Court name
Supreme Court of Uganda
Judgment date
29 May 2017

Nyakana & Sons Ltd v Kobusingye & 16 Ors (Miscellaneous Application-2017/13) [2017] UGSC 25 (29 May 2017);

Cite this case
[2017] UGSC 25
Short summary:

Civil Procedure

Coram
Kisaakye, JSC

1
5 THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA AT KAMPALA
[CORAM: KISAAKYE, JSC]
MISC. APPLICATION NO. 13 OF 2017
BETWEEN
10 E. B. NYAKAANA & SONS LTD. :::::::::::::::::::::::::::::::] APPLICANT
AND
BEATRICE KOBUSINGE & 16 ORS. ::::::::::::::::::::] RESPONDENT
[Application arising out of Supreme Court Civil Appeal No. 02 of 2017]
RULING OF COURT
15 E. B. Nyakana & Sons Ltd.(hereinafter referred to as the applicant)
filed this application under Rules 2(2), 6(2)(b), 41(1) & (2) and 43(1) of
the Judicature (Supreme Court) Rules seeking an interim order for
stay of execution of the Court of Appeal Judgment in Civil Appeal No.
55 of 2014.
20 The brief background to this application is that the respondents
petitioned the High Court (High Court (Fort Portal) Company Cause
No. 01 of 2005) seeking a winding up order against the applicant on
grounds of mismanagement. Following a protracted hearing spanning
a number of years, the High Court finally granted the winding up order
25 on 4th July 2013 on grounds that it was just and equitable to wind up
the applicant and immediately appointed a liquidator.
Dissatisfied with the order of the High Court, the applicant appealed to
the Court of Appeal which upheld the decision of the High Court to
wind it up.
30 Originally this application was filed against 17 respondents. However,
the 12th to 17th respondents were struck out in Civil Application No.
2
13 of 2017 (No. 1) for failure 5 of the applicant to serve them. The
application is therefore against the 1st to 11th respondents.
This application is based on the following nine grounds set out in the
Notice of Motion.
1. That the Applicant has appealed against the Judgment of Court of
10 Appeal to the Supreme Court.
2. The respondent is in the process of executing the orders of the
Judgment of the Court of Appeal and the Judgment was passed
against the applicant on 6th May 2016.
15
3. The application has been filed without delay.
4. The respondent has threatened execution of the order of the Taxing
Officer aforementioned.
20
5. That the applicant will suffer irreparable loss and or damage of the
execution if the said Order is not stayed and the decision of the
application aforesaid will be rendered nugatory if execution is
allowed to proceed.
25
6. The execution will interfere with the activities of the Applicant and
thereby resulting into substantial loss which cannot be remedied in
any way by award of damages or otherwise if the execution is not
stayed.
30
7. That the applicant made a similar application, that is Misc.
Application No. 16 & 18 in the Court of Appeal but has failed to
secure a date.
35 8. That the application has a high chance of success.
9. That it is in the interest of justice that the execution of the decree
be stayed pending the hearing and determination of the
Application for stay pending Appeal.
40 While the application states that it was supported by the Affidavit of
Sam Phiri, the application is supported by an affidavit sworn by Kate
Nyakana.
3
On the other hand, the respondents f 5 iled two affidavits in reply where
they contested the application. Beatrice Nyakana deponed on behalf of
the 1st to 5th respondents while Bob Kagaba deponed on behalf of the
6th to 12th respondents.
The applicant was represented by Yesse Mugenyi. The 1st to 5th
10 respondents were represented by Charles Tibaijuka while Oscar Kihika
represented the 6th to 12th respondents. Parties filed written
submissions in support of and in opposition to the application.
Applicant’s submissions
Counsel for the applicant submitted that for the applicant to qualify
15 for grant of an interim order for stay of execution, it was incumbent
upon the applicant to show that: (a)a Notice of Appeal had been lodged
in accordance with Rule 72 of the Rules of this Court; (b) a substantive
application for stay of execution was pending before this Court; (c)
there is a serious threat of execution before the hearing of the
20 substantive application; and (d) that the application for the interim
order has been filed without delay.
