Court name
Commercial Court of Uganda
Judgment date
16 August 2013

Abidi & 3 Ors v Tropical Africa Bank (Miscellaneous Application-2006/360) [2013] UGCommC 141 (16 August 2013);

Cite this case
[2013] UGCommC 141

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 360 OF 2006

ARISING FROM HCCS NO 569 OF 2002

  1. AL HAJJ ABIDI}
  2. HUSSEIN ALI ABDI}
  3. LUCKY SON LTD}
  4. RAPHAEL DRICHI} .........................................APPLICANTS/DEFENDANTS

VERSUS

TROPICAL AFRICA BANK}........................................ RESPONDENT/PLAINTIFF

BEFORE HON MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The First Applicant/Defendant commenced this application under the provisions of section 98 of the Civil Procedure Act, order 9 rules 24 and order 9 rule 26 of the Civil Procedure Rules (before revision of the rules and Order 9 rule 27 after revision of the Civil Procedure Rules) for orders that the ex parte decree/judgment entered against him in civil suit number 569 of 2002 is set aside and he is heard in defence of the suit. Secondly the applicant seeks orders that execution is stayed pending the hearing and final disposal of the application. Lastly it is for provision to be made for costs of the application.

The grounds of the application as set out in the notice of motion are that the applicant was prevented from attending the court when it ordered the suit to proceed ex parte by sufficient cause because he was out of the country for treatment. Before that the applicant left the country, he engaged the services of Tumusiime, Kabega and Company Advocates and unknown to him, they did not attend the court at any time to execute his instructions. When the applicant returned from abroad and appeared in court on 13 September 2004, he found that the court had ordered the case to proceed ex parte on the day the first prosecution witness testified. Subsequently the applicant engaged the services of F Mukasa and Company Advocates to represent him and on 21 January 2005, the applicant appeared in court with his advocate Mr Mukasa but they found that the case had already been adjourned. He was advised to file a notice of change of advocates and apply to set aside the order to proceed ex parte before the next hearing date. The applicant once again appeared in court with Mr Ssebagala Ali of Messieurs F Mukasa and Company Advocates on 28 February 2005 and the presiding judge denied audience to the firm of advocates because they had not filed a notice of change of advocates. On 28 February 2005, the second prosecution witness testified and the case was reserved for judgement on 4 April 2005. On 9 March 2005, Messieurs F Mukasa and Company Advocates filed an application seeking orders that the applicant is heard in defence to the suit but the same application was never heard. Consequently the applicant maintains that he was condemned unheard due to the faults, blunders and negligence of his advocates which should not be visited on him. The sum involved in the suit is colossal and the applicant should be made to pay only after he has been heard in defence to the suit. Lastly the applicant contends that he has a good defence to the respondents claim as the alleged admission of the claim by him was procured under duress.

The affidavit in support of the application of the first defendant affirms and reiterates the grounds in the notice of motion. He attached the receipts for the payment of fees of Messieurs Tumusiime and Kabega Advocates. He affirms that it was after the payment to the said firm of advocates that he went abroad for treatment and the advocates did not execute his instructions to their logical conclusion. He further attached the treatment forms. He affirms that he discovered that the advocates had never attended court and withdrew from the suit in March 2004 when he was still out of the country. He further adds that the omission and negligence or inadvertence of Messieurs F Mukasa and company advocates to file a notice of change was the reason why the presiding judge denied him audience when the second plaintiff witness testified. Messieurs F Mukasa and Company Advocates on 19 March 2005 filed miscellaneous application number 188 of 2005 seeking leave to allow the applicant to be heard before judgement is pronounced. However the application was never pursued and is still pending on the court record. Consequently the applicant is a victim of the blunders, mistakes and negligence of his advocates. Because Messieurs F Mukasa and Company Advocates never pursued the application for leave for the applicant to be heard before judgement, they were reported to the law Council in case number 073 of 2005. The applicant avers that the blunders and mistakes of counsel should not be visited on innocent litigants. Secondly the claim by the respondent in the suit is Uganda shillings 912,883,306/=, a colossal sum of money, and it is in the interest of justice that the applicant should be made to pay if at all only after he has been heard in defence. Furthermore the plaint alleges fraud against the applicant and the applicant should be given a chance to respond to it before he is condemned. That the interest of justice is that execution of the ex parte decree/judgment is stayed pending the result of this application. The sum awarded is Uganda shillings 876,540,298/= plus interest, and general damages of Uganda shillings 10,000,000/= and would cause the applicant to sell whatever he owns or be committed to prison as a civil prisoner. The applicant would suffer substantial loss if execution is not stayed.

