Woodlane Properties Real Estates Limited and Another v KCB Bank Uganda Limited (Civil Application 739 of 2022) [2022] UGCA 331 (25 October 2022)

THE REPUBLIC OF UGANDA

IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

CIVIL APPLICATION NO. 739 OF 2022

(Aising out of Ciuil Application No. 737 of 2022)

1. WOODLANE PROPERTIES REAL ESTATE LTD

ra

2. NAMAKULA ANNET : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : APPLICANTS

vs

KCB BANK UGANDA LIMITED RESPONDENT

BEFORE: HON. JUSTICE STEPHEN MUSOTA, JA

(Sitting as a single Justice)

RULING OF COURT

The applicant filed this application by Notice of Motion under Rures 6(2) (b), 43(1) and (2) of the Judicature Court of Appeal Rules. It seeks for orders that;

- 1. An interim order doth issue staying the execution of orders of the High Court in Miscellaneous Application No. 06gl of 2O2l pending the determination of the applicant,s main application. - 2. Costs of this application be provided for.

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The application is supported by the affidavit of Namakula Annette in which she states the grounds upon which the application is premised. Briefly, the grounds are that;

- 1. On 6th May 2O2l , the respondent filed Miscellaneous Application No. 0681 of 2021 seeking among others, an order that the registration of the l"t applicant as proprietor of the properQr comprised in Block 101 plot 25g, Block 90 plot 460, Block 101 Plot i90 and Block 101 plot 259 be cancelled. - 2. On l2th September 2022, t]'e High Court delivered its ruling in HCMA No. 068 1 of 2O2l in favour of the respondent. - 3. The High court in HCMA No. 0681 of 2o2L ordered that the transfer of the land comprised in Kyadond.o Block 101, plots 190, 259, 259, 260, 261, 262, 263, 264, 266, 267, 26g, 269, 27o end275 at wattuba to the 1"t Applicant is null and void and should be cancelled. - 4. The High court further ruled that the transfer of land comprised in Kyadondo Block 90 plots 397 , 4Sg and 460 at Katalemwa to the applicant is null and void and should be cancelled. - 5. The High court ordered that if Mr. Ngari Gichohi shall not have effected the above transfers and paid all the fees and taxes required for the completion of that process, he sha,ll be committed to civil prison. - 6. The Applicants were dissatisfied with the orders of the High Court and filed a Notice of Appeal in this court and a letter requesting for a typed record ofproceedings.

- 7. The applicants have also liled a substantive application for stay of execution and the same is pending before this court. - 8. That the applicant's appeal is meritous and raises serious questions and has a high likelihood of success. - 9. There is an eminent threat of execution as per the orders made in the ruling of the High Court in M. A No. 681 of 2021.

The respondent filed an affidavit in reply deponed by Leila Linda Najjemba Akatwijuka in which she stated that the applicant,s transfer of properties comprised in Kyadondo Brock lo1 plots 190, 259, 259, 260, 26 l, 262, 263, 264, 266, 267, 26g, 269 27 0 and, 27 ⁵ at Wattuba as well as Kyadondo Block 90 plots 3gT, 4Sg and 460 at Katalemwa into the narnes of Namakula Annette and woodlane Properties Real Estates Ltd is in contempt of subsisting court orders. The transfers were declared itlegal by the court in Misc. Application No. 68 1 of 2021 and that the applicants can now proceed to rectify their registration on the properties by conversion of the same to leasehold.

Representation

At the hearing of this application, counsel rwaha Kabuye and Ikman Twaha appeared for the applicants while counsel Kavuma Terrance appeared for the respondent.

Applicant's submissions

counsel submitted that the applicants are the registered proprietors of land comprised in Kyadondo Block lOl plots lgo,2Sg,2Sg,260,

²⁶l, 262, 263, 264, 266, 267, 268, 269 27 O and, 27 5 at Wattuba as well as Kyadondo Block 90 Plots 397, 4Sg and 460 at Katalemwa, which the High court ordered to be cancelled by the commissioner Land Registration in Misc. Application No. 681 of 2o2l and is subject of this application for interim stay of execution. counsel argued that the law governing grant of an application for an interim order of stay of execution was summaized by the Supreme Court in Hwan Sung Industries Vs TaJdin Hussein S. C. C. A No. 19 of 2OOg. That for ^a grant of an interim order of stay of execution, the applicant ought to show that a substantive application for stay of execution has been filed, there is a serious threat of execution and that a Notice of Appeal has been filed.

