Court name
Commercial Court of Uganda
Judgment date
16 August 2013

Equator Touring Services Ltd v City Council of Kampala (Miscellaneous Application-2013/406) [2013] UGCommC 143 (16 August 2013);

Cite this case
[2013] UGCommC 143

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 406 OF 2013

(ARISING FROM HCCS NO 278 OF 2010 AS CONSOLIDATED WITH HCCS NO 763 OF 2007)

MESSRS EQUATOR TOURING SERVICES LTD}..................................... APPLICANT  

VS

CITY COUNCIL OF KAMPALA}......................................................... RESPONDENT

BEFORE HON. JUSTICE CHRISTOPHER MADRAMA

RULING

The Plaintiff/Respondent is a body corporate established under the Local Governments Act and in charge of the City of Kampala. The plaintiff/Respondent filed a suit against the defendant/Applicant in HCCS No. 278 of 2010 for payment of Uganda shillings 284,612,366/= and VAT payable of Uganda shillings 51,230,226/= together with interest and costs.

The case disclosed in the plaint is that by an agreement dated 1st of April 2005, the Defendant/Applicant agreed to provide the services of managing and maintaining of Nakivubo Park Yard Market in Central Division. The Defendant/Applicant agreed to pay to the plaintiff a monthly contract sum of Uganda shillings 15,434,500/= inclusive of VAT, but defaulted in payment. When the agreement expired, the Defendant/Applicant continued to manage the market up to and until the 4 August 2005 when the Central Division of Kampala took over the management thereof due to the defendant's failure to pay accumulated arrears. The Plaintiff/Respondent alleges that for several years the Applicant/Defendant defaulted in payment of rentals while depositing small sums of money of varying amounts on its account. By the time it left management of the market, its arrears had accumulated to Uganda shillings 284,612,366/=. The Plaintiff/Respondent therefore seeks payment of the outstanding sum, VAT thereon, interest on the principal sum at 28% per annum from the date of default on each instalment or part thereof until payment in full.

The Applicant/Defendant admits in its defence having entered into a contract for the provision of the services of managing and maintaining of Nakivubo Park Yard Market but denies being in default of payment of the contract sum. The Applicant/Defendant avers that it will adduce evidence to show that it religiously remitted the contractual sums to the Plaintiff/Respondent up to and until it ceased managing Nakivubo Park Yard Market on behalf of the Plaintiff/Respondent. It ceased to manage the Nakivubo Park Yard Market in January 2006 and all payments due to the Respondent/Plaintiff were settled at the end of that period of management.

In reply the Respondent/Plaintiff asserts that its statement of account of the Applicant/Defendant's indebtedness to the plaintiff from July 2000 until the termination of the second agreement dated 1st of April 2005 is true and not false.

Subsequent to the closure of pleadings, the Applicant on the 22nd of May 2013, the applicant filed this application for judgement on admission and for costs. The grounds of the application are that the respondent proposed settlement out of court of the applicants claim and this was reduced in writing. Secondly the applicant agreed to the proposed settlement in a meeting with the respondent. Thirdly the respondent’s proposed settlement included an admission of liability for the applicants claim in the main suit. Finally that it is just and equitable that judgement on admission is entered for the applicant.

The application is supported by the affidavit of the operations manager of the applicant Mr Matiya Mujuzi. The facts in support of the application are that the applicant and the respondent signed a management agreement on 15th of December 2000 and the duration of the agreement was extended several times thereafter. The management agreement provided that the applicant would manage, control and maintain Nakivubo Park Yard market. The last renewal of the agreement was made in an agreement made on 1 April 2005 for 3 years with immediate effect until 31 March 2008. The signing of the agreement was rescinded by an offer made by the respondent to the applicant dated 18th of March 2005. There was a further termination of market management agreement in a letter dated 17th of January 2008. There were several meetings between the applicant and the Respondents Directorate of legal affairs between the months of June 2012 and December 2012 negotiating an out of court settlement of the main suit. In a meeting convened on 18 December 2012 by the Respondents Deputy Director of Legal Affairs in charge of litigation settlement terms were agreed to. The respondent followed up the meeting with a letter dated 21st of December 2012 wherein it agreed to settle the applicants claim in the main suit upon terms set forth in the letter. The proposed settlement has never been rescinded or denied by the respondent. The applicant consequently prays for judgement on admission against the defendant on the basis of the respondent’s letter dated 21st of December 2012.

The affidavit in reply to the application is sworn to by Fiona Kunihira an advocate of the High Court and counsel practising with Messrs Sendege, Senyondo and Company Advocates. In the affidavit in reply she avers that the letter dated 21 December 2012 by the respondent is clearly marked "without prejudice" at the top. By virtue of her legal training and experience as an advocate, she avers that any communication marked "without prejudice" cannot be adduced in evidence or used as an admission of liability in any case.

