Court name
Commercial Court of Uganda
Judgment date
27 May 2013

Executive Properties Ltd & 12 Ors Akright Projects Ltd (Miscellaneous Application-2012/643) [2013] UGCommC 97 (27 May 2013);

Cite this case
[2013] UGCommC 97

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 643 OF 2012

(ARISING FROM HCCS NO 251 OF 2012)

  1. EXECUTIVE PROPERTIES LIMITED}
  2. APL & EPHOL – JU LTD }
  3. HON HENRY BANYEZAKI}
  4. HON OKETCHO WILLIAM}
  5. HON NABETA NATHAN}
  6. HON PEREZ AHEBWE}
  7. HON BEN WACHA}................................................................ APPLICANTS
  8. HON AMOOTI OTADA}
  9. HON DOMBO EMMANUEL}
  10. HON SENTONGO NABUYA}
  11. HON ANGINO GUTONO CHARLES}
  12. HON SILVER NIYIBIZI BABANE}
  13. HON DORA BYAMUKAMA}

VERSUS

AKRIGHT PROJECTS LIMITED}....................................................... RESPONDENT

 

BEFORE HON JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicants filed this application under the provisions of sections 7 and 98 of the Civil Procedure Act, Order 1 rules 10 (2) (4) and 13; Order 9 rule 3 (1) (b) and (g); and Order 52 rules 1 and 3 of the Civil Procedure Rules for orders that the 4th to the 13th applicants should be struck off from High Court Civil Suit 251 of 2012 for having been improperly added as defendants to the suit; that the amended summons were not duly served on any of the defendants/applicant's; for dismissal of HCCS 251 of 2012 for being res judicata and for costs of the application.

The grounds of the application are that the respondent filed HCCS No. 251 of 2012 on 26th of June 2012 against the 1st to the 3rd applicants as the only defendants; the respondent thereafter filed an amended plaint on the 1 August 2012 adding the 4th to the 13th defendants without the leave of the court; the respondent's defaulted, failed or refused to either take out or serve amended summons on the defendants/applicants; the respondents claims in HCCS number 251 of 2012 were conclusively determined by consent of the parties by this honourable court under HCCS No. 140 of 2008; the consent decree entered on 8th of October 2008 has never been set aside and is still binding on the parties to it and as such the respondent’s claims under HCCS number 251 of 2012 are res judicata and finally that it is just and equitable that HCCS No 251 of 2012 is dismissed or struck out as an abuse of court process.

The application is supported by the affidavit of honourable Henry Banyenzaki giving detailed facts of the application. The facts are that on 4 August 2006, the first applicant entered into an agreement with the respondent wherein the first applicant would contribute Uganda shillings 435,000,000/= towards the purchase of land measuring 84 acres situated at Nansana. By an addendum thereto the respondent confirmed payment by the first applicant of the sum of Uganda shillings 435,000,000/=. The project went wrong due to actions of the respondent whereupon the respondent filed HCCS No. 14 of 2008 against the deponent and the other applicants to this application. The respondent subsequently agreed to settle the suit by consent and a consent judgement was executed on 8 October 2008. The respondent company failed to pay the decretal sums and costs under the consent and subsequently filed miscellaneous application number 33 of 2009 challenging the legality of the consent judgement/decree and application was dismissed. The respondent appealed against the ruling dismissing the application to set aside the consent judgement in civil appeal number 31 of 2009 and various interlocutory applications therein were all dismissed. Subsequently the respondent’s further appeal to the Supreme Court was withdrawn. Thereafter the respondent filed HCCS No. 251 of 2012. The deponent in support of the application believes on the basis of advice from his lawyers that the court cannot try the subsequent suit because the matter within it was directly and substantially in issue in a former suit and between the same parties litigating under the same title.

The second affidavit in support is sworn by honourable Nabeta Nathan and avers that on 1 August 2012 the respondent/plaintiff amended its plaint and his name was included as a defendant. On the information of his lawyers, he asserts that the respondent did not properly add him as a defendant to the suit. Secondly the procedure laid down by the rules of procedure which govern the court was not followed in adding him to the amended plaint. Every defendant should be served with a copy of the summons, plaint and summary of evidence but the respondent failed, refused or neglected to take out and serve summons either in the original suit or on an amended plaint on him and his fellow applicant's and the suit is incurably defective and ought to be struck out. Lastly on a basis of information from his lawyers, in believes that once 21 days of service of summons expires, the respondent had 15 days within which to apply to court to extend time but the same having expired, the matter before the honourable HCCS No. 251 of 2012 cannot legally take off.

