Court name
Commercial Court of Uganda
Judgment date
1 July 2014

Modern Development Uganda Ltd Anor v FBW Uganda Ltd (Miscellaneous Application-2014/434) [2014] UGCommC 90 (01 July 2014);

Cite this case
[2014] UGCommC 90

THE REPUBLIC OF UGANDA

 

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

 

MISCELLANEOUS APPLICATION NO. 434 OF 2014

(ARISING FROM CIVIL SUIT NO. 481 OF 2012)

 

  1. MODERN DEVELOPMENTS UGANDA LTD
  2. DR. KAIJUKA MUTABAZI EMMANUEL ………………. APPLICANTS

 

VERSUS

FBW UGANDA LIMITED …………………………………. RESPONDENTS

 

BEFORE LADY JUSTICE FLAVIA SENOGA ANGLIN

 

RULING

 

This application was brought under S.98 C.P.A and 0.52 rr 2 and 3 C.P.R seeking orders of this court staying C.S. No 481 / 2012 pending the hearing and determination of C.A. 67/2014 by the Court of Appeal.  Costs of the application were also applied for.

 

The application was supported by the affidavit of the Second Applicant Dr. Kaijuka Mutabazi Emmanuel.

 

The affidavit reiterated the grounds for the application emphasizing the leave to appeal against the ruling was granted by the Court of Appeal and that a hearing notice was issued for 30.06.14.

 

Further that, if the proceedings are stayed, the appeal will be rendered nugatory if the Applicant succeeds.  And that it is therefore in the interests of Justice that the application be allowed and the proceedings stayed.  Notice of Appeal was attached as Annexture “B”.

 

And the application for leave to appeal was granted by consent of both Counsel on the 2nd May, 2014, by His Lordship Justice Kenneth Kakuru JA. – Annexture “C”.

 

Memorandum and record of appeal was received by Counsel for the Respondent on 27.05.14 – Annexture “D”.  While the hearing notice fixing the main suit on 30.06.14 was received by Counsel for the Applicant on 29.05.14.

 

An affidavit in reply was filed on 10.06.14 deponed by one Amos Musheija Advocate. 

 

It was agreed in the affidavit that the Applicant was joined as a Second Defendant to the main suit and that dissatisfied with the ruling filed an appeal.

 

However that, the memorandum of appeal raises grounds that were not subject of the ruling from which the appeal is preferred – See Annexture “A” to affidavit in reply.

 

It was also pointed out that the Applicants memorandum of appeal raises matters that are subject of the main suit which is yet to be determined by this court.

 

And that the appeal is frivolous and lacks merit and is only intended to preempt the main suit and render it nugatory and being misconceived, it has no likelihood of success.

 

Adding that no sufficient grounds for stay of proceedings pending appeal had been shown.  It was submitted that the application ought not to be allowed.

 

The application was called for hearing on 11.06.14 in the presence of both Counsel and the parties.

 

Counsel for the Applicant stated that though he was ready to proceed, he had just been served with the affidavit in reply with many authorities.  He sought adjournment.

 

In response, Counsel for the Respondent pointed out that she had only been served on 06.06.14 and 09.06.14 being a public holiday the reply could not be filed readily. 

 

Parties were accordingly directed to file written submissions and time lines were fixed as indicated on the file.  But by 30.06.14, when the main suit was called, the ruling was not ready as the Judge had been indisposed for the whole week, when the last of the submissions were filed.

 

In his submissions, Counsel for the Applicant reproduced the application and the grounds thereof and referred to the supporting affidavit and the affidavit in reply.

 

He then stated that the court has wide powers to make necessary orders to meet the ends of justice and relied on 2 authorities.  The cases of Mugenyi and Co. Advocates vs. National Insurance Corporation C.A. 13/86 [1992 – 93] HCB 82 and M.N. Munga and 3 Others vs. Sensariire and 4 Others C.A. No. 35/99 [1998 – 2000].

 

Counsel also distinguished the cases relied upon by Respondent on grounds that in the first case indebtedness was admitted while in the second case it was an application to lift the veil and add Second Applicant as a party to the suit on grounds of fraud. – See CA. 65/2005 and CA 96/2005.

