Court name
Commercial Court of Uganda
Judgment date
5 June 2011

Sam Aniagyei Obengi & Anor v MTL Real Properties Ltd & Anor (Miscellaneous Application-2011/198) [2011] UGCommC 51 (05 June 2011);

Cite this case
[2011] UGCommC 51


THE REPUBLIC OF UGANDA
IN THE HIGH COPURT OF UGANDA AT KAMPALA
(COMMERCIAL COURT DIVISION)
MISCELLANEOUS APPLICATION NO 198 OF 2011
(Arising out of Civil Suit No. 53 of 2010)

 
1. SAM ANIAGYEI OBENG}
2.AFS CONSTRUCTION LTD}::::::::::::::::::::::::::::::::::::APPLICANTS/PLAINTIFFS


VERSUS
1. MTL REAL PROPERTIES LTD}::::::::::::::::::::::::::RESPONDENTS/DEFENDANTS
2. JOHN BYARUHANGA}

 


BEFORE THE HON. LADY JUSTICE HELLEN OBURA

RULING
This is a ruling in an application brought under Order 9 rule 23 and Order 52 of the Civil Procedure Rules (CPR). The applicant is seeking for orders that Civil Suit No. 53 of2010 which was dismissed on 04/04/2011 be reinstated and a date set for formal hearing and costs be provided for. The application is supported by an affidavit sworn by the 1st applicant/plaintiff Mr. SAM ANIAGYEI OBENG on the 13th April 2011.

The brief ground of this application as contained in the Notice of Motion is that;


1-      
The suit was irregularly dismissed as the 1st applicant was at all material times present in Court and the plaintiff’s counsel had no audience in Court having carelessly come to Court without his robes and found that the judge had dismissed the case.
2-       The plaintiffs’ presence was not taken into consideration when the suit was dismissed.
3-       There are triable issues in the case and therefore in the interest of justice the suit should be heard on its merits”.
 
The grounds as stated in paragraphs 3,4,5,6,7,8,9,10,11,12 and 14 are as follows:

3. “That on the 3rd March 2011, I was well aware that civil Suit. No 053/2010 was coming up for hearing so I came to Court about 8.00am.

4. That I and my lawyer Mr. Otim Geoffrey had agreed to meet at Court and at about 8.15 am when I tried calling him, he was not picking my calls.

5. That at around 8.45 a.m my lawyer did appear on the Court premises thereafter we started searching for the Court room in which the case was to be heard.

6. That upon discovery of the Court my case was called for mention and my lawyer informed me that he had no audience since he was not dressed in the Court robes.

7. That due to my Lawyer’s carelessness and negligence the suit was dismissed for want of prosecution.

8. That when we got out of Court, Mr. Otim Geoffrey informed me that he was going to sort out the mess and rectify the problem.

9. That after checking on him a number of times on whether the suit had been reinstated, I discovered that he had done nothing yet.

10. That upon being disappointed I engaged another firm of Lawyers with instructions to reinstate the Civil Suit No.053/2010.

11. That it is the fault of my lawyer Mr. Otim Geoffrey that Civil Suit No. 053/2010 was dismissed, yet I was present in Court at the time though he did not advise me of any remedy available to me and it was not my fault.

12. That it is in interest of justice that the Lawyer’s negligence and /or carelessness should not be visited on me.

13. That I make this affidavit in support of an Application for an Order to reinstate Civil Suit No. 053/2010.

14. That whatever I have stated hereinabove is true and correct to the best of my knowledge and belief save that based on information sources herein disclosed”.

An affidavit in reply was sworn by Mr. John Musiime a Legal Associate with the firm of M/s Byenkya Kihika and Company Advocates.
He deponed that on 3/03/2011 he accompanied Mr. Oscar Kihika to Court and he was present when C.S No 53 of 2010was called on. That neither the 1st applicant nor his counsel Mr. Otim Geoffrey were in court when the case was called on and so Mr. Kihika was constrained to apply for dismissal of the plaintiffs’ suit for want of appearance under Order 9 rule 22 of the Civil Procedure Rules and not for want of prosecution. Further that contrary to the falsehood contained in paragraphs 6 and 7 of the affidavit in support, the application was heard and ruling delivered in the absence of both the 1st applicant and his counsel.

