Court name
Commercial Court of Uganda
Judgment date
4 May 2011

Plessey Property Ltd. v Mutoni Construction Ltd (Miscellaneous Application-2011/178) [2011] UGCommC 59 (04 May 2011);

Cite this case
[2011] UGCommC 59
THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)
MISCELLANEOUS APPLICATION NO. 178 OF 2011

[ARISING FROM CIVIL SUIT NO. 0131 OF 2010]

                  PLESSEY (PTY) LIMITED::::::::::::::::::::::::::::::APPLICANT/DEFENDANT


 
VERSUS
 

MUTONI CONSTRUCTION LTD. ::::::::::::::::::RESPONDENT/PLAINTIFF

BEFORE: HON. LADY JUSTICE IRENE MULYAGONJA KAKOOZA

RULING
The applicant brought this application under the provisions of Order 6 rule 19 CPR and s.98 of the CPA seeking to amend her written statement of defence (WSD). The application was supported by an affidavit deposed on 5/04/2011 by Musa Nsimbe, an advocate in the firm of Kavuma Kabenge & Co. Advocates, the applicant’s lawyers. The respondent filed an affidavit in opposition deposed on 12/04/2011, by Susan Kaggwa, an advocate.
The main ground for the application as stated in the chamber summons was that new information had come to hand whose existence was unknown to the applicant’s advocates when they filed the WSD. Further ground was that the respondent had raised issues which could not be answered without amending the WSD.
In his affidavit in support, Mr. Nsimbe deposed that the original defence was filed on the basis of insufficient information because the defendant’s key officers worked and frequently travelled up country. That about 2 weeks before his deposition, the firm obtained fresh information which had a bearing on the case. The information related to a Takeover Certificate (Annexure “O” to the plaint). Mr. Nsimbe averred that the signature on the Takeover Certificate was procured illegally because the employment of Jose Eugenio who signed it had been terminated before he signed it on 14/12/2009. A letter terminating Mr. Eugenio’s employment and dated 30/11/2009 was attached to the affidavit as Annexure
“B”.
Mr. Nsimbe further averred that the court could not ignore the alleged illegality for illegalities once brought to the attention of court override all pleadings including admissions. That the amendments proposed were necessary to enable the court determine the real issues in controversy between the parties and denial of the amendment while not prejudicial to the respondent would be prejudicial to the applicant’s case. He went on to aver that the proposed amendment would not amount to an introduction of a new claim but would only serve to give clarity to points raised in the defence.
In her affidavit in reply, Ms. Kaggwa averred that the amendment sought was at odds with the previously established defence proffered by the applicant. That though it was signed on 14/12/2009, a date said to be after Mr. Eugenio left the employment of the applicant company, one Martin Frankenfeld, programme Manager instructed the respondents to have the Takeover Certificate in dispute signed by Mr. Eugenio. That the respondent’s employee drove to Masindi whereat Mr. Eugenio was to have him sign the document. A set of email messages between Martin Frankenfeld and Ian Dunbar exchanged between 10/12/2009 and 14/12/2009 was attached to the affidavit as Annexure “X”.
Ms Kaggwa further averred that by 14/12/2009, Mr. Eugenio was still in Masindi as the on-ground supervisor of the applicant on the project and the respondent was only informed about the termination of his employment with the applicant on 9/02/2010. She relied on an email among a batch attached to the affidavit in support as Annexure “C”.
Ms Kaggwa went on to aver that in view of the email messages contained in Annexure “X” the contents of the affidavit in support to the effect that the signing of the Takeover Certificate was illegal were falsehoods calculated to mislead the court. That in the circumstances, the affidavit in support ought to be struck out. She further averred that whether or not Mr. Eugenio’s employment had been terminated at the time of signing the takeover certificate was an internal matter; and that allowing the proposed amendment would be prejudicial to the respondent’s case.
In his submissions for the applicant, Mr. Sembuya relied on the decision in