 

He prayed that application be allowed.

 

The Respondent opposed the application in its submissions on the ground that Applicant only relied upon court’s discretionary powers under S.98 C.P.A and only distinguished cases that were served upon him out of the principle of collegiality.

 

Counsel while admitting that court has wide discretionary powers to stay proceedings, argued that the powers ought only be exercised in exceptional circumstances.  The case of Commodity Export International and Another vs. MKM Trading Co. Ltd and Another C. Appli. 96/2005 CA was cited in support.

 

Going through the brief facts of the application where the Second Defendant / Applicant was added as Second Defendant; Counsel pointed out that the memo of appeal raises facts that were never subject of the application no. 64/2014 and of the ruling.

 

It was contended that the issues raised by the Applicants in their appeal are subject of the main suit which has not yet been heard on its merits, and there is no bonafide appeal.

 

And further that it is not sufficient to show that there is a notice and memo of appeal.  The Applicants have to show that the appeal is likely to succeed.

 

Imploring court not to grant the application, Counsel insisted that the appeal was only intended to pre-empt the main suit, waste court’s time and delay justice to the Respondent.

 

The case of DFCU LT vs. Begmohamed C.A. 65/2005 was relied upon for the holding that “mindful of the backlog in the High Court, proceedings in the High Court should not be stayed unless it is absolutely necessary”

 

Pointing out that the Applicants will not be prejudiced since they can appeal at the end of the trial; Counsel argued that the application was an abuse of powers of court under S.98; with the Applicants filing various applications even before the main suit is heard.

 

Emphasizing that the court has wide discretionary powers it was pointed out that such powers should be exercised judiciously.  Adding that the Applicant seeks to appeal against a ruling that has already been complied with as having failed to stay proceedings in through the Court of Appeal, the Second Applicant filed his defence within 15 days.  The appeal is accordingly void abinitio.

 

Also that, since the appeal arises from an interlocutory order, the grievance could be raised on appeal if the Applicants are dissatisfied with the judgment on the merits.  The case of Commodity Export International and Another vs. MKM Trading Co. Ltd and Another (Supra) and the case of Bank of Baroda (U) Ltd & 3 Others vs. Edward Kabugo Ssentongo Mis. Appl. 421/13 arising from C.S. 116/2002 were cited in support.

 

Counsel then applied for dismissal of the application with costs.

 

Upon giving the submissions of both Counsel the utmost consideration, I find that I am persuaded by the arguments of Counsel for the Respondent.

 

It is true as agreed by both Counsel that this court has inherent powers under S.98 C.P.A to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of court.  But it is also clear that decided cases have established that those powers must be exercised judiciously.

 

The Applicants in the present case seek to stay proceedings in order to appeal against an interlocutory order of this court adding the Second Applicant as a defendant to C.S. No. 481/2012.

 

Decided cases already referred to in this ruling have ruled that appeals arising from interlocutory decisions could be made part of the appeal at the conclusion of the main suit and that it is therefore not necessary to appeal against an interlocutory ruling separate from the final decision.  And that to hold otherwise may lead to a multiplicity of appeals upon incidental orders made in the course of the hearing, when such matters can be more conveniently considered on appeal from the final decision.

 

 

I have found no reason in the present case to differ from the decision of the Court of Appeal No. 96/2005 and that of Lady Justice Hellen Obura in Misc. Appli. 421/13.

 

It is also apparent from the record in this case that the Second Applicant failed in his application in the Court of Appeal to stay proceedings and accordingly filed his defence within 15 days as directed.  Court is therefore left to wonder what he is appealing against.

 

Secondly, the memo of appeal also shows that the grounds of appeal apart from not being raised in the original application can be dealt with as issues in the main suit when the suit is heard on its merits.  And as held in the ruling appealed against, no injustice will be occasioned to the Applicant who will be heard in the main suit.

 

For those reasons, I find that there is no likelihood of success of the appeal.  

 

The Applicant has failed to establish sufficient cause for the proceedings to be stayed.

 

The application is accordingly dismissed with costs to the Respondent.  The main suit should be heard as earlier directed.

 

 

 

Flavia Senoga Anglin

JUDGE

01.07.14