Court name
HC: Civil Division (Uganda)
Judgment date
4 August 2014

Damco Logistics Company (U) Ltd v Societe Bisimaki Bakanova (Miscellaneous Application-2014/308) [2014] UGHCCD 167 (04 August 2014);

Cite this case
[2014] UGHCCD 167

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT NAKAWA

MISCELLANEOUS APPLICATION NO. 308 OF 2014

(Arising out of Civil Suit No. 156 of 2013)

 

DAMCO LOGISTICS COMPANY (U) LTD ::::: APPLICANTS/3RD DEFENDANT

 

VERSUS

 

SOCIETE BISIMAKI BAKANOVA ::::::::::::::::::::: RESPONDENTS/PLAINTIFF

 

BEFORE: HON. LADY JUSTICE ELIZABETH IBANDA NAHAMYA

 

RULING

 

This Application was brought by Notice of Motion under Section 33 of the Judicature Act Cap. 13, Section 98 of the Civil Procedure Act, Order 9 rules 12 and 27;     and Order 52 r. 1 & 3 of the Civil Procedure Rules. The Application is for Orders to set aside the dismissal of the Applicant’s Counter claim in Civil Suit No. 156 of 2013 and reinstatement of the same so the suit may be heard on its merits; setting aside the liquidated judgment of UGX 210,000,000/= entered in favour of the Respondents; setting aside the award of interest of 8% per year and the provision of costs of the Application.

 

The Applicant was represented by Counsel Ronald Tusingwire of M/s ENS Africa Advocates whilst the Respondent was represented by Mr Geoffrey Nangumya. The Respondent did not file written submissions. Suffice to note that on the 18th July 2014 when this matter came up for hearing, Counsel for the Respondents was not in Court at first but nevertheless Court set up a time schedule within which the respective parties were to file their documents. According to the Schedule, the Applicant was to file its written submissions by 22nd July 2014, whilst the Respondents were to file in reply by 25th July 2014. The Applicant was supposed to file his rejoinder by 29th July 2014. The Applicants were able to file their Submissions on 22nd July 2014 as agreed upon but the Respondents did not file anything.

 

The brief facts that gave rise to this are that; the Respondent herein (Plaintiff) filed Civil Suit No. 156 of 2013 against Damco Logistics Company (U) Ltd (Applicant herein) as the 3rd Defendant and 2 others. The Respondent’s claim was among others for a declaration that the Plaintiff is not liable to any charges, duty or claims against 112 plastic drums of Ethyl alcohol purchased from both the 1st and 2nd Defendants, which were duly cleared and released by Uganda Revenue Authority for transhipment to DR. Congo. The Applicant herein (Damco Logistics Company (U) Ltd) instead filed a Counterclaim against the Plaintiff and all the other Defendants. The counterclaim was for recovery of USD 55,828,50 (United States Dollars Fifty Five Thousand, Eight Hundred and Twenty Eight and Fifty Pence) arising from the breach of a contract of carriage of goods, interest thereon computable at the commercial rate, general damages and costs of the suit.

 

On the 12th February 2014, when the matter was scheduled for hearing, both the Plaintiff and Defendants were represented. Damco Logistics Company (U) Ltd was represented by Mr Ronald Tusingwire who personally asked Court to adjourn the matter to another date on the basis that they had mixed up the dates for scheduling. This Application for an adjournment was allowed and the date of hearing was fixed as 30th April 2014 at 09:00AM. Specifically, on the said date the Court would proceed with the scheduling and cross examination of the Plaintiff’s witnesses on their written witness statements as agreed between the Parties. However, there was no representative for any of the Defendants on the 30th April 2014 when the matter came up again before Court. Therefore Counsel Geoffrey Nagumya (for the Plaintiff) moved Court to adopt the Scheduling Memorandum that the Plaintiff had prepared and to proceed with hearing of the matter pursuant to Order 17, r 4 of the Civil Procedure Rules (“CPR”. This was allowed.

 

Counsel Nangumya further asked Court to enter default Judgment against all the Defendants on the liquidated amount of UGX 6,000,000/= to cover the period from 27th June 2013 until 5th April 2013 thus totalling to UGX 210,000,000/=. Counsel further observed that interest payable on the Judgment amount was 8% per year to date of Judgment and costs pursuant to Order 9, r 6 of the CPR. Counsel abandoned the prayers in the plaint and general damages for loss of business. Therefore, I granted Judgment on the sum of UGX 210,000,000, interest of 8% per year and costs of the suit.

