THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
COMMERCIAL COURT DIVISION
(Arising out of HCT-00-CC-CS-473-2003)
KIBUUKA MUSOKE ……………….………………………………… APPLICANT
TOUR & TRAVEL CENTRE LTD ………………………..…………RESPONDENT
BEFORE: HON. JUSTICE LAMECK N. MUKASA
This is an application by Notice of Motion brought under Order 27 Rule 1, Order 52 Rules 1, 2, and 3 of the Civil Procedure Rules and Section 98 of the Civil Procedure Act. The Applicant, Kibuuka Musoke A. S is one of the plaintiffs and one of the defendants on the Counter Claim in HCT-00-CC-CS-0437 -2003.
The Applicant is seeking leave to deposit security for the sum of USD47,780(United States Dollars Forty seven thousand , seven hundred eighty only) in Court being payment of the money secured by the legal mortgage dated June 30, 2003 and to release the title free of any incumbrances.
The brief background to this application is that by an Acknowledgement of Indebtedness / Memorandum of Understanding dated 26th June 2003 signed by the Applicant for and on behalf of the 1st Plaintiff, Ms Travobase Ltd, the Applicant as director/shareholder of the 1st Plaintiff deposited with the Respondent his Certificate of Title to the land and developments comprised in LRV 237 Folio 11 Plot 41 at Kiira Road Kampala as security for the repayment and personally guaranteed the repayment of the sum of Shs.15,000,000/= and US$47,780 to the Respondent. The Applicant executed a legal mortgage dated 30th June 2003 over the said property in favour of the Respondent for the above sums.
The Applicant and Travobase Ltd filed Civil Suit No 437 of 2003 against the Respondent and Stephen Mworozi whereby he contends that he executed the Acknowledgement/ Memorandum and the Legal mortgage under duress and seeks orders, interalia, that the Acknowledgement/ Memorandum and Legal mortgage be set aside and for delivery of the Title Deed for the property to the Applicant.
The Respondent filed a Counter-claim against the Applicant, Beatrice Kabatesi (now deceased) and Travobase Ltd whereby it counter-claims and seeks from them jointly and severally the payment of US $48,080 plus costs.
The Applicant has since repaid the sum of Uganda shs15,000,000/= to the Respondent. In his affidavit in support of the application, paragraph 9, the Applicant states:-
“9. THAT I wish to deposit in court a Bank Guarantee for the sum of US$47,780 (United States Dollars Forty seven thousand, seven hundred eighty only) to discharge my obligations under the legal mortgage so that the title deed for the property comprised in LRV 237 Folio 11 Plot No. 41 Kiira Road Kololo now held by the Respondent may be released to me free of any incumbrance by the Respondents. “
Mr. Blaze Babigumira, Counsel for the Respondent, strongly opposed the application. He relied on the Respondent’s affidavit in reply and sworn by its Managing director Steven Mworozi and raised several reasons. Firstly that the Applicant who was a plaintiff to the main suit could not bring an application under Order 27 rule 1 of the Civil Procedure Rules. Counsel submitted that rule 1 limits itself to an application by a defendant.
The rule states:-
Mr. Kiryowa – Kiwanuka argued that the Applicanthad brought the application as a defendant to the Counter-claim in the suit. True the Respondent, together with its Written Statement of defence, filed a counter-claim whereby it seeks to recover a debt or special damages of US$47,780 and the Applicant is one of the defendants to the Counter-claim. However there is a specific provision under which a plaintiff who is a defendant to a counter-claim can bring the application. This is under rule 9 of the Order, which provides:-
Counsel also relied on Kibuuka Musoke AS Vs Travobase Centre Ltd HCT-00-CC-MA-308-2008. I dismissed the above application for reasons that it had been wrongly brought under Order 27 rules 10 and 12 of the Civil Procedure Rules and had been brought by the wrong procedure of chamber summons instead of a Notice of Motion.
However, in Intraship (U) Ltd Vs G. M. Combine (U) Ltd (1994) VI KALR 42 Court found that the application had been brought under the wrong law. While considering whether in the circumstances the application should be struck out Justice Sempa –Lugayizi held that the question should be whether the irregularity is serious enough to prevent the Court from hearing the application and determining it on its own merits. That the answer would depend on whether the non-observance of the procedural rule in issue would lead to injustice. If it would not then the court would be willing to over look it, otherwise it would not. Article 126 (2) (e) of the Constitution requires court to administer substantive justice without undue regard to technicalities. In Alcon International Vs Kasirye, Byaruhanga & Co Advocates (1995) III KALR 91 Justice Musoke-Kibuuka held that procedural defects can be cured by the invocation of Article 126 (2) (e) of the Constitution. In Salume Namukasa Vs Yosefu Bulya (1966) EA 433 while considering the invocation of the Courts inherent powers under the equivalent of section 98 of the Civil Procedure Act, Sir Udo Udoma CJ observed that before the provisions of the section can be invoked the matter or the proceedings concerned must have been brought to the Court the proper way in terms of the procedure prescribed by the rules. That is in the manner prescribed by law.
Order 27 does not provide for the procedure to follow in an application under rule 9 thereof. However Order 52 Rule 1 provides.
On the authorities I have cited above I find the irregularity’s not so serious as to prevent me from entertaining the application under rule 9. However, both rules 1 and 9 of the Order specifically address payment of money into court in satisfaction of the claim. In the instant application the Applicant is seeking leave “to deposit security for the sum of US$47,780 -----“
A deposit of security in court for the payment of money is not payment of money into court in satisfaction of the claim. The Order does not cover deposit of security for the money claimed in the suit. Therelief sought is outside the scope of Order 29.
The Applicant is tactfully inviting this Court to order a substitution of the security deposited. That is to substitute the Certificate of Title witha Bank Guarantee. The mortgagee has a right of choice of the security to be deposited.
Further annexture B to the application is a Crane Bank Ltd letter dated 25th February 2008. It is “Re: Bank Guarantee No 2008/041 dated 25.02.2008 for US$57,000 in favour valid up to 24.02.2009” It states that the guarantee is valid for a period of one year from the 25th February 2008. This application was filed on 10th November 2008 and heard on 15th November 2008. The main suit is still under hearing. Inevitably by the time of judgment in the main suit the guarantee, if allowed to be deposited, would have already lapsed.
Considering all the above, I agree with Mr. Babigumira that, to makethe Order sought will be prejudicial to the Respondent. The application accordingly fails and is dismissed with costs to the Respondent.
Hon Mr. Justice Lameck N. Mukasa
5th February 2009