Court name
Commercial Court of Uganda
Judgment date
7 October 2013

Kasule & Anor v Housing Finance Bank Ltd & 2 Ors (Miscellaneous Application-2013/667) [2013] UGCommC 170 (07 October 2013);

Cite this case
[2013] UGCommC 170

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISC APPLICATION NO 667 OF 2013

(ARISING FROM H.C.C.S. NO. 431 OF 2013)

  1. HAJJ EDIRISA KASULE}
  2. RAJU HIRANI}.........................................................................APPLICANTS

VERSUS

  1. HOUSING FINANCE BANK LTD}
  2. LABORATORY NEEDS SOLUTION LTD}
  3. LUBUULWA TONNY}...........................................................RESPONDENTS

BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

This ruling arises from a preliminary objection on points of law to strike out an application filed by the applicants for a temporary injunction to restrain the respondents from entering upon, evicting, selling, transferring or otherwise interfering or dealing with the suit property Kibuga Block 28 plot 1122 at Makerere, Mukubira zone, Kampala district until further orders of the court.

The grounds of the application in the applicant's affidavit in support is that he filed a suit against the respondents seeking among other things recovery of the suit property through cancellation of the second and third respondents title to the suit land, nullification of the mortgage registered as an encumbrance on the title to the suit land, an order directing the first respondent to deliver up the certificate of title to the suit land to the applicant free of all encumbrance, an injunction, general damages, costs and interest. He avers that the suit was founded on fraud which the respondents committed at different dates they dealt with the suit property as detailed in the plaint. Pending investigation of the main suit, the applicant filed an application for a temporary injunction to maintain the status quo. The applicant is faced with imminent eviction of his tenants who were directed to vacate the premises within 14 days from the date of the sale of the suit property which was published in the New Vision Newspaper on 17th of July 2013. He further avers that in the premises it is just and equitable that a temporary injunction is issued restraining the respondents from evicting his tenants or going ahead with the threatened sale of the suit property until final disposal of the main suit or until further orders of this court. He further deposes that his tenant is a businessman and it will be difficult for him to find decent houses to suit their status and family demands in the short run. Secondly the tenant also paid him rent in full for the period up to August 2014 and it would be grossly unjust to inconvenience the tenant.

At the hearing of the Application, the Applicant was represented by Counsel Muzamil Kibeedi of Messrs Kibeedi and Company Advocates while the first Respondent represented by Counsel Bwayo Richard. Counsel Abbas Bukenya represented the 2nd Respondent while Eric Kiiyingi represented the 3rd Respondent.

The third Respondent’s Counsel filed written submissions on the preliminary objection and the Applicants counsel replied in writing.

The first preliminary objection is to the effect that the application is incurably defective.

Counsel contended that under order 41 rules 1 of the Civil Procedure Rules, the application is filed under the wrong rule because it does not provide for the remedy/order sought by the applicants from this court. The Chamber Summons seeks orders restraining the respondents from evicting, selling, transferring or otherwise interfering or dealing with the suit property and does not fall within the ambit of the cited law. The application is misconceived and ought to have been brought under order 41 rule 2 (1) of the Civil Procedure Rules which is based on any other injury which may have been suffered by the applicants. There was no evidence in support of the application showing any wastage, damage or alienation or wrongful sale in execution of the decree whatsoever. Consequently the application is frivolous and vexatious and ought to be rejected and struck out with costs. In support of the prayer to strike out the vexatious and frivolous applications in abuse of the process of court the applicant relied on the case of S.C Baxi versus Bank of India Ltd [1966] 1 EA 130.

In reply the Applicants counsel submitted that the propriety of rules 1 and 2 of Order 41 of the Civil Procedure Rules has been interpreted by the Court of Appeal in the case of Saggu versus Roadmaster Cycles (U) Ltd [2002] 1 EA 58 at 259 where it was held that where an application omits to cite any law or at all or cites the wrong law but the jurisdiction of the court to grant the order exists, the irregularity or omission can be ignored. The respondent has not indicated that the High Court does not have jurisdiction to grant the order sought in the application and counsel prayed that the first objection is overruled since the High Court has jurisdiction in the matter.

The second objection is that the application is a nullity.

