`   THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL COURT DIVISION)

MISCELLANEOUS APPLICATION NO. 215 OF 2014

(ARISING OUT OF MISCELLANEOUS APPLICATION NO. 234 OF 2013)

(ARISING OUT OF CIVIL SUIT NO. 234 & 572 OF 2012)

1. HASSAN BASAJJA                                     }
2. MUSA BASAJJA                                         }
3. HAJI ABAS KANGAVE                             }
4. MARY BASAJJA                              }
5. SHAMIM BASAJJA                                   }
6. AISHA BASAJJA                                        }
7. YUDAYA INTERNATIONAL LTD  }
8. HABA GROUP (U) LTD                             }
9. AZIDA BASAJJA                                        }::::::::::APPLICANTS

VERSUS

1. STANDARD CHARTERED BANK (U) LTD}
2. STANBIC BANK (U) LTD                         }
3. BANK OF UGANDA                                   }:::::::RESPONDENTS

BEFORE HON. LADY JUSTICE HELLEN OBURA

RULING

The applicants brought this Miscellaneous Application by Notice of Motion under Section 33 of the Judicature Act Cap. 13, Section 98 of the Civil Procedure Act Cap. 71 (CPA), Order 44 rule 1 (2), (3), & (4) and Order 52 rules 1 & 3 of the Civil Procedure Rules (CPR). The application is seeking for orders that the applicants be granted leave to appeal part of the ruling of this honorable court delivered on the 18^th day of March 2014 in Miscellaneous Application No. 234 of 2013 and that proceedings and orders in Civil Suit No. 571 and 572 of 2012 be stayed pending disposal of the applicants’ intended appeal in the Court of Appeal and to abide its outcome. The applicants also seek any other orders court deems fit and that costs of this application be provided for.

The grounds of this application are stated in the Notice of Motion and affidavit in support deposed by the 1^st applicant Hassan Basajja who is also the Chairperson of the Board of Directors of the 8^th applicant and a Director in the 7^th applicant. He deposed that he and the other applicants are dissatisfied with part of the ruling of this honorable court which partially overruled points of law that had been raised in Miscellaneous Application No. 234 of 2013 and have therefore filed a notice of appeal. Furthermore, that this court erred in both law and in fact when it held:-

1. That Bank of Uganda has capacity to sue on behalf of the Government of Uganda,
2. That the consent judgment in HCCS No. “OS” 09 of 2005 did not render CS No.571 & 572 of 2012 res judicata,
3.  That the realization and enforcement of the recovery upon default of payment of the sum stated therein would be in accordance with the assignment and not merely by executing the consent judgment,
4. That the plaint in CS No. 571 &572 of 2012 disclosed a cause of action,
5.  That Miscellaneous Application No. 738 of 2011 (arising out of Civil Suit No. ‘OS’ 9 of 2005) Bank of Uganda vs. Basajjabalaba Hides and Skins Ltd before His Lordship Hon. G W Kwesiga High Court Land Division did not substantially deal with the matters in controversy in Civil Suits No. 571 and 572 of 2012- Standard Chartered Bank & 2 others vs. Hassan Basajja & 8 Others,
6. That having looked at the documents relied on by His Lordship Hon. G W Kwesiga High Court Land Division in Miscellaneous Application No. 738 of 2011 (arising out of Civil Suit No. ‘OS’ 9 of 2005) Bank of Uganda vs. Basajjabalaba Hides and Skins Ltd, it could not conclusively determine whether the said sums were paid without a trial thereby potentially opening up a case already determined by the ruling of His Lordship Hon. G W Kwesiga and,
7. That Stanbic Bank and Standard Chartered Bank had no cause of action against the applicants but did not award costs to the applicants.  

Mr. Hassan Basajja further averred that the above intended grounds of appeal prima facie raise serious issues of law which merit serious judicial consideration by the Court of Appeal. He therefore stated that it is fair, just and equitable that leave be granted and the proceedings be stayed abiding the outcome of appeal so that parties may be heard by the Court of Appeal for the ends of justice to meet.