That these same principles were stated by the Supreme court in Zubeda Mohammed and another Vs Laila Kaka Wallia and another s.c.c. A No. 7 of 2oL6. counsel argued that the applicants filed a Notice of Appeal in this court on the 16th of September2022 and a letter requesting the record of proceedings. counsel relied on the decision in Attorney General of the Republic of uganda vs The East African Law society and another EACJ Application No. 1 of 2o13 on the preposition that a Notice of Appeal is a sufficient expression of an intention to file an Appeal and that such action is sufficient to found a basis for grant of orders of stay of execution.

counsel submitted further that a substantive application for stay of execution has been filed vide civil Application No. 73T of ²⁰²² pending hearing before this court. counsel argued that it is not

necessary to pre-empt the consid.eration of matters necessarJr in deciding whether or not to grant the substantive application for stay.

with regard to existence of a serious threat of execution, counsel submitted that the trial court directed the commissioner Land Registration to cancel the registration of the 1"t applicant from the land comprised in Kyadondo Block 101 plots 190, 25g, 25g,260, ²⁶l, 262, 263, 264, 266, 267, 268, 269 2T O and, 27 S at Wattuba as well as Kyadondo Block 90 plots 397, 459 and 460 at Katalemwa. The cancellation of the proprietorship will amount to a loss of proprietary interest in the land by the applicants which cannot be compensated. That the said order of the High court is self-executing and the respondent is zealous to ensure that the order is complied with.

In addition, the respondents have commenced execution proceedings vide HCT-EMA-}279-2j22 agatnst the applicants. The purpose of granting an order for an interim stay of execution pending the hearing of the substantive application and intended appeal is to preserve the subject matter and maintain the status quo so that the right of appeal is exercised without prejudicing the applicants.

Respondent's submissions

In reply, counsel submitted that Rule 2(2) of the rules of this court cannot be invoked for purposes of defeating justice. That the applicants purchased the said properties in contempt of a court order in a transaction that is rightly illegal. counsel relied on the decision in Housing Finance Bank & Speedway Auctioneers Vs Edward

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Musisi Misc. Application No. 1s8 of 2oL1 where this court held that issues touching on contempt of court take preced.ence over any other invocation of the jurisdiction of the court. counsel also relied on the decision in Hanifa Kawooya Bangirana vs Attorney General and National council for Higher Education Misc. Application No. 46 of 2o1o where court declined to grant an order to the applicant on grounds that she had gotten herself nominated in disobedience of a court order.

In addition, counsel relied on Masaka Municipal council vs Takaya Frank civil Appeal No. 1zB of 2o1s on the notion that court will not lend its aid to a man who founds his cause of action upon an immoral or illegal act. counsel submitted further that the prerequisites for grant of an interim application for stay of execution have not been fulfilled by the applicant as there is no substantive application for stay of execution that has been Iiled in this court.

Consideration of the application

The law regarding stay of execution is well stated under Rule 42 of the Court of Appeal Rules. It states that;

42. Order of heaing applications.

(1) Wheneuer an application may be mad.e either in the court or in the High Court, it shalt be made fi.rst in the High Court.

(2) Notuithstanding subrule (1) of this rule, in ang ciuil or criminal matter, the court maA, on application or of its own motion, giue leaue to appeal and grant a consequential extension of time for

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doing ang act as the justice of the case requires, or entertain an application under rule 6(2) (b) of these Rules, in ord-er to safeguard the right of appea| notuithstanding the fact that no application for that purpose has first been made to the High Court.