The respondents submit that the application arises out of an illegal miscellaneous application number 668 of 2013 where there was a grant of an interim order of injunction against the respondent. Miscellaneous application number 668 of 2013 was filed in court on 2 August 2013 and fixed for hearing on 12 August 2013 during court vacation and without a certificate of urgency in compliance with rules 3 and 4 of the Judicature (Court Vacation) Rules. The application was heard ex parte by the assistant registrar and disposed off on 16 August 2013 with the grant of an interim order without having signed, fixed and served the substantive application for a temporary injunction on the respondents. Counsel relied on the judgement of honourable justice Vincent Zehurukize in the case of Hussein Badda versus Iganga District Land Board and Others High Court miscellaneous application number 0479 of 2011 at page 13 that an application for an interim order which is originally fixed, heard and disposed off has no legal basis because it was based on an application for a temporary injunction which is not valid. Even the main application which also has not been fixed, signed and sealed is equally a nullity.

The respondents counsel contended that the chamber summons application was signed, sealed and fixed by court on 20th of August 2013 three days after the grant of an interim order and served on the 3rd respondent on 30 August 2013 prior to appearing in court on 5 September 2013. The third respondents counsel contends that any court order would be made in vain against the third respondent due to the fact that the applicant never amended the chamber summons application to remove him from the pleadings. The instant application is a nullity which this honourable court cannot sanction to perpetrate further illegalities. He relied on the case of Uganda Railways Corporation versus Ekwaru and others that an illegality once brought to the attention of the court, overrides all questions of pleadings including any admissions made therein. He prayed for the application to be struck out with costs.

In reply on whether the application is a nullity, the Applicants counsel disagreed with the third respondent’s analysis and arguments on the ground that the chamber application number 667 of 2013 does not arise out of the interim order application number 68 of 2013 as claimed by the third respondents counsel. The application number 67 of 2013 expressly states in its heading that it arises from the main suit which is a civil suit number 431 of 2013. Following the wrong premises, the arguments of the third respondents counsel are faulty and should be dismissed with contempt. Similar arguments regarding the nullity or illegality were raised by the third respondents counsel before the registrar on 15 August in order to defeat the hearing of the interim order application and the arguments were overruled by the registrar on 16 August and 13. The rule of res judicata bars the third respondent from raising the same arguments albeit before a different judicial officer. Consequently the second objection ought to be overruled.

The third ground of objection is that the orders sought would be in vain.

On this ground the order sought against the third respondents seeks to restrain him from evicting, selling, transferring or otherwise interfering or dealing with the suit property pending further orders of the court. The third respondent’s purchase of property from the first applicant on 18th of November 2008, in the presence of his grandson one Kayongo Hussein Gary at a price of Uganda shillings 250,000,000/=. The first applicant received the initial part payment of Uganda shillings 200,000,000/= in cash on 18th of November 2008 consequent to execution of the sale agreement and the outstanding balance of Uganda shillings 50,000,000/= was paid to him and he received the same on 21 November 2008 to his account entitled Kasule Edirisa Al- Hajji number 0100102985100 obtained on 11th of November 2008 with Messieurs Standard Chartered Bank, City Branch, Kampala. The third respondent sold and transferred the suit property to the second respondent on 10 December 2010 free of any encumbrances or adverse third-party claims and since then he has never been part of or in possession of the suit property. Any order passed against the third respondent would be in vain and of no legal consequence. Counsel relied on the case of Gush Mwalimu Investment Co Ltd and Another vs. Mwalimu Hotel Kisii Ltd [1995 – 1998] 2 EA 100 where it was held that one cannot seek to restrain that which has already occurred. Secondly counsel relied on the case of Uganda Corporation Creameries Ltd and Another versus Reamaton Ltd Civil Reference Number 11 of 1999 where the Court of Appeal upheld the principle of law that courts adjudicate on issues which actually exist between litigants and not academic ones. In conclusion it is the third respondents case that the application is defective as against him and any orders arising there from would be of no legal consequence.

In reply the Applicants Counsel contends that the third objection is on the merits of the application. From the orders sought and the evidence in support thereof, the temporary injunction targets the first and second respondents. This is because the first respondent bank is the one which has advertised the suit property for sale. The presence of the third respondent is as a party whose presence in court was necessary in so far as he is the party to the main suit. This is in accordance with the basic principles of fair trial enshrined in article 28 of the constitution. The third respondent’s presence is made more critical by the fact that the newspaper advertisement indicates that the registered proprietor of the suit property is the third respondent. The third objection therefore ought to be overruled.

