Court name
Commercial Court of Uganda
Judgment date
27 June 2014

Ayebazibwe v Barclays Bank Uganda Ltd & 3 Ors (Miscellaneous Application-2014/292) [2014] UGCommC 88 (27 June 2014);

Cite this case
[2014] UGCommC 88

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 292 OF 2014

ARISING FROM HCCS NO 165 OF 2012

AYEBAZIBWE RAYMOND}...................................................................APPLICANT

VS

  1. BARCLAYS BANK (U) LIMITED}
  2. ANGELA NAMAKULA OFWONO}
  3. BALONDEMU ONDEMU DAVID}
  4. KIGOZI, SEMPALA, MUKASA}

OBONYO (KSMO) ADVOCATES}............................................RESPONDENTS

 

BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicants application is for leave to appeal against the ruling and orders of this court dated 10 April 2014 and for an order to stay proceedings in HCCS 165 of 2012 pending the determination of the intended appeal and for costs of the application to be provided for. The grounds of the application as set out in the Notice of Motion brought under the provisions of Order 44 rule 1 (2), (3) and (4) of the Civil Procedure Rules are as follows:

Firstly the Applicant is dissatisfied with the ruling and order of the court by which the trial judge dismissed the Applicant's preliminary objections with costs. Secondly there are conflicting decisions of the High Court that need to be harmonised. Thirdly there are important points of law that are of public interest. Fourthly the learned judge erred in law and in fact when he held that a firm and its advocates can represent parties in a suit in which they are jointly sued and in which the subject matter is the documentation drawn by them. Fifthly if the proceedings in the main suit are not stayed, the Plaintiff will be put to undue expense of defending a suit, in which the Defendants are also Counsel and the right of appeal, if not granted by this court, will be a mockery of justice. Sixthly the Applicants appeal has a high likelihood of success and it is only just and equitable that the Applicant is afforded an opportunity to appeal to the court of appeal against the ruling and orders of this court. Lastly that it is the interest of justice and jurisprudence that leave to appeal is granted.

The application is supported by the affidavit in support of Priscilla Mugisha an advocate practising with Messieurs Akampumuza and Company Advocates. The deponent reiterates the grounds in the notice of motion and specifically attaches a copy of the ruling of the court dated 10th of April 2014 dismissing preliminary objections to the appearance of the first Defendant's advocates Messieurs Kigozi, Sempala, Mukasa and Obonyo Advocates. She deposes that is a matter of great public importance for a Superior Court to determine if a law firm which actively participated in the matter in which it is also the Defendant as well can act bona fide to its clients and in the discharge of their duty to a court as well as protection of their own interests which is diametrically opposed to all their other duties.

The appellate court should also determine if a party in a suit is precluded by the law from raising a matter of conflict of interest which is observed in the court proceedings. It is a matter of great public importance for a higher court to determine whether the prohibition of Advocates appearance in the matter in which he/she will appear as a witness in rule 9 of the Advocates (Professional Conduct) Regulations does not include the entire firm. Counsel further deposes that it is important for the Superior Court to harmonise with finality conflicting High Court decisions. The deponent in many ways raises several points revolving around the representation of the firm of KSMO advocates of the first Defendant. The Applicant also wants a superior court to determine whether the intending appellant was properly condemned in costs. That the intended appeal has a high likelihood of success and it is just and equitable that the Applicant is afforded an opportunity to appear in the Court of Appeal against the ruling and orders of this court.

On behalf of the first Defendant/Respondent, Mulema Mukasa an advocate and partner of Messieurs Kigozi Sempala Mukasa Obonyo (KSMO) Advocates filed an affidavit in reply in which he deposes facts in opposition to the application. As an advocate he contends on the basis of his training that the Applicant’s application is frivolous and vexatious and an abuse of court process. He deposes that the ruling of 10 April 2014 dismissing the Applicant's preliminary objection was clear, well researched and distinguished the authorities relied upon by the Applicant on the issue of conflict of interest and there were no important points of law to be determined by the appellate court. According to him the objections of the Applicants Counsel were intended to delay the trial of the case since the Applicant is still in possession of the property that was sold by the first Respondent despite the fact that there is no order staying his eviction from the suit property.

