Court name
Commercial Court of Uganda
Judgment date
25 November 2014

Dhibikirwa v Agro Management (U) Ltd (Miscellaneous Application-2014/250) [2014] UGCommC 159 (25 November 2014);

Cite this case
[2014] UGCommC 159

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

HIGH COURT MISCELLANEOUS APPLICATION NO 250 OF 2014

(ARISING FROM HCMA NO 651 OF 2010 AND HCCS NO 281 OF 2004)

NELSON DHIBIKIRWA}.........................................................................APPLICANT

VERSUS

AGRO MANAGEMENT (U) LTD}........................................................RESPONDENT

BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicant filed this application under the provisions of section 79 (1) (b) and 98 of the Civil Procedure Act as well as Order 44 rule 2, 3 and 4 of the, Order 51 rules 6 and Order 52 of the Civil Procedure Rules for the grant of the following orders:

  1. Extension of time within which to apply for leave to appeal against the decision of Hon. Justice Geoffrey Kiryabwire delivered on 24 April 2012 in Miscellaneous Application No. 651 of 2010 (arising from HCCS 281 of 2004) and also for lodging a notice of appeal in this court.
  2. Leave to appeal against the ruling and order of Hon. Justice Geoffrey Kiryabwire delivered on 24 April 2012 in HCMA No. T651 of 2010 (arising from HCCS 281 of 2004) and;
  3. Costs of the application to be provided for.

The grounds of the application are that High Court Miscellaneous Application No. 651 of 2012 which was filed by the Applicant to realise the fruits of a consent judgment entered in HCCS No. 281 of 2004 was dismissed. The Applicant is aggrieved by the decision of Hon. Justice Geoffrey Kiryabwire which order is not appealable as a matter of right. Thirdly the Applicants intended appeal has an arguable grounds of appeal with a reasonable chance of success. Fourthly the intended appeal has novel points of law and matters of public importance in as far as answering the question of whether the immunity provisions in multinational/international treaties adopted locally apply to transactions with other parties or whether the said multinational organisation can claim immunity when they constitute themselves into a limited liability company which is purely a private arrangement with third parties. Fifthly extending the immunity clause to International Finance Corporation (IFC) was illegal. Sixthly the Applicant’s failure to bring an application for leave to appeal was due to omission, negligence or inadvertence of its former advocates Messieurs Ondimu and Company Advocates which should not be visited upon the Applicant. Seventhly the Applicant is not guilty of dilatory conduct and lastly it is just and equitable and in the interest of justice that the application is granted.

The application is supported by the affidavit of the Applicant containing the facts in support of the application. The Applicant deposes that HCMA No. 651 of 2012 was commenced by him for execution of both Judgment and remedies in execution of the decree in his favour in HCCS 281 of 2004, which application was dismissed on a preliminary objection on the ground that the Directors of the Respondent Company were immune from any legal process. Secondly upon delivery of the ruling, he immediately instructed his former Counsels Messieurs Ondimu and Company Advocates to file an appeal and he was assured that they were going to file the appeal. The Applicant kept on following up the matter with his lawyers who kept assuring him that the matter was being taken care of and he would be informed about the progress of the appeal. After a long time of having no feedback from his former lawyers, he inquired from the court registry on the progress of the appeal and learnt that there no appeal had been lodged in the Court of Appeal as expected. The Applicant claims not to have been involved in any dilatory conduct and was diligent in following up his matter.

Subsequently the Applicant immediately instructed Messieurs Madibo – Mafabi Advocates and he was advised that his application had been dismissed on a preliminary objection due to misinterpretation and misconstruction of law and facts. The Applicant also repeats the grounds in the notice of motion.

The application was filed on 10 April 2014 and served on Messieurs Sebalu and Lule Advocates Counsels for East African Development Bank and IFC. The affidavit of service was filed on court record on 22 April 2014. Initially there was contention as to whether the Respondent’s had been duly served but that contention was resolved. Subsequently on 25 April 2014 Counsel Nalwoga Alice of Messieurs Sebalu and Lule Advocates and Legal Consultants filed an affidavit in reply indicating that they had been retained by International Finance Corporation (IFC) to handle Miscellaneous Application No. 651 of 2010. The gist of the reply is that the application is an abuse of court process and the contents of the affidavit in support of the notice of motion contain falsehoods meant to justify non-compliance with legal procedures.

