Court name
Commercial Court of Uganda
Judgment date
16 September 2004

Ojara and Anor v Busia Town Council and Anor (Miscellaneous Application-2004/458) [2004] UGCommC 32 (16 September 2004);

Cite this case
[2004] UGCommC 32


THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)
MISC. APPLICATION NO. 458 OF 2004

1. JESSE J. ODAI OJARA]
2. ISSA
WANGA] :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANTS


VERSUS
BUSIA TOWN COUNCIL::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT

BEFORE: THE HON. LADY JUSTICE MS. ARACH AMOKO


RULI NG:
This is an application for orders that:
1. A temporary injunction date issue suspending the tenders awarded by the Respondent to M/S Aremo & Sons Ltd and Freeline Taxi Club in respect of Busia Market and Bus/Taxi Parks respectively.
2. Provisions be made for costs of the application.
The application was brought by chamber summons under the provisions of Order 37
rules 2 and 9 of the CPR. It is supported by the affidavit of Jesse Odai — Ojara — the 1st
Applicant dated 3rd July 2004 and another one in rejoinder dated 1s September, 2004.
The Town Clerk of Busia, Mr. Wabudi Albert has sworn an affidavit in reply dated 26th August, 2004.
Briefly, the back ground to this application is that the Respondent through its Urban Tender Board, renewed the contracts for the management of Busia Market, taxi and bus parks in favour of MIS Aremo & Sons Ltd and Free Line Taxi Clubs respectively, for a period of two years with effect from 15st July 2004 to 30th June 2006. The Applicants allege that the Council flouted the Local Government procurement procedures in renewing the contracts. They have as a result filed Misc. Cause No. 13/04 on 1st July 2004 for inter alia, orders of certiorari and prohibition against the Respondent. The said Misc. Cause is pending before this Court.
The grounds cited in this instant application are that:
1. The Applicant is a resident of Busia Town Council.
2. The Respondent flouted Local Government Procurement Procedures in awarding tenders to M/S Aremo and Free line Taxi Clubs for Busia Market, Bus and taxi parks.
3. It is in the interest of Justice that a temporary injunction doth issue.
Mr. Patrick Mugisha represented the Applicants while Mr. Muziranza Shaban and Mr. Peter Nagemi appeared on behalf of the Respondent council.
Mr. Mugisha argued the grounds of the application as follows:
Firstly, that the Respondent flouted the Local Government regulations which govern the award of tenders and has denied the Applicants their right to bid, as intending bidders, yet M/S Aremo & Sons Ltd and Freeline Taxi Club are continuing to run the said market, taxi and bus parks in furtherance of these breaches. The Applicants want the operationalisation of these tenders suspended pending the determination of the main suit.
Secondly, the Applicants’ major contention is that whereas the power to award tenders is vested in the Busia Tender Board, the Town Council usurped that power in this case and breached Regulation No. 75 (1) and (2) of the Local Government Financial Accounting Regulations and S. 33 of the Local Government Amendment Act.
Thirdly, the other complaint is that the council meetings were not properly convened, and the sum total of these would be to render the tender awarding exercise a nullity.
This is therefore a proper case of which this Court would be pleased to issue a suspensorial injunction, pending determination of the main suit.
Mr. Mugisha also went into the details of the main cause, which are basically the same as the ones of this application.
Mr. Muziransa opposed the application very strongly on the grounds that it is not only misconceived and frivolous but that it is contrary to the law and ought to be dismissed with costs for the following reasons:
First, the cardinal principles upon which an injunction can be issued under 0.37 r 2 are very clear, namely, for purposes of preserving the status quo. The tenders in this case were awarded long time ago and the two companies are already operating under them. That in a nut — shell is the status quo. This application cannot therefore have a positive step by upsetting the status quo.
Secondly, in order to succeed in an application for a temporary injunction the Applicant should make out a prima facie case. In this case no prima facie case has been made out because:
(a). The main application is by people who are merely speculating. They merely intended to bid for tenders.
(b). They have not shown that they have the locus to bring this kind of application because they have not shown that they are aggrieved by the award.
(c). They have not issued the statutory notice of 45 days before instituting a suit against a Local Government. The suit was therefore brought in controvention of that legal requirement.
(d). The Respondent merely recommended and requested the Tender Board in to renew the contract in favour of two companies, in accordance with S.92 (7) (b) of the Local Government Act. The Tender Board took the decision. The Respondent did not therefore flout the regulations as alleged; and the case is therefore devoid of any serious questions of law.
Thirdly, the Applicants have not shown that they have suffered or are likely to suffer any damages which cannot be atoned for in damages. They are merely speculative bidders.
Fourthly, it is also the position of the law that regard be had on the balance of convenience between the Applicants and the Respondent. The Respondent is a Local Government Council which relies on revenue from these places for its operations. Therefore if anything affected this flow of revenue, it would adversely affect the budget and its operations.
On the other hand, the Applicants will not suffer any inconvenience this application is not granted. They have not been in occupation of the said facilities. They are just speculative bidders whose qualities to manage the facilities are unknown. They are very unlikely to suffer any inconvenience.
