Court name
Commercial Court of Uganda
Judgment date
29 August 2014

Elgon Flyer Services Ltd v Stanbic Bank Ltd & Anor (Miscellaneous Application-2014/407) [2014] UGCommC 122 (29 August 2014);

Cite this case
[2014] UGCommC 122

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISC. APPLICATION NO 407 OF 2014

(ARISING FROM HCCS NO 352 OF 2014)

ELGON FLYER SERVICES LIMITED}.......................................................APPLICANT

VS

  1. STANBIC BANK U LTD}
  2. NABENDE NICHOLAS}..........................................................RESPONDENTS

 

BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicant commenced this application for a temporary injunction to be issued against the First Respondent and/or its agents preventing them from impounding its buses and the lease with the Applicant, alienating, sale, removal or disposition thereof and/or acting in any way detrimental and ‘inimical’ to the Applicant's business until the disposal of the main suit before this honourable court. It is also for an order for the costs of the application to be provided for. The grounds of the chamber summons are contained in the affidavit of James Nabitawo Wasikye a director of the Applicant Company.

In the affidavits in support Mr James Nabitawo deposes that on 3 April 2006 the Plaintiff and the Defendant entered into a vehicle lease agreement to finance the purchase of buses for the Applicant’s transport business. The first Defendant initially funded the purchase of two Isuzu make buses and a sum of Uganda shillings 231,809,600/= and the buses were registered as UAH 171D and UAH 145D. In 2008 lease facility number two and an additional two buses for an additional new facility of Uganda shillings 378,038,734/= Nissan bus UAL 314B, and Nissan bus UAL 145B in 2010 and an additional two buses for new facility of US$263,848 Isuzu bus UAM 126V and Isuzu bus UAM 321V. Further in 2011 an additional two buses and an additional new facility for Scania bus UAN 366J and Scania bus UAN 360 J was granted.

Sometime in 2011 the first Respondent/Defendant wrote to the Plaintiff notifying it of default for the payment of the monthly rental default and resolved that two of the Plaintiff’s buses should be sold off to a third party to pay off the Plaintiff’s outstanding arrears and make good the Plaintiff’s accounts. The first Respondent after commissioning the Automobile Association of Uganda valued two Isuzu buses UAH 171D and UAH 145D at an open market value of Uganda shillings 105,000,000/= and 95,000,000/= respectively and sold off the buses to the second Respondent. The second Defendant/Respondent paid to the first Respondent/Defendant only Uganda shillings 50,000,000/= for the buses he took and in a transaction shrouded in secrecy.

The second Defendant who purchased the two buses to reduce the Plaintiff’s indebtedness is an employee of the first Defendant acting as the relationship manager charged with handling client relations which was highly improper and irregular and in a conflict of interest and also a violation of the lease facility agreement. The second Defendant has rebranded the two buses and continues to utilise the vehicles under YY coaches which is a competitor of the Plaintiff and on the very route used by the Plaintiff being another ground of conflict of interest of which the bank has got notice. The Plaintiff are so far paid to the first Respondent/Defendant sum of Uganda shillings 1,000,000,000/= but the first Defendant has continued to harass the Plaintiff to the extent that the first Defendant ordered for the parking of all of the Plaintiff’s buses. The first Respondent has impounded two buses registration number UAN 360 6J (Scania bus) and UAM 321 V (Isuzu bus) on the 24th of May 2014 through Messieurs Armstrong Auctioneers but the Plaintiff’s lease continues to run with the first Defendant who is continuing to act unless restrained.

The first Defendant/Respondent has not provided a statement of account even after request by the Plaintiff. The deponent contends that in the circumstances there are grounds for the grant of a temporary injunction. He contends that the decision to impound the Plaintiff’s buses is arbitrary, high-handed and does not accord with commercial justice as it was an insider dealing with conflict of interest within the Defendant which occasioned loss of earnings to the Plaintiff for which the Plaintiff seeks redress. It is further in the interest of justice that the application is allowed.

In reply the first Respondent bank filed an affidavit in reply through Mr Owilli Dennis Head of Vehicle and Asset Finance Department of the first Respondent. His deposition is to the effect that the Applicant obtained lease facilities to finance the purchase of various motor vehicles from the first Respondent. This was equivalent to US$211,418. The facility was sanctioned by the first Respondent to finance the purchase of two brand-new Isuzu 67 Seater buses. Under the terms of the lease agreement the first Respondent was recognised as the owner of the buses and the Applicant as the lessee and could only use the buses on condition that it paid monthly rentals in respect of the buses. Secondly the Applicant was entitled to quiet possession of the buses on condition that it complied with the rental repayment obligations. Failure to do so would entitle the Respondent to repossess the buses. Isuzu buses registration number UAM 126Vand UAM 321V where purchased and registered in the names of the first Respondent as the owner where the Applicant had possession of the vehicles under the terms of the lease. Subsequently in 2010 the Applicant applied for another facility which was granted by the first Respondent. The facility was to the tune of Uganda shillings equivalent of US$263,848 to finance the purchase of two Scania buses. Upon disbursement of money by the first Respondent, the first Respondent purchased two Scania buses registration numbers UAN 366J and UAN 360 J. The Applicant had possession of the buses within the terms of the lease.

The Applicant did not duly comply with its monthly rental payment obligations despite the first Respondent’s demand for compliance. While the first Respondent had the right to terminate the lease facilities, it accommodated the Applicant who always requested for time to regularise its account. Accordingly in 2011 the Applicant applied for a restructure of the lease facilities to obtain extension to regularise its accounts. The first Respondent accommodated the Applicant’s undertaking to regularise its account and accepted the request for restructure. The facility was subsequently restructured in a facility letter dated 21st of December 2011. Despite the Applicant’s undertaking to regularise its account and duly comply with its repayment obligations, the Applicant failed to do so and its account for the four buses continued accumulated arrears of rentals. Due to the Applicant's persistent default, it accounts accumulated arrears and the Applicant is indebted to the first Respondent in the sum of Uganda shillings 788,165,719/= for the four buses whose break down is given by the deponent in a tabulated form.

As a result of the Applicant’s indebtedness to the first Respondent, the first Respondent was constrained to pursue the impounding of the leased buses. The auctioneers appointed by the first Respondent Messieurs Armstrong auctioneers also impounded two buses namely Scania bus registration number UAN 366 J and Isuzu bus UAM 321 V. With reference to paragraph 6, 7, 8, 9 and 10 of the affidavit in support, the contents are tainted with falsehoods. It is not true that the first Respondent sold the buses as alleged therein. On the contrary it is the Applicant that sold buses registration number UAH 145 D and duly communicated to the first Respondent about the sale of the same. The Applicant also advised that bus registration number UAH 171 D had been grounded and they were sourcing for purchasers to dispose of the same as they did not intend to spend more money on repairs.

