Court name
Commercial Court of Uganda
Case number
Miscellaneous Application 241 of 2020
Judgment date
19 March 2020

ABSA Bank (U) Ltd & 2 Ors v Electro-Maxx (U) Ltd & Anor (Miscellaneous Application 241 of 2020) [2020] UGCommC 6 (19 March 2020);

Cite this case
[2020] UGCommC 6
Coram
Wamala, J

 

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO. 241 OF 2020

(ARISING FROM MISC. APPLICATIONS NO. 21& 178 OF 2020)

(ARISING FROM H.C.C.S NO. 162 OF 2020)

ABSA BANK UGANDA LTD

ABSA BANK (MAURITIUS) LTD

ABSA BANK LTD :::::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANTS

VERSUS

ELECTRO-MAXX (U) LTD

UGANDA ELECTRICITY TRANSMISSION CO. LTD :::::: RESPONDENTS

 

BERORE: HON. MR. JUSTICE BONIFACE WAMALA

 

RULING

This was an application by Notice of Motion pursuant to Order 50 Rule 3A(1), (2) and (3) and Order 52 Rules 1 and 3 of the Civil Procedure Rules as amended and Section 98 of the Civil Procedure Act seeking orders that:

An interim order doth issue restraining the enforcement of clause 2 of the extracted order of H/W Dr. Agnes Nkonge, Deputy Registrar, dated 27th February 2020 pending determination of the substantive injunctive relief application set out under prayer (b) of Miscellaneous Application No. 21 of 2020 and the substantive Appeal; and

Costs of the application be in the cause.

 

When the application came up for hearing, Counsel for the 1st Respondent raised four preliminary points of law which, he asserted, would dispose of the application.

The Applicants were represented by Mr. Masembe Kanyerezi and Mr. Timothy Lugayizi. The 1st Respondent was represented by Mr. Fred Muwema, Ms. Allen Kagoya and Mr. Charles Nsubuga. The 2nd Respondent was represented by Mr. Edward Rwabushenyi and Mr. Simon Anyuru. I will refer to the submissions of Counsel in the course of considering the grounds of objection.

I will begin with the second point of objection since it touches on the jurisdiction of the Court. Counsel for the 1st Respondent argued that after the passing of the Civil Procedure (Amendment) Rules S.I No. 33 of 2019 (herein called the CPR Amended Rules), applications for interim reliefs were designated and mandated to be handled by the Registrars of the Court. Counsel made reference to O.50 Rule 3A thereof which, Counsel submitted, replaced the old Rule 3 of Order 50. Counsel submitted that this application should have been filed before the Registrar. Counsel argued that even on appeal, the court that issued the order should be the court of first instance in an application to stay such an order. Counsel concluded that the matter was improperly before this Court and should be dismissed.

 

In reply, Counsel for the Respondent emphasized that in answering the objections, he was heavily relying on the provisions of S. 98 of the Civil Procedure Act which saves the court’s inherent powers to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court. Counsel submitted that the present application involved abuse of the process of the court which required the intervention of the Court. Counsel pointed to the existence of an order extracted and signed without an underlying decision of the court and the appearance that the Registrar of the Court was complicit in the abuse of the court process.

 

In a further reply, Counsel for the 1st Respondent submitted that it was the Court to determine whether there was abuse of the court process and not Counsel for the Applicant. Counsel also submitted that where there is a specific provision of the law, it was not open to the Applicant’s Counsel to rely on S. 98 of the CPA. Counsel submitted that in the instant case, Counsel would have had recourse to the specific provisions of Order 41 of the CPR on the proper procedure of seeking a variation of a court order.

 

With all due respect, I must say that I find rather unfortunate the argument by Counsel for the 1st Respondent that this Court is not seized with jurisdiction to handle applications for interim reliefs simply because that jurisdiction is vested in Registrars by virtue of O. 50 Rule 3A of the CPR as amended 2019. I find so because, the jurisdiction of this Court is well known and is granted by the Constitution and the Judicature Act. It cannot therefore be taken away by procedural rules. The better argument is that the purpose of the rule cited was to decongest the Judges’ dockets. That is true. But that cannot fetter a trial Judge’s powers under Section 33 of the Judicature Act and Section 98 of the CPA.