The respondent’s affidavit in reply was deposed to on its behalf by Mustapha Segujja, a legal officer of the respondent. In the reply the deponent avers that the respondent on 26 June 2012 filed against the 1st – 3rd applicants a suit inter alia seeking orders of the court to set aside the consent judgement executed between it and the 1st to the 13th applicants. The applicants mentioned therein were at all material times represented by Katuntu and Company Advocates jointly with Nuwagaba Mwebesa and Company Advocates who had instructions to represent them in all matters relating to the consent judgement. On 17 July 2012 the 5th, 6th, 8th, 9th, and 12th applicants filed a defence contending that the consent judgement entered into between the respondent and applicants disposed of the respondents claim against the applicants and the respondent had no cause of action against the applicants. Accordingly because the respondent was within the prescribed time to amend its pleadings, it amended its plaint and included the 4th to the 13th defendants who were at all times part of the impugned consent judgement and necessary parties to the suit. The addition of the 4th to the 13th applicants is not prejudicial to the applicant's by reason that they are part and parcel of the consent judgement in issue and conversant with all matters in question and represented by the same law firms. Leave to add parties to suits essentially serves the purpose of court investigating whether the party sought to be added to the suit are proper and necessary parties to avoid a multiplicity of suits. No injustice has been occasioned to the 4th – 13th applicants being parties to the suit as the court can only entertain and dispose of the suit after it has heard all parties to the dispute inclusive of the 4th – 13th applicants. Summonses were duly served on the 1st – 3rd applicants by the respondent. And when the plaint was amended, the plaint was duly served on the lawyers who promptly and without any complaint filed a defence on behalf of the 5th – 13th applicants. The essence of summons on the plaint is to put the parties on notice as to when to file a defence and consequently the 4th – 13th applicants duly responded and filed their defence through the same law firms. Matters involved in the underlying suit are extremely sensitive matters and are not res judicata as they have never been heard on merits or determined by court. The respondent’s cause of action in HCCS number 251 of 2012 is to set aside the consent decree between it and the applicants which was not the same cause of action in HCCS No. 114 of 2008 from which the consent judgement arose. Finally the deponent in reply avers that the applicants shall not suffer any prejudice in case this honourable court entertains the suit against them and sets aside the consent decree.

In rejoinder honourable Henry Banyenzaki by affidavit filed on court record on 6 February 2013 seems to deal with another application though it is entitled miscellaneous application number 643 of 2012. This is evident in paragraph 5 thereof where it is indicated that the affidavit in rebuttal is to one sworn by Ernest Nkoba.

Counsels filed written submissions in which the court was addressed on 4 issues namely:

  1. Whether the 4th – 13th applicants were properly added as defendants in HCCS 251 of 2012.
  2. Whether the respondent duly served the amended summons on any of the defendants/applicants.
  3. Whether HCCS 251 of 2012 is res judicata
  4. Remedies

The Respondent raised a preliminary objection to the affidavit in support of the application on the ground that upon cross examination honourable Henry Banyenzaki did not remember the place where he took the oath or the Commissioner for oaths. Furthermore, it took off by lifting up the Bible and stating his full name. Counsel sought to have the affidavits struck off the record for non-compliance with section 5 of the Oaths Act cap 19 laws of Uganda. In the reply the applicants counsel submitted that the respondents counsel wants court to penalise the deponent for not recalling the name of the Commissioner, district name or building on which the particular Commissioner for oath sits. Honourable Henry Banyenzaki complied with section 5 of the Oaths Act which requires a person taking the oath to do so by holding if he or she is a Christian, a copy of the four Gospels of the four evangelists or the New Testament and repeat after the person administering the oath, the words prescribed by law or by practice of the court. The law does not require a deponent to know the names of the commissioners before whom they take oath. The deponents did not remember the Commissioner's name and the affidavit clearly states the date and place at which the affidavit was commissioned. In those circumstances the affidavit was properly taken or made before the Commissioner for oath.