That this application was filed more than 30 days after dismissal of C.S No. 53 of 2010. That the defendants/respondents have set down their counterclaim before this court for the 29/05/2011 and therefore they would be prejudiced if this application is allowed.

The background of this application is that on the 3rd December 2008 the 2nd plaintiff and the 1st defendant entered into a joint venture agreement in the names MTL-AFS JOINT VENTURE to undertake construction business jointly. The parties subsequently registered a partnership in the name of the joint venture. It appears along the way there was disagreement on the management of the joint venture leading to irretrievable breakdown in the working relationship between the parties.

The plaintiffs then filed the ill-fated HCCS No. 53 of 2010 seeking among other remedies dissolution of the partnership, payment of liabilities of the partnership and distribution of the surplus assets and money of the partnership to the parties. The suit was fixed for scheduling on 3/03/2011 by counsel for the plaintiffs who took out the hearing notice and served on the defendants. However, on the fateful day when the suit was called on for scheduling, both the plaintiffs and their counsel were absent and upon an application for dismissal by counsel for the defendants/respondents, the case was dismissed for non appearance under Order 9 rule 22 of the Civil Procedure Rules. The applicants then filed this application seeking for the orders already stated above.

At the hearing of this application, the applicants were represented by Mr. Habumugisha Innocent and the respondent by Mr. Oscar Kihika. Counsel for the applicants argued the grounds as contained in the affidavit in support. The gist of his arguments was that HCCS No. 53 of 2010 was irregularity dismissed because the first applicant and his counsel were in Court. That counsel was not robed and therefore did not have audience in Court. That Court did not take into consideration the 1st applicant’s presence when the suit was dismissed. He contended that the mistake of the applicants’ counsel of coming to Court not robed should not be visited on the applicants. He then prayed that this application be granted as it was in the interest of justice that HCCS No. 53 of 2010 be reinstated so that it is heard on merit. Not a single authority was cited by counsel to support his submission.

Mr. Kihika for the respondents opposed this application on two main grounds. Firstly, that the 1st applicant had stated obvious falsehood in the affidavit in support in terms of what transpired in court on 3/3/2011. He submitted that while ground one of the application was that the suit was irregularly dismissed as the 1st applicant was at all material times present in Court, that on a close examination of the affidavit in support, this is not even fully established. That paragraphs 5 and 6 of the affidavit state that the 1st applicant and their counsel were within the Court premises but was evasive of their presence in the Court room.

He submitted that as stated in the affidavit in reply, when HCCS No. 53 of 2010 was called on for hearing, counsel for the defendant first established that both the plaintiffs and their counsel were not in Court before the application for dismissal was made and Court also confirmed their absence before making the order of dismissal. That therefore the applicant was clearly stating blatant lies indirectly in the affidavit.

He submitted that stating falsehood in an affidavit has been held to make the affidavit unreliable and should be struck out. He then prayed that this Court should find so with the affidavit in support and accordingly strike it out. He argued that generally the lack of affidavit in this instance meant that the application was not supported by evidence and it must fail.

He observed that there would have been nothing wrong for the applicant to state the truth that they had delayed and explained why. He then submitted that the applicants were not coming to Court with clean hands as equity demands.

The second ground on which counsel for the respondent opposed the application was that the applicant showed dilatory conduct in bringing the application. He submitted that Civil Suit No. 53 of 2010 was dismissed on 3/3/2011 and this application was filed on 15/4/2011. That the affidavit in support did not give any sufficient reason for this delay by giving timelines when instructions were given to the former counsel to take remedial action and when the applicants discovered that no action was taken. That similarly, the particular date when the present counsel was instructed to file this application was not stated in the affidavit. That consequently, no explanation has been given for the delay by over one month in bringing this application.

He contended that the applicants’ effort to squarely put the blame on former counsel for mistakes committed should be disregarded. He cautioned that in light of the falsehood stated in the affidavit in support this Court must take with a pinch of salt the rest of the paragraphs which seek to take advantage of the long established principle that mistakes of counsel should not be visited on the litigant.