Counsel submitted that the applicant had filed and served a Notice of
Appeal on the respondents, lodged a Record of Appeal within the
stipulated time of sixty days and had also scheduled the main appeal
25 to be heard.
Counsel for the applicant further submitted that the applicant had
already filed a substantive application for stay of execution (Misc.
Application No. 12 of 2017) in this Court, which was pending hearing.
Regarding threat of execution, counsel for the applicant relied on
30 Editor in Chief of the New Vision Newspaper v. Jeremiah
Ntabgoba, Civil Application No. 63 of 2004 (CA) and submitted that
the Court of Appeal directed that the applicant’s properties be
disposed of or distributed within a period of 12 months with effect
from 14th December 2016. He contended that six months had since
4
lapsed yet the main application h 5 ad not yet been fixed by this Court
for hearing.
On irreparable damage, counsel for the applicant submitted that if
execution were to be commenced, irreparable damage will be caused to
the applicant. He contended that the applicant is worth Uganda
10 Shillings 4 billion and that if its assets are distributed among the
respondents, none of the beneficiaries/respondents has the capacity to
mobilize the said amount of money to compensate the applicant
company in the event it was found by this Court that the distribution
was unlawful.
15 Counsel for the applicant contended that it was essential that the
property of the applicant should not be disposed of before the main
appeal was heard since its disposal would render the applicant’s
appeal nugatory. Lastly, counsel also contended that this application
was filed without delay. Counsel prayed that the status quo be
20 maintained before the appeal was heard and that this application be
granted.
Counsel for the applicant further relied on the decisions of this Court
in Theodore Ssekikubo & 4 others v. Attorney General,
Constitutional Application No. 04 of 2014; and Bitamisi
25 Namuddu v. Rwabuganda, Civil Application No. 11 of 2014 in
support of his submissions.
Respondents’ Submissions
All the respondents opposed the application. Counsel for the 1st to 5th
respondents refuted the applicant’s contention that it had filed an
30 application for interim stay of execution at the Court of Appeal before
filing one in this Court as is required by Rule 41(1) of the Rules of this
Court.
Counsel submitted that the applicant did not attach on its supporting
affidavit a copy of the alleged application or letters allegedly written to
5
the Deputy Chief Justice 5 seeking a hearing date. In the absence of
such evidence, counsel contended that no evidence of a prior
application in the Court of Appeal was adduced and therefore, the
applicant had failed to prove that it filed a similar application in the
Court of Appeal first before filing the present application in this Court.
10 Regarding the Notice of Appeal, counsel for the 1st to 5th respondents
submitted there was no competent Notice of Appeal before Court
because the one on record offended Rule 72(2) of the Rules of this
Court which requires that the Notice of Appeal should be lodged
‘within fourteen days after the date of the decision against which it is
15 desired to appeal.’ According to counsel, the applicant filed its Notice
of Appeal on 29th December 2016, which was 15 days after Judgment
had been delivered on 14th December 2016. Relying on the authorities
of Zubeda Mohamed & Anor v. Laila Kaka Wallia & Anor, Civil
Reference No. 07 of 2016 (SC) and Katayira Francis v. Rogers
20 Bosco Bugembe, Civil Application No. 23 of 2016 (SC), counsel for
the 1st -5th respondents contended that the late filing rendered the
main application from which this interim application arose
incompetent and by implication this application.
Further relying on Horizon Coaches Ltd. V. Rurangaranga & Anor
25 [2010] 1 E.A. 77, counsel for the 1st to 5th respondents also submitted
that the existence of a competent Notice of Appeal was not pleaded as
a ground in the Notice of Motion. Yet, he contended, the import of
Rules 42 and 43 of the Rules of this Court is that applications are
argued on the basis of grounds stated in the Motion rather than in the
30 supporting Affidavit.
Regarding a pending substantive application in this Court, counsel for
the 1st to 5th respondents also submitted that neither was a copy of the
said substantive application attached to this application nor was the
Court number of the substantive application given by the applicant.
35 Counsel further submitted that this ground was also not stated in the
6
Notice of Motion. In counsel’s vi 5 ew, all this had the effect of rendering
the present application incompetent.