The Applicant cannot be denied a fair trial as he would be at liberty to cross examine all the witnesses of the Respondents; re-examine his witnesses make up his case in accordance with his evidence but not on the basis of which advocate has cross examined him. The Applicant will not suffer irreparable injury/damage if his application is not granted. There are no matters of public importance to be determined by the highest court as alleged by the Applicant. The Respondent would be prejudiced if this application is allowed because it perpetrates abuse of court process to allow such an application without sufficient cause. He contends that the application falls short of the legal requirements for grant of leave to appeal by this court and it is made in bad faith and is intended to delay/defeat justice. Furthermore it is not just and fair to grant the orders sought in the application.

The third Respondent Mr David Balondemu filed an additional affidavit in opposition/reply to the Applicant’s application in which he deposes that he is the third Respondent with capacity to make the deposition. He read through the application together with the affidavits in support and deposes that the application is incompetent, frivolous and vexatious, barred in law, only intended to delay justice and his lawyers would raise a preliminary objection to have it dismissed with costs at the earliest opportunity when it is called for hearing. That the trial judge never erred and there is nothing to warrant the intervention of an appellate court in the circumstances. He deposes that the averments in paragraph 2 – 13 of the affidavit of Priscilla Mugisha were mere rhetoric without any legal grounds and do not raise any point of law or fact that warrants the intervention of an appellate court. In response to paragraph 3 of the affidavit of Priscilla Mugisha, he deposes that he knows that a client is at liberty to instruct any advocate of his or her choice and merely preparing documents for a client where an advocate is not called as a witness does not deter the advocate from representing a client. It was false for Priscilla Mugisha to allege conflict of interest to warrant consideration or intervention of the appellate court and in any case the Applicant does not show what prejudice he has suffered. As far as rule 9 of the Advocates (Professional Conduct) Regulations is concerned, it is clear and nothing more can be read into it to warrant further interpretation by the appellate court for the provision cannot be read to include the entire law firm including advocates who are not witnesses and allowing this application would be a waste of time. Contrary to the contention of the Priscilla Mugisha in paragraph 10, the present suit is not a public interest litigation suit and as such there is nothing that can be raised allegedly in the public interest. As far as costs are concerned, they follow the event pursuant to overruling a frivolous and vexatious preliminary objection with costs there is nothing to warrant intervention of an appellate court.

The third Respondent further deposes that it is not a proper case for stay of proceedings and the Applicant has not demonstrated how it will suffer prejudice if the first and second Respondents are represented by KSMO Advocates. He further deposes that it is in the interest of justice that the suit is heard and determined at once and any aggrieved party should be at liberty to appeal the decision. There is no likelihood of the purported appeal succeeding because the application does not raise any valid point of law or fact where the judge erred in fact or in law but is rather seeking to build jurisprudence which is not the reason courts of law exist. Courts of law have discouraged appealing against interlocutory rulings which do not go to the jurisdiction of the court and to avoid multiplicity of appeals. In order to avoid multiplicity of appeals, parties can wait until the final decision of the court and if dissatisfied since the objections do not in any way prejudice the Applicant and it does not go to the jurisdiction of the High Court. Consequently the third Respondent maintains that the application lacks merit. Lastly the power of the court to stay proceedings is discretionary and should be exercised in exceptional circumstances which are not evident in the Applicant’s application. The appeal is not made bona fide and is a ploy to further delay the main suit.