I have carefully considered the objection to the affidavit of honourable Henry Banyenzaki in support of the applicant’s application. As far as the manner of administering the oath is concerned, it is the duty of the Commissioner for oaths to administer the oath in the manner prescribed by the law. I do not agree that it is upon the deponent to have the oath administered to him in the proper way. The duty is clearly upon the Commissioner for oath who is licensed to carry out duties under the Oaths Act cap 19 laws of Uganda. For emphasis section 5 of the Oaths Act is set out here in below:

            “5. Form and manner in which oath may be taken.

(1) Whenever any oath is required to be taken under the provisions of this or any other Act, or in order to comply with the requirements of any law in force for the time being in Uganda or any other country, the following provisions shall apply, that is to say, the person taking the oath may do so in the following form and manner—

(a) he or she shall hold, if a Christian, a copy of the gospels of the four evangelists or of the New Testament, or if a Jew, a copy of the Old Testament, or if a Moslem, a copy of the Koran, in his or her uplifted hand, and shall say or repeat after the person administering the oath the words prescribed by law or by the practice of the court, as the case may be;

(b) in any other manner which is lawful according to any law, customary or otherwise, in force in Uganda.”

It is upon the Commissioner for oath to instruct the deponent on what to do. This is the practice of the court in administering oaths. A person who is taking oath is asked his or her belief and then given instructions accordingly. It is therefore strange for the respondents counsel to cross examine the deponent instead of cross examining the Commissioner for oath as to whether he complied with the provisions of the Act. In any case under section 5 (1) (b) the procedure for administration of oaths prescribed by section 5 (1) (a) is not exclusive of other lawful or customary methods for the administering of oath. In any case the deponent did state that he lifted the Bible like he did in the court when taking oath before the Commissioner. Secondly as to the place where the oath was taken, the witness could not recollect the exact building where he took the oath or the person who administered the oath. That cannot be fatal.

I agree with the applicant submission that the place where the oath was taken is indicated in the affidavit and secondly the person who administered the oath is clearly indicated. For emphasis the duty is upon the Commissioner for oaths or notary public before whom any oath or affidavit is taken to state the place and date when the oath or affidavit was taken or made. This is clear from the provisions of section 6 of the Oaths Act which provides as follows:

6. Place and date of oath.

Every commissioner for oaths or notary public before whom any oath or affidavit is taken or made under this Act shall state truly in the jurat or attestation at what place and on what date the oath or affidavit is taken or made.”

The affidavit clearly indicates that it was sworn in Kampala before Mubiru Kasozi Joseph, an advocate and Commissioner for oaths. The fact that honourable Henry Banyenzaki could not collect before whom the oath was taken and cross examination of him on that point could only be meant to discredit whether he appeared before the said Commissioner for oaths. Because the witness could not recollect the information, counsel did not achieve his objective in cross examination. In the absence of any other evidence, the place and the Commissioner for oath including the date when the affidavit was commissioned are clearly spelt out as prescribed by section 6 of the Oaths Act. Last but not least, it is a question of ethics of the Commissioner for oath's to comply with the law. They are the proper parties to be subjected to test as to whether they are compliant with the law. Secondly the duty is upon counsel who drafted the affidavit or who assisted the deponent to reduce his statement in the form of an affidavit to ensure that the law is complied with. The best that the cross examination can do is to cast a cloud as to whether a proper procedure was used. No improper procedure was established. In the premises, the preliminary objection and prayer to strike out the affidavit of honourable Henry Banyenzaki deposed to on 24 September 2012 is overruled. In the premises the applicant's application is supported by the two affidavits in support thereof.

The Applicant's submission on the first issue is that the addition, striking of or substitution of a party to a suit before trial is preceded by an application by notice of motion or chamber summons or orally at the trial in a summary manner under order 1 rule 13 of the Civil Procedure Rules. The respondent added the 4th – 13th applicants as defendants through amendment of the plaint without leave by confusing Order 6 rule 20 which allows a party to amend without leave with order 1 rule 10 which caters for addition of parties.

In reply it is the respondent's case that Order 6 rules 20 permits a plaintiff to amend the plaint without leave within 21 days from the date of the issuance of summons on the defendant or where a written statement of defence has been filed, within 14 days from the date of filing of the defence. A party can be added under order 1 rule 10 on the motion of the court if the court is satisfied that the failure to add the party was through a bona fide mistake. The exclusion of the 4th – 13th applicants as defendants was through inadvertence of counsel.

I will not dwell on the justification for the addition of the other applicants as defendants as that is on the merits. The issue before court is whether an addition of defendants can be made upon or pursuant to an application for amendment or an amendment without leave. This is a matter of procedure and can be decided through interpretation of the law and not through advancing justifiable grounds for amendment or substitution.