The grounds for believing that the facts of the application are falsehoods and that Mr Mafabi Godfrey represented the Applicant is in a notice to show cause why execution should not issue annexure "A" which has the proceedings. Secondly Mafabi Godfrey he also participated in HCMA No. 651 of 2010 before Hon. Justice Geoffrey Kiryabwire. Furthermore Mafabi Godfrey also participated in Miscellaneous Application No 557 of 2010. Secondly this application was filed on 10 April 2014 after the delivery of the ruling in HCMA No 557 of 2010 on 7 March 2014. The appeal of the Applicant has a slim chance of success because immunity is a creature of statute and not derived from the judge's ruling. The appeal does not raise any matters of public importance and is an afterthought. Lastly the application does not disclose reasonable grounds for extension of time or grant of leave to appeal and should be dismissed with costs. The affidavit in reply was filed on court record on the 25th of April 2014.

On 29 April 2014 when the matter came up for hearing, the Respondent denied having been served. The matter was adjourned to the 28th of May 2014 for hearing to enable the Respondent to file an affidavit in reply. On the 28th of May 2014 the Respondent’s Counsel Mr Joseph Luswata applied for adjournment on the instructions of IFC on the ground that annexure "A" was not issued by Messieurs Ondimu and Company advocates. The matter was fixed for 3 September 2014 at 9:30 AM.

There are several other affidavits on record which will be handled together with the application. The court was addressed in written submissions.

Applicant’s written submissions

The gist of the Applicant’s written submissions is that East African Development Bank, Development Finance Company, International Finance Corporation and Agro Management Inc constituted themselves into a private limited liability company by acquiring and or buying of the interest of the directors of Pyrethrum Farming Systems Ltd which also later changed its name to Agro Management (Uganda) Ltd. By special resolution dated 6th of October 1995, the company allotted shares to East African Development Bank, International Finance Corporation and others according to the return of allotment. Subsequently East African Development Bank, International Finance Corporation, DFCU and Agro Management Inc became directors of Agro Management (U) Ltd. The Applicant filed HCCS 281 of 2004 against the Respondent and obtained judgment in his favour and a decree was extracted thereafter.

Several attempts by the Applicant to realise the fruits of the judgment yielded little or no fruit at all. A search of the Company Registry revealed that East African Development Bank had been appointed a receiver to manage the affairs of Agro Management (U) Ltd and they filed a notice of cessation in 2010. Subsequently the Commercial Court on 9 December 2011 ordered East African Development Bank (EADB), International Finance Corporation (IFC) and Development Finance Corporation of Uganda (DFCU) to appear in court to be orally examined in respect of the debt. At the hearing, East African Development Bank and International Finance Corporation raised a defence of immunity from civil process which was upheld. The Applicant was dissatisfied with the order and instructed a firm of lawyers to appeal and the Applicant’s instructions were not prosecuted by the advocates.

The application seeks extension of time within which to appeal against dismissal of HCMA 651 of 2010 and the leave of this court to appeal against the same. The issues for determination are: whether in the circumstances the Applicant is entitled to an extension of time within which to apply for leave to appeal; and whether the leave to appeal against the dismissal in High Court Miscellaneous Application 651 should be granted.

Order 51 rules 6 of the Civil Procedure Rules gives the court jurisdiction to enlarge the time for doing an act. According to Horizon Coaches Ltd versus Kampala City Council and others CACA 149 of 2007, the application can be made informally at the time of the decision intended to be appealed against or by formal application within 14 days of the decision. The court may on application also extend the time for doing any act as the justice of the case requires.

In this case failure to bring the application was due to the inadvertence or negligence or omission of Messieurs Ondimu and Company Advocates. The negligence or omission or inadvertence of the Applicant’s Counsel is sufficient cause for enlargement of time. In the case of Bukenya versus Ereneo Kasozi Salongo SCCA No. 8 of 1992, it was held that the fact that there would be a denial of justice by the refusal of the application coupled with other reasons advanced by the Applicant were sufficient reasons for granting the application.

The Applicant is a decree holder in HCCS 281 of 2004 and the intended appeal has tenable points of law on matters of public importance, with a reasonable chance of success and it is in the interest of justice to allow the application. A denial of the application would be a denial of justice.

Whether leave to appeal against the dismissal should be granted?

On this issue the Applicant’s Counsel submits that the right of appeal is statutory while some appeals are with the leave of court. According to the case of Charles Sempebwa and 134 others versus Silver Springs hotel Ltd CACA 103 of 2003, in an application for leave, the Applicant has to show a prima facie case that there are serious issues of law or fact or both that merit judicial consideration by an appellate court.

The facts show that the Applicant’s appeal has a high chance of success in the Court of Appeal and there are arguable grounds of appeal namely: whether the immunity provided for in the Respondent’s acts extends to them when they enter the market or transact business with third parties. In the case of Concorp International Ltd versus East and Southern African Development Bank SCCA No. 11 of 2009, the Supreme Court held that the immunity does not extend to commercial transactions with third parties.