On the threat of execution, counsel for the 1st to 5th respondents
submitted that the applicant did not adduce evidence of an application
filed by the respondents to commence execution of the Court of Appeal
10 decree. Counsel further submitted that the Court of Appeal in its
Judgment did not make any order as to costs and that in the
circumstances, the threat of execution for costs as stated in ground 6
of the Notice of Motion was imaginary.
Counsel for the 1st to 5th respondents also found fault with the
15 applicant’s supporting Affidavit. First, he submitted that whereas the
Notice of Motion expressly stated that it was supported by the affidavit
of Sam Phiri, no such affidavit was attached to the motion. Secondly,
that in paragraph 16 of the affidavit of Kate Nyakana, the affidavit was
deponed in support of an application for stay of execution and not an
20 application for an interim order of stay of execution. In the
circumstances, he prayed that the application be struck out or
dismissed with costs.
Counsel for the 6th to 11th respondents associated himself with the
submissions of counsel for the 1st to 5th respondents and briefly
25 submitted in respect of some of the contested property.
He submitted that some of the properties the applicant was claiming
as belonging to the estate of the late E.B. Nyakana (plots 11-13
Ruhandika Street and on plot 4 Kabafumu Road, Fort Portal) belonged
to the estate of the late Charles Sagoro Nyakana and by implication to
30 the 6th to 11th respondents, who were the beneficiaries of this estate.
Counsel referred and relied on paragraph 4 of Bob Kagaba’s affidavit in
reply and the attached joint scheduling memorandum duly entered
and signed by both the applicant and the respondents at the Court of
Appeal to support his contentions.
7
In light of this, counsel for 5 the 6th to 11th respondents submitted that
since the applicant had conceded that the above properties were not
part of the estate of the late E.B. Nyakana, the same could not be
claimed by the applicant.
In the circumstances, counsel for the 6th to 11th respondents prayed
10 that the application be dismissed with costs.
In rejoinder, counsel for the applicant refuted the respondents’
contention that the applicant’s Notice of Appeal was lodged out of time.
He submitted that under Rule 4(a) & (e) of the Rules of this Court, the
day of Judgment, the day of lodging the Notice of Appeal and the
15 period covering the Christmas vacation were not to be considered in
the computation of time. Counsel for the applicant contended that if
the above days were excluded, then it became evident that the
applicant lodged its Notice of Appeal within the prescribed time.
Regarding the threat of execution, counsel for the applicant submitted
20 that the Court of Appeal directed that all the properties in the
applicant’s names be cancelled and replaced with those of the
executors and thereafter distribution of the property be made among
the beneficiaries of the estate of the late E.B. Nyakana within a period
of 12 months from the date of Judgment.
25 Regarding the respondent’s contention that there was no pending
substantive application, counsel for the applicant contended that the
respondents’ allegation was speculative since evidence was presented
to show the existence of a substantive application with a Court
number. He further submitted that no evidence had been adduced by
30 the respondents to contradict this fact or that the cited number refers
to some other application.
Counsel for the applicant further contended that the mix up of the
names of the deponent of the affidavit in support of the notice of
8
motion was an error that could be cured 5 by Article 126 (2)(e) of the
Constitution. Counsel reiterated the applicant’s earlier prayers.
Court’s determination
Before proceeding to consider whether the applicant has met the above
requirements for grant of an interim order of stay of execution, there is
10 a matter that I have deemed proper to dispose of by way of a
preliminary point. This relates to matters over which this Court and
the Court of Appeal have concurrent jurisdiction.
Rule 41(1) of the Rules of this Court provides as follows:
“Where an application may be made to either the Court or to
15 the Court of Appeal, it shall be made to the Court of Appeal
first.”
The orders the applicant intends to stay temporarily were issued by
the Court of Appeal, which is also vested with powers under Rule 2(2)
of the Judicature (Court of Appeal) Rules to make such orders as
20 may be necessary to meet the ends of justice. These include powers
staying execution of its orders. Indeed in Housing Finance Bank Ltd
& Anor v. Edward Musisi, Misc. Application No. 158 of 2010 (CA),
the Court of Appeal held that under Rule 2(2) of its Rules, it is vested
with powers to grant a stay of execution of its orders to a deserving
25 applicant in cases of an applicant intending to appeal against its
decision to the Supreme Court.