In rejoinder to the affidavit of the first Respondent deposed by Mulema Mukasa the Applicant deposes that the affidavit does not demonstrate how the application is frivolous or vexatious or an abuse of the process of court and falls short of the legal requirements for leave to appeal. Mulema Mukasa does not give particulars of the alleged bad faith, prejudice or intentions to delay and defeat justice. On the basis of information from his lawyers he deposes that he has a Constitutional right to apply for leave to appeal as conferred by article 50 of the Constitution and that the exercise of that right could not constitute bad faith or delay nor defeat justice. The application is made in the pursuit of justice within the established traditional channels.

Furthermore the deponent maintains that Mr Mulema Mukasa makes general blanket unwarranted prejudicial and accusatory statements and openly personally attacking his lawyers and himself for having exercised his right to appeal and this was against his constitutional right to representation and to appeal and is aimed at biasing the court in the evaluation of evidence in the application. On the basis of advice of his Counsel Dr James Akampumuza, he asserts that Mr Mulema dismissively makes general blanket statements about irreparable injury that cannot answer the gist of what he raised in his application and affidavit in support and there is no basis for those bare averments.

In further rejoinder to the affidavit in opposition of the third Respondent the Applicant deposes that he read and understood the contents of the affidavit which according to him is riddled with falsehoods. Firstly on the ground of advice from his lawyer Dr James Akampumuza, he believes that the third Respondent does not state how the application is frivolous or vexatious or is an abuse of court process. The blanket claim of the third Respondent falls short of the legal requirements for leave to appeal or the particulars of the alleged bad faith, prejudice or intention to delay and defeat justice are not disclosed. He reiterates his belief that he has a constitutional right to apply for leave to appeal a decision of court without seeking the third Respondent’s opinion and the right is conferred by article 50 of the Constitution of the Republic of Uganda. The exercise of that right neither constitutes bad faith nor delay nor defeat of justice but is a pursuit of justice within established judicial channels. The Applicant further contends that the third Respondent does not disclose the source of his beliefs.

The statement that the application seeks to build jurisprudence is an admission that the application has merit. Additionally the third Respondent’s makes general blanket unwarranted prejudicial and accusatory statements openly attacking him for having exercised his right to appeal. This was against his constitutional right to appeal and is aimed at biasing the courts valuation of the evidence in the application for leave to appeal and prejudicially to the Applicant. On the basis of advice from his lawyers he reiterates that his appeal has a high likelihood of success and the issue of representation of the parties in the court of law is cardinal and an inseparable part of the exercise of the jurisdiction of the court. He reiterates that he would be prejudiced by trial conducted by the very advocates who are directly liable for the grievances that brought him to court. Additionally the Respondent has not disputed facts contained in the affidavit in support of Priscilla Mugisha.

The ruling of the court sought to be appealed was delivered on 10 April 2014 when Counsel Dr James Akampumuza attempted to make an oral application for leave to appeal whereupon advised him to make a formal application. The formal application was filed on 24 April 2014 just 14 days after the ruling was fixed for the 28th of May 2014 at 9:30 AM. However on the 28th of May there was no body for the Applicant and the Applicant informed the court that his main lawyer Dr James Akampumuza was hospitalised while Counsel  Simon Tendo Kabenge were assisted the was appearing in another court. The application was subsequently fixed for hearing on 25 June 2014 at 9:30 AM. On 24 June 2014 Counsel Priscilla Mugisha on holding brief for Simon Tendo Kabenge informed the court that Counsel Simon Tendo Kabenge will be able to appear in court at 11 o'clock while Dr James Akampumuza was appearing in the High Court of Kenya at Busia. Several other matters had been scheduled for hearing should causes and I adjourned the application for delivering the ruling after the application to have the hearing stood over till 11 O'clock was refused and submissions of Counsel dispensed with.

Ruling

I have carefully considered the Applicants application together with the affidavit evidence and the authorities cited. The list of authorities of the Applicant does not include any case law and the Applicant relies on the Civil Procedure Act and the Civil Procedure Rules. Secondly the Respondent relies on the same law together with the Evidence Act, the Judicature Act as well as the case of Sango Bay versus Dresdner Bank [1971] EA 17 and Uganda Health Marketing Group versus Katinvuma Broadcasting and General Ltd HCMA 217 of 2012 arising from HCCS 222/2012.