The fourth of objection is that there is a defective affidavit in support of the chamber summons.

The respondents counsel submitted that the affidavit in support of the application is tainted with deliberate falsehoods and was affirmed without authority from the second applicant thereby offending Order 19 rule 3 of the Civil Procedure Rules. Furthermore it does not give the particulars of fraud and must be rejected entirely with costs. The affidavit does not indicate in what capacity or authority the deponent affirms it in paragraphs 11 and 12 on behalf of the second applicant. In the case of Makerere University versus St Mark Education Institute Ltd and Others HCCS number 378 of 1993 honourable justice Lugaizi Sempa held that where an affidavit is sworn on the behalf of others, the deponent must show that he had authority to swear the affidavit on their behalf or else the application would be defective.

Secondly the first applicant's affidavit is tainted with deliberate falsehood in paragraphs 4, 5, 6, 8 and 11 in so far as he makes the false claims to the suit property as the lawful owner. Paragraphs 8, 9 and 10 of the affidavit in reply together with annexure clearly show the outright sale of the suit property by the first applicant to the third respondent. In the case of Mugume Ben and Another vs. Akankwasa Edward [2008] HCB at page 160 honourable lady justice Stella Arach Amoko held that an application supported by a false affidavit is bound to fail because the applicant in such cases is to come to court with clean hands and tell the truth affirming the case of BITAITANA versus Kananura [1977] HCB at page 34. It followed that the defective affidavit should be struck off the court record with costs under therefore the entire application is dismissed with costs as well.

Lastly counsel submitted that the applicant’s affidavit in support of the chamber summons did not provide for the particulars of fraud alluded to in paragraph 5 thereof rendering the entire affidavit incurably defective. He relied on Order 6 rule 3 of the Civil Procedure Rules which makes it mandatory for particulars of fraud when relied upon to be pleaded in any pleadings. Counsel further relied on Harilal and Co versus Standard Bank Ltd [1967] EA 512 for the holding that a pleading does not contain material facts required if it only refers to them. In Lubega versus Barclays Bank Ltd civil appeal number two of 1992 it was held that particulars of fraud must be pleaded as a legal requirement and failure to do so can be cured by adducing evidence. Failure to comply with the mandatory requirements would lead to the prayer that the pleadings are struck out with costs. He prayed that the applicant’s application is dismissed with costs.

In reply the Applicants Counsel submitted that Defective the affidavit in reply clearly indicates in paragraphs 8 – 12 that the deponent is the landlord of the second applicant and the second applicant has already paid rent of August 2014. These are matters within the knowledge of the deponent and did not need authority from anyone to makes such a deposition. The landlord has obligations to ensure that the tenant enjoy quiet possession of the premises he has let out to the tenant. By swearing the affidavit in the instant case, the applicants counsel contends that the landlord is exercising his obligation to protect his possession rights as the landlord which is closely intertwined with the possession rights of the tenant. Finally Counsel submitted that the affidavit does not contain any falsehood at all.

In conclusion the applicants counsel contends that the third respondent’s objections are misconceived and ought to be overruled with costs to the applicant.

Ruling

I have duly considered the written objections of the third respondents counsel and the reply thereto by the applicants counsel.

The first objection is that the applicants application was not brought under the proper rule namely order 41 rule 2 of the Civil Procedure Rules. Instead the application was brought under order 41 rules 1 of the Civil Procedure Rules. Without much ado the principle stated by the Court of Appeal of Uganda in Saggu versus Roadmaster Cycles (U) Ltd [2002] 1 EA 258 and at page 262 is applicable. The Court of Appeal Held as follows at page 262:

“Regarding the second point in objection that the notice of motion did not cite the law under which it was being brought. The general rule is that where an application omits to cite any law at all or cites the wrong law, but the jurisdiction to grant the order sought exists, then the irregularity or omission can be ignored and the correct law inserted.”

