Court name
Commercial Court of Uganda
Case number
Miscellaneous Application 307 of 2011
Judgment date
21 July 2011

All Sisters Company Ltd. v Guangzhou Tigerhead Battery Group Company Ltd (Miscellaneous Application 307 of 2011) [2011] UGCommC 83 (21 July 2011);

Cite this case
[2011] UGCommC 83


THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)
MISCELLANEOUS APPLICATION NO 307 OF 2011
(ARISING FROM CIVIL SUIT NO 128 OF 2010)

ALL SISTERS COMPANY LTD)….................................................... APPLICANT


VERSUS

GUANGZHOU TIGER HEAD )
BATTERY GROUP COMPANY LTD)..........................................RESPONDENT


BEFORE: HONOURABLE MR JUSTICE CHRISTOPHER MADRAMA
RULING
Facts of application:
This ruling arises from a preliminary objection raised by the Respondents counsel on the competence of the applicants application. The applicants application was filed by notice of motion under section 98 of the Civil Procedure Act and order 52 rules 1 and 3 of the Civil Procedure Rules for orders that a consent judgement dated 28th of April 2010 between the Plaintiff, the first defendant and the second defendant in HCCS No. 128 of 2010 be set aside and for costs of the application. The grounds of the application in the notice of motion are:
1.      
That the applicant is not a party to any consent judgement in which a permanent injunction was issued restraining the first and second defendants (All Sisters Ltd) from importing, distributing, selling or offering for sale or otherwise dealing in Tiger Head batteries.

2.      
The second applicants purported signatory Epimac Kagoro is not authorised to act for or on behalf of All Sisters Company Ltd.

3.      

The purported consent judgement was procured through fraud and deceit.

4.      

That the application raises triable issues which can only be resolved by this honourable court.

5.      