An affidavit in reply and opposition to the application was deposed by Titus Mulindwa, Deputy Legal Counsel for the 3^rd respondent bank.  He averred that the decision dismissing the preliminary objection is an interlocutory decision and as such not appealable. Furthermore, that the respondents contest the application for stay of proceedings on the grounds, firstly that it is defective because jurisdiction to grant stay of proceedings by reason of an intended appeal vests with the Court of Appeal pursuant to rule 6 (2) (b) of the Judicature (Court of Appeal ) Rules S.I 13-10 and not in the trial court. Secondly, that the justice of the matter requires that it be tried and determined on its merits as is the usual case where preliminary objection is overruled.

Thirdly, that no prejudice will be occasioned to the applicants by the trial continuing as in the event that their appeal is successful the lower court’s decision will, as in any other case, be overturned and if unsuccessful, then the applicants will have been heard in their defence and will abide the High Court decision. Lastly, that the sum sought to be recovered are in excess of US $ 40,261,020 and are tax payers monies which will greatly prejudice the 3^rd respondent and the citizens of Uganda if the proceedings which seek to determine whether these amounts are due is stayed.

When this application came up for hearing, the applicants were represented by Mr. John Mary Mugisha who appeared jointly with Mr. Caleb Alaka and Mr. Obed Mwebesa while the respondents were represented by Mr. Masembe Kanyerezi appearing together with Mr. Steven Zimula. This court directed the parties to file submissions on the points of law and the merits of the applications.

Counsels for the applicants submitted that the main issue in this application is whether the application satisfies the conditions precedent for the grant of leave to appeal and cited the case of Sango Bay Estates Ltd & others vs. Dresner Bank [1971] EA where Spry V-P stated that; “leave to appeal from an order in civil proceedings will normally be granted where prima facie it appears there are grounds of appeal which merit serious judicial consideration but where, as in the present case, the order from which it is sought to appeal was made in exercise of judicial discretion, a rather stronger case will have to be made out.”

As to how a prima facie case can be determined, it was submitted for the applicants in reference to the case of Humphrey Nzeyi vs. Bank of Uganda and Attorney General of Uganda Constitutional Application No. 01 of 2013 that;

“The court has to exercise its discretion by considering all the relevant facts of the case, but in doing so, it has to restrain itself from attempting to resolve complex issues of disputed facts or those of law at this stage, and leave the same to be resolved in the substantive main cause or suit. The court however, is not precluded from considering the strength or weakness of each party’s case, but may do so only where it is apparent from the affidavit evidence and exhibited documents.”

Based on the above guidelines, it was argued that considering the affidavit evidence and the documents in the instant case, this application satisfies the conditions for grant of leave to appeal as the intended grounds raise controlling questions of law that merit judicial consideration.

As regards the prayer for stay of proceedings, the appellants’ counsels submitted that this is a proper case where an order of stay of proceedings ought to be granted. They argued based on the case of Hon. Prof. GW Kanyeihamba & others vs. Amos Nzeyi & Others H.C.C.S. No. 361 of 2010 that stay of proceedings is case management technique in the discretion of court. They also relied on the case of Harnam Sigh & others vs. Mistri [1971] C.A 122 EACA at page 125 where it was held that; “….there is no doubt that there is an inherent power to stay proceedings where the ends of justices so require.”  On that basis, they prayed that the application be allowed.

In reply, the respondents vehemently opposed the application for leave to appeal and for stay of proceedings arguing that the applicants are out of time in filing an appeal in this matter as their memorandum and record of appeal should have been filed within 60 days from the date the typed proceedings were made available to them that is from the 15^th April 2014 making the 13^th June 2014 the last day within which it should have been filed. This argument was supported by the provision in the Judicature (Court of Appeal) Rules, under rule 8 thereof which states that an appeal shall be instituted in the court by lodging in the registry within 60 days after the date the Notice of Appeal was lodged.

It was noted that a copy of typed record of proceedings was availed to the applicants on the 4^th day of April 2014 and the registrar acknowledged receipt thereof on the 14^th day of April 2014. It was then contended that there is no pending appeal in law which would form the basis for this application for leave to appeal and stay of proceedings.

