THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL COURT DIVISION)
MISC. APPLICATION NO. 421 OF 2013
(Arising from Civil Suit No. 166 OF 2002)
BANK OF BARODA (U) LTD:::::::::::::::::::::::::::: APPLICANT/1st DEFENDANT
ROBERT OPIO:::::::::::::::::::::::::::::::::::::::::::::: 2nd DEFENDANT
THE REGISTAR OF TITLES:::::::::::::::::::::::::::: 3rd DEFENDANT
EDWARD KABUGO SSENTONGO:::::::::::::::::::::::::::::::: RESPONDENT/PLAINTIFF
BEFORE: HON. LADY JUSTICE HELLEN OBURA
This is an application by notice of motion brought under the provisions of Section 98 of the Civil Procedure Act (CPA) Cap. 71, Section 33 of the Judicature Act Cap. 13 and Rule 6 (2) (b) of the Judicature (Court of Appeal Rules) Directions SI 13-10. It seeks for the following orders:
That all proceedings in the High Court, Commercial division Civil Suit No. 166 of 2002; Edward Kabugo Ssentongo v Bank of Baroda and two others be stayed pending the hearing and determination of the intended appeal against the ruling of His Lordship Hon. Justice Lameck Mukasa dated 05th April 2013 and delivered on the 17th May 2013.
That costs be provided.
The main grounds of the application are; firstly, that the scheduling conference of the above suit proceeded exparte in the absence of counsel for the applicant wherein the applicant’s counterclaim was erroneously dismissed. Secondly, that the applicant lodged a Notice of Appeal against the dismissal of the counterclaim together with a letter requesting for certified copies of the ruling and proceedings. Thirdly, that when the matter came up for hearing of the applicant’s case counsel for the respondent objected to the applicant calling its witnesses on the ground that at the scheduling conference on 28th January 2010, the court ordered scheduling to proceed ex parte under Order 9 rule 20 of the Civil Procedure Rules (CPR). Fourthly, that the applicant/1st defendant being dissatisfied with Hon. Justice Lameck Mukasa’s ruling dated 05th April 2013 and delivered on the 17th May 2013 has lodged a Notice of Appeal against the said ruling together with a letter requesting for certified true copies of the ruling and proceedings. Lastly, that should Civil Suit No. 166 of 2002 proceed before the determination of the applicant/1st defendant’s appeal, the said appeal will be rendered nugatory.
The notice of motion is supported by the affidavit of B. R. Patel, Assistant General Manager of the applicant bank. There is an affidavit in reply sworn by Edward Kabugo Ssentongo, the respondent and an affidavit in rejoinder sworn by OM Prakash Agrawal, the Chief Manager of the applicant bank.
The background to the application is that the respondent/plaintiff being the registered proprietor of land situate at Kyadondo Block 208 Plot 1408, Kawempe offered to guarantee a loan facility of Ug Shs. 40,000,000/= to Olympic Stores Ltd from the applicant/1st defendant bank. The plaintiff signed a guarantee and mortgage deed. After some time the applicant/1st defendant demanded payment and subsequently foreclosed/ sold the said property.
The respondent/plaintiff filed Civil Suit No. 166 of 2002 against the applicant/1st defendant and two others jointly and severally challenging the mortgage and foreclosure/sale of the suit property and sought for a number of declaratory orders. The applicant/1st defendant filed its written statement of defence and counterclaim against the respondent/plaintiff for the sum of Shs 38,836,023/= being the outstanding amount due and owing on the loan facility.
The applicant/1st defendant’s lawyers were served with a scheduling hearing notice but endorsed the same that counsel who had personal conduct of the matter was engaged in another matter and requested that it be fixed for another date. There was therefore no appearance for the 1st defendant on the date fixed for scheduling. According to the records efforts were made to contact Mr. Magezi who had personal conduct of the matter but he intimated that he was not able to appear as he was engaged elsewhere after appearing before Justice Kiryabwire that morning. Court took into account the background of the case and ruled that the matter would proceed. The counterclaim was dismissed upon an application by counsel for the plaintiff and the matter proceeded for scheduling in the absence of the 1st defendant and its counsel.
The applicant/1st defendant consequently filed Miscellaneous Application No. 114 of 2010 seeking to reinstate the counterclaim but it was dismissed vide the ruling of His Lordship Lameck Mukasa whereupon the applicant/1st defendant filed a notice of appeal against the said ruling and also requested for certified true copies of the ruling and proceedings.
