Court name
Commercial Court of Uganda
Judgment date
17 August 2011

Bright Chicks Uganda Ltd. v Dan Bahingire (Miscellaneous Application-2011/254) [2011] UGCommC 90 (17 August 2011);

Cite this case
[2011] UGCommC 90

THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERICAL DIVISION)

MISCELLANEOUS APPLICATION NO. 254 OF 2011

(ARISING FROM CIVIL SUIT NO.14 OF 2010)

BRIGHT CHICKS UGANDA LIMITED:::::::::::APPLICANT/PLAINTIFFF

VERSUS

DAN BAHINGIRE:::::::::::::::::::::::::::::::::RESPONDENT/DEFENDANT

BEFORE: HON. LADY JUSTICE HELLEN OBURA

RULING

This application was brought under the provisions of Order 6 rule 19 and 31 of the Civil Procedure Rules (CPR) and Section 98 of the Civil Procedure Act (CPA) seeking for orders that leave be granted to the applicant to amend its pleadings. The application is supported by an affidavit sworn by Mr. Anyi Emmanuel in his capacity as the Accounts Manager of the applicant company.

The main grounds of the application as contained in the chamber summons and the affidavit in support were that the amendment was necessary so as to provide for the actual outstanding balance unpaid by the defendant for the supplies by the plaintiff. Further that the amendment was necessary for determination of the real question in controversy between the parties and it would in no way prejudice the respondent. A copy of the proposed further amended plaint showing the nature of amendment sought to be made primarily in paragraphs 3 and 4 was annexed to the affidavit as “AM”.

An affidavit in reply/rebuttal was sworn by Mr. Dan Bahingire, the respondent.
He deposed in paragraph 3 that he was advised by his lawyers M/S. Mukiibi & Co Advocates         that the application lacked merit in that it did not meet the principles governing amendments of pleadings in as far as:-
(i)     

It was not made in good faith as it was intended to beat the defence and not to allow court determine the real questions in controversy.
(ii)     The proposed amendments introduced a new cause of action.
(iii)    The application was made mala fide and if allowed would cause injustice to the respondent/defendant that could not be compensated by way of costs.
(iv)     The application was not based on correcting errors or defects as required by the law but merely it was crafted to reframe the applicant’s claim based on the respondent’s/defendants defence already at the applicant’s exposure.
That it was not just and equitable to allow the application as it would prejudice the respondent’s defence.

Mr. Sekabanja Edward for the applicant submitted that the proposed amendment was in paragraph 4 where the plaintiff’s claim was narrowed down to the period between 22/08/2009 to 07/10/2009. That previously they had put the whole range of transaction between the parties beginning from January 2009 but they found it necessary to reduce the period so as to narrow down the issues in controversy.

He further submitted that in the proposed paragraph 4(b) they had stated that the defendant made some payments leaving an outstanding balance of Shs. 81,404,286/=. That previously, they had indicated that the respondent had paid Shs. 692,948,000= over the period from January to December 2009 but now they found it necessary to narrow down the period of transaction and payments in accordance with the statement of account. That consequently, the amendment sought to narrow down the timeframe of transaction.

Counsel submitted that the principles that govern an application like this are first that the application can be made at any stage of the trial and court could allow. Secondly, that however, careless, negligent may have been the omission or however, late that proposed amendment it could be allowed if it can be made without occasioning injustice to the other party. Further that the only remedy to the other party would be costs.

He relied on the ruling in Stewart-vs- Northern Metropolitan Tramways Ltd [1986] 16 QB 556 which was cited in Matico Stores Ltd & Another –vs- James Mbabazi & Anor [1993] HCB 31. He also referred to Muddu Awulira Enterprise Ltd & Others -vs-Stanbic Bank (U) Ltd. HCCS No. 454 of 2005 as per Justice Kiryabwire Geoffrey. He prayed that the application be allowed and conceded to the costs.

Mr. Kyeyune Albert for the respondent in opposition to the application opened his submission by giving a background of what he called the applicant’s several amendments. He pointed out that in the first place, the applicant’s case was first filed before this court by summary procedure. That upon receiving instructions from their client, they filed an application for leave which was accompanied by the proposed written statement of defence and the application was fixed for hearing.
Further that on the day of hearing the application, the applicant’s counsel then made an oral application to amend the plaint which they conceded to thinking that it was going to be directed to the errors and defects in the summary plaint as required by S.100 of the Civil Procedure Act. That however, they were surprised when on filing the amended plaint, this time it was brought under ordinary procedure. That the earlier summary plaint had stretched the applicant’s claim from about April 2009 but the amended plaint extended it back to January 2009.

He observed that the proposed further amended plaint now reduces the period to August, 2009. He further observed that the amended plaint did not just stretch the period but also changed the annextures and they were served with a couple of new statement of accounts, invoices, and receipts. That it was only the agreement between the parties that remained the same but at that stage they could not help it so they prepared a defence.

In specific response to counsel for the applicant’s submission, Mr. Kyeyune submitted that the applicant sought to amend its pleadings so as to narrow its claim but in so doing the applicant would be running away from its case. That the respondent’s defence stretched from January to December 2009 and it was crafted depending on the amended plaint but by allowing a further amendment the cause of action would be changed.