The affidavit in reply of the respondent/plaintiff is disposed to by Mrs Addah Turyamwesimira Wegulo, an advocate of the High Court and the Bank Secretary of the respondent. She deposes that when the suit was first cause listed for hearing on 19 August 2003, counsels for the applicant Messieurs Tumusiime and Kabega Company advocates were served with a hearing notice but declined to accept service and endorsed on the hearing notice that they had no further instructions in the matter. The process server proceeded to the residence of the defendants at Namirembe road in Kampala where he served court process as contained in the affidavit of service. The affidavit of service annexure "A" paragraph 6 thereof shows that he served the gatekeeper one Said when the defendants were not around. The suit was next fixed for hearing on 13 November 2003 but on that day the court was not satisfied with the service of process upon the defendant at their residence. The suit was then fixed for hearing on 17 March 2004. Service was made upon an adult member of the defendant's family who informed the process server that the applicant was away in the UK for an operation and Hussein Ali was away in Rwanda. Hearing notice was acknowledged by one Mama Moses. When the case came for hearing on 17 March 2004, the applicant's daughter Leila Ali was present in court and reported that her father was ill and away in Dubai. Additionally she informed the court that Messieurs Tumusiime, Kabega and Company Advocates had withdrawn from the conduct of the suit. Her brother Mr Hussein Ali, the second applicant was in the United Kingdom on a business trip while Bossi Ali the third defendant was in Rwanda running a transport business. She represented in court that she would inform her father and brothers that the suit have been called for hearing and an arrangement would be made to instruct another lawyer to represent the first applicant and her brothers. She informed the court that the applicant would be back within a month and the court issued an order that there would be no further adjournments and the defendants would be given a chance to engage another lawyer. The suit was adjourned to 26 April 2004 and when it was called for hearing, counsel for the plaintiff informed court that the process server have tried to get the defendants at their home but on all occasions failed to find them. Leave was given to the plaintiff to apply for substituted service through advertisement in the newspapers. A hearing notice was issued and advertised in the New Vision Newspaper and the East African Newspaper for 1 July 2004. Notice was again served on Leila Ali who acknowledged service as an adult member of the defendant's family. The defendants did not instruct a lawyer to defend them as ordered by the court and did not appear in court on the hearing date notified through the advertisement. Consequently the plaintiff’s application to proceed ex parte was granted by the court and the suit was adjourned for hearing on 13 September 2005 (2004). On 13 September 2004, the plaintiff called its first witness and the hearing of the suit was adjourned to 1 November 2004. The suit did not proceed and it was adjourned to 21 January 2005. Subsequently it was further adjourned to 21 February 2005 when the court proceeded with the hearing of the evidence of the second plaintiff’s witness. On 9 March 2005, the applicant’s belatedly filed an application for an order for the applicants to be allowed to defend themselves against the claims in the suit and the application was fixed for hearing on 15 April 2005, a date after the court was supposed to give judgement in the main suit. The court did not entertain the applicant’s application. The deponent further gives her opinion about the matter that need not be repeated. Her conclusion was that the defendants simply neglected or failed to engage a lawyer to represent them when a notice of hearing was advertised in the New Vision and the East African newspapers. The respondent maintains in the affidavit in reply that save for the claims of the alleged negligence of the lawyers of the defendants, the applicants have not furnished to court sufficient cause for the inordinate delay in bringing this application. Judgement in the suit was delivered on 1 November 2005 and a decree extracted on 7 February 2006. The defendants neglected to bring an application to contest the judgement and subsequently the decree immediately issued thereafter.

As far as the claim for a right to be heard in defence of serious charges of fraud are concerned, the first defendant was not only sued for the return of the money whose loss he negligently caused in concert with his sons but was also charged with several criminal charges under the Penal Code Act inclusive of a charge of embezzlement. The applicant was not coerced to extract a commitment to return the money and his claim that he made the commitment under duress was false. The applicant made the commitment to pay in the presence of the deponent and his son Hussein Ali. Subsequently after making the commitment, the first applicant paid Uganda shillings 30,000,000/= to the respondent bank. In total the applicant’s application is calculated to delay the course of justice because he has no plausible defence to either this suit or the criminal charges preferred against him.

The applicant again filed an affidavit in rejoinder on the 2nd of May 2013 to the reply of the respondent. In rejoinder he avers that he was acquitted of all the 27 criminal charges of fraud on 14 October 2011. Secondly he rejoins that he was not guilty of dilatory conduct in the main suit because he engaged the services of Messieurs Tumusiime and Kabega Advocates to represent him in the suit but later they withdrew from the matter on 30 July 2003 without any notice when he was abroad or medical treatment. Between January 2004 and July 2004 the applicant was out of the country undergoing medical treatment and could not seek the services of another lawyer and he could not attend court in person. On 17 March 2004 he learnt about the withdrawal of his counsel from his daughter Leila Ali and requested her to attend court on his behalf and informed the court of his absence and sickness which she did on 1 July 2004 when the suit was first called for hearing. When they came for hearing on the September 2004, the applicant had come back from Dubai and was informed that the suit was proceeding ex parte. He was further advised by the honourable judge to get another lawyer before the next hearing date of 1 November 2004. On 1 November 2004, the case did not proceed because it was not cause listed and it was fixed for 26th November 2004. On 26th November 2004, this suit never proceeded and was adjourned to 21st of January 2005. The applicant appeared in court with his lawyers on 21 January 2005 the date on which the hearing was adjourned but were stopped from proceeding as the matter was proceeding ex parte and the law firm had not been formally entered on the record. Finally the applicant reiterates that he has a good defence of the suit because he was found innocent of all the charges brought against him.

