Automated Summary
Key Facts
The Uganda Electricity Board (in liquidation) appealed a ruling requiring it to deposit Shs.150,000,000 as security. The court held that the Deputy Registrar erred by allowing the application under CPR 0.36 r.5(1)(a) without requiring proof of the appellant's intent to obstruct or delay justice. The judge emphasized that the court must be satisfied the defendant's asset disposal is intentional to prevent decree satisfaction. The appeal was allowed, the order set aside, and each party bears its own costs.
Issues
- The court examined whether the respondent needed to demonstrate that the appellant's disposal of assets was intended to obstruct or delay the execution of a potential decree. Legal interpretations from cases like Datardini and Mugimu were considered, emphasizing the necessity of intent for such orders.
- The court addressed whether the provisions of CPR 0.36 r.5(1)(a) apply differently to a statutory body in liquidation, such as the Uganda Electricity Board, compared to an ordinary company. The Divestiture Act's role in guaranteeing payment from government funds was a key factor.
Holdings
The court held that the Deputy Registrar erred in allowing the application under 0.36 r. 5 (1) (a) without requiring the respondent to prove that the appellant (a statutory body in liquidation) was disposing of its property with intent to obstruct or delay justice. The court emphasized that under the relevant rule, the court must be satisfied not only that the defendant is disposing of assets but also that the disposal is intentional to evade judgment. It further clarified that the respondent's claim, if successful, would be settled from the Government of Uganda's Divestiture Account, rendering the security deposit unnecessary. The appeal was allowed, and the impugned order was set aside, with each party bearing their own costs.
Remedies
- The court allows the appeal and sets aside the order requiring the appellant to deposit Shs.150,000,000 or have property attached. This decision is based on the view that the respondent failed to prove the appellant's intent to obstruct or delay justice.
- Each party is ordered to bear its own costs in the appreciation of the novelty of the subject matter of the appeal.
Legal Principles
The court applied the purposive approach to statutory interpretation, emphasizing that the object and intent of the statute (here, Rule 0.36 r. 5 (1) (a) of the Civil Procedure Rules) must guide its construction. The judge cited Lord Denning’s principle that statutes should be interpreted according to their purpose rather than literal wording, particularly to ensure the plaintiff’s decree can be satisfied if successful.
Precedent Name
- Abby Mugimu –Vs- Basabosa
- Pyarali Datardini –Vs- Anglo American Amusement Park
- Lall –Vs- Jeypee Investments Ltd
- Engineering Industry Training Board –Vs- Samuel Talbot Ltd
- Tamlin –Vs- Hannaford
Cited Statute
- Public Enterprises Reform and Divestiture Act, Cap. 98
- Civil Procedure Rules, Order 36, Rule 5(1)(a)
- Electricity Act of 1964
Judge Name
Yorokamu Bamwine
Passage Text
- In the words of Lord Denning L.J. (as he then was) in Tamlin –Vs- Hannaford [1950] 1 K.B. 18 at 23: 'If it should make losses and be unable to pay its debts its property is liable to execution, but not liable to be wound up at the suit of any creditors. The tax payer would, no doubt be expected to come to its rescue before the creditors stepped in.'
- Accordingly, the question of the decree becoming infructuous for want of property for its satisfaction does not arise. I would have been of a different view if the appellant was an ordinary liability company in the process of being wound up, and not a statutory body.
- I accept that submission. It is not my intention to delve into the various rules of statutory interpretation. However, the correct attitude was in my view echoed by Lord Denning in Engineering Industry Training Board –Vs- Samuel Talbot Ltd [1969] 1 All E.R. 840 when he said: 'But we no longer construe Acts of Parliament according to their literal meaning. We construe them according to their object and intent.'