The Respondent’s are directors of a limited liability company and transacting business as such. They have at all material times subjected themselves to civil process. It is only when they were called to show what properties of the company were available to enable the Applicant realise the fruits of judgment that they raised the defence of immunity from judicial process.

One of the directors of the Respondent namely East African Development Bank did not file an affidavit in reply to specifically deny the contents of the affidavit in support of the application and thereby is deemed to have conceded to the application. In the affidavit sworn on behalf of East African Development Bank, they assert that they were not served. The averment is a lie as the lawyers were lawfully served as well as the Ministry of foreign affairs as directed by the Respondent.

Finally that it is an arguable point as to whether the East African Development Bank Act and the IFC Act provisions override the constitutional provisions such as the right to equal treatment before the law and another constitutional rights.

It is in the interest of justice not to defeat the Applicant’s judgment in HCCS 189 of 2004, by granting the application.

Submissions of International Finance Corporation and East African Development Bank

In reply Counsel for the Respondents contends that the alleged background in the submissions of the Applicants Counsel is a disguised submission from the Bar and not supported by evidence and is irrelevant to the application.

The proper background is that the Applicant filed Civil Application 651 of 2012 under Order 22 rule 38 (b) of the Civil Procedure Rules to conduct an oral examination of IFC and EADB officials who are alleged to be directors of the Respondent. At the hearing of the first application, IFC and EADB raised a preliminary objection to the effect that they and their employees are immune from all legal proceedings in Uganda which objection was upheld on 12 March 2012. The Applicant filed a similar application HCMA No. 557 of 2012 in the Civil Division of the High Court (referred to as the second application) seeking the same remedies as in the first application and it was dismissed on the ground of res judicata by Honourable Lady Justice Lydia Mugambe on 7 March 2014.

The current application was filed on 10 April 2014 following the dismissal of the second application. The Applicant in this application claims in the affidavit in support that he was unable to seek leave of court to appeal the decision of Hon. Justice Kiryabwire in the first application because of failure of Messieurs Ondimu and Company Advocates to take the necessary steps. The allegations contained in annexure "A" to the affidavit in support amount to a falsehood and annexure "A" is a forgery. The purported instructions by the Applicant to Messieurs Ondimu and Company Advocates were denied by the advocate in an affidavit filed in court on 16 July 2014 by one Duncan Ondimu.

In response to the affidavit the Applicant has changed his story and deposes that he met a lawyer in that firm other than Duncan Ondimu whom he instructed contrary to what is stated in the main affidavit in support. The name of the alleged lawyer is not mentioned. In Khatijabhai Jiwa vs. Zenabu (1957) EA 38 it was held that a witness who relies on a material point would have the rest of the evidence disbelieved. In the AJ Karia vs. K Shah [1962] EA 43 it was held that where a witness/Applicant bases his claim on a forged document, his claim cannot succeed on alternative evidence.

An application for extension of time within which to take steps in the litigation must be for sufficient cause relating to the inability to take the necessary steps. The powers of the court to enlarge time are discretionary and the exercise of that discretion must have a basis. The instant case it is the Respondent’s submission that the Applicant’s reason for failure to take the necessary steps based on the inadvertence of the lawyer instructed has been denied by the lawyer in question. The Applicant lied on a material point. Secondly the Applicant relied on a forged document annexure "A" to prove his claim.

In the premises there is no sufficient cause to justify the extension of time and the court has no basis on which to exercise its discretion.

There is no explanation advanced by the Applicant as to why he changed Counsel in this matter. The affidavit of Alice Nalwoga shows that the current advocates has acted for the Applicant all through the proceedings. The alleged change of advocates from the previous to the current advocates did not happen.

Furthermore the affidavit of Alice Nalwoga is to the effect that the Applicant is familiar with the court processes. He knows that the actions in court are commenced by documents which are filed and which are to be served within a particular time. The court file shows that the Applicant served court process personally. The Applicant’s affidavit in response to the affidavit of Duncan Ondimu was drawn personally by the Applicant. It is therefore more difficult to believe that the Applicant would have sat back and not served some of the documents filed in court by his alleged advocate for service.

The above also demonstrates that the filing of the application is an afterthought following the dismissal of the second application. The Applicant by filing the first and second applications on exactly the same subject matter but in different divisions of the High Court was up to mischief amounting to abuse of court process. In the previous cases the court excused the Applicants from paying costs for reasons which are contained in the rulings. In the current situation the costs of the dismissal should be given to the Respondent.