The applicant's application was filed in May 2006 by Messrs Mugarura, Kwarisiima and Co. Advocates. The application never proceeded since it was filed. On 28 March 2013 the applicant wrote a letter to the deputy registrar through his lawyers Messrs Joseph Kiryowa and Co Advocates. The gist of the letter was that the applicant’s application was fixed for hearing on 3 July 2006 but never took off because the file was misplaced. Subsequently the applicants counsel Mr Kwarisiima passed away. Thirdly the respondent bank ceased to operate under the name of Tropical Africa Bank Ltd and is now known as Tropical Bank Ltd and there was a need for amendment of the pleadings. Furthermore that miscellaneous application number 362 of 2006 filed on behalf of the 2nd, 3rd and 4th applicants is frivolous and vexatious because the court judgement had exonerated them. Criminal charges against the applicant were concluded in favour of the applicant on 14 October 2011.

The matter was subsequently fixed before me on the 5th of June 2013. The applicant was represented by Joseph Kiryowa while there was no body for the respondent in court. The court was informed that the respondent was represented by Messieurs Kakooza Kauma and Company Advocates. The application was mentioned again on 19 June 2013 but the respondents counsel did not appear and the court was not satisfied with the affidavit of service of the hearing notice on the counsels. Notwithstanding, the court directed that the applicant files written submissions on 28 June 2013 and serve the respondents counsel if any. The respondents counsel was to respond by 8 July 2013 and serve the applicants counsel. Any rejoinder by the applicant was to be filed and served by 15 July 2013.

The written submissions in support of the application were filed in court on 25 June 2013 by Messieurs Joseph Kiryowa and Company Advocates and a reply was filed by Messieurs JM Musisi Advocates and Legal Consultants.

The first applicants written submissions are based on four main grounds: The first ground is that the applicant honestly intended to attend court on the dates when the suit was called for hearing but was prevented by sufficient cause from doing so. Secondly the order to set aside the judgement/decree will not occasion a miscarriage of justice to the respondent; thirdly the application was brought without delay in 2006. Lastly that the application should be granted in the interest of justice since the applicant is an innocent man.

On ground one, the applicant submits that sufficient cause is disclosed by the application. The applicant was sick and on treatment for chronic illness in the United Arab Emirates when the suit first came for hearing. The respondent conceded to this fact in the affidavit in reply.

Secondly a hearing notice for 1 July 2006 was advertised in the New Vision and the East African newspapers. However in the affidavit in rejoinder, the applicant avers that he was still in Dubai undergoing medical treatment and it was his daughter Leila Ali who attended court on 1 July 2004 and informed the court about his absence and sickness.

Thirdly on sufficient cause, the applicant instructed his lawyers Messieurs Tumusiime Kabega and Company Advocates to represent him but unknown to the applicant his lawyers withdrew from the conduct of the suit on 30 July 2003 without notice to him when he was still out of the country. This was a mistake/negligence of his counsel. The applicant furthermore instructed other lawyers namely F. Mukasa and Company Advocates on 21 January 2005 which was the date on which the suit had been adjourned. But because of the mistake or negligence not to file a notice of change of advocates on the court record, the suit proceeded ex parte. Counsel relied on the case of Philip Ongom versus Catherine Owota 2003 KALR at page 52 the judgement of the Supreme Court in Supreme Court civil appeal number 14 of 2001 where it was held that a litigant ought not to bear the consequences of the advocates default unless the litigant is privy to the default or where the default results from the default of the litigant to give instructions to the advocates.

The evidence adduced proves that the advocates were duly paid and the receipts were attached. The first advocate withdrew from the conduct of the applicant’s case without notice. The second lawyers appeared with the applicant in court for hearing in February 2005 but had not filed a notice of change of advocates and were denied audience. On the other hand the applicant was vigilant and personally attended court on 13 September 2004 but the case never proceeded. In those circumstances the applicants conduct was not negligent or casual as suggested by the respondent in the affidavit in reply. The respondent in the affirmation in reply does not dispute the fact that the applicant was in court with his lawyers when the last witness was heard in February 2005. In conclusion all the above factors lead to the conclusion that the applicant is the victim of the professional blunders, mistakes and negligence of his former lawyers.

In reply the respondents counsel attacked the evidence in support of the assertion that the applicant was sick and was on treatment in the United Arab Emirates. Two medical reports were produced in support of the assertion. One is dated 3rd of February 2006 and another one dated 29th of June 2004. The respondents counsel contended that the two medical chits were not sufficient to show that the applicant was for all the period involved since 13 November 2003 and until 1 July 2004 when an order was made for the suit to proceed ex parte, for treatment outside the country. He further contended that the medical chits dated 29th of June 2004 stated that the applicant was under medical care on and off since February 2004. It does not show that the applicant had a serious condition so as to keep him in hospital and prevent him from attending court. On 17 March 2004 the applicant's daughter Leila Ali attended court and reported the applicant’s absence and informed court that the applicant would be back in a month’s time. Consequently the court fixed the case for 26 April 2004. On that date the applicant did not appear in court and an order was made for substituted service on the applicant. Counsel submitted that from the evidence, the court should find that there was no sufficient cause on the ground of the alleged illness of the applicant. The court exercised a lot of restraint before it allowed the case to proceed ex parte.