That it would be in the interest of substantive justice if this honourable court were to set aside the consent judgement in civil suit No. 128 of 2010.
The application is supported by the affidavit of Silvia Jogo and director of the applicant/second defendant in the main suit sworn to on 10th June 2011. The facts averred in the affidavit are that the Applicant is authorised by the government of the Republic of Uganda to import into Uganda Tiger head batteries by statutory instrument. The respondent sued the Applicant in civil suit No. 128 of 2010 but the Applicant has not entered into any consent judgement with the Respondent and that the Applicant was not a party to the any consent judgement challenged in this application. The shareholders of the Applicant are: Jogo Silvia, Olishaba Ladgod, Kasande Christine, Tumuhereze Afara, Turinawe Agnes, and Kukundakwe Mariam and Mr. Epimac Kagoro who executed the consent judgment purportedly on behalf of the Applicant is neither a shareholder nor a director or signatory of the Applicant and was not duly authorised to act on behalf of the Applicant. Consequently the affidavit in support avers that the consent judgement was procured through fraud and deceit.
The affidavit in reply of the Respondent was sworn by Bob Kabonero a director of White Showmans (U) Ltd. The facts averred in the affidavit are that on 13th April 2010 the Respondent filed a suit against the Applicant, Uganda Revenue Authority and Three Ways Shipping Services Ltd for delivery or destruction of the offending goods arising out of infringement of a trademark No. 19468 Tiger Head. Summons were issued and served upon the defendants on the 14th April 2010 and served on all the parties. As far as the Applicant was concerned it was served upon Mr Epimac Kagoro at the premises of the Applicant. An application for interlocutory temporary injunction was also served on the Applicant on the 26th of April 2010. On the 13th of April 2010 the Respondent had applied for interim injunction which was granted on the same day pending the hearing of the main application. The interim order granting a temporary injunction order was served on the Applicant through Mr Epimac Kagoro at the company premises. Pursuant to the application for a temporary injunction the Applicant filed an affidavit in reply sworn by Jogo Silvia. Thereafter the deponent was approached by one Mr Kagoro Epimac who represented to him that he had authority to bind the Applicant company and intimated that he wanted to agree on an out of court settlement of the matter. That the Applicant represented by Mr Epimac Kagoro and the Respondent represented by the deponent commenced negotiations to amicably settle the matter out of court. On the 27th April 2010 when the matter came before the court the applicant was represented by Counsel Cephas Birungye while the Respondent was represented by Counsel Thomas Ocaya. The deponent only discussed settlement with Mr Epimac Kagoro who acted on behalf of the Applicant and even his own advocate did not participate in the negotiations. On the 27th April 2010 they executed a memorandum of understanding (MOU). This MOU is executed by the Deponent Mr. Bob Kabonero, Mr. Kagoro Epimac and a director of Three Ways Shipping Services one Jeff Baitwa. Thereafter the same persons on behalf of the various parties to the suit executed a consent judgement which was filed on the court record on the 28th April 2010. Thereafter 10 containers of Tiger Head batteries were released to the Applicant, Messrs All Sisters Company Limited. The Applicant was ordered to pay the Respondent a sum of US $ 6,500 as damages and the said money was paid by Mr Epimac Kagoro on behalf of the Applicant. It was also a term of the consent judgement that the Applicant Company and Three Way Shipping Company Ltd were to pay the costs of the suit and applications arising there from. On the 3rd of August 2010 a bank of Africa cheque under the hand of Mr Epimac Kagoro paid the said costs. The Respondents affidavit in opposition sworn by Bob Kabonero further avers that the Applicant was fully aware that the matter had been fully and finally settled by the consent judgment and that is why it has never filed a written statement of defence in the matter.
When the matter came for hearing, Counsel Cephas Birungye represented the Applicant while Counsel Kirwowa Kiwanuka appeared for the Respondent.
Preliminary Objection
Before the application could be argued, Counsel Kiwanuka raised preliminary points of objection on the competence of the application. He submitted that the application seeks to set aside a consent judgment which was entered into between the Applicants; the Respondent and Three Ways Shipping Company which has not been included as a party to these proceedings. Furthermore Uganda Revenue Authority was a party to the main suit for consequential orders. As a result of the consent judgment goods were released by Uganda Revenue Authority to the Applicant.
He contended that a judgment or order made by consent can only be set aside in a fresh suit brought for that purpose. The grounds are set out in the applicants notice of motion include fraud. He submitted that whereas fraud has been alleged, there were no particulars of fraud and deceit. Failure to plead the particulars of fraud rendered the application incompetent.
The application cites order 52 rules 1 and 3 of the Civil Procedure Rules and section 98 of the Civil Procedure Act which is the wrong rule and procedure for setting aside consent judgments. On the issue of procedure counsel referred to the case of Nalumansi vs. Hon. Justice Steven Kavuma MA 155 of 2008 and Halsbury's Laws of England 3rd Edition vol 22
He submitted that in the application it is averred that that the person who signed the consent judgment was not authorised by the company to do so. Consequently counsel contended that this requires the kind of evidence in an ordinary suit where witnesses can be cross examined and not affidavit evidence. Counsel relied on the case of Ladak Abdullah Vs Griffiths Isingoma Kakiza CA NO. 8 of 1995 to support the Respondents contention.
As far as the applicant states that the person who signed the consent was not authorised by the company he contended that the issue has to be determined by leading evidence through the testimony of witnesses. Moreover the party who signed the questioned consent has no affidavit on record and the procedure employed is inappropriate to try the matter.
Counsel wondered whether at the time of the consent judgment and there was an interim order of injunction, the purpose of Epimac Kagoro to execute the consent was to defeat the interim order. He contended that the goods belonged to the Applicant and pursuant to the consent judgment; they were released to the Applicant. He submitted that the Applicant was served with the consent judgment and took benefit of the consent judgment. In any case evidence is required and that evidence cannot be got from the evidence on court record. He contended that the court should be given an opportunity to hear from Three Ways Shipping which is a party to the consent agreement. The person who made the consent judgment should be able to testify and therefore the best procedure is to file a fresh suit.