He concluded that for the reasons stated above, the applicants had not met the requirement of Order 9 rule 23 in that they had not shown sufficient cause for their nonappearance on 3/3/2011 when HCCS No.53 of 2010 was called on for hearing. In the alternative and without prejudice, he prayed that if this court was inclined to grant this application, the applicant should first pay the costs of dismissal of HCCS No. 53 of 2010 occasioned by their negligence to appear.

In rejoinder counsel for the applicants reiterated his earlier submission and contended that there was no falsehood in the affidavit. As regards the contention that there was inordinate delay which was not explained in the affidavit, counsel contended that this was explained in paragraph 8 of the affidavit. He prayed that the application be granted and costs be in the cause.
 

Order 9 rule 23 under which this application was made requires the applicant to satisfy the court that there was sufficient cause for non appearance when the suit was called on for hearing. Once sufficient cause is shown to the satisfaction of the Court, this rule makes it mandatory for the Court to make an order setting aside the dismissal upon such terms as to costs or otherwise as the court thinks fit.

The phrase

“sufficient cause” that is normally used interchangeable with the phrase “good cause” has been explained in a number of authorities. In the cases of: Mugo v Wanjiri [1970] EA 481 at page 483, Njagi v Munyiri [1975]EA 179 at page 180 and Rosette Kizito v Administrator General and Others [Supreme Court Civil Application No. 9/86 reported in Kampala Law Report Volume 5 of 1993 at page 4] it was held that sufficient reason must relate to the inability or failure to take the particular step in time.

In Nicholas Roussos vs Gulamhussein Habib Virani & Another, Civil Appeal No.9 of 1993 (SC) (unreported), the Supreme Court attempted to lay down some of the grounds or circumstances which may amount to sufficient cause. They include mistake by an advocate though negligent, ignorance of procedure by an unrepresented defendant and illness by a party.

Courts have also established some tests to be applied when dealing with an application like this one. In the case of National Insurance Corporation v Mugenyi and Company Advocates [1987] HCB 28 the Court of Appeal which was the apex court in Uganda at the time held that;

“The main test for reinstatement of a suit was whether the applicant honestly intended to attend the hearing and did his best to do so. Two other tests were namely the nature of the case and whether there was a prima facie defence to that case….” (Emphasis added).

That ruling was adopted in the case of Nakiride v Hotel International Ltd [1987] 85 where Kalanda A. J. (as he then was) held that;

“In considering whether there was sufficient cause why counsel for the applicant did not appear in Court on the date the application was dismissed, the test to be applied in cases of that nature was whether under the circumstances the party applying honestly intended to be present at the hearing and did his best to attend. It was also important for the litigant to show diligence in the matter…”


The main issue for determination in this application is whether the applicants have shown sufficient cause to warrant grant of this application. The cause shown by the applicants is that both the 1st applicant and counsel for the applicants were in court when this matter was dismissed. That however due to counsel’s mistake/fault of coming to court not robed, he had no audience. This is stated in paragraph 6 of the 1st applicant’s affidavit. I believe the applicant hoped to benefit from the principle that mistakes of counsel however negligent should not be visited on the litigant. If indeed the applicants’ counsel was in court and failed to address court because he was not robed, this would amount to sufficient cause as noted above in the case of Nicholas Roussos v Gulamhussein Habib Virani & Another (supra), where mistake of counsel was held to be one of the grounds that amount to sufficient cause.

However, counsel for the defendants submitted that this was falsehood because before he made the application for dismissal of the suit he first established that both the plaintiffs and their counsels were not in Court. He also submitted that even Court took the trouble to establish the same before dismissing the suit.

I wish to confirm that, indeed the court records show that when HCCS. No. 53 of 2010 was called on for hearing, counsel for the defendants, introduced himself and the 2nd defendant who is also the Managing Director of the first defendant. He first inquired whether the plaintiffs were in court but when nobody responded he then stated that, “the plaintiffs are not in Court and neither is their counsel who are BSG advocates.” (Emphasis added).

Counsel for the defendants even went ahead to state that they were served on 7th February 2011 with a hearing notice that was taken out by the plaintiffs on 31st January 2011. He further stated that the absence of the plaintiff and their counsel was not explained and in the circumstances, he was constrained to apply for dismissal of the suit under Order 9 rule 22 of the Civil Procedure Rules and he accordingly prayed that the suit be dismissed with costs.

