Court name
Commercial Court of Uganda
Judgment date
1 October 2008

British American Tobacco (U) Ltd v Pioneer Construction Ltd (Miscellaneous Application-2008/452) [2008] UGCommC 72 (01 October 2008);

Cite this case
[2008] UGCommC 72


THE REPUBLIC OF UGANDA
IN THE HIGH COURT OFUGANDA AT KAMPALA

MISC APPL NO 452/08
(Arising from HCCS No 209/08)
BRITISH AMERICA
N TOBACCO (U) LTD==========APPLICANT
VERSUS
PIONEER
CONSTUCTION LTD========RESPONDENT/PLAITIFF

BEFORE: HON LADY JSUTICE M.S ARACH-AMOKO


RULING

This application was brought by the Applicant. British American Tobacco (U) Ltd, for unconditional leave to appear and defend HCCS No 209/8 filed in this court against it, by the Respondent, Pioneer Construction Ltd.

The application cites Order 36 rules 3 and 4 and Order 52 rules 1 and 3 of the CPR.

The grounds are set out detail in the affidavit of Isaac Ampeire the applicant’s Company Secretary filed with the application but briefly they are that:
a)      

The applicant is not indebted to the respondent in the sum claimed or at all.
b)       The applicant has a good and meritorious defence to the suit.
c)       There are triable issues.
d)       It is in the interest of Justice that the application is granted.

The respondents Managing Director, Charles Kyenkya has filed an affidavit in reply, dated 10th September 2008, opposing the application. Mr Ampeire filed a ‘reply’ to it.

HCCS No. 209/08 is a claim by the respondent against the applicant for shs 560,394,373, being monies allegedly due to it under Building Constracts executed by the two parties in September 2006 by which the applicant engaged the respondent to carry out building construction works on its central buying facilities in Hoima and Arua districts. It is the respondent’s case that it duly and diligently executed the works in accordance with the contract Drawings and Bills of Quantities and the payments were certified by the consultant/architect, M/s. Infrastructure Projects Ltd. The applicant has to date neglected, failed and/or refused to pay the respondent this money together with accrued interest. This constitutes breach of contract for which the applicant is liable. The respondent filed the suit by way of summary procedure under Order 36 rule 2(a) (ii) of the CPR; hence this application.

Before leave to appear and defend is granted, the defendant must show by affidavit that there is a bona fide triable issue of fact or law.

When there is a reasonable ground of defence to the claim, the plaintiff is not entitled to summary judgment.

The defendant is not bound to show a good defence on merits, but should satisfy the court that there is an issue or question in dispute which ought to be tried and the court should not enter upon the trial of the issues disclosed at this stage.(see: Maliku Interglobal Agency Ltd-vs-Bank of Uganda [1985] HCB 65, Kasule-vs-Muhwezi [1992-93] HCB 212.

It is good practice, when applying for leave to appear and defend a suit it would serve a good purpose, if the intended written statement of defence is annexed to the notice of Motion.

This assists the judge to make up his mind as to whether to refuse or to grant the application on the pleadings in the written statement of defence. (see: UCB-Vs-Mukoome Agencies) [1982]HCB at p. 22.

Upon perusal of the Notice of Motion, the affidavits and their annexures , and after listening to the submissions by learned counsel for the parties, I am satisfied that the applicant has shown that it does have bona fide triable issues as set out in the application, namely.

1)      

Whether the applicant is entitled to the liquidated damages of shs 320 million in the counterclaim intended to be raised.
2)       Whether the respondent performed the contract in accordance with the terms of the contract as to entitle it to be paid. The applicant contends that it did not complete the works to the required standard.. Several photos of defective works were attached.
3)       Where the applicant is entitled to indemnity from the project manager. This arises from the applicant’s contention that the said Project manager issued certificates for works which were incomplete.
4)       Whether the respondent is entitled to interest claimed in the suit for the period prior to completion of the works. The applicant insists that the respondent is not entitled to such interest under the terms of the contract.
5)       There is also the issue of arbitration. Clause 36 of the contract provides that in case of any dispute or difference, the parties shall refer the same to arbitration .The applicant contends that the suit is therefore premature. That arbitration would be an appropriate forum to resolve the issues relating to quality of work and delay in performance of the contract.
6)       The applicant also contends that this suit is unnecessary. As such, the respondent is not entitled to costs.
 
The respondent opposed this application very strongly, and from the protracted and lengthy submissions of both learned counsel, I am convinced beyond reasonable doubt that this is not a proper case for the procedure adopted because it will require calling witnesses and subjecting their evidence to cross-examination.

The court may even have to visit the locus in quo in Arua and Hoima to ascertain the extent of the alleged substandard works. In the circumstances, and for the aforesaid reasons, the application is grated and it is ordered as follows:
1)      

The applicant files its written statement of defence within 14 days of this order.
2)       Costs of the application shall follow the event.

………………………………….
M.S Arach-Amoko
Judge
2/10/2008

Ruling delivered in the presence of:
1)      

Eva Nalwanga of Kesirye Byaruhanga &Co. for Respondent.
2)       Okuni Court Clerk
3)       Respondent’s officials.

Absent: Applicant’s representative.

…………………………………
M.S Arach-Amoko
Judge
2/10/2008