On the basis of advice from the lawyers of the first Respondent the deponent deposes that the Applicant does not qualify for the grant of a temporary injunction because there is no prima facie case with a probability of success. This is because it obtained lease facilities from the first Respondent and was aware that it was only entitled to quiet possession of the leased buses if it duly complied with its rental payment obligations. The Applicant has persistently defaulted on its rental payment obligations as evidenced by the various correspondences attached to the affidavit. Furthermore the Applicant will not suffer any irreparable loss as it leased the buses on the understanding that upon default, the first Respondent as owner and lessor would repossess them and deal with them as it deems fit. In any event the value of the suit vehicles are quantifiable and any loss that it may suffer may well be compensated for in damages which the first Respondent as a reputable bank has the capacity to pay. Furthermore on the basis of advice from the lawyers, the first Respondent maintains that the balance of convenience favours it because it already disbursed the facility monies that financed the purchase of the leased vehicles. Secondly the Applicant defaulted in its rental payment obligations causing financial loss to the first Respondent. Thirdly the first Respondent gave the Applicant several chances to regularise its accounts to no avail. Fourthly the first Respondent is the owner of the suit vehicle with the right to repossess the vehicles upon default of the Applicant. Fifthly the first Respondent has already exercised its rights and demanded that the Applicant parks all the leased vehicles. The first Respondent has already impounded two of the vehicles. In the premises the deponent believes that the Applicant brought the application in bad faith with the intention to derail the Respondent’s legitimate recovery process.

For his part of the second Respondent Mr Nicholas Nabende filed an affidavit in reply in which he deposes that he has read and understood the contents of the affidavits in support of the application. He is the manager New Business, Vehicle and Asset Finance with Stanbic Bank Uganda Limited. The contents of paragraphs 1, 2 and 12 of the affidavits in support are admitted but the rest of the affidavit in support is denied. He deposes that the application is misconceived and bad in law and ought to be struck out with costs. Secondly that it is not a proper case for the grant of the orders sought in the application.

In rejoinder to the affidavits in reply Alfred Nabitawo Wasikye, the manager of the Applicant states that the business of the Applicant company is passenger transport of a bus fleet on the Kampala – Mbale route and its businesses greatly affected by the first Respondent’s action to impound the fleet based on the confusion and selfish interests caused by the second Respondent who is an employee of the first Respondent bank. Secondly the demands for his payments were made previously and at all times the Applicant made efforts and complied and its accounts were cleared. This is contained in annexure "H" to the affidavit in reply on behalf of the first Respondent bank by Mr Dennis Owilli. Thirdly the arranged sale of the Applicant’s old buses were agreed in order to clear the Applicants indebtedness at the time it was so agreed but in conflict of interest and selfish conduct of the second Respondent, the second Respondent got personal benefit from the process. Fourthly the first Respondent was put on notice about the dealings of its employee but adamantly went ahead to impound the Applicant’s buses well aware that it was the fault of its employee, motivated by greed that that caused the Applicant not to fulfil its obligations. Furthermore contrary to the assertions of the first Respondent, the Applicant has been performing its obligations save for the hitches that were caused by the second Respondent who is an employee of the first Respondent. The evidence is tabulated in the affidavit in rejoinder. On the ground of advice of his lawyers, he asserts that the Applicant meets the tests for the grant of a temporary injunction order because there is no rebuttal of the averments that the second Respondent employee had backhand dealings in the matter. The Applicant has continuing obligations with the first Respondent which it ought to settle and is willing to settle but cannot do so when its business is doubtful by the impounding of the buses. The Applicant has taken additional measures to better manage its operations and continued the relationship with the fourth Respondent who is holding other security of the lease as required under the offer letter and the terms and conditions of the leasing facility.

Lastly the affidavit of Nicholas Nabende has not rebutted the averments made against him and the first Respondent.

Counsels agreed to file written submissions. The Applicant is represented by Lex Uganda Advocates and Solicitors. The first Respondent is represented by Messieurs Ligomarc Advocates and the second Respondent is represented by Messieurs Bwire and Wasswa Advocates.

The gist of the Applicant’s submission in the written submissions is that the Applicant is a long standing customer of the bank since 2006 and the beneficiary of a finance lease facility granted by the first Respondent. On the 22nd of May 2014 the first Respondent instructed a firm of bailiffs to impound the four buses whereupon two of the buses were impounded. Prior to the impounding of the buses, the Applicant’s business had issues and the first Respondent and Applicant agreed that in order to regularise the facility accounts, two of the Applicant’s buses namely registration numbers UAH 145 and UAH 171 be disposed off and the proceeds applied to the accounts. These two buses were also acquired under the lease facilities but were fully acquired by the Applicant. The second Respondent who is the relationship manager of the Applicant’s account instead acquired the buses for himself on account of information he had by virtue of his office and did not pay for the buses as agreed to the extent that non-payment left the Applicant in a perilous position of being in default yet he had to continue paying rent to the first Respondent. The first Respondent took a decision to impound part of the fleet of the Applicant who is suffering loss of business yet it is still the Applicant's obligation to perform in terms of the rental payments under the lease facility.

In this application the Applicant seeks an injunction to restrain the first Respondent from impounding the buses under the lease with the Applicant, alienating, selling or removing it or in any way acting in a manner detrimental to the Applicants business until the disposal of the substantive suit. The Applicant claims the weight of obligations in terms of the lease repayments under the finance lease facility which it is unable to continue meeting given the conduct of the first Respondent when the tools of trade out of which the Applicant earns money to make the rental payments have been taken away from its control.