In the first place order 1 rule 10 and 13 of the Civil Procedure Rules have one thing in common. This is that the substitution or addition of parties or striking out of the parties is made with the leave of court. Particularly rule 13 of order 1 prescribes the procedure for making the application to court. First of all it provides that an application to add or strike out or substitute a plaintiff or defendant may be made to the court at any time before trial by motion or summons. Secondly it prescribes that it can be made at the trial of the suit in a summary manner. In other words it can be made before the trial in which case it has to be by motion or summons. In case the trial has commenced, it can be made in a summary manner. Rule 13 is permissive and cannot be said to exclude any of the methods prescribed. Rule 13 is controlled by order 1 rule 10 of the Civil Procedure Rules which give the grounds for addition, substitution or striking out of the plaintiff or defendant. What is crucial is that the application has to be made to the court.

The controversy therefore will be decided on the question of whether the applicant may without leave by amendment of the plaint substitute or add a defendant to the original plaint. There was no controversy that the addition was made under order 6 rule 20 of the Civil Procedure Rules which provides as follows:

"A plaintiff may, without leave, amend his or her plaint once at any time within 21 days from the date of issue of the summons to the defendant or, where a written statement of defence is filed, then within 14 days from the filing of the written statement of defence or the last of such written statements."

The question before the court has nothing to do with the whether the amendment was timely. The question is restricted to whether an addition of the defendant may be made under order 6 rule 20 of the CPR. My understanding of the provision is that time begins to run from the date of issuance of summons to the defendant or where a written statement of defence is filed, then within 14 days from the filing of the written statement of defence or the last of the written statements. An amendment deals with an existing pleading. This is made clear by the wording of the rule. The rule envisages an existing defendant and therefore notice of an amendment to the existing defendant and to the court. I must add that if summons have not been served on the defendant, the summons can be withdrawn and other defendants added on through amendment. Such a withdrawal and substitution or addition would not be offensive to the rules and would not amount to an amendment of an existing pleading which has been served on a defendant or defendants.

I have additionally considered the definition of an amendment according to Black's Law Dictionary 9th edition quoted in the submissions of the respondents counsel. The definition itself confirms that an amendment is a pleading that replaces an earlier pleading and that contains matters omitted and not known at the time of the earlier pleading. A pleading refers to the body of the plaint or written statement of defence and not the parties. Particularly as far as the plaintiff is concerned, it refers to the plaint. Particulars contained in the plaint are provided for by order 6 rule 1. It provides that every pleading shall contain a brief statement of the material facts on which the party pleading relies for a claim or defence as the case may be. In other words a pleading relates to the body of the plaint and not to the parties as the question of parties is material as to who are the parties pleading. In those circumstances, reliance on Black’s Law Dictionary for the definition of a pleading or amendment to pleadings does not assist the respondent. The appropriate authority on this point is Odgers' Principles of Pleading and Practice in Civil Actions in the High Court of Justice 22nd edition at page 159 where it is written as follows:

"After service the writ may be amended once without leave at any time before pleadings are closed. But this facility does not extend to an amendment consisting of the addition, omission or substitution of a party to the action…"

My conclusion is that substitution of parties can only be made with the leave of court under Order 1 rule 10 and 13 of the Civil Procedure Rules. This is because the rule making authority has deemed it fit to make a specific provision for the addition, substitution or striking out of parties in a separate rule and separate Order in the Civil Procedure Rules namely Order 1 rules 10 and 13 of the Civil Procedure Rules. Secondly amendments are dealt with under Order 6 of the Civil Procedure Rules. I agree that these rules should not be mixed as the considerations for addition of parties is catered for under a separate rule from considerations for amendments. I must add that an amendment without leave of court presupposes that summons had been served on the defendant or defendants. Therefore if summons have not been served, they can simply be withdrawn and the appropriate pleadings substituted before service without prejudice to anybody. I also agree with counsel for the applicant that where an application for addition of the defendant is allowed by the court, it would be necessary to amend the plaint and on the new means together with an amended summons which will be served on the new defendants according to order 1 rule 10 (4) of the Civil Procedure Rules.