Counsel cited the judgment of Hon. Justice Bamwine in Bank of Uganda and 2 others vs. BOU HCCS 566 of 2008 where the court agreed that fraud required elaborate evidence. However it did not dismiss the application because particulars of fraud were averred therein. The court went ahead to state that there was a need to cross examine and test evidence, test facts. For this to be done, the application should be heard in the manner of an ordinary suit. Counsel prayed that if the court is not inclined to dismiss the application, it should order that the application be tried as an ordinary suit. He further submitted that in the case of Basajjabalaba vs. BOU all parties to the consent were parties to the application. In this case the applicant has omitted two of the parties to the suit. He prayed that I dismiss the application with costs.
Reply by Applicants Counsel
Counsel Cephas Birungye submitted that his learned friend submitted on particulars of fraud yet fraud was not the only ground in the application to set aside the consent judgment. He contended that the main ground in the application is that the applicant was not a party to the consent judgment. The second ground is that the person who signed the consent was not an authorised signatory of the applicant. The court should satisfy itself about the authorisation by the applicant company and this is not about fraud.
He further submitted that the affidavit in support of the application is about who the signatories of the applicant are. The affidavit has documents which show who the signatories are. The court is required to satisfy itself whether this can prove that Kagoro is not a party. The court can also satisfy itself as to whether Kagoro is a party by looking at the pleadings in the previous matter and satisfy itself whether Kagoro appeared anywhere. The court can satisfy itself whether Kagoro made any affidavit in the previous pleadings.
As far as the law is concerned the applicant quoted section 98 of the Civil Procedure Act and order 52 of the Civil Procedure Rules. Counsel cited the case of Saggu vs. Master Cycle Uganda Ltd [2002] 1 EA 258 where it was held that it is trite law that a defect in the jurat of an affidavit or any irregularity in the affidavit cannot be allowed to vitiate an affidavit in view of art 126 of the Ugandan Constitution. The case confirmed that the general rule is that where an application omits to cite a general rule, the purpose of that is to introduce order 9 rule 12 and order 46 of the Civil Procedure Rules. Learned counsel commenced his objection by saying it is illegal to commence proceedings in any other way other than by plaint.
Applicants counsel further submitted that in the case of Bassajjabalaba vs. Bank of Uganda, the court heard the application to set aside and it was not by plaint. Besides he contended that there is a lot of case law where parties have proceeded under order 52 or order 9 rules 12 by applications and not by plaint. He referred to the case of Attorney General and Uganda Land Commission versus James Mark Kamoga and James Kamala Civil Appeal No 8 of 2004.
Counsel further cited the cases of Betuko (U) Ltd and Another vs. Barclays Bank HCMA 243 of 2009 and Muhammad Alibhai vs. Bukenya Mukasa and Another CA 56 of 1996 which are applications to set aside consent judgments by notice of motion. He contended that these cases confirm that an application to set aside a consent judgment is not by plaint. Counsel further submitted that the basis for an application under order 52 of the Civil Procedure Rules and case law decision is that the grounds for setting aside include any reason upon which a court would set aside an agreement between the parties. (See Hirani vs. Kassam. If consent was given without sufficient material facts...”) He contended that the court can satisfy itself that there is a reason to invalid an agreement between the parties. The applicant would lose if it cannot satisfy the court that there are any grounds sufficient to set aside a contract between the parties.
Counsel submitted that the preliminary objection of the respondents counsel should have been on a point of law. He contended that it is only if the Respondent proves that there is an illegality in the pleadings that the application should be struck out. However he contended that no illegality has been proved.
As far as parties to the consent are concerned, counsel submitted that it was a question of joining of parties on which the court can advise. As far as Uganda Revenue Authority is concerned, it is not even a party to the consent and therefore there was no need to join it in the application. In any case it would not be prejudicial not to join URA. There was no need to call the clearing agent or URA to prove that Kagoro Epimac is not a representative of the company. The only party omitted is Three Ways Shipping Services Group. Counsel contended that the question before court is whether the consent is a legal document.
He contended further that the question as to where the goods went and whether the applicant benefited from the consent order are not material and would not change a decision as to whether the consent was valid. The only issue is whether the consent judgment was signed by the right person and properly filed in court.
Counsel further submitted that the application was being heard by Justice Muhanguzi and before any decision could be made, counsel for the respondent indicated to court that consent could be made and the parties adjourned. This is on the record and counsel referred to paragraphs 18 22 of the affidavit in reply. Parties got leave of court and nothing happened to the knowledge of second defendant. The parties never went back to the judge and he never made a ruling. One year later is when the applicant sees a consent signed by a registrar. That it is not known who appeared before the register on behalf of the second defendant. Counsel for the second defendant never appeared before the registrar. He pointed out that there is not stamp of the applicant and therefore the court can satisfy itself whether the impugned consent can be maintained and this does not require a plaint.
He prayed that the preliminary objection is overruled and the case heard on merits. If necessary the court can seek such other evidence whether by affidavit or otherwise without undue regard to technicalities. He contended that the preliminary objection of the respondent has a purpose of defeating justice or causing delay. The remedies which the respondent may want can be obtained by an application. He prayed that the objection is overruled with costs.
Rejoinder of Respondents Counsel,
Counsel Kiwanuka submitted that looking at documents is not tenable. The documents only show who the directors are but other people can bind the company. The applicant can prove its case. There are two sides to a dispute. Inappropriate procedure can prejudice the defendant. He contended that the relevant party who signed the consent is not even in court. He has not even sworn an affidavit saying anything. Counsel further submitted that the documents of the company are curiously for the period November 2009 but it cannot be ascertained what the status of the company was in April 2010.
He further submitted that it is not correct to say that Three Ways was an agent of All Sisters Company Ltd at the time of signing the consent. That it is a very important party and ought to be joined. As far as Uganda Revenue Authority is concerned, counsel agreed that it was only joined for consequential orders. However Uganda Revenue Authority is important to determine the question as to whom they (URA) released the goods to.
Counsel finally reiterated his prayers that the procedure adopted is inappropriate and that the application should be struck out with costs or in the alternative the court makes such other orders so as to determine the real issues in controversy between the parties by ordinary suit.