The respondents counsel further submitted as far as substituted service is concerned under the circumstances the defendant could not be served in the ordinary way and service was governed by Order 5 rule 18 of the Civil Procedure Rules.

As far as negligence of the applicant’s lawyers is concerned, the applicant’s lawyers were instructed by the applicant to file a defence on his behalf and withdrew from the case for the reasons that they no longer had instructions. In the judgment honourable Lady Justice Stella Arach quotes the letter of withdrawal of the applicants lawyers. The letter was written on 31 July 2003 long before the case was first called for hearing. Furthermore on 17 March 2004, the applicants daughter Leila Ali appeared in court and informed the court that they were in touch with the applicant and were going to get another lawyer. The letter demonstrates that the applicant was aware that the lawyers had withdrawn from the case. By 1 July 2004 when the honourable judge granted the respondent an order to proceed ex parte, the applicant had not engaged a new lawyer. Consequently the applicant to the case has really and was himself negligent. The lawyers were diligent as they had communicated their withdrawal from the case. From the negligence of the applicant is in the delay in appointing a new lawyer to represent him. The first lawyer withdrew from the case of 30th of July 2003 and was only able to appoint a new lawyer on 21 January 2005 a period of about 1 1/2 years later.

Furthermore the respondents counsel submits that the applicant came back to Uganda in August 2004 and on 13 September 2004 when the hearing of the case was adjourned to 21 January 2005. On 21 January 2005 is when he thought of instructing new lawyers to represent him. By this time the order to proceed ex parte had already been granted. Consequently little blame if any can be put on the lawyers concerning events leading to the order to proceed ex parte. The applicants lawyers Miscellaneous Application number 188 of 2005 was overtaken by events as it was given a date after the judgement was delivered. Counsel relied on the case of Stone Concrete Ltd versus Jubilee Insurance Company Limited for the principle of law that delay in bringing an application and also delay in setting it down for hearing would be a good reason for its dismissal. The applicant acted casually and negligently while handling his case and should not blame it on his lawyers.

On 15 July 2013 the applicants counsel filed a rejoinder to the submissions of the respondents counsel. On the question of the evidence on the applicant’s illness, counsel submitted that if the respondents counsel had reservations about the adequacy of the affidavits of the applicant regarding his illness, he had the option to cross examine the applicant to satisfy himself about the truthfulness of the applicant. However he did not exercise the option provided for under order 19 rules 2 of the Civil Procedure Rules.

On the question of substituted service in the case of Satvinder Singh vs. Saridner Kaur (2002) KALR 616 at page 618 the High Court observed that substituted service is granted with the primary objective of ensuring that the defendant should receive knowledge of the existing suit against him or her. The question of whether he is within or without the jurisdiction of the court is necessary to establish to ensure that he is not condemned unheard. The case proceeded ex parte under first of July 2004 when the applicant according to the medical chits dated 29th of June 2004 was in the United Arab Emirates. Consequently the case should not have proceeded ex parte against the applicant (since he was out of jurisdiction).

Ruling

I have carefully considered the first ground of whether there was sufficient cause shown by the applicant against the order to proceed ex parte.