At the hearing of the application Counsel Semakula Muganya Charles appeared for the applicant while Counsel Sendege Jehoash represented the respondent’s counsel. Counsels agreed that the applicant’s application was based on the letter of the respondent attached to the application and agreed to address the court in written submissions.

The applicants case in the written submissions is that it is entitled to judgement on admission under order 13 rule 6 of the Civil Procedure Rules which provides inter alia that any party may at any stage of the suit, where an admission of facts has been made, either on the pleadings or otherwise, apply to the court for such judgment or order as upon the admission he or she may be entitled to. The rule was interpreted in the case of Central Electrical International Ltd versus Eastern Builders and Engineers, MA No. 176 of 2008 arising from HCCS No 43 of 2008 and secondly in the case of Excel Construction Ltd versus Attorney General HCCS No. 3 of 2007. The applicant admitted liability in a letter entitled with the term “Without Prejudice" from the respondent and addressed to its lawyers Sendege, Senyondo and Company Advocates on 21 December 2012. The letter was written with a view to reaching a settlement and the terms on which counsel reproduced for the court in written submissions.

The applicants case in the application is that the prayers in HCCS No 763 of 2007 where similar to the terms proposed in the settlement. The letter on which the applicant seeks judgement on admission was a culmination of a series of meetings of the parties to reach an out of court settlement. The letter amounts to an admission notwithstanding the fact that it was labelled "without prejudice". The applicants counsel submits that the "without prejudice" term ordinarily operates to prevent statements which are made in a genuine attempt to settle an existing dispute from being admissible in court as evidence against the party who made the statement. Counsel relied on the case of Rush and Tompkins Ltd versus Greater London Council [1988] 3 WLR 939 at 942 and the statement of Lord Griffiths where he said:

"The rule applies to exclude all negotiations generally aimed at settlement whether oral or in writing from being given in evidence.…"

However, just like any other general rule, the "without prejudice" rule has exceptions. For instance communications are admissible to determine whether settlement was in fact reached. Counsel relied on the case of Harrington versus Lowe (1996) 190 CLR 311. The applicants counsel contends that the exception applies to the applicant’s case and the letter of the respondent is admissible. Additionally the respondent's letter was written on 21 December 2012 while the suit was filed in 2010. It therefore satisfied the requirements that the admission must have been made "at any stage of the suit". He further relied on the case of SIETCO versus IMPREGICO SALIM J.V. HCCS No. 918 of 1999 where it was held that a judgement on admission is entered even if there are other questions to be determined so long as there is a clear and unambiguous admission of fact.

Counsel contended that the admission of the respondent was clear and unequivocal and prayed that the court enters judgement on admission on the basis of the respondent's letter dated 21st of December 2012.

In reply the respondents counsel submitted that the applicant's application clearly indicates in the heading/entitlement thereof that it arises out of HCCS No. 279 of 2012 which was consolidated with HCCS No. 762 of 2007. HCCS No. 763 of 2007 was dismissed on the 8th of May 2013 for want of prosecution. Consequently the applicant’s application cannot stand because it is based on a case which has been dismissed.

Alternatively, the letter dated 21 December 2012 cannot be admitted in evidence because it is marked "without prejudice". Respondents counsel relied on the English and Empire Digests volume 22 (blue band) pages 369 – 370. Secondly the letter is not an unequivocal admission of liability on the part of Kampala City Council or Kampala Capital City Authority. The last paragraph of the letter clearly demonstrates that it was intended to apprise counsel of the Authority of the developments in negotiations between the parties. It is written inter alia that the claims of Kampala Capital City Authority in HCCS number 279 of 2012 against Equator Touring Services Ltd should be considered and taken into account before determining the best option. The final position anticipated in the letter had not been reached and therefore discussions were still ongoing. Counsel prayed that the application is dismissed with costs on the above grounds.

Ruling

I have carefully considered the pleadings of the parties in the main suit namely HCCS No. 278 of 2010, the application of the applicant together with the affidavit evidence and the submissions of counsel.

The applicant's application is for judgement on admission brought under the provisions of order 13 rules 6 of the Civil Procedure Rules. Order 13 rule 6 of the Civil Procedure Rules provides as follows:

"Any party may at any stage of the suit, where an admission of facts has been made, either on the pleadings or otherwise, apply to the court for such judgment or order as upon the admission he or she may be entitled to, without waiting for the determination of any other question between the parties; and the court may upon the application make such order, or give such judgment, as the court may think just."

