00-CC-CA-09-2007)
UGANDA REVENUE AUTHORITY ………………………. APPLICANT
TEMBO STEELS LIMITED ……….………………… RESPONDENT
BEFORE: HON. MR. JUSTICE LAMECK N. MUKASA
This is an application brought by Notice of Motion under Sections 27 and 28 of the Tax Appeals Tribunal Act, Order 52 of the Civil Procedure Rules and Section 98 of the Civil Procedures Act. The Applicant, Uganda Revenue Authority, is seeking orders that:-
(ii) Costs of this application be provided for.
The brief background to this application is that the Respondent M/S Tembo Steels Ltd on 7th November 2005 filed Application No. TAT 22 of 2005 against the Applicant before the Tax Appeals Tribunal. The Tribunal disposed of the application by ruling in favour of the Respondent. The Applicant on 15th June 2007 filed High Court Civil Appeal No. 9 of 2007 appealing against the ruling.
This application is supported by an affidavit deponed to by Moses Kazibwe Kawumi, an Advocate of the High Court and the Applicant’s Assistant Commissioner – Litigation. He therein avers that the Respondent has filed a taxed bill of costs and is to demand Shs.18, 665,830/= as costs. That the Appeal has a very high likelihood of success and execution of the said Decree will render the Appeal nugatory and prejudice the Appellant’s interest.
Section 28 of the Tax Appeals Tribunal Act states:
The section gives the High Court discretionary powers to stay the operation or implementation of the Tribunal’s decision or part thereof pending the disposal of the appeal. While exercising its discretion to stay or not stay execution court is required to consider whether a stay of execution is appropriate or not for the purposes of securing the effectiveness of the proceedings and determination of appeal. See: Uganda Revenue Authority Vs Uganda Communications Commission HCT-00-CC-CA-No: 11 of 2006
Ms Anne Bitatule, counsel for the Applicant, submitted that the applicant’s appeal has a high likelihood of success and argued that execution of the decree by recovery of the taxed costs in the sum of Shs18,665,830/= would render the appeal nugatory and prejudice the applicants interest in the event the appeal was decided in the applicant’s favour. That the Applicant’s problem was realising the recovery of the above sum in case the appeal is successful. Counsel referred to Nganga Vs A Kimain (1969-1993) HCB 82, and Francis Mansio Micah Vs Nuwa Walakira (1992-1993) HCB 88
In Nganga Vs Kimani (Supra) Justice Harris of the High Court of Kenya stated:
In Mugenyi Vs NIC (above) the Court of Appeal stated that it is well established that the High Court has inherent Jurisdiction under section 101 (now section 98) of the Civil Procedure Act to stay any of its orders pending appeal. That since the High Court has power to stay execution of any of its orders either in the exercise of its inherent jurisdiction or under Order 39 rule 4 (now order 43) it follows that a like jurisdiction is conferred on the Court of Appeal by section 40(2) of the Judicature Act. In Micah Vs Walakira (above) the Supreme Court held that the High Court has inherent jurisdiction under section 101 (now 98) of the Civil Procedure Act to grant a stay of its own decree pending an appeal. That there are many cases where the High Court may need to order a stay and one such case, may be to preserve the status quo pending an appeal. Their Lordships also observed that Court must have control over its own proceedings and decisions to meet the interests of justice.
Where the circumstances of the case show that execution of the decree if not stayed may render the appeal nugatory in the event the appeal succeeds, that would be evidence to show that execution pending appeal might have a negative bearing to the effectiveness of the proceedings and the determination of the appeal. If court so finds then it would be appropriate for it to exercise its powers of stay pending appeal pursuant to section 28 of the Tax Appeal Tribunal Act.
Akullo – Addo JSC and Chief Justice of Ghana in Joseph Vs Jebeille (1963) 1 GLR 387 (quoted and commended to Judges by the Court of Appeal in DFCU Bank Ltd Vs Dr . Ann Persis Nakate Lusejjere C.A.C App No. 29 of 2003) stated:
In the Editor in Chief The New Vision Newspaper Vs Ntabgoba (supra) the court of Appeal held that the Court can only grant a stay of execution if there are special circumstances and good cause to justify that course. The court further held:
This is in line with section 103 of the Evidence Act which states:-
“The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact lie on any particular person”
Mr Birungi submitted that the Applicant had failed to discharge the burden cast upon it to prove that the Respondent is unlikely to be able to refund the money paid as taxed costs or restore the appellant to the status quo ante in the event of a successful appeal. Counsel contended that on the other hand the Respondent had adduced sufficient evidence as proof of its ability to pay.
All that is stated in the affidavit in support of this Application is:
The Respondent filed an affidavit in reply deponed to by Mr. Enoch Barata, Counsel for the Respondent. I will reproduce paragraphs 8, 9, and 10 where Mr. Barata avers.
9. That the Respondent has previously demonstrated ability and capability to pay earlier when required to pay 30% deposit on taxes in dispute before commencement of the application before the Tax Appeals Tribunal when shs147,522,612 (one hundred forty seven million five hundred twenty two thousand six hundred twelve shillings) was paid as a pre-condition to the suit.
10. That I am aware that the Respondent is in the business of steel products manufacturing and has two steel rolling mills at Lugazi and at Mukono.”
With the above uncontradicted evidence the respondent has shown its ability and, willingness to pay in the event of a successful appeal. In my view, the Applicants appeal, if successful, will not be rendered nugatory and the execution of the decree will not have a negative effect to the appeal since the Respondent will be able to restore the applicant to the status quo ante.
In the final result this application is dismissed with costs to the Respondent.
Hon. Mr. Justice Lameck N. Mukasa