THE REBULIC OF UGANDA

IN THE HIGH COURT OF UGANDA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 54 OF 2015

(ARISING OUT OF MISC. APPLICATION NO. 506 OF 2014)

(ARISING OUT OF MISC. APPLICATION NO. 559 OF 2013)

(ALL ARISING OUT OF CIVIL SUIT NO. 56 OF 2004)

BEN SEKABIRA ::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANT

VERSUS

ROBERT BITWIRE :::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT

BEFORE THE HON. JUSTICE HENRY PETER ADONYO:

RULING

1. Background:

This is an application by way of notice of motion under Section 98 of the Civil Procedure Act, Order 44 Rule1 (1), (2) and (4) of the Civil Procedure Rules and Rules 40(2) (a) of the Judicature (Court of Appeal) Rules seeking for orders that leave to appeal the ruling of this Honourable Court in High Court Miscellaneous Application No. 506 of 2014 be granted and the costs of the application ordered to be in the cause. The application is supported by an affidavit of Mr. David Mukiibi and it sets out the grounds under which the application is brought.

1. Grounds for this Application:

The grounds for this application are set out in the affidavit of Mr. David Mukiibi which briefly are that there are appealable grounds which require consideration of the appellant court for that would be in the interest of justice of the matter in dispute and thus that the application be granted as prayed.

1. Submissions:

During the presentation of the arguments for and against this application the parties were represented by Mr. Ernest Sembatya for the Applicant and Mr. Elias Sseguya for the Respondent. The arguments were reduced into writing and are on court record.

The Applicant main contentions in this matter are that:-

1. The finding that the applicant is liable for payment of the amounts due under the consent is erroneous in law as it is trite under company law that a shareholder, director or officer of a company can never be held liable for the company’s debts
2. Under the law of agency an agent cannot be held liable for the debts of a disclosed principle.
3. A liquidator cannot likewise be held liable for the debts of the entity in liquidation and that;
4. In finding of contempt of court the only remedy would be a fine and or civil prison for the contempt but not imputing liability on such person.

The Applicant then went ahead to narrow down these grounds into two clear issues;

1. Whether a non-party to a contract and or suit can be liable for payment of a debt and or judgment debt.
2. Whether the applicant is protected in the performance of his duties.

In the meantime the Respondent was of the firm view that the Applicant had presented no arguable grounds the grant of this application which should be dismissed with costs on the following grounds;

1. That the court order that was issued did not direct the applicant to pay the judgment debt from his own pocket but for him to enforce the court order since he was charged with the management of the bank which was in liquidation and thus it was misleading for the Applicant to argue that the effect of the court orders was that the Applicant was personally liable to settle the orders made against the bank which was in liquidation.
2. That the Applicant being an agent of bank in liquidation was liable for the acts or omissions of his principal as even the Financial Institution Act does not stop the meeting of a liability where there is clear obligation or duty and the Applicant as an agent was required to meet those obligations but had refused and neglected to pay the amounts due and owing to the Respondent.
3. That even the intended appeal is incompetent and incurably defective as the applicant ought to have sought leave before filing a notice of appeal.

1. Resolution of this Application:

Before I proceed to deal with the issues raised in this application, I will first deal the Respondent’s submission that this application ought to be dismissed since for leave to appeal was filed after a notice of appeal had already been filed contrary to the provisions of the law.

On this issue it would be worth referring to the law itself on this matter. According to Rule 41 (1) of the Judicature (Court of Appeal) Rules it is provided that;

“(1) where an application for a certificate for leave is necessary it may be made before or after notice of appeal is lodged.”

From the reading of the Rules above it is evident that a notice can be filed before or after a notice of appeal has been filed thus I would find no merit in the respondent’s submission otherwise.

As regards the main contentions in this application, the Applicant relies on the authority of Sango Bay Estates Ltd others v Dresdner Bank and AG to put his case for in that case Spry V.P stated that;

“As I understand it leave to appeal from an order in civil proceedings will normally be granted where prima facie it appears that there are grounds of appeal which merit serious judicial consideration…”

The Applicant further relied on the holding in the case of G.M. Combined (U) Ltd v A.K. Detergents (U) Ltd CACA No. 23 of 1994 where it was held that;

“An applicant seeking leave to appeal must show either that his intended appeal has reasonable chance of success or that he has arguable grounds of appeal and has not been guilty of dilatory conduct”

Relating the above holdings to the instant matter, it is clear from the pleadings in this matter that the Applicant is dissatisfied with the ruling of this court and has enumerated a number of grounds to support his dissatisfaction for which he now seeks leave do that further judicial consideration is had on those grounds for which he is uncomfortable with.

The perusal of the grounds cited in support of this application clearly show that in terms of the holding in the Sango Bay case (supra) the Applicant does show that he has a prima facie case for he questions the very rationale upon which the decision of this court was made and thus has amply shown that his grievances have merits.

However, to ensure that the justice of this matter is not blown to the wind, the Applicant will be required to show his seriousness in going forward with this matter while at the same take into account that there are pending orders of this court which ought to be taken care of. Thus while consideration will be made to grant this application it will be conditional in that the Applicant not only deposit the decretal sum of Shs. 101, 023,500 in court for it should be recalled that a court order is not made in vain and ought to be complied with in but addition to meet the costs of the applications which have already been awarded and settled by the taxing master.

The rationale being that the decretal sum so deposited would assure the Respondent that at the end of the day he will be able to get what has already been determined by this court while on the other hand were the appeal against the decision of this court to succeed then the Applicant would be in the position to get his money as a refund.

Before I take leave this matter, however, it is necessary that I comment on the ground which was tendered herein by the Applicant that the offence of contempt of court only attracts a fine or detention in civil prison.

According Article 28 (12) of the Constitution of The Republic of Uganda of 1995 As Amended the punishment for contempt of court is clearly not prescribed for and thus the end result of this constitutional arrangement is to the effect it is discretional for court to impose such punishment which the court would deem appropriate in the circumstance for the court is bestowed with such wide discretion which in its view fits the bill and thus I would respectfully disagree with learned counsel for the Applicant that the offence of contempt of court only attract the punishment of a fine or civil imprisonment. That contention in my view is not only erroneous but appears to be way off from the intention of the constitutional makers.

1. Orders:

All in all, I find that this application has merits and thus I would grant it on the following conditions;

1. The applicant deposit the decretal sum of Shs. 101,023,500/= in this court ,
2. The costs of the applications which have already been settled by the taxing master be paid by the Applicant, and
3. The Cost of this application to be in the cause.

I do so order accordingly.

HENRY PETER ADONYO

JUDGE

29TH MAY, 2015