The Applicant seeks leave of this court to file and serve the appeal out of time. No submissions have been made in disregard by the Applicant and that means that the prayer has been abandoned. Nonetheless the High Court has no jurisdiction to entertain the prayer because such power lies with the Court of Appeal.

Finally the order for leave to appeal should be denied because the court cannot separate the forged evidence from the rest of the evidence. There is no arguable point of law or fact involved when Hon. Justice Kiryabwire held that IFC and EADB and their employees are immune from legal proceedings.

The case of Concorp versus PTA is distinguishable because no directors or employees were summoned to the court. In this case however, the remedy of examination of the Respondents who are artificial persons can only be achieved by examining individual employees of that organisation. Whereas in the Concorp case PTA is an institution the Applicant’s case is potentially against the employees. In the Concorp case PTA went to the market directly. In the present case the Applicant was in the market with Agro management and not with IFC or EADB. In the premises the application should be dismissed with costs.

Submissions of the Applicant’s Counsel in rejoinder

In rejoinder the Applicant’s Counsel submitted that point’s number 1 and 2 on the question of background to the application is diversionary and should be ignored by the court. The court ought to determine the application on its merits.

On the question of the affidavit of Duncan Ondimu and the issue of falsehood and the assertion that the Applicant’s receipt showing that he instructed the firm is a forgery. The affidavit clearly shows that the firm had several persons proof of which can be seen from paragraph 6 of the affidavit in reply. The Applicant’s affidavit in rejoinder has not been challenged and remains true.

The affidavit of Duncan Ondimu was not registered in Kenya and cannot be relied upon Uganda unless it is first registered. The Applicant was clear in stating in his affidavit in support of the application that he instructed the firm, paid money and was given a receipt and no evidence was adduced to show that the receipt is a forgery. The said law firm had other staff. On the balance of probabilities the Applicant has proved that he instructed Messieurs Ondimu and Company Advocates.

 

Ruling

I have carefully considered the Applicant’s application together with the affidavit in support, the affidavit in reply and the submissions of Counsel which have been set out above.

The Respondent’s Counsel raised several preliminary objections to the application and relies on the facts deposed in the affidavit in reply of Alice Nalwoga.

The Respondent’s case is that the Applicant filed High Court Civil Application No. 651 of 2010 under order 22 rules 38 (b) of the Civil Procedure Rules seeking an order for oral examination of IFC and EADB as directors of the Respondent. The application was dismissed by Hon. Justice Geoffrey Kiryabwire on the 24th of April 2012. The Applicant had filed a similar application in HCMA No. 557 of 2012 in the Civil Division of the High Court seeking the same remedies as in the first application whereupon the application was dismissed on the ground of res judicata on 7 March 2014 by Hon. Lady Justice Lydia Mugambe.

Subsequently the Applicant filed this application on 10 April 2014 following the dismissal of the second application. However this application relies on a falsehood namely annexure "A" which is a forgery. The Respondent managed to obtain an affidavit from Mr Duncan Ondimu indicating that the Applicant never instructed him in any matter concerning the Respondent.

I have carefully considered the evidence in support of the objection. It is proven by affidavit of Alice Nalwoga that pursuant to judgment and decree in the main suit namely High Court Civil Suit No 281 of 2003, the Applicant appeared before the registrar her Worship Gladys Nakibuule Kisekka on 9 September 2010 (see annexure “A” to the affidavit). The plaintiff/judgment creditor/Applicant was represented by his current Counsel Mr Mafabi. The matter was for execution and was adjourned to 22 September 2010 for the appearance of the three directors namely EADB, DFCU and IFC. In the proceedings Pius Olaki represented DFCU Bank, Mr F Ojok of Messieurs Sebalu and Lule advocates represented the first director namely EADB. For DFCU it was contended that Development Finance Company of Uganda was a director to the judgment debtor before it evolved into DFCU. DFCU was giving financial assistance and as a result were partly in charge of the Respondent Company for management of the facility. The facility was retired except that the company registry was not updated and DFCU was not aware of any assets of the company. For EADB it was contended that to the best of the knowledge of EADB there was no property or cash to satisfy the judgment debt. The company was put under receivership after it failed to meet its obligations to the directors. The reasons the directors came aboard was because they had advanced facilities to the judgment debtor. Upon the failure of the Respondent Company to meet the requirements of the directors, the company was put under receivership by Mr Mungereza who completed liquidation in 2006. The money realised was not enough to discharge the Respondent’s liabilities.