While the Applicant and the second Respondent had agreed on the way forward to clear the Applicant’s short term financial constraint by disposing of two of the Applicants (fully owned) buses, the second Respondent who is an employee of the first Respondent and manages the Applicant relationship with the bank was privy to the Applicant financial position and did not help the case either for the bank or its client. He chose to have backhanded dealings by acquiring the buses and failing to pay for them well aware of the commercial exigencies prevailing and it cannot be said that his acts were unknown to the bank. The application ought to be decided in favour of the Applicant by granting a temporary injunction. The test for the grant of a temporary injunction was laid down by the Supreme Court in SCCA No. 8 of 1990 in Robert Kavuma versus Hotel International. In the judgment of Wambuzi CJ, the test for a temporary injunction to issue is that the court must first be satisfied that the Applicant has a prima facie case with a probability of success. Secondly the Applicant might otherwise suffer irreparable damage which would not be adequately compensated for in damages. Thirdly if the court is in doubt on the first two grounds, the court would decide the application on the balance of convenience. This is whether the inconveniences which are likely to issue from withholding the injunction would be greater than those which are likely to arise from granting it.

On whether there is a prima facie case with a probability of success, the court must be satisfied that the claim is not frivolous or vexatious and that there are serious questions to be tried (the Americans Cyanamid versus Ethicon [1975] All ER 504). The court does not delve into the merits of the main suit at this stage. All that is required to be proved is that there are serious questions to be tried by the court and that the issue is neither frivolous nor vexatious. The affidavits in support of Mr James Wasikye with the director of the company disclose a prima facie case. The Applicant has a long-standing relationship as a customer of the bank/first Respondent since 2006. The Applicant obtained several lease facilities and as paid over Uganda shillings 1,000,000,000/= in rental payments to the first Respondent. The Respondent and the Applicant had agreed to clear part of the Applicant's indebtedness by disposing of two of the Applicant's buses which process was hijacked by the second Respondent, an employee of the first Respondent and the person who is privy to the business dealings of the Applicant with the second Respondent. Consequently the Applicant asserts that the acts of the second Respondent are improper, irregular, in conflict of interest and violation of the lease facility agreement. Consequently there are serious questions for trial and the Applicant fulfils the first condition for the grant of a temporary injunction.

Whether the Applicant might otherwise suffer irreparable damage which would not be adequately compensated for in damages?

On this issue the Applicant’s Counsel submits that the Applicant is a passenger transport company whose operations are by presence of a fleet of buses plying the designated routes. The Applicant earns money from the business which it in turn uses to finance the lease repayments of the first Respondent. The Applicant has already contributed 20% of the purchase price of the buses in which case it stands to lose irreparably according to item number seven of annexure "A", item 6 of annexure "C" to the affidavits in reply for the condition of payment of 20% of the purchase price. In the case of Kiyimba Kaggwa versus Hajji Nasser Katende [1985] HCB 43 it was held that irreparable injury does not mean that there must not be physical possibility of repairing injury but means that the injury must be a substantial or material one and that is one that cannot be adequately compensated for in damages.

In paragraph 15 of the affidavit in opposition the first Respondent deposes that even if the Applicant would suffer any loss, such losses are quantifiable and can be compensated in damages and the first Respondent has the capacity to pay such compensation. That argument has no merit. There are many other things including the goodwill of passengers and wiping out its image in the time between the impounding and continued holding of the buses and the time when the suit is decided and that is also the subsequent dent on their reputation as a result of the impounding of the fleet. The loss occasioned it is tremendous. Two of the Applicants buses have been sold or acquired by the second Respondent who is an employee of the first Respondent using his advantaged deposition. The account has been made and two more buses have been impounded. In the circumstances the Applicant has only two buses to fulfil its obligations in repayments which is a tremendous feat. In those circumstances the Applicant cannot be adequately compensated by an award of damages if the injunction is not granted and the second issue should be answered in the affirmative.

Whether an injunction should be granted on the balance of convenience?

Where the court is in doubt, the Applicant’s Counsel maintains that it will grant the injunction on the balance of convenience. This means that if the risk of being an injustice is going to make the Applicants suffer them probably the balance of convenience is favourable to him/her and the court would most likely be inclined to grant to him or her application for a temporary injunction.

In this case there is a subsisting lease. In a proper case for the grant of a temporary injunction the court has upheld that the Applicant ought to demonstrate in a positive and practical way that he is willing to meet his obligations and the Applicant’s case must not only hang on a right to be heard (see Kakooza versus Stanbic Bank (U) Ltd MA Number 614 of 2012). The first Respondent ought to be restrained by a temporary injunction in the circumstances of the case and the jurisdiction of the court is provided for by section 98 of the Civil Procedure Act to meet the ends of justice as well as Order 41 Rule 1 of the Civil Procedure Rules. In conclusion the Applicant’s case is a proper case for the court to make an order for a temporary injunction against the impounding and continued holding of the fleet of buses in order that while this suit is pending determination, it is able to continue meeting its obligations as a lessee.

Reply by the first Respondent's Counsel

On the background of the case the first Respondent’s Counsel gives a detailed background as contained in the affidavit in reply. The Applicant and the first Respondent executed various vehicle lease agreements where the first Respondent agreed and extended various vehicle and asset finance facilities to the Applicant. Under the vehicle asset finance facilities the first Respondent financed purchase of buses which she leased to the Applicant and the Applicant was obliged to pay monthly rentals for the buses. The Applicant obtained lease facilities in the sum of US$411,418 and the equivalent of US$263,848 from the first Respondent in October 2009 and April 2010 respectively. The facilities financed the purchase of buses registration number UAM 126 V, Isuzu and UAM 321 V, Isuzu, UAM 360 J Scania bus and UAM 360 J, Scania bus. The first two buses were purchased under the lease facility of 2009 while the second batch was purchased under the facility of 2010. The buses were registered in the name of the first Respondent and the Applicant took possession of the buses as a lessee. Under the lease agreement the Applicant was obliged to pay monthly rentals to the first Respondent and at the end of the lease period she could exercise the option to purchase the vehicles. The Applicant defaulted on its rental repayment obligations despite several demands from the first Respondent to comply. Subsequently the Applicant sought for the restructure of the facilities and the first Respondent duly restructured the same for the benefit of the Applicant. The Applicant also made several undertakings to regularise its lease accounts for the four buses but did not fulfil its undertakings. As a consequence the first Respondent demanded that the Applicant parks the leased vehicles at its parking yard. The first Respondent instructed Messieurs Armstrong auctioneers to impound the leased buses. The auctioneers impounded motor vehicles Scania bus UAN 366 J, Isuzu bus UAM 321V. The total amount due to the first Respondent as at June 2014 was Uganda shillings 788,165,719/=. Subsequently the Applicant filed HCCS number 352 of 2014 and also filed this application seeking a temporary injunction to restrain the first Respondent from impounding the buses and disposing of them.