 

It seems after the Judgment, the file was taken for execution. The Applicant got wind of this on the 21st May 2014, when it was served with a Warrant of Attachment in Execution pursuant to a Decree dated 2nd May 2014. Therefore, Damco Logistics Company (U) Ltd (Applicant) filed this Application for setting aside the dismissal of the Applicant’s counterclaim in Civil Suit No. 156/2013; setting aside the liquidated judgment and award of interest.

 

The grounds in support of this Application are reiterated in the Affidavits of Mr Patrick Kazibwe (Claims Supervisor of the Applicant) and Mr Samuel Kakande (Counsel for the Applicant) but briefly, they are summarised below the Applicants posit that the Judgment for the liquidated amount of UGX 210,000,000/= (Uganda Shillings Two Hundred Ten Million) entered for the Respondents was made in error on the basis that the claim in Civil Suit No. 156/2013 was for Declaratory Orders, General Damages and Costs of the suit which was not a Liquidated claim specifically pleaded or proved by the Respondent. That the Applicant has a good defence to the main suit and a valid counter claim against the Respondent. Furthermore, that the main suit raises serious questions of law and fact. The Ex parte Judgment is irregular, unfair and unjust since it is contrary to Respondent’s pleadings. The Applicant was not granted an opportunity to be heard. The Applicant has a good defence to the main suit and a valid counterclaim against the Respondent which should be heard on its merit. The Application has been filed without delay and the Respondent will not be prejudiced in any way if the application is granted.

 

The Respondent filed an Affidavit in Reply deposed by Mr. Stephen Buchana (Director of the Respondent Company) denying all the Applicant’s averments. Mr. Stephen Buchana swore that the Application is an abuse of Court process; that the two Affidavits in support of the Application are irregular and should be struck out for not being registered before Court. Mr. Buchana averred that the Applicant has not been vigilant in prosecuting the Counter claim having been set aside by a Default Judgment dated 9th August 2013. Furthermore, that the Decrial sum passed by Court in Decree dated 2nd May 2014 was not granted in error since it was pleaded in the Plaint and was unchallenged. Moreover, the Applicant had an opportunity to appear on the 30th April 2014 when the matter was set for scheduling but he failed to show up yet the date was in the know of both parties. Therefore, the Ex parte Judgment was rightly entered. Mr Buchana averred further that the Applicant has no good defence to the suit and there is no likelihood that the Counterclaim will succeed. Rather, the Respondent will be highly prejudiced if the Application is allowed.

 

Issues raised by this Application

The issues that arise pursuant to the Application are;

  1. Whether the Judgement entered Ex parte was made in error;
  2. What remedies are available to the Parties.

 

Issue 1: whether the Judgement entered Ex parte was made in error

 

It was contended that the Ex parte Judgment entered in respect of Civil Suit No. 156/ 2013 was made in error. Mr Tusingwire, Counsel for the Applicant submitted that Counsel Nangumya misled Court during its proceedings conducted on the 30th April 2014 into entering Judgment for a liquidated amount of UGX 6,000,000/= per day for a period of 30 days payable in Civil suit No. 156 of 2013 to the Respondent as consideration for hiring the 2 motor vehicles. Counsel Tusingwire observed that the Judgment was entered pursuant to Order 9 Rule 6 of the CPR without formal proof. That this was made in error. Counsel further submitted that prior to dismissal of the suit pursuant to Order 9, rule 11 of the CPR, it must be proved that the suit was called for hearing and the Defendant failed to appear. It was Counsel Tusingwire’s averment that civil suit No. 156 of 2013 was instead set for scheduling inter parte on the 30th April 2014. Counsel observed that a Scheduling Conference is mandatory under Order 12, Rule 1 prior to hearing of the case. Counsel quoted Black’s Law dictionary by Bryan A. Garner 9th Edition at page 788for the definition of a hearing. In Black’s Law dictionary (supra) “Hearing” refers to “a judicial session, usually open to the public, held for the purpose of deciding issues of fact or law, sometimes with witnesses testifying. … Any setting in which an affected person presents arguments to a decision maker.”Counsel concluded that in view of the above, the Judgment was entered in error.