Muddu Awulira Enterprises Ltd. v. Stanbic Bank, HCMA 528/2010 for the purpose of amending pleadings. He cited Nile Breweries v. Bruno Ozunga UGCC C/S 580/2007 for the submission that the essence of pleadings is to give fair notice of the case which has to be met so that the opposing party may direct his evidence to the issues disclosed by them. He further submitted that the purpose of the amendment was to rectify the WSD to conform with the plaint so that the suit is disposed of justly when all material facts are known. He went on to submit that the contract in dispute was not written and that therefore there was need for the parties to be allowed to bring out such facts as show the circumstance of an oral contract. He added that the sums in dispute are substantial and it required that the quantum of money claimed is established from the facts surrounding the transaction.
In reply, Mr. Brain Kaggwa for the respondent submitted that the applicant had not justified the necessity to amend her pleadings but further to that the proposed amendment was a complete departure from her original pleading. That the proposed amendment was to make the whole nature of the applicant’s case change. He relied on Mulla on The Code of Civil Procedure, (
16th Edition); Halsbury’s Laws of England (4th Edition) Vol. 36(1) at paragraph 78; Bullen and Leak’s Precedents of Pleadings (11th Edition); and the decision in the case of Abdul Karim Khan v. Muhamed Roshan [1965] EA 289. He further submitted that the proposed amendment would greatly prejudice the respondent’s case.
Mr. Kaggwa went on to submit that in view of the contents of Annexure
“X” to the affidavit in reply, the efforts to plead facts to show that Jose Eugenio’s employment was terminated before he signed the Takeover Certificate amounted to relying on a falsehood that justified striking out the affidavit in support of the application.
I will first consider the prayer to strike out the affidavit in support based on an alleged falsehood that Mr. Jose Eugenio’s employment had been terminated by the time he signed the Takeover Certificate, Annexure
“O” to the plaint. It is very clear from Annexure “B” to the affidavit of Musa Nsimbe that the applicant intended to terminate Jose Eugenio’s employment by that letter. Whether that happened or not seems to be in issue. I say so because of the various dates that were mentioned in the same letter regarding what he had to do before he was considered to have left the employment of the applicant company. The fact that the letter exists and the applicants are trying to plead facts related to it in order to counter the respondent’s claim belies the allegation that it is a falsehood. I therefore will not strike out the affidavit in support.
I now turn to the merits of the application. Order 6 rule 19 CPR provides that the court may, at any stage of the proceedings, allow either party to alter or amend his or her pleadings in such manner and on such terms as may be just. It further provides that all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.
In Eastern Bakery v. Castelino [1958] EA 461, the Court of Appeal for East Africa summarised the law on amendment of pleadings. It was held that amendments to pleadings sought before the hearing should be freely allowed, if they can be made without injustice to the other side; and that there is no injustice if the other side can be compensated by costs. The court went on to hold that amendments are not to be denied just because they introduce a new case; but there is no power to enable a distinct cause of action to be substituted for another, not to change by means of amendment the subject matter of the suit. That the court would refuse leave to amend where the amendment would change the action into one of a substantially different character or where the amendment would prejudice the rights of the opposite party existing at the time of the proposed amendment. It was finally held that the principles applicable to the amendment of plaints were equally applicable to the amendment of WSDs.
In her WSD the applicant completely denied the contract alleged by the respondent and for clarity of the discussion I will reproduce the relevant paragraphs of the original WSD, verbatim.