Fifthly, the application does not meet the requirements of 0.37 rule 2 under which it was brought. It is a principle that while seeking for a temporary injunction the relief sought in the main suit must be for an order of injunction as well. In the instant case the remedies sought are that:
1. the Court nullifies the award.
2. any other relief.
3. costs.
There is no prayer for a permanent injunction. See: Rev. Emmanuel Nsubuga —Vs The Buganda Government civil suit No. 144/64 followed by Egonda Ntende J. in Frank B. Kwehega —Vs- Esso (U) Ltd C.S. No. 377/92.
Even under S. 38 (3) of the Judicature Act on which the Applicant seem to rely, an injunction can only be granted to prevent a threatened or apprehended waste or trespass. In the present case there is nothing under threat or waste. See also: Dr. Martin Aliker C.S No. 1582/74 by Sekandi J. (as he then was).
- E. C. Kiyimba Kaggwa —Vs- Haji Katende C.S. No. 2109/84.
Sixthly, there is only one affidavit in support by Odai — Ojara, yet it is indicated that this application is in respect of both Applicants. The interest of the 2nd Applicant Issa Wanga is therefore not verified and he should be struck off from this application.
Seventhly, the notice relied on by the Applicants is forged. The correct one is the one dated 20th April, 2004, attached as ‘A’ to Mr. Wabudi’s affidavit in reply.
Lastly, Misc. Cause No. 13/2004 is for orders of certiorari and prohibition. It is a requirement of the law under S1 74 Rule 3 i.e. the Law Reform (Misc. Provisions) (Rules of Court) Rules that no such application shall be made unless leave therefore has been granted by the Court. From the record, it is not pleaded that leave was obtained prior to instituting the main application. In the absence of such leave, it is therefore likely that the main application is likely to fail since it is a legal requirement.
Mr. Mugisha made a long reply and submitted that a Statutory Notice is not necessary in matters of Judicial review such as this one because by their own nature, matters of Judicial review require urgent intervention by the Court. He referred to sections 3 (7) and S. 38 of the Judicature Act 3/02.
Regarding the question of leave, Mr. Mugisha submitted that the Court should not be misled by the title of the main application but the Court should be guided by the main prayer which is neither for an order of certiorari or prohibition but for a declaration that the actions of the council are null and void. The new section 38 (7) of the Judicature Amendment Act 2002 has done away with the requirement for leave. It requires a straight filing for an application for review.
The principles regarding the grant of temporary injunctions relied on by counsel for the Respondents have also been effectively replaced by a new regime in the Constitution and the Judicature Statute which gives the Court wide discretionary powers to administer substantive justice. He referred to S. 38 (3) of the Judicature Act 2003 in support of this argument.
On the point on prima facie case, Mr. Mugisha contended that the case raises serious questions of law and fact as can be discerned from the affidavits on both sides, for example:
- whether proper notice was given for the council meeting,
- Whether the resolution by the council was a recommendation or a directive to the Urban Tender Board.
- The management of public affairs and the conduct a public body.
The evidence against the Respondent is overwhelming and the case has a high likelihood of success. A temporary injunction suspending the operationalisation of such conduct should therefore issue while the Court investigates the same.
Regarding Irregurable Injury, Mr. Mugisha contended that it is not a requirement for injunctions sought under applications for Judicial review. The Applicants are suing as residents of Busia Town Council and as individuals. (See UCB case). They are residents who are entitled to bid and this bidding procedure has been swept under the carpet. They therefore have the locus.
On the balance of convenience, Mr. Mugisha submitted that the Respondent council would not suffer the inconvenience as alleged. The council could handle the activities on its own. The Applicants will suffer more because the dues for this year will have been collected and it will have to start next year if they succeed in their suit.
This application is proper under 0.37 rule 2. There is no need to pray for a permanent injunction before applying for a temporary injunction under 0.37 rule 2. The cases cited preceded under the common law right. In this case, we have a statutory provision which provides for temporary injunctions and it does not make that requirement.
Secondly, the main application by its nature would lead to restrictive orders which would give a permanent injunction. The companies are the agents of the Respondent.
0.37 rule 2 under which the application was brought provides in the relevant part that:
“2. (1) In any suit for restraining the Defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the Plaintiff may, at any time after the commencement of the suit, ....... apply to the Court for a temporary in/unction to restrain the Defendant from committing the breach of contract or injury complained of or any injury, of a like kind arising out of the same contract or relating to the same property or right.”
The rule is clear. The suit must be for restraining the Defendant from committing a breach of contract or other injury complained of; in order to succeed under Order 37 rule 2. In the case of Rev. Emmanuel Nsubuga —Vs- Buganda Government MB. No. 45/64. The Plaintiffs sought a temporary injunction to prevent the Defendant from withdrawing grants and teachers from the Plaintiff’s schools. The Court held inter alia that, for an application under 0.37 rule 2 the suit must be for an injunction. In that case, the suit was for a declaration. The application was dismissed.