 

For avoidance of doubt, let me lay down the said provisions. Section 33 of the Judicature Act Cap 13 provides –

 

The High Court shall, in the exercise of the jurisdiction vested in it by the Constitution, this Act or any written law, grant absolutely or on such terms and conditions as it thinks just, all such remedies as any of the parties to a cause or matter is entitled to in respect of any legal or equitable claim properly brought before it, so that as far as possible all matters in controversy between the parties may be completely and finally determined and all multiplicities of legal proceedings concerning any of those matters avoided.

 

Section 98 of the CPA provides –

Nothing in this Act shall be deemed to limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.

Let me start by pointing out that this is not an ordinary and routine application seeking interim reliefs. The facts leading to this application are peculiar enough to invite the intervention of a trial Judge in the matter. This therefore would settle the issue as to whether the present application was properly before this Court. Let me point out below what makes the application peculiar in my view.

 

The Plaintiff (present 1st Respondent) brought the suit against the Defendants (present Applicants and 2nd Respondent) and also filed applications for an interim Order and for a Temporary Injunction. Before the application for an interim order could be heard substantively, for reasons of extreme urgency and alleged threat, the Applicant’s Counsel made an oral application for an exparte interim order, which the court granted. This, the law allows. The first issue, however, raised by the Applicants is that when the order was extracted, it contained an order which was not pronounced in the Ruling of the Court. Secondly, the impugned part of the order was issued in positive/active terms. The Order is on record and states: “The 4th Respondent is directed to effect payment of any monies or proceeds accruing or due to the Applicant to the Applicant’s Bank Account No. … which are held with Equity Bank Uganda Limited Owino Branch”.

 

Prima facie and without going into the merits of the application, I wish to point out that the law on injunctive reliefs is clear. An order of an injunction is intended to preserve the status quo until all matters in issue are resolved by the Court. Injunctions by their nature are in the form of a restraint. Injunctions that command the doing of things are not issued in ordinary circumstances. They are issued in special circumstances calling for mandatory injunction orders. No such circumstances appear on the face of the record in the present case. As such, prima facie, when such an order is drawn to the Court’s attention, it is not one that the Court can ignore.

 

Consequently, by letter dated 6th March 2020, Counsel for the Applicants (Respondents then) sought audience before the learned Registrar and complained about the inclusion in the signed order a matter that the Court had not pronounced itself on. This is the proceeding that led to the Ruling of the Registrar dated 10th March 2020 which over ruled the oral application made by Counsel for the 1st Respondent (then).  

 

Aggrieved with the decision of the Registrar, the Applicants filed an appeal by way of a Notice of Motion as provided for under Order 50 Rule 8 of the CPR. In the same appeal, they sought to stay the part of the order of the Registrar of which they were aggrieved. They also filed the present application seeking an interim relief as shown above.

 

Clearly this is not an ordinary application for an interim relief. I do not agree that the aggrieved party in such circumstances must go back to the same Registrar to seek an interim relief against actions set in motion by an interim order issued by herself. It is even worse where among the allegations, the parties are inferring abuse of the court process. It is not proper for the Registrar to sit in judgment of allegations against her concerning, not the merits of the application, but the manner in which he/she handled the matter.  

 

Therefore even though it is correct that the rules and the practice of this court, and indeed many courts now, is to have Registrars handle interim and other interlocutory matters, such cannot be reason for Court to hesitate to intervene in appropriate circumstances to make such orders intended to meet the course and ends of justice. I find the present case a fit and proper one that required the invocation of the Court’s inherent powers. I therefore overrule point of objection number two.

 

I will now resolve the other points of objection in the order they were raised. The first point of objection was that the application was incompetent as it was brought without a pending substantive application. Counsel relied on Order 50 Rule 3A (3) as amended which provides that: “The Court shall only consider the hearing of an application for interim relief where there is a pending substantive application with a likelihood of success”. Counsel argued that there was no pending substantive application since M.A No. 21 of 2020 was an appeal and not a substantive application within the meaning of the above cited provision. Counsel referred to the case of Hwang Sung Industries Ltd vs Tajdin Hussein & 2 Others SC Civil Application No. 19 of 2008.

 

In reply, Counsel for the Applicants submitted that the appeal was brought by way of an omnibus application which the law allows. Counsel submitted that the CPR amended Rules appear to do away with some level of formality explaining why they even make provision for seeking exparte interim orders orally.