Counsels for the respondents further submitted with reference to the case of Sanyu Musoke vs. Sam Galiwango, SCCA 48 of 19995 reported in [1997] V KALR at pg 52 that; “It must be pointed out that the issue of appealing against every ruling that is made in the course of the trial has come before this court on several occasions and decisions on it have been made to the effect that it is not necessary to file separate appeals, one against the interlocutory order made in course of the hearing and another one against the final decision . To hold otherwise might lead to multiplicity of appeals upon incidental orders made in the course of the hearing when such matters can more conveniently be considered in an appeal from the final decision.”

The respondents’ counsel drew this court’s attention to the observation of Hon. Justice D.K. Wangutsi in his ruling in Leaf Tobacco & Commodities (U) Ltd vs. Mastermind Tobacco (K) Ltd Misc Appl. 0443 of 2012 to the effect that to allow appeals against every interlocutory decision would be to prolong suits to expensive extents. It would undermine the procedures, as well as raise the cost of litigation so leave to appeal interlocutory orders should be granted only in exceptional circumstances that involve a controlling question of law which if resolved the whole case would be determined.

For the above reasons, counsels for the respondents prayed that the application for leave to appeal be refused because no such exceptional circumstances exist in this case.

On the prayer for stay of proceedings, it was submitted for the respondents that there is no pending appeal as the time within which the appeal should have been filed lapsed without the memorandum and record of appeal being filed. It was further submitted that even if there was a pending appeal and leave to appeal were granted, that would not be a basis for staying the main suit. It was argued that the case of National Housing & Construction Corporation vs. Kampala District Land Board & Anor SCCA No. 06 of 2002 relied upon by the applicants’ counsels is not helpful on the matter as it deals with the exercise of the Court of Appeal of its jurisdiction to stay proceedings under rule 6 (2) (b) of the Judicature (Court of Appeal) Rules which are not applicable in this case and,  in any event, in that court the test is whether the continued hearing of the suit will render the appeal nugatory which in this case will not happen if the matter proceeds.

In rejoinder, the applicants counsel submitted that the application satisfies the conditions precedent for the grant of leave to appeal and emphasized rule 76 of the Judicature (Court of Appeal) Rules that allows lodgment of a notice of appeal before the grant of leave to appeal. They argued that it is inconceivable that the applicants could lodge a memorandum and record of appeal within 60 days as contended by the respondents’ counsels before obtaining the leave which is precondition to institution of an appeal. The applicants reiterated their earlier submissions and prayers.

I have carefully considered the above arguments of the parties and the intended grounds of appeal as stated in the affidavit in support of this application and I do find that the exceptional circumstances that merit grant of leave to appeal interlocutory orders do exist in this case. It is my firm view that the intended grounds of appeal canvassed by the applicants, especially the question whether or not the suit is res judicata, raise controlling questions of law which if resolved in favour of the applicants would determine the whole case before this court.

In addition, I am also convinced that some fundamental questions of law are raised by the question as to whether Bank of Uganda has capacity to sue on behalf of the Government of Uganda. This court therefore agrees that since the appellants have opted to appeal against this court’s decision on the matter, those questions of law would need to be determined by the Court of Appeal and for that reason I would be inclined to grant leave to appeal.

I did take into account the arguments of the respondents that there is no appeal but I failed to find merit in it. This is because while it is true that an appeal is filed by lodging a memorandum and record of appeal in the manner provided under rule 83 of the Judicature (Court of Appeal) Rules, the applicants did not have an automatic right of appeal and so they could not have filed a memorandum and record of appeal without first obtaining leave to appeal from this court or if denied by this court, from the Court of Appeal. An appeal filed without the leave of court would be struck out for being incompetent as was held in Dr. Sheikh Ahmed Mohammed Kisuule vs. Greenland Bank( In Liquidation)SCCA No. 11 of 2010 where Kitumba, JSC in her leading judgment stated thus:

“Additionally, where leave is required to file an appeal such leave is not obtained the appeal filed is incompetent and cannot even be withdrawn as an appeal. See Makhangu Vs Kibwana [1995-1998] 1 EA 175. It is not a merely procedural matter but an essential step envisaged by Rule 78 of the rules of this court……. However, in the instant appeal no genuine steps were taken to apply for leave to appeal either in the High Court or in the Court of Appeal. Consequently there was no competent appeal before the Court of Appeal. Similarly there is no competent appeal before this court. In the result I would strike out this appeal with costs to the respondent.”