With reference to the principles for the grant of temporary injunctions the courts are guided by various principles laid down in the cases of Kiyimba Kaggwa versus Hajji Katende (1985) HCB 43, Robert Kavuma versus Hotel International Ltd SCCA Number 8 of 1990 and American Cyanamid versus Ethicon [1975] All ER 504. The Respondents Counsel reiterated submissions on the principles as set out in the cases and there is no controversy about the principles.

Secondly he submitted that the purpose of a temporary injunction is to preserve the status quo pending determination of the main suit. Counsel maintains that there is no status quo to maintain in respect of the two buses namely Scania bus registration number UAN 366 J and Isuzu bus registration number UAM 321 V. The first Respondent had already instructed Messieurs Armstrong auctioneers who impounded the said buses due to the Applicant’s default on its obligations. The buses are in possession of the Applicant and the status quo that the Applicant seeks to preserve does not exist.

Consequently the application can only be considered in the relation to the remaining two buses which were not impounded namely Isuzu bus registration number UAN 126 V, and Scania bus registration number UAN 360 J.

Whether there is a prima facie case or whether the Applicant must show that its claim has serious issues for trial and is not frivolous and vexatious?

The Applicant admits that it executed a vehicle lease agreement with the first Respondent under which the suit buses were purchased and leased to the Applicant. Paragraphs 3, 4, 5, 6, and 7 of the affidavit in support attests to the relationship between the parties and copies of the lease agreements in respect of the said buses are attached as annexure "A" and "C" respectively. The logbooks of the leased vehicles are duly registered in the names of the first Respondent and attached to the affidavits in reply as annexure.

It is not in dispute that the Applicant defaulted on its monthly rental payment obligations. The continuous and persistent default is adduced in the affidavit in reply of Dennis Owilli. The default and failure of the Applicant to meet its contractual obligations and undertakings to regularise its account is also reflected in several annexure referred to. The evidence has not been rebutted. There is further evidence that the first Respondent accommodated the Applicant’s requests on several occasions but the Applicant still reneged on its undertakings. Several annexure H1, H2, H3 and H4 demonstrate continuous default in terms of arrears of the Applicant's accounts. The Applicant was in breach of its lease obligations upon which the first Respondent as owner of the property had the right to repossess the leased vehicles. In the case of Francis Kayanja versus Diamond Trust Bank HCMA 300/2008 the court found that because the Applicant had clearly defaulted on his loan repayment, he had failed to establish a prima facie case. Though the case dealt with the mortgaged property, the principle is applicable to leased property.

On the submission of the Applicant's Counsel that there is a serious questions to be determined by the court, it is alleged that the fourth Respondent and the Applicant had agreed to clear part of the Applicant's indebtedness by disposing of two of the Applicants buses but this process was hijacked by the second Respondent who is also an employee of the first Respondent. These submissions according to the first Respondents Counsel are an afterthought and are being raised in the hope of making out triable issues. Whereas the Applicant makes the allegation against the first Respondent that is no evidence that there was such an agreement between the first Respondent and the Applicant. It is not an agreement with the effect that the first Respondent was to await sale proceeds from certain vehicles to clear outstanding arrears. The Applicant’s made a commitment to pay dated 25th of March 2014 but did not mention at all that payment was pegged to the alleged balance from the sale of buses to the second Respondent. It is only the Applicant’s default that prompted the first Respondent to require the Applicant to park the leased vehicles and subsequently the first Respondent instructed auctioneers to impound the vehicles. The valuation report annexure A2 to the affidavit in support of the application which was attached as the alleged proof of the arrangement was conducted in July 2011. It is claimed thereafter that after commissioning the said valuation, the first Respondent sold off the buses to the second Respondent. This would imply that the sale took place in 2011. Surprisingly the Applicant did not attach a copy of the sale agreement to prove his claims and show that the first Respondent sold the said buses to the second Respondent.

If there was any arrangement between the Applicant and the second Respondent it was done without the knowledge of the first Respondent and the Applicant chose to raise it with the first Respondent after it had breached its commitment of 25th of March 2014. The first Respondent was not aware or involved in any private dealings. The story of the Applicant is a delaying tactic aimed at derailing the first Respondent from enforcing its rights. It should not be a basis for holding that the Applicant has a prima facie case against the first Respondent warranting a stay of the exercise of the Respondent's rights.

The allegation that the first Respondent sold the bus to the second Respondent has been rebutted in paragraph 13 of the affidavit in reply. In the affidavit Dennis deposes that the Applicant sold the bus registration number UAH 145 D and informed the Respondent of the sale. ANNEXTURE G1 is an e-mail from the Applicants director informing the second Respondent and other officials of the first Respondent that the bus had been sold in its state for Uganda shillings 17,000,000/= and the money was deposited on the Applicant’s account with the first Respondent. The e-mail does not state who the purchaser was. Secondly it is clear from the e-mail that there was no balance outstanding. Secondly the e-mail stated that the Applicant was supposed to get a purchaser for the second bus UAH 171 D. The emails were not rebutted by the Applicant. If indeed the second Respondent had purchased the buses and still had an outstanding balance due why then did the first Applicant's director state that the bus was sold as it is for Uganda shillings 17,000,000/= and that the monies were directly deposited with the bank? The e-mail was addressed to the second Respondent; the Applicant now alleges the first Respondent sold the bus to and that he did not pay the balance. Clearly the Applicant’s claims against the first Respondent are baseless.

If it is true that the bus was sold to the second Respondent, it is clear from the e-mail and there was a deliberate intention to conceal this from the first Respondent. Furthermore if the bus was sold at a higher price than 17,000,000/=, clearly the Applicants director misrepresented to the bank, probably with the intention of retaining the balance for their benefit without the knowledge of the first Respondent. It means that the Applicant's representatives deliberately concealed this information from the first Respondent and they have now turned around to use the same to defeat the first Respondent's interests. They have acted with dirty hands and should not benefit from it. In the case of honourable Hanifa Bangirana Kawooya versus Attorney General and Another Constitutional Court Miscellaneous Application No 46 of 2012 Honourable Lady Justice Stella Arach Amoko held that an injunction being an equitable remedy, it cannot be granted to a party who has demonstrated openly by his conduct that he/she is undeserving of the equitable relief. Any person who relies on equity must come to the court with clean hands. In this case the Applicant has demonstrated dirty hands. Firstly she defaulted on the lease obligations and cannot turn around to raise a claim against the first Respondent when she clearly represented different facts to the Respondent in the past. From those facts it is the Applicant who sold the buses and now seeks to pin it on the first Respondent as one of its ploys to derail the first Respondent's exercise of its contractual rights.