Judgment in the main suit was delivered by Hon Lady Justice Stella Arach Amoko and the matter was brought to the attention of the receiver. The receivership was voluntary. The registrar ruled that good cause had been shown by the directors because the company underwent liquidation and the judgment creditor/Applicant was advised to try other legal avenues.

Subsequently on 3 December 2010 the Applicant filed High Court Miscellaneous Application No. 651 of 2010 for the court to orally examine the judgment debtor’s directors. It is apparent from the application which is annexure “B” to the affidavit of Alice Nalwoga that judgment in the main suit was delivered in October 2005 whereupon the Applicant extracted a notice to show cause why execution should not issue. It is averred that the notice to show cause was ignored by the judgment debtor. Secondly the judgment debtor had no known property to be attached to realise the sum of Uganda shillings 24,028,508/=. Consequently the Applicant went against the directors. The application made no reference to the fact that the Respondent Company was under liquidation.

The ruling of Hon. Justice Geoffrey Kiryabwire was delivered on the 24th of April 2012 in which the court found that the directors were immune from legal process under the EADB Act, as well as the IFC Act. In annexure "C" namely Miscellaneous Application No. 557 of 2010, the Applicant filed another application in November 2010 for the oral examination of the directors of the judgment debtors. The grounds of the application are the same. The application was heard by Hon. Lady Justice Lydia Mugambe and ruling was delivered on 7 March 2014. The ruling was delivered pursuant to preliminary objections raised by Alice Nalwoga of Sebalu and Lule Advocates Counsel for IFC and EADB, directors of the Respondent Company. The objection was that Miscellaneous Application 557 of 2010 is res judicata. The preliminary objection was sustained. The court observed that summons were served on the Respondent but the Respondents failed to appear in court and the court heard and granted ex parte HCMA 557 of 2010 on 9 December 2011 before Hon. Justice Vincent Zehurukize. The court ordered that the Respondent’s directors namely EADB, IFC and DFCU appear in court on 18 January 2012 at 9 AM to be orally examined in respect of the judgment debt and to produce all documents and records concerning the transaction. This was in HCCS No. 189 of 2004 where a consent judgment was entered on 13 October 2004 wherein the Respondent company was ordered to pay the Applicant Uganda shillings 6,800,000/= as well as general damages of Uganda shillings 8,000,000/= and the costs of the suit and interest at the rate of 36% per annum from the date of filing the suit until payment in full.

At the same time the Applicant filed another application against the second Respondent in the Commercial Division of the High Court in HCCS No. 281 of 2003. A consent judgment was entered with the Respondent and a decree extracted on the same terms as HCCS 189 of 2004. The application having failed, the Applicant made the same application in Miscellaneous Application 651 of 2010 which was heard and disposed of by Hon. Justice Geoffrey Kiryabwire. The court found that at the time of the order of Hon. Justice Vincent Zehurukize, ordering the Respondents directors namely East African Development Bank; International Finance Corporation; Development Finance Corporation of Uganda (DFCU) appear in court on 18 January 2012 to be orally examined in respect of the debt with the Applicant, and to produce all documents and records concerning the transaction, the ruling of Hon. Justice Kiryabwire of 24th of April 2012 in HCMA 651 of 2010 did not exist because the application had not been determined.

However at the time of the determination of the preliminary point in Miscellaneous Application No 557 of 2010, the ruling of Justice Kiryabwire was in force. Consequently the application was res judicata on account of the ruling of Hon. Justice Geoffrey Kiryabwire on 24 April 2012. The learned judge however expressed reservations about the denial of the Applicant of a right to realise the fruits of the consent judgment. She granted leave to appeal, in case it was required for the Applicant to find redress in the Court of Appeal. I must observe that the leave to appeal only relates to the ruling that the application is res judicata and not to the question of immunity of the directors from legal process.

I have carefully considered the evidence and certain matters need to be highlighted. First of all it has already been held that the ruling on the question of whether the Respondent’s directors are immune from court process is res judicata. However Honourable Lady Justice Lydia Mugambe granted leave to appeal her judgment, which ruling is primarily on the question of whether the application before her namely Miscellaneous Application No. 557 of 2010 was res judicata. The Applicant in this application is seeking leave to appeal against the decision of Hon. Justice Geoffrey Kiryabwire dated 24th of April 2012 in High Court Miscellaneous Application No. 651 of 2010. It is contended for the Respondent that the application is prompted by the dismissal of Miscellaneous Application No. 557 of 2010. However, the substance of the current application is an application for extension of time to file an appeal out of time and for leave of this court to file an appeal from the ruling of Hon. Justice Geoffrey Kiryabwire. On that basis the Applicant’s Counsel prayed that the court ignores the objections to the current application by the Respondent’s Counsel. The gist of that application was the examination of the Respondent’s directors which application was disallowed on the ground of immunity from legal process. Strangely Honourable Mr Justice Vincent Zehurukize had granted the application ex parte in High Court Miscellaneous Application No 557 of 2010 and there is no evidence or submissions to the effect that the order had been set aside. I must note that an Order under order 22 rule 38 (b) of the Civil Procedure Rules for oral examination is an order of the High Court and unless set aside subsists until it abates. The fact that the oral examination was to take place at a particular date did not set aside the order on account of there being no hearing on appointed date. The fact that the order was made ex parte emphasises that it had to be set aside first or it can be implemented. The ex parte order was made before the ruling of honourable Mr Justice Geoffrey Kiryabwire. The question is what purpose the order would have served?