Secondly for the omission to cite the correct law to be able to bite, the person objecting must demonstrate that they have suffered prejudice or are likely to suffer prejudice due to the omission. In the case of Boyes v Gathure [1969] 1 EA 385 the Court of Appeal of Eastern Africa per Spry VP held that use of the wrong procedure will not invalidate the proceedings so long as it does not go to jurisdiction and does not occasion any prejudice or injustice to the opposite side. The third respondent has not demonstrated the prejudice he would suffer by the citation of order 41 rules 1 of the Civil Procedure Rules. The application and the grounds thereof speak for themselves. The third respondent has opportunity to respond to the applicant’s application as stated in the pleadings and affidavit in support. Secondly the High Court has jurisdiction to entertain the application. In light of the above two authorities, the first objection on the ground of citation of the wrong rule is overruled.

The second objection is that the application is a nullity because the applicant never obtained a certificate of urgency before applying for an interim order. Secondly the application was fixed before fixing the main application for a temporary injunction. To counter this argument the applicants counsel submitted that the same matter had been raised before the registrar by the third respondents counsel and was overruled. Consequently he contended that the matter was res judicata.

I was invited by the applicants counsel to peruse the record of proceedings. On the 14 August 2013, the third respondents counsel submitted that costs can not arise in the application because it was an illegality on the ground that there was no certificate of urgency. Secondly the application was misconceived. It was consequently adjourned by the deputy registrar to 15 August 2013. The deputy registrar further held that the certificate of urgency is dispensed with following directions of the court that the registrar should handle the application. On 15 August 2013, the third respondents counsel argued the preliminary objection against the application. He stated that it was a nullity in so far as it does not arise out of a fixed application for a temporary injunction.

The deputy registrar reserved ruling which he delivered on the 16 August 2013. He ruled on the question of non-payment of court fees for the affidavit in rejoinder, none fixing of the substantive application for a temporary injunction for hearing first before the application for an interim order is heard and the contention that the application for an interim order of injunction was not hinged to a substantive application. All the objections were overruled. The third respondents counsel informed the registrar that he had instructions to appeal against the ruling and sought the leave of the court to appeal.

I agree that the question of whether the application was a nullity was raised before the assistant registrar and the third respondents counsel informed the court that he had instructions to appeal the decision. An appeal from the ruling of the registrar is lodged under order 50 rules 8 of the Civil Procedure Rules. Under section 79 (1) (b) of the Civil Procedure Act, an appeal from the order of the deputy registrar shall be lodged within seven days of the order appealed against. In the absence of an appeal, the matter would be res judicata. It cannot be handled in the main application.

However, the interim order granted by the registrar lapsed and does not have to be taken into account in handling the main application for a temporary injunction. The matter now before the court is an application for a temporary injunction. The application indicates that it arises from civil suit number 431 of 2013. The court does not have to make any reference to the application for an interim order. The current application was issued by the registrar on 28 August 2013 and fixed for hearing on 4 September 2013. The application indicates that it is pending the hearing of the main suit. I have not had the opportunity of perusing the case of Hussein Bada vs. Iganga District Land Board and 4 others cited by counsel. For the moment I am satisfied that the application is on the face of it regular and duly issued by the assistant registrar of the commercial court division. The application is therefore not a nullity. The objection that the application is a nullity is overruled.

The third objection is that the orders sought against the third respondent to restrain him from evicting, selling, transferring or otherwise interfering or dealing in the suit property would be in vain. The basis of the objection is that the sale agreement attached to the affidavit in reply indicates that the first applicant sold the property on 12 June 2008. Another agreement indicates that on 18 November 2008 an additional agreement was made completing the sale etc. Subsequently there was a transfer of the property.

Whatever the case may be, counsel for the applicant's contention is that the submissions are on the merits of the application and ought not to be handled as a preliminary objection. I believe the basis of the submission is that an objection which is preliminary in nature should deal with the competence of the application itself. The question of whether a temporary injunction order should be granted as against the third respondent on the basis of evidence attached in defence or reply to the application is on the merits. Unless set down as a point of law, it requires the evaluation of evidence. Once it requires an evaluation of evidence, it cannot be said to be a preliminary point of law which may be argued on the basis of the pleadings. Once there is evaluation of the defence, it becomes a point of law based on the pleadings and affidavit evidence. That would be a defence on the merits of the application and is not a preliminary point or objection. It requires looking at the evidence of the defence. The point of law is therefore stayed pending the hearing of the main application.

The fourth objection is that the affidavit in support of the chamber summons is defective.

The first point submitted is that it was affirmed without authority from the second applicant and therefore offends order 19 rule 3 of the Civil Procedure Rules. To counter that submission the applicant submitted that the deponent was a landlord and had an interest in enjoying or ensuring the enjoyment of quiet possession of his tenants and the matter was within the knowledge of the deponent.

