THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 239 OF 2013

ARISING FROM HCCS NO 375 OF 2009

1. SHUMUK SPRINGS DEVELOPMENT LTD }
2. SPRINGS INTERNATIONAL HOTEL LTD }
3. SHUMUK FINANCIAL SERVICES LTD}..................................... APPLICANTS
4. MUKESH SHUKLA}

VERSUS

1. BONEY MWEBESA KATATUMBA }
2. VIRANI BAHADUKALI }
3. JOSEPH SEMPEBWA }
4. PETER LULE}.................................................................... RESPONDENTS
5. TECTON GROUP }
6. ARVIND PATEL }
7. REGISTRAR OF TITLES}

BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicants filed this application under order 22 rule 26 and 89 of the Civil Procedure Rules and section 98 of the Civil Procedure Act for orders that the court stays execution of the payment of costs of the 2nd, 3rd, 4th, 5th and 6th Respondents pending the final disposal of HCCS Number 375 of 2009 and the court stays the execution of the payment of costs of the first Respondent.

The application is supported by the affidavit of the fourth Applicant. The grounds of the application are also contained in the chamber summons. The first Respondent's Bill of costs was taxed allowed at Uganda shillings 62,173,450/= and execution proceedings have been commenced against the Applicants. The 2nd, 3rd, 5th, and 6th Respondents were jointly allowed a bill of costs of Uganda shillings 81,798,815/= and have commenced execution proceedings against the Applicants. The 4^th Respondent’s bill of costs is yet to be taxed and may be taxed soon. The Applicants claim that there is a pending suit against the 2nd, 3rd, 4th, 5th and 6th Respondents. The suit is a counterclaim in HCCS No. 375 of 2009 at the Commercial Court Division of the High Court. The first and second Applicant's have a pending suit against the 1^st Respondent in HCCS No. 126 of 2009 in the Commercial Division of the High Court. The Applicants contend that it is in the interest of justice that the court issues a stay of execution of the payment of the costs of the Respondent until the pending suits have been decided. It is in the interest of justice that an order of stay of execution issues staying execution for payment of costs of the Respondents until the suits have been decided. The Applicant avers that the 4^th Applicant is ready and willing to deposit as security for the due satisfaction of the payment of the costs of the Respondents  a residential property comprised in Mengo Kibuga Block 29 and Plot 205 registered in his name and valued in excess of Uganda shillings 350,000,000/=.

The affidavit of the 4^th Applicant Mr Mukesh Shukla repeats the grounds in the chamber summons and adds that he has been served with notice to show cause why he should not be arrested and committed to appear before the registrar execution division. Furthermore that he has demonstrated a commitment to pay legal costs of the Respondents by offering his private houses as security for the due performance of any orders of the court until after the two pending suits have been decided. A photocopy of the title deed of the property and the valuation report are annexed to the affidavit in support.

The affidavit in reply sworn by the first Respondent is that the application is a blatant abuse of court process considering that civil suit number 375 of 2009 was a distinct suit in its own right and conclusively dismissed against him. The question of costs had been conclusively settled by the trial judge in taxation appeal number 21 of 2012 and has not been appealed. The obligation to pay taxed costs had no connection to, and cannot be pegged to the outcome of HCCS number 126 of 2009 because HCCS number 375 of 2009 was dismissed with costs for being an abuse of court process. The first Respondent is not a party to the counterclaim in HCCS number 375 of 2009.

Further affidavit in reply sworn on the behalf of the 2nd, 3rd, 5th and 6th Respondents by David Mukiibi who practices with Masembe, Makubuya, Adriko, Karugaba & Sekatawa advocates avers that HCCS No. 375 of 2009 was dismissed against the respondents for failure to disclose a cause of action. No appeal was preferred by the Applicants against the decree dismissing the suit. After the taxation of their bills of costs, the Applicants obtained an interim stay of execution pending determination of the appeal from the taxation decision. The appeal was heard and determined in the Applicants favour and the costs were sent back to the registrar for reassessment. Costs were taxed and allowed at Uganda shillings 81,798,615/=. The Applicant's consented to payment of the costs of the 2nd, 3rd, 5th, and 6th Respondents in three weekly instalments effective 8 April 2013 to 12th of April 2013 according to a copy of the consent annexure "C" attached to the affidavit in reply. The consent has not been varied or set aside. Secondly there is no suit pending in the court against the 2nd, 3rd, 5th and 6th Respondents in the names of the Applicants as required by order 22 rules 26, which rule is the basis of the application. Consequently there was no basis upon which the court can stay execution of the payment of costs of the 2nd, 3rd, 5th and 6th Respondents in HCCS No. 375 of 2009.

The affidavit in reply and on the behalf of the 4th defendant was sworn by one Sarah Kisubi an advocate practising with Messieurs Kalenge, Bwanika, Ssawa and advocates, advocates of the 4th Respondent. The main contention is that the counterclaim in HCCS No. 375 of 2009 has no bearing on the question of costs and the counterclaim can be sustained on its own. Secondly stay of execution would be unjust, unfair and prejudicial to the Respondents who have incurred costs in defending the main suit and should be allowed to enjoy the fruits of their litigation at the earliest opportunity. Finally that it is just and equitable that the application is dismissed.