He noted that in the amended plaint, it was stated that all the supplies were on credit but now it was stated in the proposed further amended plaint that all the supplies were on cash basis. That after realizing that the defendant did not have problems with what he was stated to have paid but only had problems with two invoices, the applicant has now changed the statement of accounts and was now leaving out the two invoices issued around May.

Counsel referred to the case of Mbayo Jacob Robert-vs-Electoral Commission & Another [Election Petition No. 07 of 2006] where court held that amendment can be allowed if it does not introduce new inconsistent cause of action or occasion injustice to the other party.

He submitted that by the applicant changing the annextures, it was bringing in a new cause of action. He referred to the case of Al Hajji Nasser Ntege Sebagala-vs-Attorney General & Others [Constitutional Petition No. 1 of 1999] where a cause of action was defined as a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant.

He noted that although the amount claimed had been maintained in the proposed amendment but the facts giving rise to it had been changed. That the cause of action had therefore been changed by the proposed amendment. He also stressed that this application was made in bad faith with intention to beat the respondent’s defence but not to assist court determine the real issues in controversy.

To this end he argued that the amended plaint which was sought to be further amended had a statement of accounts which was prepared by the applicant’s accountant and it was the basis of the defendant’s defence. That the applicant was introducing a new statement of accounts and leaving out the old ones originally attached.

Mr. Kyeyune submitted that the applicant had abandoned the figure that was stated to have been paid in the amended plaint and also omitted to mention that from January-November 2009 the applicant had supplied birds worth shs 774,333,190=. He contended that the respondent’s defence was based on what was stated to have been supplied and what was conceded to have been paid thus leaving the respondent’s case hanging on the two disputed invoices. He concluded that the proposed amendment will change the cause of action; beat the respondent’s defence thereby occasioning injustice/prejudice to the respondent.

He prayed that the applicant’s proposed amendment be subjected to section 100 of Civil Procedure Act which restricts amendments. He further prayed that the application be dismissed with costs and if court was inclined to allow costs must be awarded to the respondent.

Mr. Sekabanja in rejoinder first of all sought to correct the impression on section 100 of the CPA which he submitted and I agree with him that it is to do with correction of proceedings, as opposed to amendment of pleadings. He contended that what counsel for the respondent had alluded to as prejudice and specifically the statement of accounts was a question of evidence which the respondent could challenge during proceedings.

As regards the alleged change of cause of action, he submitted that the claim had not been changed and therefore he did not intend to delve into it. He argued that it was the plaintiff’s case and he had the right to determine which fact or evidence would prove its case. Further that it was open to the defendant in his pleadings to state such facts as would answer any claim or matters through his case.

Mr. Sekabanja wondered how exclusion of a matter could deny a party a defence or cause injustice since the party still had opportunity to plead that fact in his favour. He reiterated his prayer that the application be allowed and conceded to the costs of the amendment.

Order 6 rule 19 under which this application was brought 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, and all such amendments shall be made as maybe necessary for the purpose of determining the real questions in controversy between the parties”.
 
As per the wordings of this rule, grant of an application for amendment of pleadings is discretional and I am conscious of the fact that this discretion is a judicial one which must not be exercised arbitrarily.
 
According to Mulla , The Code of Civil Procedure, 17th Edition Volume 2, at pages 333, 334 and 335; as a general rule, leave to amend will be granted so as to enable the real question in issue between the parties to be raised on the pleadings, where the amendment will occasion no injury to the opposite party, except such as can be sufficiently compensated for by costs or other terms to be imposed by the order. Leave to amend must always be granted unless the party applying was acting mala fide and where it is not necessary for determining the real question in controversy between the parties. The application to amend must be made bona fide and made in good faith.
 
Odgers on Pleadings and Practice 20th Edition at page 170 also states that where the amendment is necessary to enable justice to be done between the parties, it will be allowed on terms even at a late stage. However, if the application be made mala fide, or if the proposed amendment will cause undue delay, or will in any way unfairly prejudice the other party, or is irrelevant or useless, or would raise merely a technical point, leave to amend will be refused.
 
There are a number of cases that have followed the above principles that govern amendment of pleadings. They include Eastern Bakery v Castelino [1958] EA 462 (CAU), Matico Stores Ltd & Another v James Mbabazi & Another [1995] 111 KALR 31, Mbayo Jacob Robert v Electoral Commission & Another, Election Petition Appeal No. 07 of 2006 (Court of Appeal), Gaso Transport Services (Bus) Ltd v Obene [1990-1994] EA 88 at page 96 (Supreme Court of Uganda) and in the recent Commercial Court Division cases of Muddu Awulira Enterprises Ltd & 2 Others v Stanbic Bank Uganda Ltd MA. No. 528 of 2010 as per Kiryabwire J, and Plessey (PTY) Ltd v Mutoni Construction Ltd MA No. 178 of 2011 as per Mulyagonja J.