This Court then perused the records and confirmed that service was effected by the plaintiffs as stated and granted the prayer for dismissal on the ground that the absence of the plaintiff and their counsel was not explained. All these proceedings took place in an open court in the presence of other litigants and counsels who were waiting for their cases to be called on.

Unless the first applicant is deaf or does not understand the English language, there was no way he could have sat there quietly as counsel repeatedly stated that he was absent and his absence was not explained. This Court does not believe the 1st applicant’s contention that he was in Court when his case was called on and dismissed. I therefore agree with counsel for the defendants’ submission that what the 1st applicant stated in his affidavit was obvious falsehood.

As regards the contention that counsel for the plaintiffs Mr. Geoffrey Otim was in Court but not robed, this Court is more inclined to agree with the submission of counsel for the defendants that this was a blatant lie. It is unbelievable that an advocate (who was even known to counsel and Court in this case) whether not robed could sit quietly in Court as his client’s case was being dismissed. The common practice that I have observed in this Court is that where an advocate is not robed, he/she first applies to be heard and if Court declines, he/she then instructs another advocate to hold brief for him/her to apply for an adjournment. I believe if counsel for the plaintiffs was present in Court, he would not have departed from that practice more so when his client’s case was in danger of being dismissed. Contrary to this averment, this Court took judicial notice of Mr. Otim Geoffrey entering the Court room immediately the ruling dismissing the suit was delivered.

In view of the above findings, I agree with counsel for the defendants’ submission that the affidavit in support of this application contained obvious falsehood and therefore the applicants are not coming to court with clean hands as equity demands. That finding now leads this court to consider the effect of a defective affidavit on an application like this.
 

Counsel for the defendants submitted that stating falsehood in an affidavit has been held to make the affidavit unreliable and such an affidavit should be struck out. He prayed that this Court should find so with the instant affidavit and accordingly strike it out. He argued that generally the lack of affidavit in this instance meant that the application was not supported by evidence and it must fail. He promised to supply an authority to support this submission but he never did so.

There are a number of authorities that adopt a rigid approach in dealing with defective affidavits as well as those that adopt a more liberal approach in line with Article 126 (2) (e) of the 1995 Constitution. A more rigid approach was adopted in the case of Sirasi Bitaitana and 4 Others v Emmanuel Kananura [1977] HCB 34 where Allen J, (as he then was) held that;

1.      

“The inconsistencies in an affidavit cannot be ignored however minor, since a sworn affidavit is not a document to be treated lightly. If it contains obvious falsehood then it all naturally becomes suspect.
2       
An application supported by a false affidavit is bound to fail because the applicant in such a case does not go to court with clean hands and tell the truth”. (Emphasis added).
 
This ruling was followed in the case of Nathan Katamba v Stephen Kabigyema [2000] KALR 780 where Musoke Kibuuka J, held that;
 
“Affidavits are very serious documents. Once one contains a falsehood in one part, the whole becomes suspect. An application supported by a false affidavit is bound to fail. The applicant has not come to this court with clean hands. The affidavit in support is struck out. The motion remains unsupported by any kind of evidence and is therefore valueless”. (Emphasis added).

This principle has been refined by adopting a more liberal approach which allows the offending paragraphs of the affidavit to be severed/ignored and the rest of the content to be admitted/accepted. This was the holding in a number of cases as was stated in the case of Col. (Rtd) Besigye Kizza v Museveni Yoweri Kagutta & Electoral Commission (Election Petition No. 1 of 2001) [2001] UGSC 3 where Odoki B.J. (Chief Justice) in the lead judgment stated as follows;
“In Reamation Ltd. V UGANDA Corporation Creameries Ltd. and Another Civil Application No. 7 of 2001, Motor Mart (U) Ltd. v Yona Kanyomozi Civil Appeal No. 6 of 1999 and Yona Kanyomozi v Motor Mart (U) Ltd. No. 8 of 98, the Supreme Court adopted a liberal approach to affidavits. In Yona Kanyomozi v Motor Mart (U) Ltd (supra) Mulenga JSC, held that some parts of counsel’s affidavits were false and that those parts were irrelevant to the application and could be ignored. On a reference to the full Court, it was argued that the impugned affidavit was capable of severance as the single judge did before arriving at his decision. The full court held that it was unable to interfere with the discretion exercised by the single judge.
From the authorities I have cited there is a general trend towards taking a liberal approach in dealing with defective affidavits. This is in line with the constitutional directives enacted in Article 126 of the Constitution that the courts should administer substantive justice without undue regard to technicalities. Rules of procedure should be used as handmaiden to justice but not to defeat it”.