The hearing of Civil Suit No. 166 of 2002 continued in the presence of counsel for the applicant/1st defendant who was allowed to cross examine the respondent/plaintiff. When the matter came up for hearing of the defendants’ case, counsel for the respondent/plaintiff objected to the applicant/1st defendant calling its witnesses on the ground that at the scheduling conference on 28th January 2010 the court had ordered the matter to proceed ex parte under Order 9 rule 20 of the CPR. The hearing of the matter proceeded before the then trial judge pending the court’s ruling on the objection. When I took over the matter upon the transfer of the then trial Judge to another division, the ruling was still pending. The case was cause-listed under the backlog clearance session in March this year and the 2nd and 3rd defendants concluded their defence in May 2013 before the ruling was delivered. In order to expedite disposal of the case, I gave the parties timelines for filing written submissions subject to the outcome of the ruling which was by then with the Registrar, Commercial Court for delivery.
On 17th May 2013 the ruling on the respondent/plaintiff’s objection was delivered wherein the objection was upheld. The applicant/1st defendant being dissatisfied with that ruling lodged a Notice of Appeal against the said ruling together with a letter requesting for certified copies of the ruling and proceedings. The applicant/1st defendant then filed the instant application seeking for stay of proceedings which was basically at the stage of delivering the judgment.
During the hearing of the application, the respondent/plaintiff was represented by Mr. Katumba Chrisostom while Ms. Natukunda Juliet held brief for Mr. John Magezi for the applicant/1st defendant. Both counsel filed written submissions in the matter which I have considered in this ruling
The issues submitted upon by both counsel are;
Whether the applicant is entitled to an Order for stay of all proceedings in High Court Civil Suit No. 166 of 2002.
What remedies are available to the applicant?
On the first issue, counsel for the applicant/1st defendant submitted that the applicant has duly filed notices of appeal against the two rulings of Hon. Mr. Justice Lameck Mukasa and duly requested for certified true copies of the rulings and proceedings which have to date not been provided. It was argued for the applicant that it is therefore the court’s duty to make an order for stay of proceedings to prevent the appeals if successful from being rendered nugatory. The applicant’s counsel referred to the case of Akankwasa Damian vs Uganda, Supreme Court Constitutional Application No. 7 of 2011, Constitutional Application No. 9 of 2011 where the court noted that where an unsuccessful party is exercising un restricted right of appeal, it is the duty of court to make such orders for staying proceedings under judgment appealed from, as well as to prevent appeal if successful from being nugatory. But court will not interfere if the appeal appears not to be bonafide or there are other sufficient exceptional circumstances.
Counsel for the applicant also submitted that it would be a great injustice to deny the applicant to pursue its rights of appeal as it has bona fide appeals and arguable grounds. Firstly, the applicant’s counsel argued that at all material times after the scheduling of the matter in which counsel for the applicant was absent, the applicant attended the subsequent hearing of the suit with full participation but the respondent did not object to the applicant’s participation in the court proceedings until when the matter came up for hearing of the defendant’s case. It was therefore the applicant’s submission that the respondent who was entitled to benefit from Order 9 rule 20 of the CPR waived the right to an ex parte hearing when the applicant participated in the proceedings by filing documents and cross examining the respondent’s witnesses without objection from the respondent. The applicant’s counsel relied on Halsbury’s Laws of England, Third Edition, Volume 14 paragraph 1175 at page 637 for the definition of waiver. Counsel for the applicant also cited Edson Kanyebwera vs Patori Tumwebaze  2 E.A 86 (SCU) where Tsekooko JSC held that;
“The rule permitting exparte hearing when a defendant does not appear, is intended to discourage a defendant from frustrating a plaintiff who is ready to proceed but it is not intended to bar the defendants who have defended the suit from further participation.”
Counsel for the applicant argued that court’s decision upholding counsel for the respondent’s objection to the applicant calling its witnesses is a violation of the right to a fair hearing as the applicant has the right to defend Civil Suit No. 166 of 2002 on matters of law, facts and evidence.
Furthermore, it was submitted that the applicant’s counsel was prevented by sufficient cause from appearing when the suit came up for scheduling on 28th January 2010 and that an error or mistake of counsel should not necessarily be visited on his client. Counsel for the applicant relied on Order 9 rule 27 of the CPR which allows setting aside an ex parte decree upon sufficient cause being shown. For the test of sufficient cause the applicant’s counsel cited Nakiriride vs Hotel International Ltd (1998) HCB 85. As for the position that sufficient cause includes mistake of counsel this court was referred to the decisions in Nicholas Roussos vs Ghulam Hussein Habib Virani (Civil Appeal No. 9 of 1993); Dr. Sheik Ahmed Mohammed Kisuule vs M/s Greenland Bank Ltd in Liquidation, High Court (Commercial Division), Miscellaneous Application No. 2 of 2012 and Mulowooza & Brothers Ltd vs N. Shah and Co. LKtd S.C.C.A No. 20 of 2010.