Whether the Applicant has proved that he/it will suffer irreparable loss that cannot be compensated by an award of damages?

The first Respondent’s Counsel submits that the Applicant does not satisfy the criteria because it is not the owner of the bus but the lessee. It is required to pay monthly rentals in order to retain quiet possession and enjoyment of the property. The Applicant was on notice that upon default in payment of monthly rentals, the first Respondent as owner and lessor would repossess and deal with the vehicle as it deems fit under the lease agreement. In Kakooza Abdullah versus Stanbic Bank Ltd HCMA 614 of 2012 the court held that the sale of the mortgaged property does not amount to irreparable loss since a person enters into an agreement with sufficient knowledge that upon default, the property will be sold off. On that basis it cannot plead irreparable loss. That case dealt with mortgaged property but the principle on irreparable loss and notice of the consequences of default and the time of entering the transaction applies to this case. The Applicant executed a lease agreement with notice that upon default, the lessor had the right to repossess the leased assets. It is only just that the first Respondent exercises its rights to pursue repossession of the buses since the Applicant has demonstrated persistent default on its obligations.

Furthermore the affidavit evidence in support of the application does not show what loss will be suffered that cannot be atoned for by an award of damages. The Applicant is under obligation to prove by affidavit evidence what loss it would suffer that cannot be atoned for by damages in the event that the reliefs sought is denied.

On the question of whether the Applicant depends on the buses to conduct business for purposes of financing the lease payments, and that the Applicant contributed 20% to the purchase price, the information that Counsel for the Applicant bases his submissions on is not backed by evidence especially on matters pertaining to goodwill and reputation. It is a submission from the bar. Without prejudice the Applicant has no right to claim loss of goodwill and reputation on account of the first Respondent when it is by its own conduct of persistent default not built any goodwill or reputation with the owner of the vehicles. The Applicant is aware of the consequences of default. The Applicant enjoys quiet possession under the lease agreement on condition that he duly pays lease rentals agreed-upon. In those circumstances the Applicant cannot claim that it will suffer irreparable loss when the vehicles are repossessed due to default in rental payments.

Furthermore the Applicant’s claim in the main suit is for breach of contract and the Applicant seeks special damages and general damages. It is trite law that in a claim for breach of contract, where the claimant succeeds, he or she is awarded damages. In those circumstances any loss suffered by the Applicant can be atoned for by an award of damages if the Applicant succeeds. Counsel further relied on the case of American Cyanamid versus Ethicon Ltd [1975] AC 396. The Applicant’s claim by its nature is capable of being compensated by an award of damages. Secondly the first Respondent’s deponent has affirmed that the first Respondent has the capacity to pay damages if any award of damages is made to the Applicant. On the basis of the above the injunction ought to be denied. On the reverse side in the Applicant has not demonstrated that it has capacity to pay damages that would be awarded to the first Respondent in the event of the injunction being granted and the first Respondent succeeded in the main suit. The Applicant’s conduct of persistent default shows that the Applicant does not have the capacity to compensate the first Respondent. On that basis the injunction ought to be denied.

The balance of convenience

On this issue the Respondent’s Counsel submits that the balance of convenience favours the first Respondent and not the Applicant. The first Respondent would be most inconvenienced because the Respondent has already disbursed the facility monies that financed the purchase of the leased buses. The Applicant defaulted on its rental repayment obligations causing financial loss to the first Respondent. The first Respondent gave the Applicant several chances to regularise its account to no avail. The first Respondent is the owner of the suit vehicles with the right to repossess the vehicle was upon default of the Applicant. Lastly the first Respondent has already exercised its rights as lessor and demanded the Applicant to park the leased vehicles.

In the premises the application and the main suit are frivolous and vexatious and brought in bad faith with the intention of derailing the first Respondent’s legitimate exercise of its rights. The application has no merit since the Applicant has failed to satisfy court on the grounds for the grant of a temporary injunction in the affidavits in support and it ought to be dismissed with costs. Secondly the Applicant be ordered to hand over the remaining buses to the first Respondent since the first Respondent already demanded that the same is parked but the Applicant has failed to do so.

Without prejudice to the above submissions the first Respondent prays that in the event that the honourable court grants the injunction restraining the first Respondent from repossession of the buses, the injunction ought to be conditional that the Applicant is ordered to pay all outstanding arrears on the lease accounts within 14 days and continues servicing the lease in accordance with the agreement failure upon which the first Respondent should be at liberty to exercise its rights.

Submissions on behalf of the second Respondent

For his part the second Respondent’s Counsel submitted that paragraphs 3 to 12 of the affidavits in support by James Nabitawo Wasikye demonstrates that the buses against which the Applicant intends to get injunctive orders are UAM 126 V Isuzu bus; UAM 131 V Isuzu bus, UAN 360 J Scania bus; and UAN 366 J Scania bus. However in paragraph 12 the affidavit in support is to the effect that the first Respondent impounded two of the buses namely UAN 366 J Scania bus and UAM 321 V Isuzu bus. Consequently out of the four vehicles, only two vehicles are already impounded. In paragraph 9 of the affidavit of James Nabitawo the second Respondent purchased two buses to reduce on the Plaintiff’s indebtedness. It means that the above two buses were not only impounded but also have been sold. For that reason not order of a temporary injunction can issue against impounding and selling of the said two vehicles. The second Defendant's Counsel relies on the case of Yesero Mugenyi versus Philemon Wandera [1987] HCB 78 for the purpose of a temporary injunction which is to preserve the status quo until the matters in dispute are investigated and finally disposed of. For that reason not injunctive order can issue in respect of motor vehicles registration numbers UAN 366 J and UAM 321 V which are already impounded and sold.

Ruling

I have carefully considered the application together with the details of the written submissions of Counsel and authorities cited.

There is no controversy about the purpose of a temporary injunction as far as legal doctrine is concerned. A temporary injunction is meant to maintain the status quo until the matters in controversy are resolved by the court. Secondly the grounds for the grant of a temporary injunction order are also not in controversy as far as legal doctrine is concerned.