I did not find the case of Uganda Health Marketing Group versus Katinvuma Broadcasting and General Ltd HCMA 217 of 2012 arising from HCCS 222/2012 relevant because the application for leave to appeal was dismissed on a preliminary point and will only refer to the case of Sango Bay versus Dresdner Bank [1971] EA 17 which considers the principles for granting an application for leave to appeal.

In the case of Sango Bay versus Dresdner Bank [1971] EA 17 being a decision of the East African Court of Appeal sitting at Kampala, it was held that an Applicant has to prove that there are grounds of appeal which merit serious judicial consideration and where the appeal is from an order which is discretionary a stronger case has to be made out. The judgment of the Court of Appeal on the point was delivered by Spry V-P between pages 20 – 21 when he held:

“As I understand it, leave to appeal from an order in civil proceedings will normally be granted where prima facie it appears that there are grounds of appeal which merit serious judicial consideration but where, as in the present case, the order from which it is sought to appeal was made in the exercise of a judicial discretion, a rather stronger case will have to be made out.”

The ruling for which the Applicant seeks leave to appeal to the Court of Appeal arose from preliminary objections raised by the Plaintiff’s lawyers against the first and second Defendants being represented by Messieurs KSMO advocates who are also the fourth Defendant in the same suit.

 In order to determine whether there are grounds which merit judicial consideration on appeal, the Applicant has to demonstrate the grounds of objection showing where the court erred on the question or the issues raised by way of an objection. It would therefore be necessary to set out what the controversy before the court was and how it determined that controversy. For leave to appeal to be granted, the Applicant must demonstrate that there are arguable points of law or grounds of appeal which require serious judicial consideration on appeal arising from the decision of the court on the controversy. It is necessary to set out the controversies upon which the court ruled and the grounds of the application which dispute or contest the correctness of the decision of the court on each controversy. Such grounds should be capable of forming the grounds of appeal deserving of serious consideration by the appellate court.

The gist of the Applicant’s objection was that Messieurs KSMO advocates should not represent the first and second Defendants because there is a potential conflict of interest between their interest and that of their client. The Applicant is the Plaintiff and the objection is to the representation of the Defendants by Messieurs KSMO advocates. In that ruling I noted that the Plaintiff's Counsel  had initially objected to Messieurs KSMO advocates representing themselves and appearing as Counsel  and potential witnesses in the same suit. KSMO partners subsequently withdrew as witnesses and on that basis the court held that their appearance as Counsel in this suit was not a problem. Secondly the Plaintiff's advocate in the second objection now before court submitted that he was raising a new point in that it was a point of conflict of interest of KSMO representing the first and second Defendants when they themselves have been sued for acting fraudulently in the same transaction. Secondly that KSMO advocates have confidential information by virtue of having carried out the entire transaction the subject matter of the suit thereby contravening Regulation 4 of the Advocates (Professional Conduct) Regulations. Counsel had submitted that there was a possibility of KSMO advocates using the confidential information to the detriment of the first Defendant.

In the ruling I noted that I did not have to consider regulation 9 of the Advocates (Professional Conduct) Regulations which deal with the potential of an advocate being called as a witness in the matter in which he or she represents a client because it had been raised before and a ruling had been delivered on the basis of that previous objection which ruling has not been appealed. The ruling was delivered on the 27th of June 2013. Subsequently Messieurs KSMO advocates/the partners thereof claimed they would not appear as witnesses.