In the case before me, the main suit is quite frankly, to put it mildly confusing. It is entitled:
“MISC. CAUSE NO. 13 OF 2004 IN THE MATTER OF S. 38 OF THE
JUDICATURE STA
TUTE NO.38 OF 1996
AND

IN THE MA TTER OF THE JUDICATURE (AMENDMENT) ACT 3/2002
AND
IN THE MA TTER OF RULE 5 OF THE LAW REFORM (MISCELLANEOUS
PROVISION RULE OF COURT) RULES S. 1
74-1
AND IN THE MAT
TER OFAN A WARD AND/OR RENEWAL OF TENDERS OF
BUSIA MARKETS AND BUSIA TAX
I/BUS PARK BY BUSIA TOWN COUNCIL
(RESPONDENT)

AND
IN THE MAT
TER OF THE HUMBLE APPLICATION FOR ORDERS OF
CERTIORARI
AND PROHIBITION BY JESSE -J. ODAI - OJARA AND ISSA
WANGA (APPLICANTS)”
The title clearly indicates that the main cause is an application for orders of certiorari and prohibition.
The prayers sought are also to the effect that the Court should call for and nullify the award of the tenders in question, and to order the council to follow established Local Government procurement procedures.
These are not prayers for restraining orders. From the outset, therefore this is not a proper application under 0.37 rule 2 of the CPR.
The principles for the grant of a temporary injunction were clearly stated by counsel for the Respondent. I need not repeat them. I only wish to confirm that the said principles/conditions are still applied by our Courts even after the 1995 constitution or the amendments to the Judicature Statute. For example, even in the case Mr. Mugisha relied on, that is Kikungwe Issa, Salaam Musumba and three Ors —Vs- Standard Bank Investment Corporation and 3 ORS — Misc. Appl. No. 394 and 395/04, Kiryabwire Ag. J. applied all the principles and the three conditions for the grant of temporary injunctions in reaching his decision.
That application was based on Articles 126 of the Constitution, S. 33 of the Judicature Act, Section 98 of the CPA and 0. 37, rules 1, 2 and 9 of the CPR.
In the instant application it is instructive to note that none of the said provisions were cited.
The granting of a temporary injunction is an exercise of Judicial discretion and the purpose for granting it is to preserve maters in status quo until the question to be investigated in the suit can be finally disposed of. The status quo in this case is not in dispute. The Busia Town Council has renewed the tender for managing its market, bus and taxi parks to Ms Aremo & Sons Ltd and Freeline Taxi Clubs for two years w.e.f 1st July 2004 to 30th June 2006. The two companies are now managing them. The temporary injunction sought by this application is clearly not to maintain this status quo. If I may say it bluntly, the order sought is to change or disrupt the status quo, that is by “suspending the awards” to the said companies. Clearly, this order cannot be granted as prayed because it would definitely defeat the purpose for which a temporary injunction is usually sought.
Secondly in an application for a temporary injunction, the Court must be satisfied that there are serious questions to be tried. The material available to the Court at the hearing of the application must disclose that the Plaintiff has real prospects for succeeding in his claim for a permanent injunction at the trial. See: Halsbury’s Laws of England 4th Edn Vol. 24 para 855, Kiyimba Kaggwa —Vs- Haji Abdu Nasser Katende (supra) (per incuriam) and American Cyanamid Co. —Vs- Ethicon Ltd [1975] 1 All E.R. 504.
From the evidence available before me, namely the affidavits for and against the application, I have reached the conclusion that the Applicants have a rather weak case, both procedurally, and substantially; for the following reasons.
From the procedural aspect; the Applicants have skipped one mandatory step in instituting the main cause. The law still requires that the Applicants must obtain leave from the Court first, before applying for the orders of Judicial Review such certiorari or prohibition. The law is called the “Civil Procedure (Amendment) (Judicial Review) Rules, 2003. Si No. 75/2003. Section 4 reads:
“4(1) No application for Judicial review shall be made unless the leave of the High Court has been obtained in accordance with this rule.”
This provision is mandatory and it has been applied, for instance in Misc. Cause No. 144/2004 - In the matter of An Application for Judicial Review and In the matter of Annerbrit Aslund —Vs- AG. Before Katutsi J, and Patrick Karimagezi —Vs- Co-op Bank (In liquidation) Misc. Case No. 23/04 by Lameck Mukasa J.
It is not therefore true that the requirement for leave has been done away. What is perhaps no longer a requirement is the 45 days statutory notice. This is, as Mr. Mugisha rightly pointed out, due to the usually urgent nature of such applications.