At the hearing of the application, the Applicants were represented by Counsel Augustine Kibuuka Musoke while Counsel Benson Tusasirwe appeared for the first Respondent, and the fourth Respondent was not represented. The 2nd, 3rd, 5th and 6th Respondents were represented by Stephen Zimula. The seventh Respondent was not served.

The Applicant filed written submissions in support of the application while the Respondents responded orally and the Applicant's Counsel made oral submissions in rejoinder.

I have carefully considered the submissions. The Respondents Counsels jointly submitted on a point of law. This is whether the application is properly brought under order 22 rules 26 of the Civil Procedure Rules. Order 22 rule 26 of the Civil Procedure Rules provides as follows:

"Stay of execution pending suit between decree holder and judgment debtor.

Where a suit is pending in any court against the holder of a decree of the court in the name of the person against whom the decree was passed, the court may, on such terms as to security or otherwise, as it thinks fit, stay execution of the decree until the pending suit has been decided."

Rule 26 provides for stay of execution at the discretion of the court where there is a suit pending in any court against the holder of a decree or the judgment creditor by the person against whom the decree was passed namely a judgment debtor. In such cases the judgment debtor may apply to the court executing the decree or which passed and is executing the decree for stay of execution pending determination of the suit.

The Applicant’s issue in the written submissions are whether the court can stay execution of the decree or the payment of the costs of the first Respondent on the ground that there is another pending suit between himself and the first and second Respondents. That the pending suit is based on the same subject matter in the same division of the High Court. The second issue is whether the court can stay execution of a decree of the payment of the costs of the second, third, fourth, fifth and sixth Respondents on the ground that they have counterclaims against Applicants pending in the same suit, namely HCCS No. 375 of 2009 in the same division of the High Court.

The Applicant’s Counsel broadly submitted that the court can stay execution of the decree for the payment of costs on the ground that there is another suit pending between himself and the decree holder. He submitted that the conditions are that there must be a pending suit in any court against the holder of a decree of the court in the name of the person against whom a decree was passed. The court can impose terms or otherwise as it thinks fit to stay execution of the decree until the pending suit has been decided. Counsel relied on the case of Iddi Halfani vs. Hamisi Binti Athumani [1962] EA 761 where the High Court of Tanzania considered a rule which is in pari materia with order 22 rules 26 of the Civil Procedure Rules. Counsel submitted that in that case it was held that the rule imposes no condition regarding the nature of the pending suit or the effect of a stay of proceedings granted under the rule as regards adjustment of the claims or prevention of multiplicity of execution proceedings.

"All that the rule requires is that there shall be a pending suit, which in the absence of limiting words means any kind of suit brought by the unsuccessful against the successful party in the earlier suit was decree is to be executed."

Counsels for the Respondents on the other hand contend that the main suit had been dismissed but the counterclaim had remained and the defendants then sought to execute the order to dismiss the main suit by way of the costs awarded in that matter. Counsel Benson Tusasirwe submitted that even if the rationale of order 22 rule 26 of the Civil Procedure Rules was to adjust the claims between the two litigants so that it would be necessary to wait for the outcome of the pending suit in order to do so, in this case there is no doubt that the parties involved are the same, the subject matter is the same, and it would be impossible to adjust the claims against each other. This is because the main suit had been dismissed but the counterclaim survived. He contended that in the instant case the two suits are organically distinct though founded on the same facts. The justification in the case quoted by the Applicants Counsel does not hold in the instant suit.

As far as the 2nd, 3rd, 5th and 6th Respondents are concerned the Applicant voluntarily filed a written consent in the Execution Division of the High Court agreeing to pay upon terms contained in the consent. The consent has not been set aside or varied and is binding on the Applicants and therefore the application for stay of execution cannot be granted.

I have carefully considered the point of law that arises from the above submissions. Order 22 rule 26 of the Civil Procedure Rules provides that the pending suit should be in any court against the judgment creditor and in the name of the judgment debtor. In other words it must be a suit filed by the judgment debtor against the judgment creditors. What happened in HCCS No. 375 of 2009 was that the main suit was filed by the Applicants against the Respondents. The Respondents filed a counterclaim against the Applicants. The main suit was dismissed with costs which is the subject matter of the application for stay of proceedings. In other words as far as HCCS No. 375 of 2009 is concerned, there is no suit filed by the judgment debtor against the judgment creditors in that suit. The counterclaim is in the names of the judgment creditors against the judgment debtor. I have further considered the case of Iddi Halfani v Hamisi Binti Athumani [1962] EA 761 of the High Court of Tanzania and decided by Sir Ralph Windham CJ. He said at page 763 and I quote:

"All that the rule requires is that there shall be a pending suit, which in the absence of limiting words means any kind of suit, brought by the unsuccessful against the successful party in the earlier suit whose decree is to be executed." [Emphasis added]

The decision does not support the submissions of the Applicant as far as HCCS No. 375 of 2009 is concerned. This is because the counterclaim in HCCS No. 375 of 2009 which is a pending suit is brought by the successful party (the respondents) against the unsuccessful party (the Applicants). There is therefore no pending suit of the kind envisaged by order 22 rules 26 of the Civil Procedure Rules. There is no pending suit filed by the applicants (judgment debtors) against the respondents (Judgment creditor) in HCCS No. 375 of 2009. Consequently as far as HCCS No. 375 of 2009 is concerned, the application for stay of execution of the costs in that suit under order 22 rules 26 of the Civil Procedure Rules is incompetent.