The medical chits dated 29th of June 2004 are sufficient proof that the applicant was outside jurisdiction on 29 June 2004. The chit was issued by a medical doctor/general practitioner Dr Zaffar Mohammed of the United Arab Emirates on 29 June 2004. This evidence has not been rebutted by the respondent. Furthermore the affidavit in reply sworn by the bank secretary of the plaintiff Ms Addah Turyamwesimira Wegulo does not rebut the assertion of fact that the applicant was outside the country and therefore outside jurisdiction. The only evidence in the matter from which inferences of fact can be drawn is the information given by the daughter of the Applicant Ms Leila Ali when she informed the court that the first applicant would be back in Uganda within a period of one month on 17 March 2004. Particularly the affidavit in reply of the respondent through the Bank Secretary does not introduce any evidence to the contrary. Paragraph 7 specifically avers that the applicant was away in Dubai and was ill. Paragraph 9 avers that Leila Ali informed the court that she would inform the applicant that the suit had been called for hearing and that an arrangement would be made to instruct another lawyer to represent the first applicant and her brothers. She reports in paragraph 10 that the said Leila Ali informed the court that the first applicant will be back in Uganda within a period of one month. Subsequently the court made an order adjourning the suit to 26th April 2004. However it is clear from the affidavit that there is no information about the whereabouts of the applicant on 26 April 2004. Specifically she avers that the process server tried to locate the defendant's at their home in Mengo but on all occasions failed to find him. By the time the process server went to serve the defendants at their residence, he did not indicate and there is no evidence that the applicant had returned as represented to court by Leila Ali. Consequently we must assume that the only evidence available is the representation given by Leila Ali to the court that the applicant would be in the country after one month as indicated above. The affidavit of service clearly indicates that service was on the defendant generally and not on any particular defendant. Subsequently, the plaintiff was given leave to advertise the notice of the next hearing of the suit which was fixed for 1 July 2004. Notice was served on Leila Ali who is an adult member of the defendant's/applicant's family. She acknowledged service of the notice according to the affidavit of service on the court record filed by Fred Kamya and dated 25th of June 2005. In paragraph 15 the bank secretary avers that on 1 July 2004 when the suit was called for hearing, the defendants were not represented and the court granted the plaintiffs application to proceed ex parte under the provisions of Order 9 rule 20 of the Civil Procedure Rules. There is no evidence from the respondent to the effect that the applicant had come back to Uganda by June 2004. It was on 26 April 2004 that the applicants counsel applied for an order for substituted service on the applicant/defendants by way of advertisement in the newspapers. Order 9 rules 20 provides that the court shall make an order upon being satisfied that summons or notice of hearing was duly served on the defendants, to proceed ex parte against the defendants if they do not appear. The hearing of the suit was adjourned to 13 September 2005 wherein the deponent testified as PW1. In paragraph 17 the bank secretary does not dispute the assertion of fact of the Applicant that he had returned to Uganda in August 2004. Subsequently the hearing did not proceed on 1 November 2004 when it had been fixed for hearing but proceeded on 21 February 2005 when the plaintiff called the second witness. It is in the submission of the parties and in the evidence that from the time the plaintiff returned in Uganda in August 2004 according to the evidence, he did not instruct counsel to represent him in a timely manner.

I have duly considered the evidence about the presence of the applicant in the country at the time when substituted service on him was ordered by the court. It is clear from the evidence and as submitted by the respondent’s counsel that the applicants counsel Messieurs Tumusiime and Kabega Advocates had withdrawn from the conduct of the applicant’s case in a letter referred to in the judgement of the court. At page 3 of the judgement, the court notes that the defendants lawyers in their letter to the deputy registrar dated 31st of July 2003 withdrew from the conduct of the applicant’s case. The plaintiffs advocate submitted in court that Leila Ali was not technically a legal representative of the defendants. The court notes that in order to make progress in this suit, she allowed a last adjournment to 21 June 2004 at 10 o'clock and directed service through advertisement in the New Vision and the East African newspapers and further to be served on an adult member of the defendant’s family in Uganda. The honourable judge permitted after substituted service for the suit to proceed ex parte on the 1st of July 2004.

From the judgement of the court, service of the hearing notice on an adult member of the defendant's family was meant to be service on the defendants who were in Uganda. The court was not aware on questions of fact as to whether the first defendant/applicant had returned to Uganda. The hearing notice advertised in the New Vision Newspaper of Monday, 21 June 2004 advertises that the hearing of the case had been fixed for 1 July 2004 at 11 o'clock. The hearing notice was addressed to all the defendants and Messieurs Tumusiime and Kabega advocates. The same hearing notice appears in the East African newspaper of June 21-27, 2004. The evidence of service is contained in the affidavit of service of one Fred Kamya sworn to on 25 June 2004 and filed on court record the same day.

There was no service outside jurisdiction from the evidence on record. The question is therefore whether the court can consider the affidavit evidence of the applicant after the previous judge was satisfied with the service of hearing notice on all the defendants and permitted the suit to proceed ex parte against all of them. The object of substituted service of summons was considered in Satvinder Singh vs. Saridner Kaur HCDC No. 2 of 2002 before Justice Rwamizazi-Kagaba of the High Court of Uganda (See (2002) KALR 616 at 617). Where the Hon Judge of the High Court held as follows:

I must observe that substituted service is granted with a purpose or goal to achieve. It is granted when the court is satisfied that there exists a practical impossibility of actual service that the method of substituted service asked by the plaintiff/petitioner is one which will in all reasonable probability, if not certainty, be effective to bring knowledge of the plaint/petition to the respondent/defendant, (whether substituted service is granted for the defendant who is within the jurisdiction of the court or outside its jurisdiction) the primary objective is to ensure that the defendant should receive knowledge of the existing suit against him or her and thereby eliminate the violation of his rights which requires that a person shall not be condemned unheard."

The objective of any service is to ensure that the defendant is served or notified of the summons or hearing notices. In miscellaneous application number 406 of 2010 arising from HCCS number 61 of 2002 between David Ssesanga versus Greenland Bank Ltd (in Liquidation) the court considered the effect of service of summons by substituted service when the defendant is outside the jurisdiction of the court. The question considered was whether substituted service can be made on the person outside the jurisdiction of the court? Following Order 5 rule 5 I held that where there are several defendants service shall be made on each defendant. Secondly service on an agent has to be made where the agent is empowered to accept service in terms of Order 5 rule 10 and Order 3 generally of the Civil Procedure Rules.