In those circumstances the first issue as to whether the suit against the 4th – 13th applicants should be struck out on account of joining them to the suit without leave of court succeeds. I do not agree with the submission that the court should examine whether any prejudice has been occasioned to the defendants. The issue before the court is whether the commencement of the action against the said defendants/applicants was proper. In those circumstances article 126 (2) (e) of the Constitution for the submission that procedural rules are handmaidens of justice cannot be invoked. The applicant's prayer to strike out the 4th - 13th applicants as defendants in HCCS 251 of 2012 succeeds and the order is granted.

The second question is whether amended summons were served on the applicants and if not whether the suit should be struck out against the applicants.

The first issue having succeeded, the striking out of the 4th – 13th applicants disposes the second issue.

The third issue is whether HCCS 251 of 2012 is res judicata.

The submission of the applicant is that the matters in their civil suit number 251 of 2012 are res judicata because they were conclusively decided and determined by consent of the parties in civil suit number 140 of 2008. Counsel relied on section 7 of the Civil Procedure Act which bars the court from trying any issue or suit in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties or between parties under whom they claim litigating under the same title and in a court of competent jurisdiction. By looking at the pleadings in civil suit number 251 of 2012, counsel contended that comparison with the pleadings in HCCS 140 of 2008 shows that the basis of the respondent’s suit against the applicant is the same in both suits. In the previous suit namely HCCS 114 of 2008 the respondent sought declaratory orders, permanent injunctions restraining the applicant's or their agents from interfering with the affairs of the “Nansana Project” or in the main business of the respondent, damages for breach of contract and breach of trust plus costs of the suit. This was terminated in a consent judgment and the respondent's application in miscellaneous application number 33 of 2009 to set aside the consent judgement/decree was dismissed. An appeal from a decision dismissing miscellaneous application number 33 of 2009 was dismissed by the Court of Appeal and the applicant’s further notice of intention to file an appeal in the Supreme Court was withdrawn. Counsel further submitted that filing civil suits based on the same causes of action is an abuse of the process of court. It was a mere change of phraseology, order of paragraphs, and wrong addition of parties to make the claim a new cause of action and amounted to an abuse of the process of court.

The plea of res judicata applies not only to points upon which the first court was actually required to adjudicate but to every point which properly belonged to the subject of litigation and which the parties exercising reasonable diligence might have brought forward at that time according to the decision in Chris Tushabe versus Co--operative Bank Ltd HCCS number 364 of 2012 and the judgement of honourable Justice Geoffrey Kiryabwire following the East African Court of Appeal case of Kamunye and Others versus Pioneer General Assurance Society Ltd. Furthermore the consent judgement was challenged by the respondent in miscellaneous application number 33 of 2009 which went on appeal in civil appeal number 31 of 2009 to the Court of Appeal and all applications arising from Civil Suit number 140 of 2008. All the allegations in the current suit ought to have been brought forward in HCCS 140 of 2008. The respondent is alleging five years later that a consent judgement was entered under a mistake and misapprehension without showing whether the applicants were blameworthy in the mistake and misapprehension would not entitle the respondent to retry the issue.

In reply counsel for the respondent submitted that the test of whether a suit is res judicata was applied in Hudson Musoke versus Standard Chartered Bank Ltd HCCS 258 of 2009. For a suit to barred by the doctrine of res judicata, the issue is whether the matter in controversy in the subsequent suit properly belonged to the subject of litigation in the former suit and whether the parties through the exercise of reasonable diligence ought to have included it as part of the plaint in the former suit. Counsel submitted that according to the affidavit in reply filed on the behalf of the respondent and paragraph 13 and 14 thereof Mr Mustafa avers that the matters in controversy in the current suit are significantly different from HCCS number 140 of 2008. Counsel contended that in the previous suit the respondent filed for declaratory orders, a permanent injunction against the applicants from interfering with the affairs of the Nansana Project and damages for breach of trust. The cause of action revolved around a joint venture entered into between the respondent and the first and second applicants the 4th – 13th applicants are struck off the suit and duly paid their costs. However this struck out applicants/defendants returned and shared in the decretal sums as judgment creditors. Counsel submitted that if this was not fraud, it was a misapprehension and against the courts policy. This is the respondent’s cause of action in the subsequent suit. The respondents cause of action in the subsequent suit is premised on a mistake which vitiated the consent judgement entered into by the parties. Counsel submitted that this fraud was discovered after the consent judgement had been entered into. The particulars of fraud have been pleaded in the amended plaint. Those matters have never been before the court and are not determined by the consent judgement. Consequently the contention that the subsequent suit is res judicata is unfounded. The issues and causes of action in HCCS 140 of 2008 and HCCS 215 of 2012 are different. The fact that Messrs Kituma Magala and Company Advocates filed an application challenging the execution of the decree in that matter and subsequently an appeal in the application does not bring the respondent within the ambit of the doctrine of res judicata. The respondent’s suit is clearly a suit to set aside the consent judgement and is materially distinct from the suit that led to the consent itself. The misapprehension of the respondent in relation to the 4th – 13th applicants was not an issue that had been canvassed in the earlier suit. The earlier suit was on matters involving the business transaction between the applicants and the respondents. In the subsequent suit what is in contention relates to the consent that had been entered into by the parties.