Most importantly it was my ruling that the question of whether Messieurs KSMO advocates would appear as witnesses had been dealt with in the previous objection on the 27th of June 2013. The objection had been made on 27 June 2013 and was grounded on consideration of regulation 9 of the Advocates (Professional Conduct) Regulations which bar an advocate from appearing as Counsel in a matter where he is a witness. Consequently I confined myself to the second aspect of the objection which dealt with regulation 10 of the Advocates (Professional Conduct) Regulations as well as regulation 4. As far as the regulation 4 is concerned my finding was that it was very clear and unambiguous and provides that an advocate shall not accept instructions from any person in respect of a contentious or non-contentious matter if the matter involves a former client. Obviously by KSMO representing the first and second Defendants they were not acting against a former client in defending the Plaintiff's suit. My finding was that the first Defendant and the second Defendant are not former clients within the meaning of regulation 4 of the Advocates (Professional Conduct) Regulations. Regulation 4 was inapplicable and that was the ruling of the court on that aspect of conflict of interest.

The ruling of the court further dealt with regulation 10 of the Advocates (Professional Conduct) Regulations. First of all it was the ruling of the court that the first and second Defendants had to be consulted about being represented by KSMO advocates before considering the Applicants objection. I also noted that the first and second Defendant were the ones who had instructed KSMO advocates. I noted that the question of conflict of interest was being raised by the adversary. I also held that I cannot revisit the question of appearance alleged to be contrary to regulation 9 on other grounds having ruled on the same already. I was of the opinion that the Applicant/Plaintiff had a duty to raise all objections against the representation of KSMO advocates of the first and second Defendants at once. The objection ought to have been raised on 27 June 2013 when the suit came for hearing together with the previous objection to the appearance of KSMO Advocates made on that day.

I have carefully considered the Applicants application and there is no arguable point of law being raised in the application on the basis of my finding that rule 4 of the Advocates (Professional Conduct) Regulations was inapplicable because it concerns prejudice to a former client and the first and second defendants are not former clients of KSMO advocates but current clients.

Secondly no arguable point has been raised on the point that regulation 10 of the Advocates (Professional Conduct) Regulations did not support the Applicant’s objection based on the authorities reviewed in my ruling. The decision is that the first and second Defendants are not former clients of KSMO advocates. Secondly, there was no concrete evidence of such prejudice to the Applicant. Thirdly the first and second Defendants had to be made parties for the court to consider whether they should not be represented by their own lawyers Messieurs KSMO advocates on the basis of an objection from the adversarial Counsel claiming that the interest of the first and second defendants would be prejudiced.

Specifically the application for leave to appeal does not address the specific points of law which can be the only points of law that can be raised in objection to the ruling. In other words arguable points should arise from the ruling of the court and not on something which was not in controversy raised before and which the court did not and could not have determined.

I have additionally considered ground 4 of the notice of motion that the learned judge erred in law and in fact when he held that a firm and its advocates can represent parties in this suit in which they are jointly sued and in which the subject matter is the documentation drawn by them. There is no such decision in the ruling of the court sought to be appealed.

On the question of conflicting decisions of the High Court that need to be harmonised, no arguable points have been raised neither have the decisions and the holdings in those decisions been made the subject matter of this application by showing the conflict in the decisions. Just like an application for a temporary injunction, arguable points have to be raised in the Notice of Motion and as supported by affidavit evidence supporting the grounds raised in the notice of motion. Given the explicit points on which the court overruled the objections it was incumbent upon the Applicants Counsel to raise points which if argued would form a basis for reversal of the rulings and findings of the court.

In conclusion it is apparent that the grounds in the notice of motion do not raise arguable points which challenge the decision of court on the actual matters in controversy and which the court ruled upon. To illustrate the point, the first ground in the notice of motion is that the Applicant is dissatisfied with the ruling and order of the court. That is given and a litigant would not appeal unless or until he is dissatisfied or aggrieved by the decision. The question still remains as to what the grounds of grievance or dissatisfaction are. I will set out the three grounds in the notice of motion which are the only grounds attempting to give grounds of appeal from the decision of court:

"Firstly that there are conflicting decisions of the High Court that need to be harmonised."