In Gaso Transport Services (Bus) Ltd v Obene (supra) Tsekooko, JSC stated that the four principles that appear to be recognized as governing the exercise of discretion in allowing amendments are:-
1.      

“The amendment should not work injustice to the other side. An injury which can be compensated by an award of costs is not treated as an injustice.
2.       Multiplicity of proceedings should be avoided as far as possible and all amendments which avoid such multiplicity should be allowed.
3.       An application which is made mala fide should not be granted.
4.       No amendment should be allowed where it is expressly or impliedly prohibited by any law (for example limitation actions)”.
In all the above cases much emphasis was placed on the fact that the amendment should be freely allowed provided it is not done mala fide and does not occasion prejudice or injustice to the other party which cannot be compensated by award of costs.

Applying the above principles to the facts of this case, and taking into consideration the affidavits and the submissions of both counsels, I find that the circumstances of this case do not merit grant of this application for the following reasons:

First of all, I agree with the submission of counsel for the respondent that this application is made mala fide with a view of defeating the respondent/defendant’s defence. While the applicant has maintained the amount being claimed at Shs. 81,404,286= from the time the suit was first filed by summary procedure, in the amended plaint and in the current proposed amendment, the grounds for this application was that the amendment was necessary so as to provide for the actual outstanding balance unpaid by the defendant for the supplies by the plaintiff.

However, what is sought to be amended is not the outstanding balance but rather the period within which the said amount accrued and how it accrued. In the original plaint in summary suit it was stated that between 1st April 2009 and 30th November 2009 the plaintiff supplied poultry worth Shs. 267,405,696/= and only Shs. 186,001,410= was paid leaving an outstanding balance of Shs. 81,404,286=. When the applicant’s oral application for amendment of the plaint was allowed by consent, the matter was brought by ordinary suit and the period of claim was accordingly extended up to January 2009. The total value of poultry supplied over that period was also changed to Shs. 774,353,190= and the defendant was stated to have paid a total of Shs. 692,948,904= and the outstanding balance remained at Shs. 81,404,286=.

The defendant in his amended defence and counter-claim denied that the plaintiff supplied poultry worth Shs. 774,353,190= and instead stated that the amount supplied was worth Shs. 674,844,644=. He challenged the genuineness of some tax invoices worth Shs. 99,508,546= that were attached to the plaint as group Annexture “D” which he claimed were not signed by him or his agent and no receipts were issued in respect of them as was the practice. He off-set that amount from the total value of poultry stated to have been supplied by the applicant in order to arrive at his figure of Shs. 674,844,644=. He however, conceded that he had paid a total of Shs. 692,948,904= which he claimed was Shs. 18,104,260= in excess of what was supplied. He made a counter claim for that amount.

When this matter came before me for scheduling directions, the plaintiff’s counsel intimated that he had instructions to apply for leave to further amend the plaint. I requested him to show counsel for the respondent the proposed amendment so that he could consider consenting to it and save court from hearing a formal application. Upon looking at the proposed amendment, counsel for the respondent indicated that he would oppose it. This led to the filing of this application with a copy of the proposed amended plaint indicating that this time the plaintiff wanted to abridge the period of claim from between January and November 2009 to between August to October 2009 and leave out the value of what was supplied and the amount so far paid. The outstanding balance however, still remained the same at Shs. 81,404,286=. From the above facts, it is therefore not true that the purpose of the amendment sought was to provide for the actual outstanding balance unpaid by the defendant for the supplies by the plaintiff as stated in the grounds of this application.

In my considered opinion the amendment was being sought in bad faith to defeat the defence wherein the respondent/defendant was challenging the genuineness of some of the tax invoices for May 2009 and counter claiming what he allegedly overpaid. In reaching this conclusion, I was persuaded by what is stated at page 171of Odgers on Pleadings and Practice (supra) that where the action has been brought on a substantial cause of action, to which a good defence has been pleaded, the plaintiff will not be allowed to amend his claim by including in it, for the first time a trivial and merely technical cause of action, which such defence may not cover.

 
In view of the above statement, I am convinced that what was sought to be amended was a trivial matter which is not necessary to enable this court determine the real question in controversy between the parties which is basically whether the amount claimed is owing. When it accrued is a matter of evidence which in my opinion could be adduced by the plaintiff without amending the plaint since the period for the claim was already included therein and the defence also extended up to that period. I would have probably been inclined to allow the amendment if it was to extend the period of claim to cover what was left out other than to abridge it as it was proposed.
Secondly, due to my finding that this application was made mala fide with a view of defeating the defence, it follows that granting it would be prejudicial to the respondent and it would work injustice to him that would not be compensated by an award of costs.

Thirdly and lastly, refusing to grant this application would not in any way give rise to multiplicity of proceedings. This court can wholly determine the real question in controversy between the parties basing on the facts disclosed in the pleadings as they are currently.

In the final result, I decline to grant this application and dismiss it with costs.
I so order.

Hellen Obura
JUDGE

18/08/2011

Ruling read in open court in the presence of Mr. Edward Ssekabanja for the applicant and Mr. Albert Kyeyune for the respondent.

Ms. Ruth Naisamula-Court Clerk.

18/08/2011