He further stated that in that case the only method of adducing evidence was by affidavit and that many were drawn in a hurry to comply with the time limit for filing pleadings and determining the petition. He then concluded that it would cause great injustice to the parties if all the affidavits which did not strictly conform with the rules of procedure were rejected. Consequently the Court ruled that the relevant evidence that was admissible would be received in Court and those parts that were based on hearsay would be rejected.

This Court is bound to apply the liberal approach adopted by the Supreme Court. This means that the paragraphs in the affidavit that contain falsehood would be ignored and the parts that are admissible would be accepted. Accordingly, paragraphs 6, 7, 8, 11, 12 which all relate to the falsehood that the 1

st applicant and his counsel were in Court and blames counsel for being negligent/careless by not robbing are ignored together with paragraph 14 which states that what is stated in the affidavit is correct and true whereas not.

What now remains of substance in the affidavit for this Court to evaluate to determine whether sufficient cause is shown are paragraphs 3, 4, 5, 9 and 10. Basically paragraphs 3, 4 and 5 allude to the fact that the 1

st applicant was within the Court premises by 8.00 am on 3/3/2011 and was able to link up with his counsel at 8.45 am whereupon they started searching for the Court room where proceedings were taking place.

Paragraphs 9 and 10 contain averments that the 1

st applicant after checking on their former counsel several times discovered that he had not done anything to reinstate the suit and accordingly engaged another firm of advocates to apply for reinstatement of the same.
 
The question to be answered then is whether these averments in the admissible part of the affidavit show any cause let alone a sufficient one for the applicants’ nonappearance in court when the suit was dismissed to the satisfaction of this Court as required by rule 23 of Order 9. I am afraid strictly speaking my answer would be no but in view of the guidance given by the superior Court on the test to be applied in such an application, this Court is obliged to apply those tests in evaluating those paragraphs of the affidavit.

Doing the best that this Court can in the circumstances of this case, and being guided by the tests to be applied in a case of this nature as quoted above, I will take it that the 1st plaintiff intended to be in Court on 3rd March 2011 when HCCS No. 53 of 2010 was dismissed and if his averment that he was within the Court premises by 8.00 am is true then in that case he did his best to be in Court. It is possible that his counsel let him down by not coming in time which information he should have stated in his affidavit other than opting to tell a blatant lie that they were present in Court. As already stated in this ruling the plaintiffs’ counsel entered the Court room immediately after the ruling was delivered. I will therefore take it that he also tried his best to be in Court but arrived late only to find that his clients’ case had been dismissed. I also wish to note that the plaintiffs’ case was the first to be called on for hearing that day. But that should not be an excuse for an advocate who came late to court because it is common knowledge that court business starts at 9.00 am unless expressly stated otherwise.

I have also looked at the nature of the claim in H.C.C.S No. 53 of 2010 and the remedies sought. The plaintiffs’ claims against the defendants jointly and severally were for an account of the company’s property and money, distribution of the surplus of the firm assets and money, and dissolution of partnership arising from fraud, mismanagement, and breach of the partnership relationship. The plaintiffs prayed for judgment against the defendants and orders that relate to these claims and in addition for an order against the defendants to indemnify the 1

st plaintiff and the 2nd defendant to indemnify the 2nd plaintiff against all the debts and liabilities of the firm. They also prayed for damages as well as costs.

The basis of these claims was that the fraudulent, unprofessional and prejudicial manner in which the defendants conducted themselves affected the carrying on of the partnership business and led to irretrievable breakdown in the working relationship in the partnership.

The defendants in their written statement of defence and counterclaim contended that the plaintiffs’ suit was barred in law for misjoinder, frivolous, vexatious and an abuse of the court process. They denied any wrong doing on their part and instead contended that it was the plaintiffs’ staff that was responsible for the running of the partnership business including the management of its accounts. They also denied conducting themselves unprofessionally, illegally, fraudulently and unethically and undertook to put the plaintiffs to strict proof thereof.