As far as the first objection is concerned, the deposition of the Applicant that the delay was due to inaction of Messrs Ondimu and Company Advocates is ill advised. The main ground for bringing this application late is found in ground 6 of the Notice of Motion which is to the effect that failure to bring an application for leave to appeal was due to the omission, negligence or inadvertence of his former advocates Messieurs Ondimu and company advocates. This evidence has been contested as a falsehood by the Respondent who relies on the affidavit of Mr Duncan Ondimu. The deposition of Duncan Ondimu cannot be ignored. He was a sole proprietor of Messieurs Ondimu and Company advocates and confirms that he has never received instructions or payment as legal fees to represent the Applicant in respect of the matter involving the Respondent Company. Secondly that the attached receipt annexure "A" was never issued by him or anybody in his firm with his instructions. Mr Duncan Ondimu was never cross examined. However his evidence is consistent with other facts.

It is asserted by Alice Nalwoga in paragraph 3 of her affidavit that High Court Miscellaneous Application 651 of 2010 and HCMA No. 557 of 2010 were handled by the Applicant’s lawyer Counsel Godfrey Mafabi. Similarly Counsel Mafabi appeared before the registrar in HCCS No. 281 of 2003 in a notice to show cause why execution should not issue against the directors of the Respondent namely East African Development Bank, DFCU (U) Ltd and IFC. In this application Counsel Mafabi is the Applicant’s counsel. The Respondent subsequently produced evidence to the effect that Mr Duncan Ondimu alleged to be a former Counsel of the Applicant had not executed the instructions of the Applicant to prosecute an appeal from the decision of honourable Mr Justice Geoffrey Kiryabwire delivered on 24 April 2012. In an affidavit in reply Counsel Duncan Ondimu also deposes that annexure "A" to the affidavit in support is a forgery. Annexure "A" to the affidavit is a receipt for the sum of Uganda shillings 2,300,000 issued by Messieurs Ondimu and Company Advocates Legal and Tax Consultants. The Respondent’s Counsel asserts that the Applicant's application is supported by a falsehood in a material particular and the court ought to disbelieve the rest of the facts in support of the application in the affidavit of the Applicant. There is no evidence to link Counsel Mafabi and Messieurs Ondimu and Company Advocates and Legal and Tax Consultants. The current application HCMA No. 250 of 2014 was filed by Messrs Madibo – Mafabi and Company Advocates.  HMCA No. 557 of 2010 was filed by Messrs Sabiti and Company Advocates. Similarly HCMA No. 651 of 2010 was filed by Messrs Sabiti and Company advocates. All matters were however argued by Counsel Godfrey Mafabi. Counsel Mafabi also appeared before the registrar. The inevitable conclusion is that Mr. Godfrey Mafabi was the Counsel instructed to argue the various applications. On the balance of probabilities I agree that the Respondent has proved that the Applicant is relying on a falsehood.  This is made more apparent by the fact that his response to the affidavit of Duncan Ondimu though giving his address as c/o Messrs Madibo Mafabi Advocates and Solicitors is personally drawn and filed by himself. He deposes in the affidavit that Messrs Ondimu and Company advocates had other legal practitioners.  He however does not mention the name of the advocate he instructed.  The deposition of Alice Nalwoga is more credible than that of the Applicant.  I wholly agree that the decision of the East African Court of Appeal in A.J. Katia and Others vs. V.K. Shah and Another [1962] EA 43 and at page 48 is applicable. They held that a party who founds his case upon a forged document having discovered the forgery cannot be allowed to succeed by disregarding the forgery and relying on other evidence.

