THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (LAND DIVISION) MISCELLANEOUS APPLICATION NO.834 OF 2019 (ARISING OUT OF HCCS NO.839 OF 2017) SAAVA MICHAEL DAVID KYAZZE::::::::::::::::::::::::::::::::::::::: APPLICANT VERSUS DOREEN AINOMUGISHA COMMISSIONER LAND REGISTRATION:::::::::::::::::::RESPONDENTS BEFORE HON. MR. JUSTICE HENRY I. KAWESA RULING This application was brought by notice of motion under Article 28(1) &126(2)(e) of the Constitution, Section 33 of the Judicature Act Cap 13, Section 98 of the Civil Procedure Act Cap 71 and O.9 r.12, 27 and 29 of the Civil Procedure Rules SI 71-1; seeking for orders that- An order setting aside the exparte judgment and decree in respect of the counterclaim in Civil Suit No.839 of 2017 be granted. The order dismissing Civil Suit No. 839 of 2017 be set aside. That Civil Suit No.839 of 2017 be reinstated and the matter heard interparty and determined on its merit. Costs of this application be provided for. The grounds of the application, which I shall not reproduce, are supported by the affidavit of the Applicant wherein he avers as follows; That he is one of the administrators of the estate of the late Elizabeth Nakabiri (hereinafter the deceased). A copy of letters of probate was attached as “A”. That the deceased was at the time of her demise the registered proprietor of land in Bulemezi Block 124 Plot 10 at Kisuma (hereinafter the suit land). A copy of a special certificate of title was attached as “B”. That the 1st Respondent connived with the 2nd Respondent and fraudulently transferred the suit land prompting him to lodge a caveat to protect his and other beneficiaries’ interest, and also filed a suit against them. A copy of the plaint was attached as “C”. Further, that his advocates progressed well with the suit until they elected never to appear in Court without updating him. That he was not informed of the hearing date of the 23rd January, 2019 by his advocates hence missing attending Court. That his advocates were also absent on that date after which the 1st Respondent prayed to Court to dismiss the suit for nonappearance and the prayer was granted. Further that the Respondents also prayed to Court to proceed exparte in respect of the counterclaim, which prayer was also granted. A copy of the judgment was attached as “D”. That a decree has since been issued and the 1st Respondent is in the advanced stage of execution. A copy of the decree was accordingly attached as “E”. It is his evidence also that the suit and the counterclaim raise serious triable issues regarding fraud and connivance that require a full investigation of the matter lest the estate of the deceased shall suffer irreparable loss. The application was opposed through an affidavit deponed by the 1st Respondent. In her reply, she averred that she is the current registered proprietor of the suit land. That while the suit land was registered in the deceased name, it was subject to a mortgage with Co-operative Bank Ltd and its genuine certificate had been deposited with that bank to the knowledge of the Applicant. A copy of the “genuine” certificate of title was attached as “A”. That the certificate of title held by the Applicant is a forgery created by him to cheat Co-operative Bank Ltd of its monies lent to Ms. Nakabembe Enterprises Ltd which was at the time standing at a tune of Ugshs.526,000,000/- only (five hundred twenty six million shillings) in 2013. She urged me to refer to a letter attached as “B” in proof whereof that Ms. Nakabembe Enterprises having failed to pay the loaned monies, the bank in the exercise of its powers under the mortgage in 1999, advertised the suit land for sale. A copy of the advert was attached as “C”. That subsequently, with the liquidation of the Co-operative Bank and her assets, sold to Ms. Nile Acquisition, she purchased the suit land at Ugshs.160, 000,000/- only (one hundred sixty million shillings) in 2017 after the Applicant failed to redeem it. That the purchase was conducted by Nile Acquisition, through SIL Investments Ltd her appointed agent who handed to her the certificate of title and a mortgage release instrument. A copy of receipt of payment and mortgage release instrument were attached as “D” and “E”. Further that the Applicant is merely hiding under Counsel’s mistake for his own failure to follow up his case; and that he was informed by her Counsel that all matters in furtherance of hearing of HCCS No.839 of 2017 were always done by her advocates. In addition to this, she stated that the record clearly shows