Indeed leave to appeal is an essential step which is also prescribed under Order 44 rule 1 (2) of the CPR for purposes of the High Court. In the instant case, in a bid to obtain the required leave, the applicants duly filed this application on 1^st April 2014, that is, fourteen days after the ruling sought to be appealed against was delivered by this court and an affidavit in reply was filed on 2^nd June 2014. Thereafter the parties utilized about two months to file written submissions and have been waiting for the ruling of this Court.

Rule 40 (1) (a) of the Judicature (Court of Appeal) Rules prescribes the time within which a formal application for leave to appeal may be made. It states thus:

“40. Application for certificate of importance or leave to appeal in civil matters.

1. In civil matters—

1. where an appeal lies if the High Court certifies that a question or questions of great public or general importance arise, application to the High Court shall be made informally at the time when the decision of the High Court is given against which the intended appeal is to be taken; failing which, a formal application by notice of motion may be lodged in the High Court within fourteen days after the decision, the costs of which shall lie in the discretion of the High Court
2. ……” (Emphasis mine).

This court’s ruling was delivered on 18^th March 2014 and the application for leave was filed on the 1^st April 2014 which was the fourteenth day after the decision. This means the application was filed on time but the delay to obtain leave was occasioned by the procedure of filing affidavit in reply, submissions and preparation of the ruling which cannot be blamed on the applicants. What is important is that they filed a notice of appeal and took the necessary steps to obtain leave and in addition applied for and obtained the record of proceedings as by law required. This court cannot now begin inquiring into whether or not there is an appeal well knowing that the same could not have been filed before leave is obtained. What the applicants need to satisfy this court about is that a notice of appeal which merely expresses the intention to appeal by the party giving the notice was filed within the prescribed time.

I have had the opportunity of looking at annexture “B” to the affidavit in support of this application, being a copy of the notice of appeal filed on 20^th March 2014 just two days after the ruling was delivered. I am therefore satisfied that the applicants intend to appeal against the decision of this court and have taken the necessary steps to that end. Since their application passes the test of exceptional circumstances for grant of leave to appeal against interlocutory orders, I accordingly grant their prayer for leave to appeal.

As regards the prayer for stay of proceedings and the orders of this court, I have considered the arguments of both parties and I am more inclined to grant the prayers for the simple reason that if the matter proceeds and the appeal succeeds especially on the intended ground of res judicata then it would have been a waste of time for this court to have proceeded with the matter. Similarly, the intended ground on capacity of the Bank of Uganda to sue on behalf of the Government of Uganda would have a serious bearing on the parties to the main suit if that ground succeeds. For those reasons, the prayers for stay of proceedings and orders are also allowed.

In the result, this application succeeds and the following orders are made:-

1. Leave is granted to the applicants to appeal against part of the ruling of this court delivered on 18^th March 2014 in Misc. Application No. 234 of 2013 Hassan Basajja & 8 Others vs. Standard Chartered Bank & 2 others.
2. Proceedings and orders in Civil Suit No. 571 and 572 Standard Chartered Bank & 2 Others vs. Hassan Basajja & 8 others are stayed pending the disposal of the intended appeal in the Court of Appeal.
3. Costs of this application shall be in the main cause.

I so order.

Dated this 23^rd day of June 2015.

Hellen Obura

JUDGE

Ruling delivered in chambers at 3.00 pm in the presence of:-

1.  Mr. Masembe Kanyerezi and Mr. Steven Zimula for the respondents.
2. Mr. Joseph Kyazze and Mr. Keneth Kakande both h/b for Mr. Caleb Alaka for the applicants.

JUDGE

23/06/15