Furthermore I believe the evidence and submission that the Applicant relies on a deliberate falsehood for the application to extend time. This is based on the consistent evidence that Counsel Geoffrey Mafabi represented the Applicant throughout the relevant part of the matters sought to be appealed against. Why does he purport to have instructed another firm except to show that the error of Counsel excused the delay?   I once again endorse the judgment and principle stated by the East African Court of Appeal in Khatijabai Jiwa Hasham vs. Zenab d/o Chandu Nansi [1957] EA 38. Where a judge relies on an obvious falsehood the Appellate Court is bound to reopen the evidence and assess it afresh or call new evidence. In other words courts cannot be allowed to rely on false evidence on material matters (See judgment of Sir R. Sinclair at pages 48 – 51). In this case the reasons for failure of the Applicant to file a notice of appeal and memorandum of appeal or to apply for leave in time is based on a falsehood and the application cannot be granted.

That notwithstanding, in case I am wrong in holding that the applicant is guilty of relying on a falsehood, the Applicant’s application will lead to no possible good because the right person to be orally examined is the liquidator/receiver Mr. Mungereza and not the Respondents.  There has to be a conclusion to the issue of the judgment debt which has not been satisfied. The purposes of Order 22 rule 38 (b) of the Civil Procedure Rules is to examine the directors to establish what liabilities and assets the judgment debtor has. However the powers of directors were taken over by the liquidator or receiver in whom the management and property of the company vested. The provisions on voluntary winding up are applicable and are in some respects the same as a winding up by order of court. Under section 299 of the repealed Companies Act cap 110 which was the applicable law it is provided that:

“299. Provisions applicable to every voluntary winding up.

Sections 300 to 307 shall apply to every voluntary winding up whether a members’ or a creditors’ winding up.

Section 301 provided that the Liquidator could exercise certain powers conferred on a liquidator by appointment of court under section 244 of the Companies Act cap 110. It provides as follows:

301. Powers and duties of the liquidator in a voluntary winding up.

(1) The liquidator may—

(a) in the case of a members’ voluntary winding up, with the sanction of a special resolution of the company, and, in the case of a creditors’ voluntary winding up, with the sanction of the court or the committee of inspection or (if there is no such committee) a meeting of the creditors, exercise any of the powers given by section 244(1) (d), (e) and (f) to a liquidator in winding up by the court;

(b) without sanction, exercise any of the other powers by this Act given to the liquidator in a winding up by the court;

(c) exercise the power of the court under this Act of settling a list of contributories, and the list of contributories shall be prima facie evidence of the liability of the persons named therein to be contributories;

(d) exercise the power of the court of making calls;

(e) summon general meetings of the company for the purpose of obtaining the sanction of the company by special resolution or for any other purpose he or she may think fit.

(2) The liquidator shall pay the debts of the company and shall adjust the rights of the contributories among themselves.

(3) When several liquidators are appointed, any power given by this Act may be exercised by such one or more of them as may be determined at the time of their appointment, or, in default of such determination, by any number not less than two.

Last but not least the powers under Section 244 (1) (d) (e) and (f) are:

244. Powers of the liquidator.

(1) The liquidator in a winding up by the court shall have power, with the sanction either of the court or of the committee of inspection–

 (d) to pay any classes of creditors in full;

(e) to make any compromise, or arrangement with creditors, or persons claiming to be creditors, or having or alleging themselves to have any claim, present or future, certain or contingent, ascertained or sounding only in damages against the company, or whereby the company may be rendered liable;

(f) to compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the company and a contributory or alleged contributory or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets or the winding up of the company, on such terms as may be agreed, and take any security for the discharge of any such call, debt, liability or claim and give a complete discharge in respect thereof.

The liquidator was fully responsible under the above provisions to settle creditors. Such creditors include the directors of the company who are the inappropriate persons to be summoned about the property and liabilities of the Respondent Company.

Originally the Respondents had been summoned before the registrar to show cause why execution should not issue against the Respondent. It is apparent that it is the directors of the Respondent Company who were required to appear before the registrar of the court and they did appear and sufficient cause was shown to the satisfaction of the registrar. This was on 9 September 2010, 14th of September 2010 and on 20 October 2010 wherein the registrar writes as follows:

"Given the information from the bank director's representatives; good cause has been shown why the bank directors cannot be brought to look for the judgment debtor's liability, more so when it underwent liquidation, the judgment creditor is advised to seek other legal recourse.

.......................................

Gladys Nakibuule Kisekka,

DEPUTY REGISTRAR

COMMERCIAL COURT”

The Registrar of this court is empowered by Order 50 rule 4 of the Civil Procedure Rules to issue notices to show cause on applications for arrest and imprisonment in execution of the decree of the High Court and formal orders for attachment and sale of property.