The Applicant has moved under the provisions of Order 41 rules 1 (a) and 9 of the Civil Procedure Rules. Order 41 rule 1 (a) provides that:

“(1) where in any suit it is proved by affidavit or otherwise

  1. that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or…"

The grounds for the grant of temporary injunction have to be proved by affidavit or otherwise. The term “otherwise” in my view includes a perusal of the plaint to determine the prima facie cause of action. A cause of action is determined upon a perusal of the Plaintiff and anything attached to it forming part of it and on the assumption that the averments in it, unless otherwise successfully rebutted by affidavit evidence in the application, are true. The ingredients of Order 41 rule 1 (a) of the Civil Procedure Rules are clear enough in that there should first be a property in dispute in a suit between two or more parties. Secondly the property in dispute has to be in danger of being wasted, damaged, or alienated by any party to the suit or wrongfully sold in execution of a decree. The first requirement is to prove that there is property that is in danger through wastage, damage, or alienation by wrongful sale in execution of a decree. In other words it must be shown that the action threatened and which is sought to be restrained is likely to upset the status quo. Upsetting the status quo can in some instance render the claim of the Applicant in the suit nugatory or otherwise the Applicant may not be adequately compensated by an award of damages if it occurs. The Applicant also proceeded under the provisions of sections 38 (1), 38 (3) (b) of the Judicature Act and section 98 of the Civil Procedure Act.

Section 38 (1) of the Judicature Act gives the High Court powers to grant an injunction to restrain any person from doing any act as may be specified by the High Court. Secondly section 38 (3) (b) of the Judicature Act provides that where before or after the hearing of any cause or matter, an application is made for an injunction to prevent a threatened or apprehended waste or trespass, an injunction may be granted, if the High Court thinks fit whether the estate claimed by the parties or any of the parties are legal or equitable. Section 38 of the Judicature Act as quoted above gives the court powers to grant an injunction order to restrain any person from doing any act. Secondly an injunction may be granted to prevent a threatened or apprehended waste. The provisions define powers of the High Court and are not procedural. They are not in conflict with Order 41 rule 1 (a) of the Civil Procedure Rules which is specific and is only supported by the powers under section 38.

In this case the Applicant claims that there is property which is in danger of being alienated through sale or impounding by the Respondent. The Applicant seeks to restrain the first Respondent from impounding buses in its possession under a lease from the first Respondent. The buses under lease are described in paragraphs 3, 4, 5, 6 and 7 of the affidavit in support of the application. In paragraph 3 the Applicant describes buses registration numbers UAH 171D and UAH 145D (Isuzu buses). In Paragraph 4 he describes buses registration numbers UAL 314B and UAL 145B (Nissan Buses) as well as Isuzu bus UAM 126V and UAM 321V. In paragraph 5 in the year 2011 an additional two buses and an additional new lease facility for Scania buses registration numbers UAN 366J and UAN 360J were granted. In the year 2011 the first Respondent wrote to the Plaintiff notifying it of default in payment of monthly rentals and resolved that two of the Plaintiff’s buses will be sold off to a third party. Messieurs Automobile Association of Uganda valued two buses registration numbers UAH 171 D and UAH 145 D at the open market value of Uganda shillings 105,000,000/= and 95,000,000/= respectively. It is alleged that the first Respondent sold the buses to the second Respondent. This evidence is however disputed by the first Respondent on the ground that it was the Applicant who sold the buses and not the first Respondent. What is crucial however is that two of the buses described above had been sold off out of the 8 buses leaving 6 buses of which two have been impounded by the First Respondent.

The first Respondent impounded two buses registration numbers UAN 366 J and UAM 321 V Isuzu buses on the 24th of May 2014 through Messieurs Armstrong Auctioneers. This leaves the Applicant in possession of Isuzu bus UAM 126 V, and Scania bus UAN 360 J. Secondly Nissan bus UAL 314 B and UAL 145B. Isuzu buses registration number UAM 126 V is listed in the letter of instruction annexure "C" to the affidavit in support for impounding but is not included among the vehicles impounded. There is however an instruction in a letter addressed to Messieurs Armstrong Auctioneers dated 23rd of May 2014 to impound it. On the 24th of May 2014 the Applicant wrote to the first Respondent formally requesting for an account statement from the date of purchase of the units of buses described therein (eight in total) to date.

The primary cause of the Applicant seems to be related to the letter of the first Respondent dated 22nd of May 2014 annexure "B" to the affidavit in support of the application in which the first Respondent makes reference to the letter of the Applicant dated 25th of March 2014 addressed to its Company Secretary making a proposal that the Applicant settles the April 2014 obligations falling due on 15 April 2014 of Uganda shillings 27,422,424/=. Secondly it is indicated therein that the Applicant had proposed to clear outstanding arrears within four months while at the same time meeting its monthly obligation of Uganda shillings 27,522,424/= to bring the account up to date by 31st of August 2014. Part of the first Respondent's letter reads as follows:

"To our disappointment, we have not received any payment on account since 12th of March 2013 which has brought your account to arrears of Uganda shillings 134,400,000/= (in words as well).

This position is unacceptable I would like to advise that you immediately today 22nd of May 2014 park all our buses at our yard in Makindye to avoid auctioneer costs.

Kindly get in touch with Gladys Namala Edwards on 0782200636 to allow you access to the yard for parking. Thank you.

Yours faithfully…"

The Applicant’s plaint was filed on the 28th of May 2014 against the Defendants jointly and severally for breach of contract. It is therefore apparent that the Applicants action was prompted by the Defendants threatened action in exhibit annexure "B" to the affidavit in support quoted above. The Applicant obtained an interim injunction restraining the First Respondents action on the 2nd of June 2014.

Annexure G1 to the affidavit in reply by Mr Dennis Owilli paragraph 10 thereof at attaches a letter from the Applicant referred to in the above quoted letter in which the Applicant made a proposal for the clearing of arrears. The letter is dated 20th of March 2014 and is addressed to the secretary of the first Respondent bank. It reads as follows:

            "REF: Plan for clearing arrears

On 3 March 2013 we reached an agreement with the Collections Department. Since then the following issues came up and we failed to meet our commitment.

  1. Scania bus UAN 360J was released by Stanbic back into our custody on Tuesday 4th March 2014. It had an electrical problem and was delivered to the repair shop for Scania at Skenya in Luzira. Skenya repairs were delayed by two weeks due to unavailability of parts imported from Sweden. The total cost was initially projected at shillings 7 million but went up to shillings 9.8 million which we had to meet.
  2. Nissan bus UAL 145 B broke down on 26th February and requires shillings 4.5 million for repairs which include the purchase of an engine block. This is yet to be repaired.
  3. In our letter dated 3rd of March 2014 we indicated that we would start operations in Kampala Bus Park beginning on 5 March 2014. This plan has not been effected due to the changes in ownership at the bus Park. We have already submitted our application fees to both Horizon and Qualicel operators of the bus Park totalling shillings 7 million. On Wednesday 26th of March 2014 a meeting will be held by the Transport Licensing Board to allow us operate in the bus Park. We hope to improve our loads and increase our revenue.

