Court name
Commercial Court of Uganda
Judgment date
17 August 2012

Barclays Bank Uganda Ltd v Kikwaya (Miscellaneous Application-2012/128) [2012] UGCommC 94 (17 August 2012);

Cite this case
[2012] UGCommC 94
Coram
Obura, J

THE REPUBLIC OF UGANDA

IN THE HIGH COPURT OF UGANDA AT KAMPALA

(COMMERCIAL COURT DIVISION)

MISCELLANEOUS APPLICATION NO 128 OF 2012

(Arising out of Civil Suit No. 16 of 2011)

 

BARCLAYS BANK UGANDA LTD :::::::::::::::::::::::::                                                                                                                                                 APPLICANTS

VERSUS

EDISON KIKWAYA MUSINGUZI:::::::::::::::::::::::::::                                                                                                                                                 RESPONDENT

 

BEFORE THE HON. LADY JUSTICE HELLEN OBURA

 

RULING

 

This application was brought by notice of motion under Section 33 of the Judicature Act, Section 98 of the Civil Procedure Act, Order 9 rule 23 and Order 52 rules 1, 2 & 3 of the Civil Procedure Rules (CPR).  The applicant is seeking for orders that the dismissal of Civil Suit No. 16 of 2011 be set aside and the suit be reinstated and costs of the application be provided for. The application is supported by an affidavit sworn by Ms. Rachael Tumwebaze an advocate in the law firm that was instructed by the applicant to handle its case.

 

The brief grounds as contained in both the notice of motion and the affidavit in support are that the applicant and its advocate were prevented from appearing in court on 1st February 2012 by sufficient cause. The deponent of the affidavit explained that when they were served with a hearing notice, she visited the court registry and she was informed by the clerk that the suit was fixed for hearing in error since it had not yet gone through the mandatory mediation process. She averred that she later filed the mediation notes and served it on counsel for the respondent. In the circumstances, the applicant and its advocate were prevented from appearing in court on 1st February 2012 as they believed that the matter had been removed from the cause list to enable it go through the mediation process.

 

An affidavit in reply and opposition to this application was sworn by Mr. Edison Kikwaya Musinguzi, the respondent. He deposed that it was the applicant’s advocates who served the hearing notice on his advocates for appearance in court on 1st February 2012 and they had no choice but to appear. He further deposed that his advocates were not served with the mediation notes as the copy attached to the affidavit is not duly stamped as alleged.

 

He averred that the applicant filed its case in January 2011 and did not bother to take steps to fix it for mediation for over a year and is therefore guilty of dilatory conduct. Further that there was no basis for the applicant and its advocate to believe that the suit had been removed from the cause list.

 

When this application came up for hearing, counsel for both parties agreed to file written submissions which they did. I have carefully considered those written submissions that were mainly based on what was stated in the affidavits as summarized above.

 

As rightly submitted by counsel for the applicant, 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, there is no discretion given to court over the matter. An order setting aside the dismissal upon such terms as to costs or otherwise as the court thinks fit must be made.

 

In Lucas Marisa v. Uganda Breweries Ltd (1988-1990) HCB 131 at 132 it was held that, “the sufficient cause had to relate to failure by the applicant to take the necessary step at the right time”.

 

In addition to the sufficient cause required to be shown under Order 9 rule 23, courts have also established some tests to be applied when dealing with an application like this one. In National Insurance Corporation v Mugenyi and Company Advocates [1987] HCB 28 the Court of Appeal 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 followed in Nakiride v Hotel International Ltd [1987] 85 where it 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 issue for determination in an application like this one is whether the applicant has shown sufficient cause to warrant grant of the order sought. In dealing with this issue, I will also apply the two tests stated by the Court of Appeal in National Insurance Corporation (supra).

 

It was submitted for the applicant that Civil Suit No. 16 of 2011 was fixed for hearing on 1st February 2012 in error as it had not yet gone through the mandatory mediation process. It was contended that upon receiving a copy of the hearing notice, counsel for the applicant approached the court registry staff who advised that the matter was going to be removed from the cause list and forwarded to the mediator.

 

On the other hand, counsel for the respondent argued that it was the applicant’s counsel who extracted the hearing notice that was served on them. The applicant and its advocates were faulted for not taking steps to have the matter proceed for mediation and I do agree with that submission.

 

The applicant filed Civil Suit No. 16 of 2011 on 17th January 2011 and the written statement of defence was filed on 17th March 2011. The applicant then just sat back without taking any steps with a view to proceed with the suit. It was only when the matter was fixed that attempts were made to prepare the mediation notes which, according to the respondent’s counsel, were not even served on them.