 

The other contention raised by the Applicant’s counsel was that the Respondent’s claim in Civil Suit No. 156/2013 did not constitute a liquidated demand. He noted that the claim was for Declaratory Orders, General Damages and Costs of the suit. Counsel Tusingwire further observed that the Applicant filed a Defence to the suit and raised a Counter Claim against the Respondent and the other Defendants. Therefore, it was made in error since it was without any formal proof. He asked court to set aside the decree and order that the suit be heard on its merits.

 

I am cognisant of the fact that on the 30th April 2013 when Civil Suit No. 156/2013 came up before this Court, Mr Nangumya Counsel for the Respondent moved Court pursuant to Order 9 Rule 6 of the Civil Procedure Rules (CPR) to enter an Ex parte Judgment on the amount of UGX 6,000,000/= which, according to Counsel, was money payable to cover a period of 30 days for the continued breach thus totalling to UGX 210,000,000/=.

 

Order 9, r 6 of the CPR provides that “where the plaint is drawn claiming a liquidated demand and the defendant fails to file a defence, the Court may subject to rule 5 of this Order, pass judgment or any sum not exceeding the sum claimed in the Plaint together with interest at the rate specified, if any, or if no rate is specified, at the rate of 8 percent per year to date of Judgment and Costs. [Emphasis added]

 

The defining words under the provision are where ‘the Plaint is drawn claiming a liquidated demand and the defendant fails to file a defence’. It suffices to note at this stage that the Applicant (3rd Defendant) in Civil suit No. 156/2013 filed a defence and a Counter        Claim against the Respondent herein and all the other Defendants in the suit. The Applicant’s defence in Civil Suit No. 156 of 2013 was filed on 27th August 2013. This was attached as Annexture “A” to this Application. In the Counter claim, the Applicant sought orders for the recovery of a total of USD 55, 828.50 [United States Dollars Fifty Five Thousand Eight Hundred and Twenty Eight Pence] arising out of breach of a contract of carriage of goods, interest thereon computable at a commercial rate, general damages for breach of contract and costs of the suit.

 

In respect to the issue whether the amount UGX 210,000,000/= which was awarded to the Respondent constituted a liquidated demand under Order 9, r. 6 of the CPR. The word “liquidated demand” which bears the same meaning as “liquidated claim” according to Black’s Law dictionary (supra) at page264, refers ‘to a claim for an amount previously agreed on by the parties or that can be precisely agreed on by the parties or that can be precisely determined by operation of law or by terms of the parties’ agreement.’

 

Therefore, in accordance with the above, for an amount to be a liquidated demand, it must be a claim made for an amount that has been agreed on by the parties or a claim which can be precisely determined by operation of law or by the terms and conditions of the agreement made by the Parties.

 

According to the Editor of “Odgers on Pleadings and Practice” G.F Harwood 12th Edition published by Stevens and Sons Limited (1971) at page 44whether the plaintiff’s claim comes within the definition of a debt/liquidated demand affects not only the question whether the Plaintiff should indorse his writ with a claim for fixed costs, but also the form of Judgment which can be obtained in default of appearance/defence. When the amount to which the Plaintiff is entitled can be ascertained by calculation, or fixed by any scale of charges or other positive data (see G.L Baker Ltd vs. Barclays Bank Ltd [1956] 3 WLR 1409; [1956] 3 ALLER 519), it is said to be liquidated or made clear. But when the amount to be recoverable depends upon the circumstances of the case and is fixed by opinion or by assessment or by what may be judged reasonable, the claim is generally un liquidated…”

 

In accordance with the Respondent’s pleadings in Civil Suit No. 156/2013, the Respondent’s claim against the Defendants was jointly and severally for a Declaratory Order that the Defendants have no claim at all against the Plaintiff; Special Damages; Permanent Injunction against the 3rd Defendant from impounding the Plaintiffs’ goods; General Damages and costs of the suit. It is true that during the hearing held on the 30th April 2014, Counsel Nangumya abandoned all the prayers in the Plaint and sought Court for judgment upon the Liquidated demand of UGX 6,000,000/= multipliable by 30 days which totals to UGX 210,000,000/=.