As far as the first Respondent is concerned additional arguments were made about the pendency of HCCS No. 126 of 2009. The application was argued on the merits and there is no need for me to repeat the arguments of Counsel except on one crucial point on which the matter revolves. The most important aspect of the argument which I consider relevant is that in High Court civil suit No. 375 of 2009 the suit was dismissed against the first Respondent for abuse of court process. Counsel submitted on the object of rule order 22 rule 26 and particularly quoted from Chittaley’s Commentary on the Code of Civil Procedure second edition page 1781 as quoted below:

"The object of this rule is twofold: (i) to enable the judgment debtor and the decree holder to adjust the claims against each other, and (ii) to prevent a multiplicity of execution proceedings."

I agree with the Applicant’s Counsel that the case of Iddi Halfani vs. Hamisi Binti Athumani (Supra) does not disagree with the above quotation as to one of the objects of order 22 rules 26 of the Civil Procedure Rules. However stay of execution is an exercise of the courts discretion. Where the suit is dismissed for abuse of the process of court, the claim for costs cannot be adjusted against any other claim of the judgment debtor by reason that an order dismissing a suit for abuse of court process is a preventive order. According to Osborn's Concise Law Dictionary 11th edition Sweet and Maxwell 2009 at page 5, abuse of process is:

"The court may strike out a statement of case if it appears to the court that the statement of case is an abuse of the courts process, e.g., where the claim is the same as a claim which has already been adjudicated upon between the parties. It is a power "which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people": by Lord Diplock in Hunter versus Chief Constable of West Midlands Police [1982] AC 539" [Emphasis added]

According to Odgers' Principles of Pleading and Practice in Civil Actions in the High Court of Justice 22nd edition London Steven's and Sons 1981 page 150 the term "abuse of the process of the court" is descriptive and connotes:

"… The powers of the court must be used bona fide and properly, and must not be abused. The court will prevent the improper use of its machinery and will not allow it to be used as a means of vexatious and oppressive behaviour in the process of litigation. In particular it is an abuse of the process for a plaintiff to litigate against an identical issue which has already been decided against him in earlier proceedings, even though the matter may not be strictly res judicata."

Finally section 98 of the Civil Procedure Act provides that nothing in the Act would limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court. The power to prevent abuse of the process of court cannot be stayed. The order was made and the first Respondent was awarded costs. The nature of the order to prevent abuse of the process of court is embodied in the order of costs as well. It operates as a sanction against a litigant to prevent certain actions considered abuse of the process of court. The nature of the order is not a question of mathematical figures by way of costs which may be offset. It was a dismissal with costs which is for abuse of process and the costs ought to be paid as part of prevention of abuse of court process. Most importantly, the Applicant's never appealed the decision of the court dismissing High Court civil suit number 375 of 2009 as been an abuse of the process of court. In those circumstances an application to stay the use of the coercive powers of court to prevent an abuse of its process on the ground that there is a pending suit wherein another order may be made in which the costs can be offset against the earlier costs cannot stand.

Last but not least the Applicant already has a written consent entered into between the Applicants and the 2nd, 3rd, 5th and 6th defendants/Respondents the terms of which include the an agreement for the plaintiff/applicants to pay the defendant's costs in three weekly instalments effective 8th of April 2013 – 12th of April 2013. I have considered arguments that the Applicants Counsel executed the agreement in order to prevent his client Mr Mukesh Shukla from being arrested. Unfortunately for the Applicants the consent agreement was filed in a court of law and within HCCS No. 375 of 2009 and is binding. It specifies when the costs should be paid. However to execute and file such an agreement without intending it to be executed for purposes of buying time would be an abuse of the process of court. Secondly there is no application to set aside the consent agreement by which the Applicant agreed to pay the Respondents. The agreement operates as estoppels against the current application for stay of execution because the application for stay of execution as it stands now operates is granted to prevent the implementation of the agreement between the parties.

In those circumstances the Applicant's application lacks merit. Because it was blatantly argued for against the applicants own express written consent to pay the costs without any attempt to apply to set aside the agreement, the application is dismissed with costs payable by the Applicants to the Respondents.

Ruling read in open Court this 22^nd of April 2013

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Augustine Kibuuka Musoke for the applicants

Benson Tusasirwe for the first respondent

First respondent in court

Steven Zimula appears on behalf of the 2^nd 3^rd, 5^th and 6^th respondent

Charles Okuni: Court Clerk

Christopher Madrama Izama

Judge

22^nd April 2013