As far as failure to find the defendant is concerned, the plaintiff's counsel rightly submitted before the court and the court agreed that Leila Ali was not a representative of the first defendant or the defendants generally. In this case service was made on Leila Ali. I would therefore consider the substituted service. Substituted service is made under Order 5 rule 18 of the Civil Procedure Rules. I noted in the above case that the provision assumes that the defendant is within the jurisdiction of the court. Rule 18 provides as follows:

“18. Substituted service

(1) Where the court is satisfied that for any reason the summons cannot be served in the ordinary way, the court shall order the summons to be served by affixing a copy of it in some conspicuous place in the courthouse, and also upon some conspicuous part of the house, if any, in which the defendant is known to have last resided or carried on business or personally worked for gain, or in such other manner as the court thinks fit.

(2) Substituted service under an order of the court shall be as effectual as if it had been made on the defendant personally.”

Order 5 rules 18 of the Civil Procedure Rules is clear about the circumstances where substituted service may be ordered. First of all the court is to be satisfied that summons cannot be served in the ordinary way. Secondly the affixing of a copy in a conspicuous place in the court house or on part of the residence or house of the persons sought to be served or where the person last resided or carried on business or personally worked for gain or in some other manner as the court thinks fit, presupposes that the person would be made aware of the summons by affixing of a copy or by the service in the manner that the court thinks fit. The underlying rationale for every service is that the defendant would become aware of the matter contained in the notice or summons. A summons is an order of the court directing a party to appear in court. In the case of a hearing notice, it directs the person receiving the hearing notice to appear in court on a particular date failure for which the suit may be heard or determined in the absence of the person served. The second assumption under rule 18 quoted above is that the defendant sought to be served is within the jurisdiction of the court and would be able to access a copy of the summons affixed at the conspicuous place or the service in the manner ordered by the court.

In the case of David Ssesanga vs. Greenland Bank (In Liquidation) (Supra) the court held that service outside jurisdiction is analogous to the provisions of section 21 of the Civil Procedure Act which provides for service outside a magisterial district/area by Magistrates Courts. Service has to be sent to the court having local jurisdiction to effect service on the person sought to be served. Furthermore the court held that order 5 rule 18 (1) of the Civil Procedure Rules partly deals with service by the court in a place where or “...in which the defendant is known to have last resided or carried on business or personally worked for gain, or in such other manner as the court thinks fit” . In other words where the defendant is resident outside jurisdiction, he or she is not a person ordinarily resident within the local limits of the court’s jurisdiction.  In this case the evidence is that at the time of the order of the court to serve the defendant through the provisions for substituted service, the defendant was a resident of the United Arab Emirates.  Under common law rules, substituted service can only be valid if the defendant is within the local limits of the court's jurisdiction when the order for substituted service is made. In the case of Myerson v Martin [1979] 3 All ER 667 the Court of Appeal dealt with the question of substituted service on a person outside the local limits of the court’s jurisdiction. Lord Denning held at page 670 that substituted service is only valid where the defendant is resident within the local limits of the Court’s jurisdiction and not outside jurisdiction:

Lord Denning traces the origin of the common law rule that substituted service can only be made on a defendant when at the time of issue of summons or writ the person was resident within the local limits of the court’s jurisdiction. To quote at page 671:

“If the defendant was in fact outside the jurisdiction at the time the writ was issued, and the plaintiff knows it, the plaintiff can take his choice and issue a writ for service within the jurisdiction, but in that case he has to wait his opportunity and hope that the defendant will return to England and be served personally. There cannot be substituted service.

Otherwise if the defendant was in fact outside the jurisdiction when the writ was issued, and is likely to remain outside, the proper course for the plaintiff is to apply for leave to serve out of the jurisdiction, in which case he can only get it if the case comes within RSC Ord 11 ...”

The authority seems to deal with service of summons on a defendant. Consequently it may be argued that the common law precedent deals with summons to file a defence or enter appearance and not with service of hearing notices. However upon perusal of the Supreme Court case of Kanyabwera v Tumwebaze [2005] 2 EA 86, the Supreme Court of Uganda held that service of hearing notices should follow the provisions of Order 5 of the Civil Procedure Rules. Particularly the judgement of Oder JSC held at page 93 that in the service of hearing notices, the provisions of Order 5 which deals with service of summons are applicable with equal force. He said:

"Order 5, rule 17 of the Civil Procedure Rules provides that where summons have been served on the defendant or his agent or other person on his behalf, the serving officer, shall in all cases, make or annex or cause to be annexed to the original summons an affidavit of service stating the time when and the manner in which the summons was served and name and address of the person, if any, identifying the person served and witnessing the delivery of the tender of the summons. The provisions of this rule are mandatory. It was not complied with in the instant (at page 94) case. What the rule stipulates about service of summons, in my opinion, applies equally to service of hearing notices." (Emphasis added)