that for all material time, the main suit and the attendant applications were coming up for hearing, the Applicant was always absent. That the mediation report further shows that mediation failed because of the Applicant’s refusal to attend. A copy of this was attached as “F”. She also averred that in case this Court is inclined to grant this application, then the Applicant should be ordered to deposit Ugshs.400,000,000/- only (four hundred million shillings) as security for costs. The Applicant rejoined to the 1st Respondent’s averments. He accordingly averred that the contentions raised by the 1st Respondent regarding the genuiness of his title are matters to be determined during trial of the main suit. That he genuinely applied and was granted the special certificate of title after having been informed by SIL Investments Ltd that the duplicate got lost. It was his assertion also that there was no money that exchanged between Co-operative Bank, Nakabembe Enterprises Ltd and the deceased. Further, that he was informed by his advocates, that all transactions touching the suit land were fraudulent reason being; Bank of Uganda entered into a contract to handle the affairs of Co-operative Bank with Nile River Acquisition Company, a non-existent entity. He attached a copy of search report from URSB (Uganda Registration Service Bureau) in proof whereof as “B”. That the special certificate of title in the hands of the Respondent was fraudulently created. That SIL Investments Ltd purporting to have lost the duplicate certificate of title created the said special certificate of title without the knowledge of the deceased. That all transactions based on Nile River Acquisition Company Ltd were void ab initio. That the 1st Respondent derives her purported interest from Nile Acquisition Company Ltd and as such is equally null and void. A copy of the transfer form by Nile River Acquisition Company Ltd and Police Investigation report were attached as “C1” and “C2” in support thereof. That the deceased neither held a bank account with Co-operative bank nor did she execute the purported power of attorney in favour of Nakabembe Enterprises Ltd. I was referred to two letters from Bank of Uganda which were attached as “D1” and “D2”. That the purported signature on the mortgage deed is not of the deceased. He further averred that the negligence and lack of professionalism by his previous Counsel ought not to be visited on him. He disputed that he was always absent in all proceedings as per the record. That he was never informed of mediation, by his Counsel, which was hurriedly done since it did not last for the required 60 days. He refuted the 1st Respondent’s plea for security for costs; asserting that it does not meet conditions required for granting such an order because the pleadings disclose triable issues. Ultimately, he maintained that the main suit raised triable issues which require a full investigation after hearing both parties. Counsel for both parties filed written submissions which I shall consider accordingly in determining the application. In their submissions, Counsel for the Applicant proposed two issues thus; Whether the Applicant has shown sufficient cause to warrant setting aside the exparte judgment and decree? Whether Civil Suit No.839 of 2017 should be re-instated? I shall resolve the two issues concurrently given that the principles of law applicable to both are more less the same. The Applicant in this case was the counter defendant in the 1st Respondent’s counterclaim from which the impugned exparte decree was issued; and the Plaintiff in the main suit which was dismissed under O9 r22 of the Civil Procedure Rules. This calls for the application of O.9 r27 and O.9 r23 of the Civil Procedure Rules to the respective situations in determining whether or not to grant the orders sought. As regards issue 1; O.9 r27 of the Civil Procedure Rules, provides that a decree passed exparte against a defendant may be set aside upon his or her application on proof that he or she was prevented by any sufficient cause from appearing when the suit was called for hearing. This is done upon terms as Court may deem fit. As regards issue 2; O.9 r23(1) of the Civil Procedure Rules, provides that where a suit is dismissed under O.9 r22, the Plaintiff may apply for an order to set aside the dismissal upon satisfaction of Court that there was sufficient cause for non-appearance. The setting aside is also made upon terms as Court may think fit. What can be deduced from both rules is the requirement of