The applicant also relied on Re Christine Namatovu Tebajjukira (1992-1993) HCB for the holding that the administration of justice should normally require that the substance of disputes be investigated and decided on their merits and that errors and lapses should not necessarily debar a litigant from pursuit of his rights. It was further submitted that the applicant is not guilty of dilatory conduct having filed notices of appeal against the two rulings in a timely manner and having requested for certified true copies of the proceedings and therefore the applicant should not be barred from pursuing its rights to have the said appeals decided on their merits.
Counsel for the applicant also contended that the suit is pending final determination since judgment has not been delivered even if the respondent/plaintiff, 2nd and 3rd defendants have filed their written submissions as directed by this court. He argued that the applicant filed a written statement of defence and has since 2002 attended many hearings. He pointed out that the applicant is ready and willing to expeditiously bring its witnesses for hearing, cross examination and re-examination and therefore should not be denied an opportunity to robustly and vigorously present its defence.
In reply, counsel for the respondent opposed the application. He submitted that the applicant is not entitled to an order for stay of proceedings in Civil Suit No. 166 of 2002 firstly, because the order to proceed ex parte made on the 28th day of January 2010 has not been set aside by court and still stands to this day. It was submitted for the respondent that if the applicant was interested in calling evidence in the main suit, it should have applied to set aside the Order for the respondent/plaintiff to proceed ex parte under Order 9 rule 21 of the CPR so that they could be allowed to be party to the proceedings. The respondent’s counsel also contended that there is no right that the respondent waived by allowing the applicant’s counsel to participate in the proceedings because court orders are not waived by conduct of the parties to suit without proper application being made and that the respondent could not bar the applicant’s counsel from participation in the matter but could stop the applicant from calling evidence. It was the contention of the respondent’s counsel that the quotations cited by counsel for the applicant from Halsbury’s Laws of England(supra) and Edson Kanyebwera vs Patori Tumwebaze (supra) were not applicable to the facts of this case.
Secondly, counsel for the respondent submitted that there is no appeal in law filed by the applicant but rather intended appeals because to date the applicant has not taken any step to file any appeal but only filed Notices of Appeal and requested for certified true copies of proceedings. Counsel for the respondent argued that it is now settled law that it is the duty of the intending appellant to actively take the necessary steps to ensure the appeal is filed in time and prosecuted and not the duty of the court or any other person. He based this argument on UTEX Industries Ltd Vs Attorney General, Civil Application No. 52 of 1995 (SC), S.B Kinyatta & Another vs Subramanian & Another Civil Application No. 108 of 2003 (Court of Appeal) and Election Petition Application No. 7 of 2012, Kasibante Moses vs Electoral Commission (Court of Appeal).
Counsel for the respondent further submitted that this case is distinguishable from the case of Akankwasa (supra) because in the instant case the applicant has not filed an appeal which should be evidenced by a duly filed Memorandum of Appeal on court record and annexed to the pleadings. He also contended that the intended appeals are not bona-fide since the applicant has not proved to this court that both of them have any likelihood of success and the applicant has not attached a Memorandum of Appeal to prove that there are arguable grounds of appeal yet this court cannot establish that the appeals have higher chances of success without looking at it.
Lastly, counsel for the respondent contended that the present application is a technique by the applicant to delay the delivery of judgment and the course of justice. The respondent’s counsel submitted that the pleadings in Civil Suit No. 166 of 2002 have already been closed pending judgment and the applicant has a chance, if not satisfied with the outcome of the judgment, to prefer an appeal to an appellate court and raise all the matters raised here by way of an appeal. This court should not be kept in abeyance waiting for the applicant to file its appeals.
In his submissions in rejoinder, counsel for the applicant reiterated his earlier submissions made in favour of the application and added that essential steps have been taken to pursue the appeal but the applicant has been let down by the delay in the preparation and delivery of certified copies of the proceedings and rulings to enable the applicant prepare and file its appeals. It is the applicant’s contention also that it need not attach Memorandum of Appeal to prove that there are arguable grounds of appeal.
I have carefully perused all the affidavits and documents filed by the parties as well as the record of proceedings and considered the submissions for and against the application. It is the applicant’s case that the respondent who was entitled to benefit from Order 9 rule 20 of the CPR waived the right to an ex parte hearing when the applicant participated in the proceedings by cross examining the respondent’s witnesses without objection from the respondent. This same argument was raised by counsel for the 1st defendant when counsel for the respondent objected to the 1st defendant’s calling of witnesses and the trial judge asked counsel for the 1st defendant whether two wrongs make a right. A ruling was later made on the objection which is now pending appeal and it is the appellate court that has jurisdiction to determine whether the requirement of Order 9 rule 20 can be merely waived by conduct.