In the applicant’s joint submissions in rejoinder jointly prepared by Katuntu and Co Advocates for the 5th, 6th, 7th, 8th, 9th and 12th Applicants, Messrs Nuwagaba and Mwebesa Advocates for the 1st, 2nd, 3rd, 4th, 10th and 13th Applicants submitted as follows. In determination of whether a suit is res judicata, it is imperative to look at the pleadings to ascertain the causes of action and how they arose. The basis of the claim in HCCS 251 of 2012 is the same as what was before the court in HCCS 140 of 2008. Counsels reiterated earlier submissions that the suit is res judicata.

I agree that the starting point for establishing whether a subsequent suit is res judicata is to compare the claim in the previous suit disclosed in the pleadings from the claim in the subsequent suit as reflected in the pleadings. Secondly it is necessary to examine the judgment and decree in the previous suit.

In HCCS number 114 of 2008 the suit in paragraph 15 thereof against the defendants jointly and severally was for declaratory orders, a permanent injunction restraining the defendant's or their agents from interfering with the affairs of the Nansana Project, or the main business of the plaintiff, damages for breach of contract and trust, and costs of the suit. It is averred that on the third day of July 2006 the plaintiff on the express recommendations of the fourth defendant entered into an agreement to buy land totalling 84 acres in Nansana. The fourth defendant agreed to mobilise his colleagues from Parliament to purchase parcels of land which would raise enough money to pay off the vendor's balance. Subsequently on 14 July 2007 the fourth defendant and his co-defendants namely the 3rd, 5th – 13th defendant incorporated a company which was sued as the 1st defendant with the objective of inter alia carrying on the business of buying and selling real estate. On 4 August 2006 the plaintiff entered into a joint venture in order to consolidate their joint objectives and form a joint venture company which is the second defendant. In the joint-venture the plaintiff's contribution was Uganda shillings 165,000,000/= while that of the first defendant was to be Uganda shillings 435,000,000/=. It is averred that the first defendant company as a subscriber to the joint-venture never made any contribution to the joint-venture which rendered it redundant. The plaintiff averred that it received payments from individuals in respect of the Nansana Project but not the first defendant company or the first subscribers in the joint-venture company. Several other facts were given and the plaintiff sought declaration that there was no joint-venture between the plaintiff and the second defendant. Secondly, a declaration that neither the first nor the second defendant ever paid any money to the plaintiff for the Nansana project. Thirdly, a declaration that the defendants jointly and severally caused financial losses to the plaintiffs business. Fourthly a declaration that the defendants have no right whatsoever in the Nansana Project nor in the plaintiff company. Fifthly, a permanent injunction to restrain the defendants jointly and severally or the agents from interfering in the affairs of the Nansana Project and the plaintiff company. Finally general damages for breach of contract and trust, inconveniences caused the plaintiff company and for costs of the suit.

In the consent judgement dated 8th of October 2008 and entered by the registrar on 10 October 2008 the suit was settled. The title of the suit reads HCCS number 114 of 2008 between the respondent and Executive Property Holdings and 12 others. In the consent it was agreed that the matter is settled and judgement is entered in the following terms:

"

  1. That the defendants are owed Uganda shillings 435,000,000/=.
  2. That the defendants agree to vacate the caveat subject to payment of such same sum of Uganda shillings 435,000,000/= plus interest at 25% from the date of payment or payment of Uganda shillings 435,000,000/= plus any appreciation in the land on a pro rata basis of deposit less to the lease land.
  3. Each party to bear their own costs except for costs incurred by the 2nd to the 13th defendant's whose costs shall be paid by the plaintiff. "

The contention of the applicants is that the respondent challenged the consent judgement in Miscellaneous Application No. 33 of 2009. The application was dismissed and the consent judgment upheld. Subsequently the respondent appealed to the Court of Appeal in Civil Appeal No. 31 of 2009 and various interlocutory applications arising out of the appeal were all dismissed. A subsequent appeal to the Supreme Court was withdrawn by the respondent whereupon the respondent filed HCCS No. 251 of 2012.