The defendants however admitted that there was irretrievable breakdown in the working relationship of the partnership and that their written proposal to the plaintiffs to resolve the matter met no co-operation.


 
         The defendants by way of a counterclaim contended that the plaintiffs went behind the partnership that had been contracted by Eco Bank (U) Ltd to carry out works at its Katwe Branch and sought re-award of the contract to themselves. That the contract to the firm was terminated and immediately thereafter the plaintiffs issued a notice to terminate the joint venture. That this conduct by the plaintiffs was malafide and amounted to breach of the fiduciary relationship between the parties for which the defendants claimed general damages.
 
It was also contended that the defendants subsequently took it upon themselves to complete the ongoing work of the joint venture at their own costs and expense to redeem their name after the plaintiff refused to participate and contribute to the works and the defendants would seek a refund of the monies so spent by themselves on the partnership jobs.

I have summarized the plaintiffs’ claim in HCCS No. 53 of 2010 and the defence and counterclaim to enable this court assess whether there are triable issues raised in that suit that would warrant reinstating it. I have also looked at the elaborate Joint Venture Agreement entered into by both parties on the 3

rd day of December 2008. If the parties had strictly abided by the provisions of this agreement HCCS No. 53 of 2010 would not have arisen. Nonetheless, they did not hence the suit where each party was accusing the other of wrong doing. I find that there are triable issues raised in that suit. Having found so, would it therefore not be in the interest of justice and of both parties that the suit is reinstated such that all the matters in controversy are resolved once and for all in the spirit of section 33 of the Judicature Act. My answer to this question is yes because I do not see any prejudice that would be occasioned to the defendant by the suit being reinstated save for the issue of costs in respect of which Order 9 rule 23 gives this Court discretion to make an appropriate order.

In the result, looking at the circumstances of this application in its totality as analysed above, this court is satisfied that it warrants reinstatement of HCCS No. 53 of 2010 so that the same is heard on merit and disposed off. In arriving at this conclusion, I have also taken into account the fact that there is a counterclaim by the defendants that needs to be heard and determined. Since the parties will still be appearing in the same matter, the main suit could as well be reinstated and determined together in order to save the time that would be wasted and the costs that would be incurred by both parties if this application were denied and the matter went on appeal.

Before I make the final orders in this matter, I wish to comment on the second ground advanced by the respondents’ counsel for opposing this application. It was contended for the respondents that there was dilatory conduct by the applicants in bringing this application more than 30 days after the suit was dismissed. Further that the inordinate delay was not explained in the affidavit in support.

Counsel for the applicants in response submitted that the delay was explained in paragraph 8 of the affidavit in support. It was stated in that paragraph that as the applicant and his former counsel were getting out of Court on the day the suit was dismissed, counsel undertook to sort out the mess and rectify the problem. In my view this paragraph alone does not explain the delay. However, I find that the explanation is contained in paragraphs 8, 9 and 10 although no dates were given. I am of the view that that explanation can suffice since counsel for the respondents did not assist this Court by supplying an authority which sets the standard of explanation.

In the final result, I order that the dismissal of HCCS No. 53 of 2010 be and is hereby set aside and the suit accordingly reinstated upon the following terms;

1)      

The applicants shall pay the taxed costs of dismissal before the suit can be fixed for hearing.
2)       The defendants are awarded the cost of this application.

I so order.
 
Before I take leave of this matter, I wish to point out the difficulty this court faced in dealing with the affidavit in support of this application which contained obvious falsehood. If it was not for the fact that the Superior Courts, whose decision bind this Court, had adopted a liberal approach in dealing with defective affidavits in line with Article 126 of the Constitution, this Court would have been persuaded by the rigid approach in the earlier decisions and struck out the affidavit. It is my humble view that an affidavit being sworn evidence should not at all be admitted once it is proved that some parts contain falsehood.
With all due respect and at the risk of asking for what has already been done but not within my knowledge, I am of the humble view that a clear distinction needs to be made by the superior Courts on affidavits that contain obvious falsehood that goes to the substance of the evidence sought to be adduced therein and those that are defective in other aspects. I hope this will be done in the near future.

Hellen Obura


JUDGE
6/06/2011