It therefore follows that since this Court and the Court of Appeal have
concurrent jurisdiction over this application, the applicant was
enjoined to file its application in the Court of Appeal first.
30 The applicant contends that it complied with this provision but has
failed to secure a hearing date. The respondents on the other hand
submit that there has been noncompliance with Rule 41(1) of the
Rules of this Court.
9
I have perused the 5 record of this application. I note that in both
ground 6 of the application and paragraph 8 of the applicant’s affidavit
in support of this application, it is stated and deponed respectively,
that that the applicant lodged Misc. Applications Nos. 16 / 2017 and
17/ 2017 in the Court of Appeal praying for an interim order and stay
10 of execution in January 2017. Again in paragraph 8 of the applicant’s
affidavit in support of this application, the deponent depones that
continuous efforts by the applicant’s lawyers to secure a date to have
the applications fixed and heard at the Court of Appeal have been
unsuccessful, despite writing series of letters to the Deputy Chief
15 Justice over the matter.
However, none of these documents referred to in ground 6 and
paragraph 8 were attached to the Affidavit in support of this
application. In the circumstances, the Court is not able to satisfy itself
whether the applicant complied with Rule 41 (1) of the Rules of this
20 Court before it filed the present application in this Court.
Consequently, it is my finding that the applicant did not comply with
the provisions of Rule 41 (1) of the Rules of this Court.
My finding above should have been enough to dispose of this
application. However, I note that Rule 41(2) of the Rules of this Court,
25 permits this Court to entertain an application under Rule 6(2) (b) (that
is an application for stay of execution) to safeguard the right to appeal,
even though the applicant has not first made his or her application to
the Court of Appeal. Given that the present application arises from an
application for stay of execution, I will in the interests of justice,
30 proceed to determine the merits of this application vis-à-vis the
requirements the applicant must first satisfy in order for the Court
grant it an interim order of stay of execution.
The application shows that it was filed under Rule 6 of the Judicature
(Supreme Court) Rules. However, the applicant, submitted that the
10
application is 5 brought under Rules 2(2), 6, 42 (1) and 47(2) of the
Rules of this Court.
Be that as it may, Rule 6(2) (b) of the Judicature (Supreme Court)
Rules provides for stay of execution and is not applicable in the
present application. The Rule which is applicable to this application
10 for an interim order for stay of execution is Rule 2(2) of the Judicature
(Supreme Court) Rules. This Rule vests this Court with inherent
powers to make such orders as are necessary to meet the ends of
justice.
The above position was recently restated by this Court in Zubeda
15 Mohamed & Anor v. Laila Kaka Wallia & Anor, Civil Reference
No. 7 of 2016, where it was held as follows:
“The law governing applications for injunctions or stay of
execution is set out in Rule 6(2) (b) of the Rules of this Court
which reads as follows:
20 ...
Applications for stay of execution are handled by a full bench.
In cases of urgency, however, this Court is empowered by Rule
2(2) of the Rules of the Court to issue interim orders in
order ‘to achieve the ends of Justice.’ Applications for interim
25 orders are heard by a single Justice of the Court. Applications
for interim orders are granted pending determination of the
substantive application, not the appeal. An interim order is a
stop gap measure to ensure that the substantive application is
not rendered nugatory.”
30 The question for determination now is whether the applicant has
satisfied this Court to exercise its discretion to grant the applicant an
interim order of stay of execution pending the disposal of the main
application.
According to the supporting affidavit to its application sworn by Kate
35 Nyakana, the applicant contends that it has: (a) lodged a Notice of
Appeal; (b) filed Civil Application No. 12 of 2017 seeking for an order of
Stay of Execution from which the present application emanated.
11
There is a wealth 5 decisions of this Court’s that have laid out the
factors that Court will consider before granting an application for an
interim order for stay of execution pending the determination of the
substantive application. These include Zubeda Mohamed & Anor v.
Laila Kaka Wallia & Anor, Civil Reference No. 7 of 2016 (SC);
10 Theodore Ssekikubo & 4 others v. The Attorney General,
Constitutional Application No. 04 of 2014 (SC); Yakobo Senkungu
& ors v. Cresensio Mukasa, Civil Application No. 05 of 2013 (SC)
among others.