proof of sufficient cause before the orders sought are granted. It is trite that the sufficient cause must relate to the failure to take the necessary steps required by law, and it is demonstrated when the Applicant shows that he or she had an honest intention of attending Court. In addition to this requirement, an Applicant must also show that he or she was diligent in applying for reinstatement. These propositions of law have been reechoed in several cases some of which were cited by both Counsel in their respective submissions that is; Marisa versus Uganda Breweries Ltd [1988-90] HCB 131; National Insurance Corporation versus Mugenyi & Co. Advocates CA No.14 of 1984, Girado versus Allan & Son (U) Ltd [1971] EA 448, Crown Beverages Ltd versus Stanbic Bank of Ug Ltd HCMA No. 0181 of 2005; and Parminder Singh Marwah Katongole versus Muzafaru Matovu HCCA No.51 of 2015. As regards issue 1; the sufficient cause fronted by the Applicant is mistake, inadvertence and negligence of his Counsel for not informing him of the hearing date to enable his attendance. Counsel for the Applicant properly submitted that mistake of Counsel, however reckless or negligent, constitutes sufficient cause. He cited Arthur Busingye & Anor versus Gianluigi Grassi & Anor HCMA No.203 of 2013 and Joel Kato & Anor versus Nuulu Nalwoga SCCA; Appn. No.4 of 2012 in support of this proposition. In countering the Applicant’s stand, as to sufficient cause; the 1st Respondent averred that the Applicant is merely hiding under Counsel’s mistake. She then faulted him for not following up on his case. That all matters in furtherance of the case were always done by her advocates. Further, that even the mediation report shows that mediation failed because of the Applicant’s refusal to attend. All this was reiterated by her Counsel in his submissions who emphasised that there is no sufficient cause exhibited by the Applicant. The Applicant then countered this by stating that he was not informed of the mediation by his advocates; and that the mediation was not done for 60 days as required by law. Having fully appreciated both versions, I am hesitant to fault the Applicant as the 1st Respondent and her Counsel do. In doing so, I borrow leaf from the observations Obura J., in Arthur Busingye & Anor versus Gianluigi Grassi & Anor (Supra), a case cited by Counsel for the Applicant. As it is also in this case, the Applicant instructed an advocate with whom matters relating to the conduct of his suit squarely fell. He could therefore not be expected to follow up his case in Court after he had instructed a Counsel to do so. His instruction can thus be regarded as a demonstration of an honest intention of attending Court. Had his Counsel appeared, or informed the Applicant to enable his appearance, I am certain that all this would not have happened. The claim of non-attendance of mediation is also far-fetched to indict the Applicant. This is because annexture “F”, mediation report, attached to the 1st Respondent’s affidavit clearly indicates that mediation did not last for 60 days as mandated by the law. This then supports the Applicant’s claim of nonappearance and mistake of his Counsel, and faults the 1st Respondent who incriminated self by asserting that it was her Counsel that conducted all matters in furtherance of the hearing of the main suit. Why then didn’t they wait for the mediation period to lapse? In the circumstances, therefore, I am inclined to find that the Applicant has demonstrated sufficient cause for non-appearance on the date of hearing. As to whether he was diligent in applying for reinstatement; Counsel for the 1st Respondent contended that the Applicant was guilty of inordinate delay in bringing this application. It was his submission that it took 6 months for the Applicant to apply for reinstatement since his suit was dismissed on the 23rd of January, 2019, and this application brought on the 5th of June, 2019. He thus submitted that the Applicant should not be allowed to stifle the work of Court since he already showed no interest in pursuing his claim. He then urged me to follow the ruling in Parminder Singh Marwah Katongole versus Muzafaru Matovu (supra) where Court rejected a like application brought after 9 months on ground of inordinate delay. On the other hand, Counsel for the Applicant submitted that the Applicant was diligent in applying for reinstatement since the decree was signed on the 14th of May, 2019 and the application brought on the 5th June, 2019. To him, the one month gap cannot amount