3.      
The Defendant further denies the contents of paragraphs 3, 4, 5, 6, 7, 8, 9, 10 and 11 and shall put the plaintiff to strict proof thereof.
4.      
The Defendant further denies paragraphs 12, 13, 14, 15, 16 and 17 to (sic) the plaint.
5.      
The defendant in denial of paragraphs 3 to 18 shall aver at the trial that there was no contract at all between the Defendant and the Plaintiff in which the Defendant as the subcontractor undertook to install fibre optic cables on terms and conditions as per contract under the E-Government OFC Phase II Project handled by HUAWEI Technologies. The relationship was at a level when the plaintiff unilaterally went on to treat and lay cables without agreement and terms.
6.      
The defendant therefore denies paragraphs 3 to 8 and shall aver that it does not owe the plaintiff any money at all.
In the alternative, the applicant pleaded that the respondent assumed the risks of an independent contractor and therefore was not entitled to the orders sought or any remedies. In the further alternative she pleaded supervening factors or force majeure and acts which were beyond her control. Finally the applicant pleaded that the respondent had waived her rights (I think to payment) and was estopped from making any claims; and that those that were made were false claims aimed at self-enrichment and/or for selfish reasons.
The respondent
did file a reply to the WSD in which she pleaded a valid contract as stated in paragraph 4 of the plaint. She also pleaded quantum meruit for the services rendered. The reply to the WSD was filed on 21/05/2010, almost one year ago.
In the proposed amended WSD, the applicant proposes to replace paragraph 5 of the WSD with a completely new plea as follows:
5.      
In answer to paragraph 4, the defendant avers:-
a)      
by an understanding between with (sic) the plaintiff on or about the 10th September 2009, the Defendant subcontracted the Plaintiff to lay and install fibre optic cables from Nakasongola to Masindi for a distance covering 7,750KM under the E-Government Phase II Project handled by HUAWEI;
b)       That the Defendant then discovered that a fundamental error and or mistake had been negligently and or wilfully and illegally made by one of its officers (who has since been terminated) when he unlawfully issued a wrong unit price to the Plaintiff with the result that the prices had drastically shot up and would have far reaching multiparty implications arising since the Defendant had been contracted by a third party HUAWEI Technologies which too, was under contract with the Government of Uganda under the Uganda E-Government and Backbone Transmission (Project Phase II). The employee had bypassed or skipped an approval or verification step thereby committing a fundamental error and or mistake.
c)       That on learning this gross error in unit price the project was immediately handed to the defendants country manager Wilbur Syandira. The Defendants Country Manager then notified the plaintiffs through its Managing Director Ian Dunbar that new revised rates had been issued (sic) which parties organised a sequence of meetings to address this problem one such meeting date was 23rd November 2009. {A copy of the Defendants email letter to the plaintiff is attached marked “A”}
The sub-paragraphs to paragraph 5 went all the way to letter (g) pleading new facts that were never mentioned in the original WSD. There was also a new paragraph 6 to the effect that the contract was terminated by consent of both parties and it was thus untenable for the respondent to claim damages. A new paragraph 7 was proposed to be added to specifically respond to paragraphs 5-18 which had earlier been denied. New paragraphs 8 to 17 were further proposed to be added introducing claims that verification of the works had to be done before payment could be made and accusing the respondents of making speculative claims. It was also pleaded in paragraph 11, very much in contradiction of the express denials of liability in the original WSD that the applicant had always been willing to pay monies owed to the respondent if only the quantum of the work done could be established. And strangely in paragraph 13, the applicant proposed to plead that the dispute relates to the carrying out of pre-completion conditions to determine the works done, not a failure by the defendant to pay.
It is a well known and respected rule of practice that additions to a pleading on amendment have to be underlined. Deletions are on the other hand stricken through. Strangely, the proposed amended WSD had underlines only in respect of parts of some of the numerous new paragraphs, as if to try and convince this court that the WSD was the same document. I was not persuaded by those efforts because they bordered on an attempt to mislead the court. If the applicants had wanted to apply for an amendment generally then they should have sought a general amendment, not purport that the completely new WSD was anywhere near the original defence which they had completely turned on its head.