We hope to stabilise our operations by the end of April. We have restructured our internal operations especially in the maintenance department and reduced our payroll. This will enable us meet our monthly obligation of shillings 23,000,000 plus the VAT. Since we engaged the collections Department in February we have been able to deposit a total of shillings 60 million towards our monthly obligations for the month of February and March. We shall meet the monthly obligations for April as we stabilise.

We are requesting that effective May we will need for months to clear the arrears of shillings 74 million as we continue meeting our shillings 23,000,000 plus VAT monthly obligations. This will enable us get the account current by 31 August 2014."

In the above letter the Applicant admits that it has a monthly obligation of Uganda shillings 23,000,000/= to the first Respondent together with the VAT monthly obligations. Secondly the Applicant admitted by that letter Uganda shillings 74,000,000/= in arrears. The Applicant's proposal was made in March 2014 and replied in May 2014. The correspondence also establishes that the two buses which were sold were sold way back before the proposals of the Applicant. The exact time of month when the buses were sold is however not clear. In paragraph 8 of the plaint it is alleged that the buses were sold by private treaty in January 2014. However what is crucial is that the buses were sold before the proposal of the Applicant which was made in a letter dated 20th of March 2014.

The allegation that the first Respondent sold the buses to the second Respondent is not supported by documentary evidence and is denied by the first Respondent in the affidavit in reply. The crux of the issue is that the first Respondent received only Uganda shillings 50,000,000/= as part payment for the two buses sold. There is evidence that the Applicants account is in arrears of Uganda shillings 134,000,000/= according to the letter of the first Respondent dated 22nd of May 2014. Secondly there is prima facie evidence that Messieurs Stanbic bank instructed Messieurs Automobile Association of Uganda to carry out a valuation of the buses which have been sold. The valuation reports indicate that the two buses sold were valued at Uganda shillings 105,000,000/= with a forced sale value of Uganda shillings 73,500,000/= for issuance of bus UAH 171D and Uganda shillings 95,000,000/= with a forced sale value of Uganda shillings 63,000,000/= for Isuzu bus registration number UAH 145 D allegedly sold to the second Defendant. The total forced sale value of the vehicle is Uganda shillings 136,000,000/= while the market value is Uganda shillings 200,000,000/=. There is no evidence of how much the two buses were sold at. The Applicant avers that only Uganda shillings 50,000,000/= was paid by the Respondent. Without evidence of how much the vehicle was sold at the balance cannot be calculated except from the pleadings. Whatever may be the remaining sums due upon the alleged sale cannot be quantified. I will only make one assumption for purposes of argument. If the vehicle had been sold at a forced sale value, the two buses would have fetched Uganda shillings 136,000,000/= leaving a balance of Uganda shillings 86,000,000/=. This has however not been proved by affidavit evidence as required by Order 41 rule 1 (a) of the Civil Procedure Rules.

Last but not least the Applicant has a monthly obligation (in addition to the arrears of Uganda shillings 134,000,000/=) to pay Uganda shillings 27,522,424/=. The arrears are supposed to have been cleared by August 2014. The evidence on record is that on 2 June 2014 his worship the Assistant Registrar of the Commercial Court Division granted an interim order against the first Respondent, its servants and/or agents from impounding, alienating, removal, interfering with, sale or disposal or acting in any way detrimental and inimical to the Applicant in respect of Isuzu bus number UAM 126 V and UAN 360 J until the determination of the main application which had been fixed for 25 June 2014. Subsequently on 25 June 2014 by consent of the parties through their Counsel the interim order was extended up to the 29th of August 2014 when a ruling is expected in the main application.

On the other hand the first Respondent’s argument is that it is entitled under the lease agreements upon default to repossess the buses. The first Respondent’s Head of Vehicle and Asset Finance Department Mr Dennis Owilli avers in paragraph 11 of his affidavit in reply that the total outstanding balance under the several leases for the buses stands at Uganda shillings 788,165,719/= while the amount in arrears stands at Uganda shillings 133,034,105/=. The affidavit was deposed to on 30 June 2014. All the four remaining buses are in arrears while the outstanding full rental obligations remain to be cleared in future dates if the leases are not terminated.

Paragraph 4 of the lease agreement provides that the first Respondent remains the owner of the buses throughout the lease term. Paragraph 11 of the standard lease agreement provides that the lessee shall be in breach if it does not pay any money due under the lease. Secondly under paragraph 11.2.1 provides that in the event of failure to pay by the lessee, the first Respondent has a right upon giving 14 days written notice to cancel the lease and take possession of the goods and thereafter be entitled to dispose of the goods in any manner.

Having assessed the evidence, the matter to determine is whether the Applicant has demonstrated that it has serious questions for trial which issues are worth considering by the court. In other words that the suit is not frivolous or vexatious but discloses a prima facie cause of action against the Defendants. The Applicant alleges that the official of the first Respondent is responsible for its failure to service the lease. It is averred that second Respondent paid 50,000,000/= Uganda shillings and is yet to pay 150,000,000/= Uganda shillings.  In the remedies however the Applicant seeks a declaration that the sale of the buses to the second Defendant is wrongful and an order for the payment of special damages. In theory where the sale is wrongful what is the appropriate remedy?  The Applicant claims loss per day of Uganda shillings 1,000,000/=. There seems to be a question for trial based on the fact that the First Respondent denies having sold the vehicle while the Plaintiff asserts that it did. The court cannot resolve that issue in this application. I am however I am in doubt as to whether the Applicant has a prima facie case with a probability of success because it has defaulted on its obligations and its own undertaking in the letter of 22 March 2014 proposing to retire arrears by 31 August 2014. If the first Respondent sold the vehicle, there may be a question of quantum to consider that is relevant to the Applicant’s indebtedness. Secondly there is no evidence that the Applicant has been paying the requisite monthly rentals to the First Respondent since the time an interim order was issued by the registrar on the 2nd of June 2014. The Applicant would like to continue with the lease agreement. The first Respondent as a Lessor may be entitled to take appropriate action upon default in payments by the Lessee. Because I am in doubt on the question of serious questions for trial, I will next consider the question of whether the Applicant will suffer irreparable injury that cannot be atoned for by an award of damages.