The Applicant/first defendant has proved that he was outside the jurisdiction of the court between April and 1 July 2004 when an order was made for substituted service on him together with other defendants. I therefore persuaded by the above authorities and binding judgement of the Supreme Court firstly that service of hearing notices has not be made in the manner provided for under order 5 of the Civil Procedure Rules. Secondly the English authority is persuasive for the proposition of law that where someone is outside the jurisdiction of the court, service has to be made outside jurisdiction and not through substituted service. By the time the court made the order; it assumed that the defendant was within the local limits of the court’s jurisdiction. Order 5 makes a clear distinction between substituted service under Order 5 rule 18 of the Civil Procedure Rules and service outside jurisdiction under rule 22 thereof. This is read in conjunction with Order 5 rule 29 of the CPR which provides that the court may direct that any summons, order or notice shall be served on any party or person in a foreign country and the procedure prescribed by rule 28 of the order with reference to service of notice of the summons shall apply to the service of any summons, order or notice so directed to be served. It is a further finding of this court that service on Leila Ali, being an adult member of the first applicant’s family was not considered by the court and at the instance of the plaintiff's counsel as effective service on the defendants. This clearly appears at page 3 of the judgement of the court. Consequently the applicant was served as if he was resident within the local limits of the court’s jurisdiction whereas not. The rationale for service outside jurisdiction in the applicant's case would be to make the applicant aware of the hearing of the suit. I will further make comments about the availability of legal counsel in the applicant's case. However, service outside jurisdiction is clearly governed by Order 5 rules 22 and 29 of the Civil Procedure Rules. It cannot however be ruled out that service on an adult member of the defendants may in certain situations be effective service even if a defendant was outside jurisdiction at the time of service. However the question of service on an adult member of the defendant's/applicants family was ruled out by the court in this case. What is material is where the defendant ordinarily resides. In the Applicant’s case, he was outside jurisdiction for a long time.

In the case of Karachi Gas Co Ltd v H Issaq [1965] 1 EA 42  the Court of Appeal of East Africa sitting at Nairobi per Newbold Ag V-P held at page 53 that service of summons outside jurisdiction are made in the circumstances defined by (Order 5 rule 22 of the Uganda CPR):  

“As regards the first of these issues the defendant was out of the jurisdiction and was neither domiciled nor ordinarily resident in Kenya. In such a case the courts of Kenya will not assume jurisdiction in relation to any matter arising out of contract unless the circumstances fall within the provisions of O. V, r. 21 of the Civil Procedure (Revised) Rules, 1948 (K). This rule details the circumstances in which service of a summons or a notice of summons may be allowed out of the jurisdiction in order to give effect to a jurisdiction which the courts have assumed.” (Emphasis added)

Given the analogous application of the rules to hearing notices, the circumstances set out under Order 5 rule 22 thereof. Rule 22 (g) includes in the circumstances the person is out of jurisdiction and is a necessary or proper party to the suit properly brought against the person duly served within the jurisdiction. By analogy a person resident outside jurisdiction, has to be served outside jurisdiction for the service to be effective. This is merely a requirement to give notice. However, service could have been made on the counsels who were authorised to accept service under the provisions of Order 3 of the Civil Procedure Rules. However, the applicant had no lawyers. It is not a requirement in civil cases for a litigant to be represented by counsel. Therefore failure to instruct counsel cannot be visited on the litigant in the circumstances of the plaintiff's case. All that needed to be done was to serve the litigant personally and it is up to that litigant whether to instruct counsel to represent him or not. Consequently, in this case, because Leila Ali could not have received any hearing notice or summons on behalf of the applicant, it was proper for service to be effected outside jurisdiction and on the applicant personally.

Order 9 rule 27 of the Civil Procedure Rules provides for the setting aside of the ex parte decree issued against the defendant. Originally the application was made under order 9 rules 24 and 26. Rule 27 which is the applicable rule under the revised provisions of the Civil Procedure Rules provides as follows:

"In any case in which a decree is passed ex parte against the defendant, he or she may apply to the court by which the decree was passed for an order to set it aside; and if he or she satisfies the court that the summons was not duly served, or that he or she was prevented by any sufficient cause from appearing when the suit was called on for hearing, the court shall make an order setting aside the decree as against him or her upon such terms as to costs, payment into court, or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit; except that where the decree is of such a nature that cannot be set aside as against such defendant only, it may be set aside as against all or any of the other defendants also."

A perusal of the provision shows that the defendant may apply to the court which passed the decree for an order to set it aside if the defendant satisfies the court that the summons were not duly served. Secondly the defendant may satisfy the court that he or she was prevented by any sufficient cause from appearing when the suit was called for hearing. In the plaintiff’s case, it may be argued that the hearing notices were not duly served because the defendant was outside the local limits of the jurisdiction of the High Court being resident in the United Arab Emirates. There is strong evidence that the defendant was receiving treatment outside the jurisdiction of the court at the time the suit was ordered to proceed ex parte against him and he was outside for over three months. Secondly, in case the court is wrong on the question of service outside the jurisdiction of the court of the hearing notice as opposed to substituted service, the question is whether the applicant has shown any sufficient cause for failure to appear at the time when the suit was called for hearing.