An admission of facts can be made either on the pleadings or otherwise. Secondly, the rule applies to any party to the suit whether the plaintiff or defendant. This is because a party may apply for judgement or order as upon the admission he or she may be entitled to. Of course the defendant cannot apply for judgement on the claim not pleaded other than for an order of dismissal of the Respondent’s suit or disallowing the claim or such other orders as a defendant may be entitled to in the defence. This is particularly so when the defendant has no counterclaim against the plaintiff.

In this case the applicant has applied for judgement on admission against the Respondent/Plaintiff. Counsel for the Respondent has pointed out that the pleading of the Applicant discloses that HCCS No. 278 of 2010 was consolidated with HCCS 763 of 2007, but HCCS No. 763 of 2007 has been dismissed. The applicant has not rebutted this submission. Moreover a copy of the ruling of the court dismissing the suit was attached to the Respondent’s submissions without any challenge to it by the Applicant’s counsel. Consequently the application arises from High Court civil suit number 278 of 2010 together with or as consolidated with High Court civil suit number 763 of 2007. The court file in which the application has been filed for the moment is in the file of HCCS No 278 of 2010. The respondents counsel attached the ruling of Honourable Lady Justice Helen Obura in HCCS No. 763 of 2007 between Equator Touring Services Ltd and Kampala City Council. The ruling was delivered on the 8th of May 2013. The court noted in that ruling that order 17 rule 6 (1) of the Civil Procedure Rules gives the court discretion to dismiss a matter where no action has been taken for a period of two years with a view to proceeding with the case. The honourable judge noted that she gave the plaintiff the benefit of doubt by summoning them to court to give them a chance to explain the delay and if the reasons were convincing the court would have in the interest of justice allowed them to remedy the wrong. However the suit was dismissed in the following words:

"However, since they have opted to scorn the magnanimity of this court by not appearing, I have no option but to dismiss the suit with no order as to costs and I so order."

The Respondent’s Counsel has raised a preliminary objection based on the competence of the Application. The preliminary objection amounts to a submission that the basis of the application for judgement on admission has been dismissed.

I have duly considered the respondents objection to the applicants application. The applicant's application was filed on court record on the 22nd of May 2013 after dismissal of High Court civil suit number 763 of 2007 on the 8th of May 2013. No evidence of the pleadings in HCCS No 763 of 2007 or the dismissal of the suit was provided in the application itself. Notwithstanding the submission on the apparent pleading that the two suits were consolidated, the court on the 8th of May 2013 specifically dismissed HCCS No 763 of 2007. In that case Equator Touring Services Ltd was the plaintiff and the City Council of Kampala was the defendant. In the current suit namely HCCS number 278 of 2010, City Council of Kampala is the plaintiff while Messieurs Equator Touring Services Ltd is the defendant. It is the respondent namely Kampala Capital City Authority, the successor of Kampala City Council which is the plaintiff in the current suit from which the applicant filed an application for judgement on admission. There is no counterclaim of any kind by Messieurs Equator Touring Services Ltd against Kampala Capital City Authority.

In those circumstances, HCCS number 763 of 2007 in which the applicant's case was dismissed is no longer part of the suit. In other words, the claim of the applicant has already been dismissed and therefore the court cannot consider judgment on admission because the suit has been completed by an order of dismissal. The implication of that finding is that the application having been filed after HCCS number 763 of 2007 had been dismissed is an abuse of the process of court. The applicant does not have any surviving claim other than a defence against the respondent and cannot apply for judgement on admission basing on the letter dated 21st of December 2012 from the respondent. I have further noted that the applicant's written submissions in support of the application are deceptively entitled "Plaintiff's Submissions". The applicant is not the plaintiff but the defendant and has deliberately tried to mislead the court by entitling the submissions as the "Plaintiff's Submissions".

In HCCS number 278 of 2012, Kampala Capital City Authority claims 284,612,366/= Uganda shillings against the applicant together with the sum of Uganda shillings 51,230,226/= for the Value Added Tax thereon. The applicant's prayer in that suit as the defendant is that the Respondent's suit should be dismissed or the plaint rejected. There is no counterclaim against the respondent to this application. Last but not least, there is no evidence of consolidation of those suits namely HCCS number 278 of 2012 and HCCS number 763 of 2007. HCCS number 763 of 2007 was specifically dismissed alone. There is further no evidence at the time the parties filed submissions that HCCS number 763 of 2007 has been reinstated or that there is an application to reinstate it.

In the premises, the applicant's application is incompetent and an abuse of the process of court in so far as it tries to claim judgement on admission in a suit which has been dismissed. The application is forthwith dismissed with costs to be paid by the Applicant Counsel personally.

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

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Songon Watuwa Mustapha for the Applicant holding brief for Counsel Muganwa

Applicant not in court

Fiona Kunihira for the respondent holding brief for Sendege.

Charles Okuni: Court Clerk

 

 

Christopher Madrama Izama

Judge

16th August 2013