Paragraph 5 of the affidavit in support of the application deposes that the case is founded on fraud which the respondents committed at different times when they dealt with the suit property as stated in the plaint. Unfortunately the plaint is not attached. What is attached is the advertisement of the sale by public auction/private treaty of property in the names of the third respondent. In paragraph 8 the deponent avers that he was faced with imminent eviction of his tenants who were directed to vacate the premises within 14 days from the date of sale of property published in the New Vision Newspaper of 17th of July 2013. He further gives the description of his tenant. The respondents counsel relied on the case of Makerere University versus St. Mark Education Institute Ltd and others HCCS number 378 of 1993 of the effect that where an application was granted on an affidavit sworn on behalf of others, and the deponent does not show that he had authority to swear the affidavit on their behalf, the application would be untenable with regard to the other co-applicants.

In this particular case the application is made by the first applicant and the second applicant. It can only be untenable with regard to the second applicant and not the first applicant who is the deponent to the affidavit. There is no averment that the affidavit is made on behalf of the second applicant. It is not the third respondent’s case that the application of the second applicant should be struck off the record or that the second Applicant should be struck off the application. His prayer is that the application fails on the basis of not indicating the capacity in which the affidavit in support is sworn on behalf of the second applicant. The objection is therefore overruled.

Secondly the third respondents counsel submitted that the applicants affidavit is tainted with deliberate falsehoods especially in paragraph 4, 5, 6, 8 and 11 in so far as he claims to be the lawful owner of the suit property. Again this submission is untenable in light of the fact that in paragraph 5 the deponent avers that he has filed a suit against the respondents on the basis of fraud committed at different times. As I said earlier, unfortunately the plaint was not attached even though it is indicated as having been attached. The court copy does not have a copy of the plaint attached. That notwithstanding, the averments is that the applicant is not the registered proprietor and therefore the application contains falsehoods, cannot be tried at this stage of the proceedings since it is the crux of the suit. I have taken the liberty to peruse the pleadings which are on court record. The applicant’s case is that he was the registered proprietor. In those circumstances therefore, it cannot be asserted merely on the basis that the applicant avers that he is the owner of the suit property that the affidavit is a falsehood. The question of who is the owner is both a question of fact as well as a question of law. The applicant avers that he receives rent from the suit property. It is the applicants claim that he is the owner of the suit property which was fraudulently transferred from him and that is a matter that should be tried at the hearing of the main suit.

On the submission that the affidavit does not contain particulars of fraud under order 6 rule 3 of the Civil Procedure Rules in paragraph 5 thereof and was therefore incurably defective, the objection is similarly misconceived. Order 6 rule 3 of the Civil Procedure Rules provides as follows:

"In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default or undue influence, and in all other cases in which particulars may be necessary, the particulars with dates shall be stated in the pleadings."

It is glaringly obvious that the above provision deals with pleadings. On the other hand an affidavit contains evidence. In other words affidavits are evidence by way of affidavits. The question of fraud has to be pleaded in the plaint or the chamber Summons. The affidavit in support of an application for a temporary injunction does not have to prove any fraud. Furthermore the particulars of the alleged fraud do not have to be mentioned if it is pleaded in the plaint. The application for a temporary injunction should be confined to the grounds for a temporary injunction which are grounds for maintaining the status quo pending the hearing of the suit. For instance some of the matters to be considered in an application for a temporary injunction are whether the applicant's application raises an arguable issue which merits judicial consideration. Sometimes the issue is framed as an issue of whether there is a prima facie case with a likelihood of success. Pleadings on the other hand are averments that are to be proved through evidence. The authorities cited by the applicants counsel on the question of particulars of fraud are therefore irrelevant. The authorities deal with pleadings and not evidence while an affidavit is evidence. In those circumstances the last objection is overruled. The application shall proceed on the merits and third respondents counsel is free to raise the other matters stayed as a defence to the application. The preliminary objections are overruled with costs payable by the third respondent.

Ruling delivered on the 7th day of October 2013

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Arthur Kirumira for the 3rd Respondent

Bwayo Richard for the 1st Respondent

Faith Akutunda for the Applicant

Charles Okuni: Court Clerk

 

 

Christopher Madrama Izama

Judge

7th September 2013