 

According to direction 2 (2) of the Constitution (Commercial Court) (Practice) Directions S.I. Constitutional 6,  the Commercial Court was established to deliver to the commercial community an efficient, expeditious and cost effective mode of adjudicating disputes that affect directly and significantly the economic, commercial and financial life of Uganda. The dilatory manner in which the applicant handled its case is contrary to the above objective of establishing the Commercial Court. Litigants who are not prepared to take steps to ensure that their cases are handled expeditiously should not bring their cases to the court to just clog the system and cause unnecessary backlog.

 

As regards the contention on who extracted and served the hearing notice, I do find that according to the records, the hearing notice was signed by the registrar on 19th October 2011. It was addressed to counsel for the respondent who had filed the written statement of defence M/S Mpeirwe & Co. Advocates.  It appears the hearing notice was never served. The current counsel for the respondent filed a notice of change of advocates on 19th January 2012 and a copy of the hearing notice bearing their stamp indicates that it was received on 18th January 2012. Could it therefore be that they were served with the hearing notice before they had filed the notice of change of advocates? I want to imagine that they could have just, out of vigilance, picked a copy of the hearing notice from the file as they were preparing to file the notice of change of advocate because they could not have been served before they were on record.

 

It is also possible that when the applicant’s counsel realized that the matter had not yet gone through the mandatory mediation process, they decided not to serve the hearing notice but failed to ensure that the suit was removed from the cause list. While I condemn the delay in proceeding with the case, I will give the applicant and its counsel the benefit of the doubt and accept the argument that they believed that the matter had been removed from the cause list since a mandatory step had not yet been complied with.

In the circumstances, I find that counsel for the applicant was negligent in failing to ensure that the case was removed from the cause-list and neglecting to appear on the date the matter came up before court. However, it is now settled that mistake of counsel however negligent cannot be visited on the litigant.See among other authorities, Banco Arabe Espanol v Bank of Uganda SCCA No. 8/1998 [1997-2001] UCL 1

 

In Nicholas Roussos vs. Gulamhussein Habib Virani & Another, Civil Appeal No.9 of 1993 (SC), the Supreme Court attempted to lay down some of the grounds or circumstances which may amount to sufficient cause and mistake by an advocate though negligent was stated to be one of them. For that reason, I find that the applicant has shown sufficient cause that would warrant grant of this application.

 

I have also looked at the nature of the claim in H.C.C.S No. 16 of 2011 and the defence in line with the two other tests stated by the Court of Appeal in National Insurance Corporation (supra). It was argued by counsel for the respondent based on the authorities of Crown Beverages Ltd v Stanbic Bank Uganda Ltd MA. No. 181 of 2005 and Shamsudin Jiwan Mitha v Abdulaziz Ali Ladak [1960] EA 1054 that in an application like this one the nature of the case should not be looked at. I do agree that the merit of the case should not be delved into to the extent of determining whether or not it has a high chance of success. However, I believe as stated in National Insurance Corporation (supra), there is no harm in looking at the nature of the claim and the defence to it for purposes of determining whether there are triable issues.

 

With due respect to counsel for the respondent, the two authorities he relied on to support his argument are High Court decisions which can only be persuasive to this court. However, since they are in conflict with the decision of the Court of Appeal which is binding on this court, I will follow the binding decision and look at the nature of the claim and the defence as I do here below.

 

The applicant sued the respondent for recovery of Shs. 55,893,499/= being money due and owing from the defendant’s loan account. It also claimed for interest at 28% per annum and costs of the suit. The respondent filed a defence in which the loan was not denied but the amount was disputed as being inaccurate since it included unconscionable interest and erroneous calculations. It was further alleged that the respondent’s inability to repay the loan was due to the collapse of his business. The respondent sought to rely on the doctrine of frustration.

 

Looking at the nature of the applicant’s case and the defence, there are some triable issues raised which would be in the best interest of justice for this court to reinstate the suit so that it is heard and determined on its merit.

 

In the premises, I order that the Order dismissing H.C.C.S. No. 16 of 2011 be and is hereby set aside and the suit is accordingly reinstated. Taking into account the fact that the applicant was not very vigilant in furthering the progress of its suit thereby leading to the dismissal of the suit, the costs of this application is awarded to the respondent.

 

I so order.

 

Dated this 17th day of August 2012

 

 

Hellen Obura

JUDGE

 

Ruling delivered in chambers at 3.00 pm in the presence of Ms. Olivia Kyalimpa Matovu for the applicant and Mr. Jude Byamukama for the respondent who was present.

 

JUDGE

17/08/12