There is no material dispute as to the facts of the applicant’s application from the respondent. I have carefully perused the contents of the amended plaint in HCCS number 251 of 2012 in which the bar of res judicata has been raised by the applicants. The plaintiff’s case is for an order to set aside the consent decree dated 8th of October 2008 for having been irregularly and mistakenly entered into by the plaintiff. Secondly it is for an order restraining the defendant's, their agents and all those claiming under them from executing the consent decree. It is further for special damages of Uganda shillings 1,485,000,000/=; general damages, interest at commercial rate from the date the special damages were incurred until payment in full, interest on the general damages from the date of judgement till payment in full and costs of the suit.

In effect the respondent’s suit is a suit to set aside the consent decree dated 8th of October 2008, for injunctions to restrain the defendants/applicants from enforcing the decree and general and special damages arising there from. A careful perusal of the amended plaint shows that the respondent’s grievance is that the consent judgement was entered into with the 3rd – 13th defendants against whom the suit had been struck out. Indicating that the plaintiff owed the 3rd – 13th defendants a sum of Uganda shillings 435,000,000/= whereas not. Indicating that the 3rd – 13th defendants had independently lodged a caveat on the plaintiffs property whereas not. Condemning the plaintiff/respondent who was a shareholder in the second defendant company in costs in favour of the second defendant.  Assuming that the third – 13th defendants had advanced money to the plaintiff/respondent when the monies were paid to the second defendant for purposes of a joint-venture with the plaintiff.

 A lot of criticism is levelled against the consent judgement. Furthermore that it was mistakenly couched in a manner that perpetrated an unjust enrichment on the part of the applicants. The consent was given without sufficient facts the effect that the money is in issue said to be owed by the plaintiff/respondent were actually paid to the second defendant for the joint-venture business. The money could not have been paid to the plaintiff as there was no consideration for such payment. The consent judgement was entered into without any knowledge that the third defendant had falsified incorporation documents of the second defendant.

Miscellaneous application number 33 of 2009 arising from HCCS number 114 of 2008 is attached to the affidavit of Mustapha Ssegujja. It was an application for orders that execution warrant of attachment issued by the honourable court on 27 January 2009 is set aside and for costs of the application. The grounds are that the applicant greatly satisfied the decree and is committed to pay the balance. Secondly, that the applicant would suffer substantial loss if the respondent/judgement creditor's are not stopped from executing the warrant of attachment. Thirdly that the applicant/judgement debtor was likely to face multiple suits for specific performance or compensation from various customers who paid deposit against the various plots from which they cannot take possession if the warrant is not set aside when the substantial monies had already been refunded and paid to some of the respondents/judgment creditors. Finally that it is just and equitable that an order setting aside the warrant of execution is issued. The matter came for ruling before honourable justice Anup Singh Choudry. In the ruling the honourable judge writes that the warrant of attachment was issued following a consent judgement dated 8th of October 2008. Furthermore the consent arose from a joint-venture agreement dated 4th of April 2006 between the applicants and the respondents. He noted that the consent decree dated 8th of October 2008 was signed by all the 12 defendants. He noted that the issue before the court is whether the sum of Uganda shillings 435,000,000/= paid by individuals or third parties for and on behalf of the first defendant was the joint-venture scheme acknowledged in the addendum dated 4th of August 2006 is money paid by the 1st defendant. Secondly whether the monies refunded to the individual subscribers was a payment in satisfaction of the consent judgement against the first defendant (respondent) and whether payment made to individual subscribers amounted to payment to the respondent company. He held that the payment to the directors/individuals or third parties cannot be held to be a payment to the company unless the payments were stipulated as paid to the company or payments are received by individuals as agents of the company and expressed as such. He further held and I quote:

"I do not accept that the respondents were paid the monies specified under the consent judgement because any payments made by the applicants were clearly not payments to the respondents (Underwood versus bank of Liverpool (1924) QB 775) and the applicants ought to have been more prudent in view of the consent order.