A perusal of these authorities shows that before Court exercises its
15 discretion, it must be satisfied that:(a) a Notice of Appeal has been
lodged in accordance with Rule 72 of the Rules of this Court; (b) a
substantive application for stay of execution is pending before Court;
(c) there is a serious threat of execution before the hearing of the
substantive application; and (d) the application has been filed without
20 undue delay.
Turning to the first factor, the applicant submits that it filed a Notice
of Appeal. This contention is also repeated in paragraph 6 of the
applicant’s affidavit in support of the application. However, the
applicant neither attached a copy of the Notice of Appeal nor the
25 Judgment of the Court of Appeal from which the intended appeal
emanated attached. Attaching these two crucial documents could
have gone a long way in helping Court to determine whether the
applicant had filed a Notice of Appeal, and if so, whether it was filed in
accordance with Rule 72 (2) of the Rules of this Court.
30 I note that copies of both the Court of Appeal Judgment and the Notice
of Appeal were attached on the Affidavit in Reply to the application
deponed by the 1st respondent, Beatrice Kobusinge. Notwithstanding
this attachment by the 1st respondent, I still find that it was the duty
of the applicant and not the respondent to prove that it had lodged a
35 Notice of Appeal in accordance with Rule 72(2) of the Rules of this
12
Court. It would, 5 in my view, be bad practice for the applicant or this
Court for that matter to solely rely on the documents filed by the
respondent(s) to prove the applicant’s case. In the circumstances, I
find that the applicant did not prove to this Court that it had lodged a
Notice of Appeal in accordance with Rule 72 (2) of the Rules of this
10 Court.
I now turn to the next ground which is the existence of a pending
substantive application. Counsel for the applicant submits that he
has filed a substantive application (Civil Application No. 12 of 2017)
for stay of execution in this Court. This contention is also averred in
15 paragraph 14 of the affidavit in support of the application. I however
note that just like in the two preceding instances, counsel for the
applicant did not adduce any evidence to support his contention. It
could have been proper to attach this pending substantive application
(if any) on the affidavit in support of the application. In the
20 circumstances, the Court is not able to ascertain whether there is a
pending substantive application for stay of execution or not.
The Notice of Motion also stated that that the application is supported
by an affidavit deponed by Sam Phiri. However, no such affidavit was
attached. Rather the applicant instead filed an affidavit in support,
25 deponed by Kate Nyakana ‘in support of an application for stay of
execution!’ It therefore follows that the application did not have an
affidavit in support. I am unable to agree with the applicant’s counsel
that such an error should be overlooked basing on Article 126 (2) (e) of
the Constitution.
30 Regarding the threat of execution, I am also not satisfied that the
applicant has made a case on this ground. No evidence was adduced
by the applicant that the respondents have filed any application to
commence execution of the Court of Appeal decree. I also agree with
counsel for the respondents that the threat of execution for costs as
35 stated in ground 6 of the Notice of Motion was imaginary. This is
13
because the Court 5 of Appeal expressly stated that it will not make any
order as to costs.
Lastly, counsel for the applicant in ground 9 in support of the
application contended that in the interest of justice, the application
should be granted. Justice, in my view presupposes fairness. I have
10 already alluded to the fact that originally, this application was brought
against 17 respondents. However, following this Court’s Ruling in E.
B. Nyakana & Sons v. Beatrice Nyakana & 16 others, Civil
Application No. 13 of 2017 (No. 1), the 12th to 17th respondents were
struck out. They were struck out following the applicant’s repeated
15 failure to serve them with this application in spite of even being
ordered to do so by this Court. It also suffices to note that the 17th
respondent is the Official Receiver mandated under the relevant laws
of our country to manage the affairs of companies that are being
wound up, like the present applicant. This Court cannot make an
20 order against the Official Receiver when the Official Receiver has not
been heard. The same applies to the other respondents that were
never served with this application by the applicant.
In the circumstances and for reasons given above, I have found no
basis to warrant this Court to grant the orders sought in the
25 application. This application is therefore dismissed with costs to the
1st to 11th respondents.
Dated at Kampala this………29th…day of ………May……..…………… 2017.
……………………………….………………
JUSTICE DR. ESTHER KISAAKYE,
JUSTICE OF THE SUPREME COURT.