The duty of this court in so far as this application is concerned is to determine whether proceedings before this court which in effect is delivery of the judgment should be stayed pending the appeal whose memorandum is yet to be filed. In Commodity Export International & Another v Mkm Trading Company Ltd & Another Civil Application No.96 Of 2005 the Court of Appeal observed that the Court’s power to stay proceedings is discretionary and would be exercised by the Court in exceptional circumstances.
This court further takes counsel from the observation of the Court of Appeal in DFCU Ltd v Begmohamed Civil Appeal No. 65 of 2005 that we should be mindful of the backlog in the High Court. It follows that proceedings should not be stayed unless it is absolutely necessary. I must also observe that the decision by the then trial judge to allow the matter proceed in the absence of applicant and its counsel was made after steps were taken to ensure that counsel for the 1st defendant was accommodated. The trial judge stood over the matter to allow counsel for the 2nd & 3rd defendants contact the 1st defendant’s counsel to notify him that the matter was due to proceed for scheduling that day. The records show that he was indeed contacted but he opted to carry on with whatever else he was engaged in instead of rushing to court. The trial judge then noted that this was an old case of 2002 which had been bogged down by numerous adjournments at the instance of counsel for the parties. He ordered the matter to proceed.
When counsel for the 1st defendant appeared on the date of adjourned hearing, he opted to proceed as though nothing had taken place in his absence. It was his duty to comply with the law but he only chose to apply for reinstatement of the counterclaim which application was also dismissed because the trial judge was not satisfied with the reason given for the absence of counsel and his client.
It is also noteworthy that the notice of appeal against that ruling was filed in 2010 but to date no further steps have been taken to file a Memorandum of Appeal and have the appeal heard. The issue of that appeal is only being raised now that a stay of proceedings is required. This in my view still shows the laxity exhibited by the 1st defendant and its counsel in having the main suit heard and conclusively determined.
I also take note of the fact that the two appeals which are the basis of this application arise from interlocutory rulings. I believe if the judgment is delivered and the applicant is dissatisfied with it all those matters could be ground of one appeal so as to avoid multiplicity of proceedings which have caused unnecessary backlog of cases. On this position, I am fortified by the decision of the Supreme Court in Sanyu Lwanga Musoke v Sam Galiwango S.C. Civil Appeal No. 48 of 1995 where it was held that it is not necessary to appeal against an interlocutory ruling separate from the final decision. To hold otherwise might lead to multiplicity of appeals upon incidental orders made in the course of the hearing when such matters can more conveniently be considered in an appeal from the final decision.
I have also taken into account the elaborate argument of counsel for the 1st defendant on the right to a just and fair hearing and the well established principle that mistake of counsel should not be visited on a litigant. It is my well considered view that the arguments would best be put before the appellate court but just by way of observation, on the right to a just and fair hearing; it is my firm view that all the parties to a proceeding and the court have a role to play to achieve this. One party cannot sit back without taking the necessary steps and keep demanding that right from the other players because justice is not only for one side. That right accrues to all the parties and so they must all be vigilant and it is the duty of this court to ensure that it is achieved not only by one party but by all.
As regards the principle on mistake of counsel, I have said it before and I wish to repeat here that this very well intended principle is being abused by some unscrupulous advocates who deliberately fail to do what they ought to do with the hope of applying this principle when need arises. I am convinced that the circumstance of each case must be considered without a blanket application of the principle or else court would risk being unjust and unfair to the non-defaulting party to the proceedings like in the instant case where the matter has been pending in court for over ten years now.
On the whole, the applicant has not shown this court that the appeal is made bona fide or that there are any sufficient exceptional circumstances to justify an order for staying proceedings.
For the above reasons, I am more inclined to agree with counsel for the respondent that this application is only intended to further delay dispensation of justice. In the result, it must fail and it is accordingly dismissed with costs to the respondent. The applicant is ordered to file its submission in the main suit within twenty one days from the date of this ruling and, in any case not later than 25th November 2013. The plaintiff shall file a rejoinder to that submission if any by 6th December 2013 and judgment shall be delivered on 30th January 2014 at 3.00pm.
I so order.
Dated this 5th day of November 2013.
Ruling delivered in chambers at 3.30 pm in the presence of:
Ms. Natukunda Juliet holding brief for Mr. John Magezi for the applicant.
Mr. Katatumba Chrisostom for the respondent who was present.