 

The present application shows that it arises from M.A 21 of 2020 and M.A 178 of 2020. The former is the appeal against the decision of the Registrar. The latter is the substantive application for an interim order. By its nature, an appeal against the decision of a Registrar to a Judge is in the form of an interlocutory relief. This is seen partly from the way the law permits it to be commenced; by Notice of Motion. Secondly, it is also derived from the fact that matters handled by the Registrar are interlocutory matters. The law therefore does not envisage an appeal from a decision of the Registrar from a main suit or a decree. That is why, in my view, the appeal is not commenced by way of a Memorandum of Appeal.

 

That being the case, I find no problem with the decision of the Applicant’s Counsel to bring the application for stay of the impugned order together with the appeal by way of an omnibus application. Under the law, applications may be brought omnibus where applications are of the same nature, have the effect of mitigating a multiplicity of suits, one is a consequence of the other or where no injustice would be occasioned by handling both applications. See Dr. Sheik Ahmed Kisuule vs Greenland Bank Ltd HC M.A No. 2 of 2012 [Obura J.]; and Kapiri vs International Investments Ltd & 5 Ors HC M.A No. 160 of 2014 [Namundi J.]           

 

In M.A 21 of 2020, the appeal is against an order of the Registrar issued in an oral exparte application. The Applicants are asking this court to expunge clause 2 of the order. They are also seeking an order to stay the impugned clause 2 until the final disposal of the appeal. They are further basing their application on M.A 178 of 2020 which is the application for an interim order. I cannot accept the argument that with all the said pending interlocutory applications, all of them at the very infancy of the suit, the applicant still needed to bring another substantive application for an order of stay of execution. This would run counter to the intentions of filing omnibus applications. There is need to avoid multiplicity of actions and to expeditiously determine matters before the Court. I therefore find that M.A No. 21 of 2020 was properly brought as an omnibus application and that, together with M.A No. 178 of 2020, they constitute pending substantive applications the basis of the present application. This point of objection is also overruled.

 

The third point of objection was that the 1st Respondent had obtained an interlocutory judgment against the 1st Applicant, the 1st Applicant having failed to file a Written Statement of Defence (WSD) and, as such, the 1st Applicant had no locus in the matter and is already locked out.

 

In response, Counsel for the Applicants submitted that the 1st, 2nd and 3rd Defendants (Applicants herein) had filed a WSD on the 16th March 2020 at 2.30 pm way before the alleged interlocutory judgment was entered on the 17th March 2020. Counsel submitted that the 1st Respondent’s Counsel accept in their application for the interlocutory judgment that the 16th March 2020 was the last day for filing of the WSD. The Defendants therefore filed in time and the position of law quoted by the 1st Respondent’s Counsel is not applicable to the present circumstances.

 

In a further reply, Counsel for the 1st Respondent submitted that the issue of the WSD filed after an interlocutory judgment was entered by the Registrar needs to be investigated. Counsel further submitted that the record was checked including the computer system and there was no WSD even by the 17th March. Counsel submitted that whatever the case, there is a judgment which must be obeyed unless and until it is set aside.

 

I agree with Counsel for the 1st Respondent that the matter of a WSD appearing on record after an interlocutory judgment has been entered requires very serious investigation. The investigation however is not for purpose of determining this application but to guard the sanctity of the Registry and the Court. There is definitely a problem that on record is a WSD filed on 16th March 2020 and on the 17th March 2020 an interlocutory judgment was entered. Whoever is responsible for this mischief must be sanctioned. This systemic inefficiency in the Court registry cannot however be used against a litigant. It has to be sorted out administratively. Thus as far as the record is concerned, there was a defence filed by the 16th March 2020 earlier than the issuance of the interlocutory judgment.     

 

An interlocutory judgment entered against a defendant who filed a WSD is contrary to the law and therefore illegal. The law is that an illegality once brought to the attention of the court overrides all considerations including pleadings and cannot be left to stand. See Makula International Ltd vs Cardinal Nsubuga SCCA No. 4 of 1981 [1982] UGSC 2 (8 April 1982).

 

In the instant case, the interlocutory judgment was illegally entered irrespective of whose fault it is. It is therefore automatically set aside and cannot be a bar to the Applicants who filed their WSD in time from pursuing their rights. The third point of objection is also overruled.