Ruling of Court
I have carefully considered the objection of the respondent and submissions of counsels. The applicants application seeks to set aside a consent judgment entered by the High Court Commercial Division Deputy Registrar on the 28th of April 2010. The consent is undated by the parties but dated by the court. It is signed for the plaintiff by Kabonero Bob the deponent of the affidavit in reply secondly by Jeff Baitwa on behalf of the first defendant and thirdly by Kagoro Epimac on behalf of the 2nd respondent. For the record the plaintiff is the current respondent to this application while the first Defendant was Three ways Shipping Services (Group) Limited. The second defendant is cited as the applicant in this matter. Uganda Revenue Authority was the third defendant but did not endorse the consent judgment.

The first objection of the applicant is to the effect that the wrong procedure was used because a notice of motion brought under order 52 rules 1 and 3 of the Civil Procedure Rules and section 98 of the Civil Procedure Act was not the right or correct procedure and it did not cite the correct law for setting aside a consent judgment. Counsel contended that a consent judgment where fraud is the ground pleaded is best handled as a suit commenced by plaint where evidence would be led through witnesses. Alternatively that if the application is not struck out for being incompetent the court should order that it is tried as an ordinary suit where evidence is led through witnesses and not by affidavit. I have read the authorities cited by the applicants and respondents counsels. As far as citation of wrong law in an application is concerned, I am persuaded by a wealth of authorities on this point. I would first refer to the case of Saggu vs. Road master Cycles (U) Ltd [2002] 1 EA 258, being a decision of the Court of Appeal at Kampala. As far as wrong citation of law is concerned or wrong procedure is concerned, the court restated the law that wrong procedure or wrong citation of law would not invalid proceedings if it does not go to jurisdiction or cause prejudice to the opposite side. The general rule is that where an application does not cite any law at all or cites the wrong law, but jurisdiction to grant the order sought exists, then the irregularity or omission can be ignored and the correct law inserted. The court of appeal restated the law that the court should not treat any incorrect act as a nullity with the consequence that anything founded thereon is itself a nullity unless the incorrect act is of the most fundamental nature. They held that matters of procedure are not normally of a fundamental nature. Citing an earlier case, they noted that the administration of justice required that the substance of a dispute should be investigated and decided on the merits and that error and lapses should not necessarily debar a litigant from the pursuit of his rights.
I am bound by the holding in the case of Saggu (supra) which in any case is supported by a wealth of authorities. In the case of Mohamed Allibhai vs. W.E Bukenya and Departed Asians Property Custodian Board Civil Appeal No. 56 of 1996 which was strangely cited in support of the respondents objection there was an application to set aside a consent agreement. That application had been brought by notice of motion (see page 3 of the judgement) before the matter went on appeal to the Supreme Court. In the case of Betuco (U) Ltd and Another versus Barclays Bank Uganda Ltd and 3 Others HCMA 0243 of 2009, the application to set aside the consent order was made by notice of motion. Furthermore reference can be made to some two judgments of the East African Court of Appeal. The first is the case of Brooke Bond Liebig (T) Ltd v Mallya [1975] 1 EA 266, a leading authority on the principles used by courts in determining whether a consent judgment can be set aside. The Court of Appeal sitting at Dar es Salaam composed of Law Ag P, Mustafa Ag VP and Musoke JA decided a similar point. The respondent sued the appellant and claimed damages for wrongful dismissal. During the hearing a compromise was entered into signed by the parties, their advocates and the judge. The Respondent then demanded more than was due under the compromise and when this was refused he applied by motion under the Tanzanian Order 23, rule 3 of the Civil Procedure rules for review of the consent agreement. The trial judge set aside the consent and the respondents counsel applied by notice of motion citing Order 23, rule 3 of the Civil Procedure Code to review and construe an agreement of compromise and directs the defendant to pay the sums as directed therein. The judge set aside the consent agreement on the ground that the parties did not agree on the basis of the purported agreement and ordered trial of the suit to resume. The Appellant appealed and the first ground of appeal was that the application was made under order 23 rule 3 which provided for recording of compromises and not for review. The court of Appeal agreed that the applicant had moved under a wrong order which did not apply to review and the correct order was order 43 (which dealt with reviews).
At page 268 they noted:
However the notice of motion did ask for review. It is the substance, rather than the form, of an application which is material, and I think the judge had jurisdiction under O. 43 to review his order making the compromise agreement an order of the court. Mr. Dastur then submitted that the proper procedure to set aside a consent judgment was by separate suit, and he cited a number of Indian authorities to this effect. Mr. Lakha was, however, able to cite an equal number of equally persuasive authorities to the effect that a disputed compromise can be challenged in the suit itself, and that this can be done by application in the suit and not necessarily by separate suit. My own view is that Mr. Lakhas submission on this point must prevail. Even if procedure by separate suit is the proper procedure, and I am not convinced as to this, a court is not precluded from giving effect to its decisions under its inherent powers, especially where time and expense can be saved, see Mawji v. Arusha General Store, [1970] E.A. 137,
The court cited its decision in Mawji versus Arusha General Store at page 138 per judgment of Newbold, P:
We have repeatedly said that the rules of procedure are designed to give effect to the rights of the parties and that once the parties are brought before the courts in such a way that no possible injustice is caused to either, then a mere irregularity in relation to the rules of procedure would not result in vitiation of the proceedings. I should like to make it quite clear that this does not mean that the rules of procedure should not be complied with indeed they should be. But non-compliance with the rules of procedure of the court, which are directory and not mandatory rules, would not normally result in the proceedings being vitiated if, in fact, no injustice has been done to the parties.”
The court further cited the inherent powers of court under section 95 of the Tanzanian Civil Procedure Code which is in pari materia with section 98 of the Ugandan Civil Procedure Act and which provides that:
Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.”
From the two authorities it is clear that an application to set aside a consent judgment may be made by notice of motion for review or it may be made by plaint. Secondly, a wrong citation or failure to cite the correct rule so long as it did not go to jurisdiction or occasion a miscarriage of justice to the opposite side did not made an application incompetent. The correct rule for review may be inserted. In other words the application is not a nullity and may be cured by amendment. Furthermore, section 98 of the Civil Procedure Act which preserves the inherent powers of court to make such orders as meet the ends of justice may be invoked to arrive at justice in the circumstances of a case. In doing this the court considers whether any prejudice would be occasioned to any of the parties. The basic principle is that the opposite party has been notified of the claim or matter brought against it and has had an opportunity to respond to and defend it. This takes care of the constitutional principles of fundamental justice about the right to fair notice and opportunity to defend oneself as enshrined in article 28 and as further entrenched by article 44 (c) of the Constitution of the Republic of Uganda. The intention of article 126 (2) (e) is to ensure that substantial justice is done and that parties are not blocked by matters of form. To a large measure the question of whether a rule or law is of a fundamental nature in the circumstances of the case or not has been left to the judgment of the court. The decisions of courts have often met the criteria in article 126 (2) (e) of the constitution as was captured in the case of Iron and Steelwares Ltd v. C.W. Martyr & Co. [1956} 23 EACA 175 AT 177 where the East African Court of Appeal observed that:
Procedural rules are intended to serve as handmaidens of justice, not to defeat it.”
In Adonia vs. Mutekanga [1970] EA 429 it was held by the Court of Appeal at Kampala that the exercise of inherent powers by a court is a matter of judicial discretion provided the court has jurisdiction. Per Spry JA at page 432 where he said:
The high court is a court of unlimited jurisdiction, except so far as is limited by statute, and the fact that a specific procedure is provided by rule cannot operate to restrict the courts jurisdiction.”
In conclusion on this point, the application is not incompetent as far as bringing it by notice of motion or under the laws cited is concerned. As far as the issue of whether the applicant has pleaded particulars of fraud is concerned, I need not belabour the point. The question of whether there are sufficient material facts would need a determination of the application on merits by examination of the affidavit in support and documents attached. I agree with the applicants counsel on the grounds for setting aside a consent judgment set out in the case of Hirani vs. Kassam 19 (EACA) 131. This case was quoted by Law Ag. P in the case of Brooke Bond (T) Ltd vs. Marlya [1975] E.A. 266 at page 269:
“the circumstances in which a consent judgment may be interfered with were considered by this court in Hirani v. Kassam (EACA), 19 E.A.C.A. 131, where the following passage from Seton of judgements and orders , 7th Edition vol 1 page 124 was approved.