The court does not have power to alter or vary a properly constituted consent order in favour of the first defendant (respondent) who has not been paid in full or at all. The consent order can only be annulled or set aside if there is evidence of fraud, or unless it is varied by further consent order, or some exceptional grounds.…" (Emphasis added)

The respondent’s application in miscellaneous application number 33 of 2009 was dismissed on 11 March 2009. It is clearly averred in the applicant’s application that there was an application to set aside the consent judgement which was dismissed. Paragraph 5 of the affidavit in support of the application sworn by honourable Hendry Banyenzaki states as follows:

"That the respondent company failed to pay the decretal sums and costs under the consent and subsequently filed miscellaneous application number 33 of 2009 challenging the legality of the execution of the said consent judgement and/or decree."

(6) That the respondent's application was dismissed and the current consent judgement was upheld."

It is evident that miscellaneous application number 33 of 2009 never challenged the legality of the consent judgement. It is also evident from the ruling of the court that there was no challenge to the consent judgement. The court clearly indicated therein that the consent judgement was binding and can only be set aside on the grounds of fraud or by a further consent of the parties or on exceptional grounds. In other words there was no application before the learned judge to set aside the consent judgement on any grounds. It is also evident from the respondent's suit that is primarily a challenge to the consent judgement. A challenge to the consent judgement can be brought by way of the suit according to the authority of Brooke Bond Liebig (T) Ltd v Mallya [1975] 1 EA 266 , a judgment of the Court of Appeal for East and Africa sitting at Dar es Salaam. . Law Ag P at page 268:

“Even if procedure by separate suit is the proper procedure, and I am not convinced as to this, a court is not precluded from giving effect to its decisions under its inherent powers, especially where time and expense can be saved, see Mawji v. Arusha General Store, [1970] E.A. 137, where the judgment should, and could, have been the subject of appeal, but was corrected by the judge on the purported exercise of his powers under O. 39, r. 33. I would repeat, and respectfully adopt, the following passage from the judgment of Newbold, P. in Mawji’s case at p. 138:

“We have repeatedly said that the rules of procedure are designed to give effect to the rights of the parties and that once the parties are brought before the courts in such a way that no possible injustice is caused to either, then a mere irregularity in relation to the rules of procedure would not result in vitiation of the proceedings. I should like to make it quite clear that this does not mean that the rules of procedure should not be complied with – indeed they should be. But non-compliance with the rules of procedure of the court, which are directory and not mandatory rules, would not normally result in the proceedings being vitiated if, in fact, no injustice has been done to the parties.”

 The court did not rule out the procedure by way of a suit to challenge a consent order or judgment. The possibility does exist for a challenge to a consent judgement to be filed by way of an ordinary suit. Secondly the matter before the court is not whether an ordinary plaint is the proper procedure for setting aside a consent judgement. The question is whether the current suit which clearly seeks to set aside the consent judgement is res judicata. If the orders sought in the suit are wider than a resurrection of civil suit number 140 of 2008 that is a matter on the merits and has nothing to do with the doctrine of res judicata. My conclusion is that there has never been any application to set aside the consent judgement. Consequently a suit filed to set aside the consent judgement is not res judicata. I hasten to add that if the consent judgement is set aside, then civil suit number 140 of 2008 would remain unresolved and would be fixed for trial. If the suit of the respondent goes beyond setting up grounds for setting aside the consent judgement, it is not the question of res judicata but one of filing a subsequent suit based on the same facts. I would not make further comments about what is not properly before the court for judgement. I am persuaded in the premises that the respondent's suit is not res judicata and therefore is not barred under section 7 of the Civil Procedure Act. The plea of res judicata is accordingly dismissed. Whatever went on appeal arose from an application to set aside a warrant of attachment and had nothing to with the consent judgement.

In the premises the names of the parties struck out in this ruling is struck out with costs. The rest of the orders sought in this application lacks merit and is dismissed with costs.

Dated at Kampala this 27th day of May 2013

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Charles Okuni: Court Clerk

Counsel Kituuma Magala for the respondent appearing jointly with Isaac Walukagga who is involved in a High Court Matter in another court

Mr. Kizza Aaron from Nuwagaba Mwebesa and Company Advocates for the applicants and Holding brief for Katuntu and Company Advocates whose Asuman Nyonyintono is indisposed.

 

 

Christopher Madrama Izama

Judge

27th May 2013