On this ground paragraph 7 of the affidavit in support only makes a clear assertion that there are conflicting decisions of the High Court that need to be harmonised by a superior court so that the matter is determined finally. No decision of the court is quoted. On the basis of the ground and evidence, no arguable point has been raised.

The second ground of objection is that:

            "There are important points of law that are of public interest"

In the affidavit in support paragraph 9, it is averred that the question of whether the law allows an advocate such as Jacqueline Kagoya to be a witness when they have been deeply involved in the transaction as Defendants in the suit. On this point I held that the matter was considered on 27 June 2013 and cannot be raised again. The ruling of the court was not appealed since 27 June 2013. The ground of appeal should deal with whether I was wrong to hold that the matter cannot be revisited.

On the question of whether there was conflict of interest for the fourth Defendants to represent the first and second Defendants; my conclusion inter alia in the ruling was that the first and second Defendants had to be heard on the question of whether their lawyers should not represent them because of the alleged conflict of interest. The first and second Defendants are the Clients who instructed Messrs KSMO Advocates. The court cannot make a ruling without hearing them on such an issue which affects their interest. No arguable point of law has been raised about whether I was right to conclude that the first and second Defendants on the question of whether their lawyers can represent them ought first to be heard before the matter can be determined.

Paragraph 7 of the affidavit in support of the application also provides that it is important for a superior court to determine on appeal if the Applicant was rightly condemned in costs for raising a matter of public interest when none of the parties submitted or prayed for costs in the objection. In my opinion the award of costs is at the discretion of court and costs follow the event and no issue which should be seriously considered by an appellate court has been raised as to whether the exercise of that discretion was not done judicially. In the case of  Sango Bay vs Dresdner Bank (1971) (supra) where the decision involves the exercise of discretionary powers by a judge, stronger grounds have to be raised for leave to appeal to be granted. I suppose this is because the grounds for overturning a decision made in the exercise of judicial discretion are harder. In this case no strong ground for serious consideration by the Court of Appeal has by disclosed by the application.

Secondly I have considered the application for stay of proceedings pending determination of the intended appeal.

I agree with the Respondents Counsel that the Applicant is also the Plaintiff and the issue involves land which the third Respondent claims to have bought. The status quo favours the Applicant/Plaintiff because he is in possession of the property whose sale to the 3rd Respondent is being challenged in this suit. Secondly there is no basis for stay of proceedings since the first and second Defendants have not objected to their own lawyers representing them. There is no evidence, and it is not the case of the Applicant in the objection under consideration for leave to appeal, that the Applicant was prejudiced by KSMO Advocates representing the Defendant.

It is far-fetched to consider that the Applicant who is the Plaintiff would be prejudiced by the adversarial lawyer. Every lawyer in the adversarial system acting for the opposite side is supposed to seek and protect the interest of their client and not of the opposite client even though they owe duties to the court to ensure that the truth is established. Whatever they ethically do which prejudices the opposite party in the interest of their client is permissible provided the opposite party is not a former client. In the premises I find no merit whatsoever in the application for stay of proceedings.

In the premises the application for leave to appeal is dismissed and the application for stay of proceedings is also dismissed. This suit will proceed for hearing unless otherwise proceedings are stayed by the Court of Appeal as defined by article 134 (1) of the Constitution of the Republic of Uganda, section 9 of the Judicature Act and the Judicature (Court of Appeal Rules). The suit shall be fixed for hearing and costs of this application shall abide the outcome of the main suit.

Ruling delivered in open court the 27th of June 2014

 

Christopher Madrama Izama

Judge

Judgment delivered in the presence of:

David Oundo Wandera for the 3rd Respondent

3rd Respondent is absent

The Applicant Ayebazibwe Raymond in court

KSMO Advocates are absent

Charles Okuni: Court Clerk

 

Christopher Madrama Izama

Judge

27th of June 2014