Rule 2(2) of the Judlcature court of Appeal Rules grants this court powers to make such orders to meet the ends of justice. It provides that

(2) Nothing in these Rules shall be taken to limit or othentise affect the inherent power of the court, or the High Court, to make such orders as maA be necessary for attaining the ends of justice orto preuent abuse ofthe process ofang suchcourt, and that power shall extend to setting aside judgments which haue been proued null and uoid afier theg haue been passed, and shall be exercised to preuent abuse of the process of ang court caused bg delag.

In National Enterprise Corporation Vs Mukisa Foods Miscellaneous Application No. 7 of L998, this court held that;

"The court has power in its discretion to grant stag of execution where it appears to be equitable uith a uiew to temporailg preserue the status quo. As a general rule, the onlg ground for stag of execution is for the applicant to show that once the decretal propertg is disposed of there is no likelihood of getting it back should the appeal succeed.,'

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I have borne all the above principles and authorities cited by both counsel in mind in considering this Application.

In Hwan Sung Industries ltd vs Tajdin Husseln and,2 others Civil Application No. 19 of 2OO8, Okello JSC (as he then was) stated some of the principals to be considered in granting interim orders of stay of execution, thus:

"For qn application for an inteim order of stag, it suffices to show that a substantiue application is pending and that there is a seious threat of execution before the heaing of the pending sub st antiu e applic atio n.

It ls not necessary to pre-empt consideration of matters necessary in deciding whether or not to grant the substantiue application for stag."

In evaluation of the conditions laid out above and in regard to the condition of lodging a notice of appeal, I will refer to the Supreme court case of Dr. Ahmed Muhammed Kisuule vs. Greenland Bank (In liquidation) Miscellaneous Application no. z of 2o1o in which it was stated that;

"For an application in this Court for a stag of exeantion to succeed the applicant must first show subject to other facts in a giuen case, that he/ she has lodged a notice of appeat in accord.ance with Rule 72 of Rules of this Cortrt..."

According to the evidence on record, a Notice of Appeal has been lodged under Rule 76 of the Rules of this court on 19th September

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2022. A substantive application for Stay of Execution has also been filed and it is referenced as Civil Application No. 73T of 2022.

Lastly, there should be an eminent threat of execution for this court to grant an interim order of stay of execution. From the affidavit evidence of the 2"a applicant, trial court directed the commissioner Land Registration to cancel the registration of the 1st applicant from the land comprised in Kyadondo Block 10 1 plots lgo , 2Sg, 2S.g , 260, 26L, 262, 263, 264, 266, 267, 268, 269 2TO and,275 at Wattuba as well as Kyadondo Block 90 Plots 397, 459 and 460 at Katalemwa.

Whereas the respondent's argument is that the transfer and registration of the applicants on the suit land was done in contempt of a court order, the supreme court has held that for an interim order or stay of execution to be granted, it is not necessary to pre\_empt consideration of matters necessary in deciding whether or not to grant the substantive application for stay. For this court to delve into the illegality of the transfers and subsequent registration on the said title deeds would amount to pronunciation on the substantive application and the appeal itself.

This court held in Krone uganda Limited vs Kerilee Investment Limited Civil Application No. 63 of 2O2O that;

"The underlying principle is that Court is not required to inquire into the meits of the case from which this apprication arose, since this ls not an appeal, howeuer it is required to deterrnine whether prima facie, there eist grounds of appeal that merit serious consideration. It is a balancing act.,'

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It has been previously held in Mohammed ssebagala and another Vs Diamond Trust Bank Civil Application No. 223 of 2Cl22 by Justice Geoffrey Kiryabwire, JA, that;

"It would therefore appear to me that the grant of an inteim Ord.er is a matter of judicial discretion the purpose of which is the preseruation of the slalus quo pending the heaing of the sub s tantiu e applicatio n. "

In the circumstances of this case, I find that the applicants have proved the conditions for grant of an order of interim stay pf execution. This application therefore succeeds and I order that;

- 1. An interim order of stay pf execution of the decree of the High Court in Misc. Application No. O6gi of 2O2l pending the determination of the substantive application for stay is hereby granted. - 2. Costs of this application shall abide the main cause.

Dated this 3-srb day of 5+ ²⁰²²

@\*'N,"\*A

Stephen Musota JUSTICE OT APPEAL