Going on then to the question whether the proposed general amendment of the WSD introducing facts that are largely contradictory and inconsistent to what was originally pleaded ought to be allowed, Mulla on The Code of Civil Procedure (16th Edition, at page 1853-1855) summarises situations in which a proposed amendment converts a defence into another of a different and inconsistent character. The general rule is that no amendment should be allowed which would introduce a totally different case (Laird v. Briggs (1880) 16 CD 440). Therefore, the court will not allow an amendment that would involve a complete change of front in the defence.
An amendment which deprives a plaintiff of the valuable right accruing to him from admissions made in the original written statement of defence prejudices the plaintiff irretrievably and constitutes a new and different case and it should be refused. Inconsistent and contradictory allegations in negation of an admitted position of fact and mutually destructive allegations of fact should not be allowed to be incorporated by amendment. And though a defendant has a right to take an alternative plea in the defence, this is subject to an exception that by the proposed amendment the other side should not be subject to injustice. In addition, leave to amend will not be given if the party applying is acting mala fide, as where there is no substantial ground for the case proposed to be set up by the amendment. Want of bona fides may be inferred from great delay in making the application.
In this case, the respondent sought to rely on Annexure “O” to the plaint, also attached to the affidavit in support as Annexure “A”. The applicant’s contest is that the document was procured illegality. However, the emails attached to the affidavit in reply as Annexure “X” leave no doubt as to how Annexure “A” to the affidavit in support was obtained by the respondents. And it is important to note that the applicant did not by way of affidavit in rejoinder deny that it was so obtained. That brings me to the conclusion that the proposed amendment was geared to depriving the respondent of the benefits that would accrue from Annexure “O” to the plaint. I was led to that conclusion because in response to paragraph 4 (w) of the plaint wherein Annexure “O” was included, the applicant’s defence was simply to put the respondent to strict proof. Having denied everything, including the contract, the applicant now wants to introduce a completely different and contradictory case. But as is clearly laid out above, the law does not sanction such an amendment.
I am also in doubt of the applicant’s
bona fides in bringing this application. Mr. Nsimbe deposed that as applicant’s advocate’s they did not have the information which they now seek to plead, reason being that the officers of the applicant company are oftentimes on duty upcountry. That may be so, but the WSD that it is sought to amend was filed in court on 30/04/2010. The respondent filed a reply to it on 21/05/2010 in which she seriously challenged the WSD. Why then did not the applicant seek to bring those facts to light at that time? When a party has a good and bona fide defence to a suit, it ought not to be cajoled out of them. They should be able to come up with it straight away, if they are well intentioned, but not wait for a whole year to do so.
In addition, this application to amend pleadings came about during the proceedings that were held on the 31/03/2011. The parties had filed a joint scheduling memorandum in court on 18/03/2011 in which the applicant made certain admissions of facts pleaded in the plaint but which she had vigorously denied in her WSD. On the 31/03/2011, counsel for the respondent moved court to enter judgment on the basis of those admissions and Mr. Sembuya for the applicant responded thereto. Court then drew it to his attention that he was stating many facts that had not been pleaded and that would not be allowed. He then in the course of his submissions expressed the need to amend the WSD because there were too many facts stated in the scheduling memorandum that the defendant had not pleaded and which were crucial to its case. Coincidently, the proposed amended WSD is a reproduction of the defendant’s facts as stated in the joint scheduling memorandum.
I very reluctantly obliged and allowed the applicant to file a formal application because the facts stated in the scheduling memorandum and on which the application for judgment on admissions was based were clearly in contradiction of the applicant’s initial defence. I allowed the applicant to make this application especially because justice had not only to be done but it also had to be seen to have been done. There was also need to carefully weigh the justice of an application made in such circumstances and importing very many new facts into the suit. It now turns out that the applicant cannot be allowed to amend her WSD as it would prejudice the respondent’s case. Admissions stand that cannot be withdrawn at this stage.
In conclusion, I am unable to grant this application and it is hereby dismissed with costs to the respondent.

 

Irene Mulyagonja Kakooza
JUDGE
05/05/2011