As far as the question of irreparable injury is concerned, the Applicant stands to lose its business which it may not be able to recover if all the buses are grounded as threatened and/or sold. Yet when considering the Applicant's proposals, it is capable according to its representation of meeting its obligations within a few months. On the other hand if it loses its business, it would suffer substantial loss because it will be hard for the Applicant to recover the market value of the buses. For the Respondent it has been argued that an award of damages would be sufficient to cover any losses that the Applicant would incur as a result of refusing the injunction. If the Applicant proves that the second Respondent acted in breach of its fiduciary obligations, it would have lost the chance to get the appropriate remedy and I am not sure whether in such circumstances an award of damages would be adequate. The Applicant stands to lose substantially by loss of business and goodwill considering that it runs a fleet of buses. It is however doubtful whether this would be substantial loss since impounding and sale upon default in rental payments is within the contemplation of the parties when executing the lease agreements. I further disagree with the arguments that the Applicant has lost goodwill with the first Respondent by defaulting on its obligations. The first Respondent and the Applicant have been in touch on the issue of rental obligations and have rescheduled payments before. Rescheduling of payments is part of the business of the First Respondent whose primary aim is to obtain all rental payments before selling the vehicles to the Applicant at a nominal contractual value. Moreover the Applicant charges interest on all arrears at an agreed rate and is contractually compensated when there is a delay in payment. All in all, the question as to whether damages would be an adequate remedy is in doubt. There is a further question of alleged breach of duties owed to the Applicant in a normal customer/bank relationship on the question of sale of the Applicant’s two buses which affects the rights of the parties under the lease contract. In the premises the application will be considered on the balance of convenience.

As far as the balance of convenience is concerned, the Applicant claims that it would be able to meet its obligations by the end of August 2014. It has admitted its indebtedness and that it is in arrears. The Applicant claims that it has a monthly obligation of Uganda shillings 23,000,000/= as well as VAT obligations. Secondly by 22 March 2014 it had an outstanding arrears of Uganda shillings 74,000,000/=. The Applicant further alleges that the second Respondent owes money to it from the very buses which had been funded by the first Respondent. The question ought to be tried before upsetting the status quo. The first Respondent is in a position to prevail upon the second Respondent who is its employee and whose actions is alleged to have been in breach of fiduciary duties owed to the Applicant by both Respondents. Let the question be investigated because it has financial implications on the Applicant’s performance and hence ability to pay the rentals and arrears. Secondly the first Respondent has already impounded two of the Applicant’s buses and its financial implications have not been disclosed. Are they sufficient to meet the Applicant’s obligations? The status quo is that the Applicant has only 4 buses. The First Respondent can hold on to the asset impounded for a period of time which may be determined. The Applicant alleges that it is owed 150,000,000/= Uganda shillings on the sale of the first two buses. If this is proved then the ground for impounding the Applicant’s buses would have been dealt with and the first Respondent would be satisfied. Most importantly the first Respondent’s affidavit in reply by Dennis Owilli avers in paragraph 11 that the Applicant owes a total of 133,034,105/= Uganda shillings in arrears. If the First Respondent recovers its arrears and the Applicant continues servicing its monthly rental repayment schedule as contracted there would be no inconvenience to the first Respondent.

As far as the second Respondent is concerned, he argues through his Counsel that the buses have been sold and that is the status quo so there is nothing to restrain.  In his affidavit in reply he does not deny specifically being the purchaser of the buses which have been sold. He agrees that he is the Manager New business and vehicle and Assets Finance with the first Respondent.  He only makes a blanket denial and puts the Applicant to strict proof but as a manager he does not give relevant facts which absolve him of the allegations. His argument is that the buses were sold and the status quo has changed. The status quo has indeed changed but he can still be restrained from disposing of the buses in his possession if the allegation is true. It is alleged that he took the buses and only paid 50,000,000/= leaving a balance of Uganda shillings 150,000,000/= which sum is sufficient to satisfy the arrears of rentals owed by the Applicant. It is further alleged that the sale was wrongful. The balance of convenience favour maintaining the status quo until the issue is investigated in a full trial.

The above notwithstanding I agree with the first Respondent’s Counsel that if the court is inclined to grant a temporary injunction, it should be a conditional grant. I agree that a conditional grant is the best order to grant in the circumstances in light of the Applicant’s representations of being able to meet its obligations. The balance of convenience favours a conditional grant of a temporary injunction. In the premises the following orders shall issue:

  1. A conditional temporary injunction issues against the first Respondent and or its agents restraining them from further impounding the buses under the lease with the Applicant, alienating, sale, removal or disposal thereof or wasting or in any way diminishing the value of the buses in its possession until disposal of the main suit or until the Applicant fails to meet the conditions imposed in this order.

 

  1. A temporary injunction issues restraining the second Respondent from disposing of buses registration numbers  UAH 171D and UAH 145 D until after the allegations of wrongful sale are fully investigated and determined or until further orders of the court upon satisfaction that the alleged sale was lawful and full consideration has been paid to the first Respondent.

 

  1. The Applicant shall clear its arrears of rent with the first Respondent by the 15th of October 2014.

 

  1. The Applicant shall comply with monthly rental obligations by the 30th of September 2014.

 

  1. Upon failure of the Applicant to comply with its obligations under this order, the first Respondent shall be at liberty to exercise its rights under the lease.

 

  1. It shall be a ground excusing the Applicant for breach of its obligations if it produces satisfactory evidence to the first Respondent that the second Respondent owes the sums alleged to it under the alleged sale of buses registration numbers UAH 171D and UAH 145 D to the second Respondent whereupon the details of the satisfaction of the first Respondent about the alleged transaction shall be notified to the Registrar of this court jointly by the First Respondent and Applicant’s Counsel.

 

  1. The question of costs of this Application is stayed pending the following: If the Applicant defaults on the terms of this order the costs shall be borne by the Applicant. On the other hand if the Applicant abides by the terms of this order costs shall abide the outcome of the suit.

Ruling delivered this 29th day of August 2015 in open court

 

Christopher Madrama Izama

Judge

Judgment delivered in the presence of:

Edmund Wakida for the Applicant,

Alfred Wasikye Director of the Applicant

First Respondent represented by Alice Mwebaza

Second Respondent represented by Aggrey Bwire

Second Respondent in court

Charles Okuni: Court Clerk

 

Christopher Madrama Izama

Judge

29/08/2014