 

The 4th and last point of objection was that the application was incompetent as it was not based on an appealable order. Counsel submitted that there was no decision refusing any application by the Applicant’s Counsel. Counsel argued that in her Ruling, the Registrar simply directed the party as to what to do. Counsel relied on the case of Chesanga Joan vs Barawa General Agencies Ltd HC M.A No. 72 of 2012 [Kawesa J.]  

 

In reply, Counsel for the Applicants submitted that under Order 50 Rule 8 of the CPR, a party has a right to appeal against “any order” of the Registrar as of right. Counsel submitted that this refers to all rulings, all orders and decisions made by the Registrar. Counsel submitted that in the instant case, at the time they made the request to the Registrar to correct the order, they had thought that it was an inadvertent error which the Registrar would correct upon reading her Ruling. Counsel further submitted that in their request to the Registrar, they were not seeking variation of any order but for expunging the impugned order from the record.

 

To establish what Counsel for the Applicants sought for in the proceedings of 9th March 2020 and what the Court granted in the Ruling of the Deputy Registrar of 10th March 2020 requires an examination of how the matter calling for the correction of the record arose.

 

By letter dated 6th March 2020 addressed to the Deputy Registrar, Counsel for the Applicants herein referred to the interim order application which was argued and granted exparte on the 27th February 2020. Counsel also referred to the order that was extracted by Counsel for the then Applicant. Counsel continued (quoting the relevant bits);

“As you will note from the typed proceedings, whilst the negative Order number 1, in the extracted order restraining payment by the 4th Respondent to the 1st Respondent of monies due under the Deeds of assignment … was argued before you and granted, the positive Order numbered 2 in the extracted order directing the 4th Respondent to effect payment of any monies or proceeds accruing or due to the 1st Respondent, to the Applicant’s bank account … was not part of the application before you and neither was it the subject of any ruling of your court on that date or otherwise.

… Your extracted order is accordingly required to be corrected by expunging this illegal item no. 2 ab initio pursuant to the slip rule…”        

 

The above is the request that led to the proceedings of 9th March 2020 and that is the matter that was argued. During the oral arguments before the Deputy Registrar, Counsel for then Applicant (beneficiary of the order) opined that the matter required a formal application if the order was to be varied. In her Ruling, the learned Deputy Registrar in paragraph 2 at page 1 properly summarised the import of the application by Counsel for the 1st Respondent then (now Applicant) thus –

“The 1st respondent protested the 2nd clause of the order dated 27th/02/2020 and prayed the same to be corrected and subsequently vacated.” 

 

In her final Decision, the Deputy Registrar held thus –

“I am alive to the fact that the order dated 27th/02/2020 was applied for orally, however, circumstances warranting correcting of the record requires the Applicant to file a formal application as was held in … (quotes authority) … which unfortunately was not done in this case. Court accordingly finds that Learned Counsel for the first Respondent is not properly before Court and as such the point raised cannot be resolved by merely an oral application but rather a formal application.

Accordingly, the oral application raised by Learned Counsel for the 1st Respondent is over ruled.”  

 

In the appeal filed by the present Applicants, Counsel for the Applicants indicates that they do not agree with the above decision of the learned Deputy Registrar. Counsel for the 1st Respondent herein argues that the Deputy Registrar made no decision and therefore there is nothing to appeal against. I must say I am unable to appreciate the argument by learned Counsel for the 1st Respondent. If a party seeks a particular relief, and the Court refuses to give it and instead the Court directs something else, the party is not obliged to take what the Court directs or orders otherwise. The party is entitled to challenge the refusal to give what they sought. This is what the present Applicants are pursuing. This point of objection has no merit as well and is overruled.

 

Counsel for the 1st Respondent had also raised the issue of representation of the 2nd and 3rd Applicants herein. Counsel for the Applicants however confirmed that they represent all the three Applicants and they had filed a WSD for all the said Defendants. In absence of any evidence to the contrary, I do not find this a disputed issue.

 

In all therefore, all the points of objection raised by learned Counsel for the 1st Respondent have been found devoid of merit. The same are overruled and the hearing of the application on merits shall proceed. Costs shall be in the cause.

 

It is so ordered

 

 

………………………….

Boniface Wamala

JUDGE

19/03/2020