I have also stated earlier on that this is not a proper application under Order 37 rule 2 due to the nature of the prayers; that is, there is no prayer for a permanent injunction, if anything, and Mr. Mugisha confirmed this during submissions, the prayers sought are declaratory.
Substantially, I think that the Applicants also have a weak case. As counsel for the Respondent put it, they are mere speculators. They say they are potential bidders if it is true, then all Ugandans and Busia Residents are potential bidders. There is no evidence before me that given a chance, they are even likely to win the tenders. Their track record is unknown, as opposed to the two companies which have been managing the facilities in question. This raises the issue of their locus standi, and I am inclined to agree with the submission by the Respondent’s counsel, that this is lacking. This is clearly not a public interest litigation to qualify under Article 17 (1) (d) of the constitution’ on which the Applicants in the case of Kikungwe Issa —Vs- Stanbic Bank (supra) based their claim. That Article provides that:
“17 (1). It is the duty of eve! y citizen of Uganda
(a)…..
(b)…..
(c)….
(d). to protect and preserve public property.”
That case is therefore distinguishable from the instant one which is clearly based on a purely private and commercial interest of the Applicants. The most appropriate forum for such a complaint should have been in my view, the IGG; and not the Court.
From the evidence available, the decision to renew the contracts was taken by the Urban Tender Board, and not by the Respondent. This fact is not disputed. The allegation that the Respondent did not give seven clear days before the meeting is also weak. There are two notices — one by the Applicants and the other one by the Respondents. Each party claims that it has the correct one. However, I do not think that reason alone should render the award illegal. This is because the contract was renewed by the Urban Tender Board and not by the Council. There is no allegation that the Tender Board flouted the procurement regulations; and that, in my view, is what matters in cases of procurement.
Furthermore, no order or directive was shown to Court from the Respondent to the Tender Board to prove that the Council interfered or influenced the award. The minutes relied on reads at page 6 that:
“However, the Town Clerk finally advised that council can recommend g renew but not to award. He further advised that the Tender Board should set the reserve fee and even perform its function of awarding so that their work is not interfered with. The Board, mandated to award all Tenders after council submissions.
Resolution:
a. The tender for Bus/Taxi Park should be renewed for another three years period from ft July 2004 to 30th June 2007 and that the Tender Board shall set the reserve fee as provided by law.
b. One member proposed that the tender for the market at BTC be handled likewise and there was no objection.”
The Tender was renewed for only two years only instead of 3 years recommended by the Council.
I therefore agree with counsel for the Respondent that there are no serious questions to be tried by this Court at all. These are complaints which should be referred to the IGG.
The Applicants have also not shown that they are likely to suffer any irreparable injury that cannot be atoned for in damages. It is not enough to merely allege that the Applicants are likely to suffer irreparable injury. There must be evidence to prove the allegation.
As for the balance of convenience, I am inclined to agree with the Respondent’s counsel that the Respondent will be greatly inconvenienced if this application is granted because its revenue collection will be affected if the two contracts are suspended. The Court takes Judicial notice of the fact that the award of tenders to private companies is intended for the maximum collection of revenue since the local authorities lack the expertise in most cases. The Respondent also was being sued by the two companies for breach of contract if it suspends their contract.
On the other hand, the Applicants are not likely to suffer any inconvenience if the application is not granted. They can always wait for the next opportunity to bid for the said tenders or other tenders by the Respondent. In the meantime, they will carry on their normal business.
In conclusion, and for the reasons I decline to grant the order prayed for and instead dismiss this application with costs to the Respondent.

M.S. Arach — Amoko
JUDGE
17/9/2004
Ruling delivered in Court in the presence of:
1. Mr. Muziranza Shaban for Respondent and Mr. Nagemi.
2. Mr. Noah Mwesigwa for Respondent.
3. Mr. Mugisha — Absent.
4. Parties representatives.
5. Milton — Court clerk.
M.S. Arach - Amoko
JUDGE
17/9/2004