Prima facie, any order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and on those claiming under them…and cannot be varied or discharged unless obtained by fraud or collusion, or by an agreement contrary to the policy of court… or if consent was given without sufficient material facts, or in misapprehension or ignorance of material facts, or in general for any reason which would enable court to set aside an agreement between the parties”

The applicant has specifically pleaded that it was not a party to the consent judgment in that the person who signed namely one Mr. Epimac Kagoro was not an authorised official of the company. This cannot be determined at this stage and ought to be heard on the merits. The question of who can bind the company is a matter that can vitiate a contract and may be a ground for setting aside a contract. A consent agreement filed in court is a contract and its endorsement by court only gives it more solemnity and backing of court process than an ordinary contract without the seal of court. The fact that a consent order remains a contract was held in the English case of Huddesfield Banking Co. Ltd Vs- Henry Lister & Son Ltd (1895) 2 Ch D. P. 273 Lindley L. J. At 280:
“I have not the slightest doubt that a Consent Order can be impeached, not only on the ground of fraud, but upon any ground that would invalidate it. It is expressed in a more formal way than usual. …To my mind the only question is whether the agreement upon which the Consent Order was based can be invalidated or not. Of course if that agreement cannot be invalidated the Consent Order is good. If it can be the Consent Order it is bad”

As to whether there is sufficient evidence to establish whether Kagoro Epimac has the authority of the applicant is a question on the merits and cannot be raised as a preliminary point of law.
Last but not least is the question of parties. As I have noted above Uganda Revenue Authority is not a party to the consent agreement. In other words it never contracted with the parties and it is therefore not a necessary party for purposes of setting aside the agreement and consequently the consent judgment founded upon it. As far as the question of necessary parties are concerned, it is governed by order 1 rules 10 and 13 of the Civil procedure Rules. The court may add or substitute any party for purposes of effectually adjudicating on the actual matter in controversy and avoiding multiplicity of actions. Non joiner of a necessary party is not fatal and can be rectified upon application of a party to join, substitute, add or strike out a party. On the question of whether Mr. Kagoro Epimac should have sworn an affidavit on record, the Applicant clearly disowns him and if anything he may be a witness for the Respondent if he asserts that he had authority of the Applicant. The above point is however immaterial for purposes of determination of the Respondents preliminary objection.
For the reasons stated above the preliminary objection of the Respondent is overruled with costs.
Ruling delivered on the 22nd of July 2011

Hon. Mr. Justice Christopher Madrama
Ruling delivered in the presence of:
Cephas Birungye for the Applicant
Karugire holding brief for Kiwanuka for the Respondent
Ojambo Makoha
Court Clerk

Hon. Mr. Justice Christopher Madrama