to inordinate delay. He also sought to distinguish Parminder Singh Marwah Katongole versus Muzafaru Matovu (supra) from the instant application on ground that in that case, the application was brought 9 months after the judgment was delivered, and also that the Applicant had entered into a settlement agreement with the Respondent. I also looked at annexture “E”, the decree sought to be set aside and this indicates that it was indeed extracted on the date asserted by Counsel for the Applicant. As he asserted also, this application was brought on the 5th June, 2019. This confirms that it was brought within one month of the extraction of this decree. In my view, this cannot be regarded inordinate delay given the circumstances. I, thus, agree with the Applicant’s Counsel that the Applicant was diligent in applying for reinstatement. This is, however, not the end in respect of issue 1. As both Counsel rightly submitted, relying on Kyobe Senyange versus Naks Ltd (1980)HCB 31, before such a decree is set aside, the Court has to be satisfied that the defendant not only had some reasonable excuse for failing to appear but also that there is merit in his or her defence. In my view, this can only be determined by looking at the pleadings of both parties; in this case, the 1st Respondent’s counterclaim and the Applicant’s defence to it; and nowhere else. The counterclaim in this case raised claims of fraud against the Applicant. These allegations were flatly refuted by the Applicant in his defence. Fraud is by itself a grave accusation which requires strict proof. Considering the fact that the Applicant denied the 1st Respondent’s fraudulent accusations, I find it hard to deny him a hearing especially since the accusation involves a worthy subject matter; that suit land measuring 142.8 hectares. It would, thus, be unjust to deprive the Applicant such property without hearing his side. It is also clear from the evidence presented herein that there are far deeper issues that require a full investigation after a hearing interparty. As it has always been emphasised, the administration of justice requires that the substance of all disputes should be investigated and decided on their merits. See Banco Arabe Espanol versus Bank of Uganda SCCA No. 8 of 1998, a case also cited by the Applicant’s Counsel. Closing an eye to the issues raised herein would thus be contrary to justice. As such, I find that there is merit in the Applicant’s defence to warrant setting aside the exparte decree passed against him. Court however warns Counsel on instructions to always ably represent their clients to avoid such scenarios. Regarding the second issue; I find it not necessary to reiterate my findings regarding sufficient cause, and the Applicant’s diligence in applying for a reinstatement having already done so, as above. I would like, however, to add with emphasis one thing in respect of the Applicant’s diligence in applying for reinstatement. As can be seen on the record, the Applicant’s suit was dismissed on the 23rd January, 2019, and this application was brought after about 5 months therefrom. It appears from the evidence that the Applicant was ignorant of the progress of his case until a decree was extracted on the 14th of May, 2019 and issued against him. Having become aware of this, the Applicant ably applied for reinstatement within one month. This supports a finding that he was diligent in applying for reinstatement. Having demonstrated all the necessary requirements, I find it fair and just to grant this application to enable the determination of the main suit, and counterclaim on the merits. I find it inappropriate to grant the 1st Respondent’s prayer of ordering the Applicant for deposit security for costs in the absence of any proof of conditions for such order. Ultimately, the application succeeds under the following terms; An order setting aside the exparte judgment and decree in respect of the counterclaim in Civil Suit No.839 of 2017 is hereby granted. An order setting aside an order dismissing Civil Suit No. 839 of 2017 is hereby granted. An order reinstating Civil Suit No.839 of 2017 and the counterclaim therein for hearing inter parties is hereby granted. Costs of this application be in the cause. I so order. ……………………………. Henry I. Kawesa JUDGE 30/09/2019 30/09/2019: Kasaija Robert and Murungi Sharon for the Applicant. Applicant present. Respondent absent (left) Counsel (Rubeiza Jacob (left) Court: Ruling delivered to the parties above in chambers. ……………………………. Henry I. Kawesa JUDGE 30/09/2019