However subsequently and on 19 November 2010 the Applicant filed a formal application under Order 22 rule 38 (b) of the Civil Procedure Rules for the oral examination of the directors. Order 22 permits a decree holder to apply to the court for an order, in the case of a Corporation for an officer of the Corporation to be orally examined on whether any or what debts are owing to the judgment debtor and whether the judgment debtor has any and what property or means of satisfying the decree and the court may make an order for the attendance and examination of the judgment debtor or officer or other person and for the production of any books or documents.

Strangely the registrar had already dealt with the issue of examination of officers of the Corporation/Respondents to this application. Subsequently the Applicant filed a formal application before the judge. Suffice it to note that had there been a formal application before the registrar, there would have been an automatic right of appeal from the decision of the registrar under order 44 rule 1 (u) of the Civil Procedure Rules. The matter was dealt with by the registrar on 20 October 2010 before the filing of the application. A judgment creditor was in court but Counsel for the Applicant was absent. The registrar had issued an order that good cause had been shown why the bank directors cannot be brought for examination. This is on account that the Respondent had undergone liquidation.

Had it been the desire of the judgment creditor to challenge the finding of the honourable registrar, the right cause of action was to appeal to the judge under Order 50 rule 8 of the Civil Procedure Rules there being an automatic right of appeal from the orders of a registrar. The record of proceedings before the registrar is annexure "A" to the affidavit of Alice Nalwoga. Had there been an appeal from the order of the registrar, there would be no right of second appeal under section 76 (2) of the Civil Procedure Act to the Court of Appeal.

As it is, the issue of proceedings before the registrar were not put in issue before Hon. Justice Geoffrey Kiryabwire in Miscellaneous Application No. 651 of 2010 for consideration however the judge commented about it though he primarily dealt with the preliminary objection on the ground of immunity of the East African Development Bank, International Finance Corporation and Agro Management Group Inc (USA), the Development Finance Company of Uganda Ltd. Paragraph 4 of the affidavit in support of the application avers that:

"That on the 10th day of October 2005 the date of the decree, to date no payment was made. The Applicant/plaintiff obtained an order of notice to show cause why execution should not issue but the same was ignored by the judgment debtor."

The Applicant deposition is inconsistent with the proceedings before the honourable registrar wherein she found that cause has been shown by the Respondent's why execution should not issue. It is however not true as demonstrated by those proceedings that the notice to show cause was ignored by the judgment debtor because the director’s of the judgment debtor had been summoned and made representations to the court through Counsel about the Respondent being under liquidation.

The ruling of Hon. Justice Geoffrey Kiryabwire preliminarily at page 3 shows that there were averments and submissions that the Respondent Company was put under receivership and there was no more money to pay the judgment debt. It was represented before him that the best persons suited to explain or render a true account of the Respondent's financial position is the receiver who dealt with the property of the Respondent Company. He noted that the court made an order for the oral examination of the Respondent's directors namely; International Finance Corporation (IFC) and the East African Development Bank (EADB) and Development Finance Company of Uganda Ltd (DFCU) on 14 September 2011.

Subsequently Hon. Justice Geoffrey Kiryabwire heard arguments in objection on the ground of immunity of the banks separately. It was submitted that the court order requires the directors of EADB to appear in court for oral examination whereas under article 49 (1) (a) of the East African community treaty gives directors, officers and employees of the bank immunity from all civil proceedings for acts performed in their official capacity. With regard to IFC section 4 of the IFC act cap 190 which incorporates the IFC agreement and article 6 extends immunity to IFC. The arguments for and against the objection dealt with the issue of immunity only. The court found that the Respondent's officials were immune from being orally examined by a court.

However the court having found that the Respondent had been put under receivership, the right person to be summoned to explain anything is the receiver or Liquidator of the Company. Subject to the law on limitation to execution proceedings the Applicant is at liberty to proceed against the liquidator or receiver as the case may be who administers the property on behalf of all creditors.

In the premises the Applicant’s application serves no useful purpose and is accordingly dismissed. In light of the fact that the Applicant is a judgment creditor struggling to get paid what is due to him under the law, I have found it unjust to order full costs when the matter ought to have been brought against the liquidator of the Respondent Company. In the premises the Respondent is entitled to costs and the Applicant will pay ½ of the taxed costs of the application.

Ruling delivered in open court the 25th day of November 2014.

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Charles Okuni: Court Clerk

Patson Arinaitwe holding brief for Counsel Joseph Luswata for the Respondents

The applicant Mr. Nelson Dhibikirwa in court

Applicant’s Counsel is absent.

 

Christopher Madrama Izama

Judge

25/11/2014