I have carefully considered the evidence as far as the latter part of the rule is concerned. In the first place it is evident from the holding of the court that Messieurs Tumusiime and Kabega Advocates gave a notice to the court withdrawing from the conduct of the first applicant’s case. In other words the applicant was not represented by any lawyer at the time an order was made for substituted service. In other words the lawyers could not be served on behalf of the applicant. Secondly the applicant was ill and undergoing treatment in the United Arab Emirates. This evidence has not been rebutted. Furthermore the applicant returned in Uganda in August 2004 after the order to proceed ex parte had been made. Subsequently, the applicant instructed another counsel but their application to set aside the order to proceed ex parte was not heard. However, the court has to deal with the first premises of whether the applicant was prevented from appearing in court when an order was made to proceed ex parte. I further taken into account the Supreme Court decision in Kanyabwera v Tumwebaze [2005] 2 EA 86 that an order to proceed ex parte under Order 9 rule 20 of the Civil Procedure Rules is not meant to shut out the defendant in subsequent proceedings. Notwithstanding, there were attempts to set aside the order to proceed ex parte which was not heard on the ground that the lawyers representing the applicant subsequent to the order never gave formal notice of instructions on the last hearing date when the plaintiff called its second and last witness.

On the first issue as to whether the plaintiff was prevented by sufficient cause from appearing when an order was made to proceed ex parte and upon service through substituted service, the conclusion of the court is that the plaintiff was ill and undergoing treatment in the United Arab Emirates and was prevented by sufficient cause from appearing in court within the wording of order 9 rule 27 of the Civil Procedure Rules. The fact that he had no counsel to represent him or that he did not instruct one was not negligence on his part. What if he could not afford one? If he had no counsel, he had a right to represent himself.

Thirdly, I have duly considered the merits of the suit. First of all the suit/claims as against the 2nd, 3rd and 4th defendants were dismissed. Secondly the issues as framed in the judgment appear at page 4 thereof as follows: (1) "Whether the first defendant breached his fiduciary duties to the bank; (2) Whether there was fraud by the defendants; and (3) Remedies. The first issue is primarily concerned with whether the first defendant breached his fiduciary duties to the bank. The issue of whether there was fraud by the defendants generally is also intertwined with the first issue and primarily concerns the first defendant. This is further evidenced by the fact that the suit was dismissed against the other defendants. So the question of whether the plaintiff is responsible for failing to control the proper running of the staff entrusted under his supervision and was therefore responsible for financial loss of Uganda shillings 876,540,298/= was heard and decided in the absence of the defendants defence.

In those circumstances, I am satisfied that the defendant has shown sufficient cause that he was prevented by sufficient cause from defending himself. Lastly the issue was whether the application was made timeously. The judgement of the court was delivered on 1 November 2005. The applicant’s application was filed on the 23rd of May 2006. The applicant had filed an application to set aside the order to proceed ex parte in miscellaneous application number 188 of 2005. The application was lodged on court record on 9 March 2005. The application was never heard for reasons which the court does not need to go into. The application was initially fixed for 15 April 2005. Apparently and as submitted by the respondents counsel, this was a date after the case had been fixed for judgement. The record of the court shows that the judgement was fixed for 4 April 2005. However judgement was delivered on 1 November 2005. There is no clear explanation as to what happened between 15 April 2005 and 1 November 2005. However, the applicants subsequently filed the current application to set aside the judgement and decree. The application was made within a period of six months. In those circumstances, the application was made within time.

It is also apparent that the applicant was concurrently facing criminal proceedings. The criminal proceedings terminated in favour of the applicant on 14 October 2011. There is no clear explanation as to why the current application was not fixed immediately after termination of the criminal proceedings. It was however a matter pending in court and subsequently heard. In the circumstances, the applicant’s application was made in time and I decline to disallow the applicant’s application on the ground of want of prosecution of the application. This is because the respondent never proceeded to have the application dismissed for want of prosecution but made the submission after the applicant proceeded with the application. The question of whether the application should be heard should have been a preliminary question. However written submissions were ordered after the respondents counsel on three occasions never appeared in court.

Counsels further submitted on whether there was negligence on the part of the applicant's lawyers, and whether there was miscarriage of justice to the respondent and the dictates of the interest of justice. Upon conclusion of the first issue, it is not necessary under order 9 rule 27 of the Civil Procedure Rules, to consider the rest of the grounds and issues. I have also considered the question of whether the applicant acknowledged his indebtedness to the respondent. In my opinion the question of whether he made the acknowledgement under duress or not is a triable issue and should be considered after hearing his defence. The applicant will be given an opportunity to cross examine the plaintiff’s witnesses and proceed with his own defence.

Consequently the judgment and decree of the court in the main suit is set aside as against the applicant only under the provisions of order 9 rule 27 of the Civil Procedure Rules. The costs of the application shall however abide the outcome of the main suit.

The suit shall proceed for mediation and where mediation fails, shall be fixed for hearing forthwith.

Ruling delivered in open court the 16th day of August 2013

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

 

Kiryowa Joseph for the Applicant

Applicant in court

Nakabonge Rachel for the respondent

Respondent not in court

Charles Okuni: Court Clerk

 

Christopher Madrama Izama

Judge

16th of August 2013