 

Paragraph 9 which Counsel Nangumya highlighted to Court as containing the liquidated demand stated the amount read ‘the Plaintiff wholly holds the Defendants jointly and severally liable for the loss of 2 hired vehicles at a rate of Ug. Shs 6,000,000/= (six million shillings) per day for motor vehicles truck Registration No. CGO 6816AB19 and CGO 5942 AC 19 already loaded with the goods for transshipment now halted at Nakawa and the general damages for loss of businesses.’ I find that this does not fall within any of the above definitions of a liquidated demand given above. Therefore the Judgment and subsequent Decree thereof must have been an over sight by Court. I therefore agree with Counsel for the Respondent. I also reiterate the fact that the Applicant herein filed a Defence to Civil Suit No. 156/2013 and a counterclaim.

 

With respect to the Counsel for the Applicant’s submissions on a scheduling conference, that the date 30th April 2014 was set for scheduling only and therefore the Applicant was to that extent denied the right to a fair hearing. I disagree with his submissions on this issue. According to the record, on the 12th February 2014, when the matter came up in presence of both Counsel for the Applicant and Respondent, it was agreed that the respective Parties would file their Written Witness Statements and a joint scheduling memorandum. In fact 30th April 2014 was the date set for scheduling and cross examination on the Plaintiff’s witness statements. Therefore, since the Applicant did not abide by this time schedule, it cannot claim that it was not given a right to be heard.

 

In conclusion and for the fore going reasons, I am convinced that the Ex parte Judgment was entered in error by Court.

                                                                                                                               

1ssue 2: What remedies are available to the Parties

The Applicant is seeking orders of setting aside the dismissal of the Applicant’s Counter claim in Civil Suit No. 156 of 2013 and reinstatement so the suit may be heard on its merits; setting aside of the liquidated judgment of UGX 210,000,000/= entered in favour of the Respondents; setting aside the award of interest of 8% per year and that court makes an order as to costs of this Application.

 

I am cognisant that this Application was brought under Order 9 r 12 and 27 of the CPR. Under Order 9 r 12 of the CPR, this Court has the discretion to set aside an Ex parte Judgment upon such terms as may be just. Pursuant to Order, 9 r 27 of the CPR, Court has the discretion to set aside an Ex parte Decree on proof that ‘the summons were not duly served; or that he or she was prevented by any sufficient cause from appearing when the suit was called on for hearing’. In his written submissions, Counsel Tusingwire cited with authority the Supreme Court case of Nicholas Roussos vs. Ghulam Hussein Habib Virani Civil Appeal No. 9 of 1993 where Court laid down the considerations for what amounts to a “sufficient cause,

 

I have noted the submissions of the Applicant’s Counsel and the Affidavits in support of the Application. In paragraphs 5-9 of his Affidavit in support of the Application, Mr Samuel Kakande deponed that on the 29th April 2014, he as Counsel for the Applicant inquired from the Court’s Registry about the hearing of the matter and was informed by Mr Masongole Joseph (Court clerk), who is attached to the Chambers, that the matter would not take off on the 30th April 2014 since the trial Judge was still operating a criminal session in Mpigi up to 1st May 2014 and that a new  date would be communicated to the Parties. The deponent therefore, extracted hearing Notices for the purpose of re-fixing the matter for hearing. However, he was informed by the staff at the Court Registry that the file had been misplaced. In paragraph 7, Mr. Samuel Kakande attests that it was on the 21st May 2014 when he discovered from one Elijah Nkusi (the Applicant’s Deputy Managing Director) about a warrant issued against the Applicant pursuant to a decree dated 2nd May 2014. Upon further inquiry at the Nakawa Court Registry, he was informed that the file had been transferred to the Execution Division.

 

With due respect to Counsel Tusingwire, I find that there was a miss-communication made to him because the Session in Mpigi had earlier ended on 12th April 2014, since it run from 03rd March to April 2014 therefore Counsel was misinformed.

 

However, this does not preclude the matter from falling into the definition of “sufficient cause” In the case of Nicholas Roussos vs. Ghulam Hussein Habib Virani (supra), recognised some of the precedents where Court had decided what amounts to sufficient cause and it was stated while citing Shabin Din v. Ram ParkashAnand (1955) 22 EACA 48 that a mistake by an advocate though negligent may be accepted as a sufficient cause.

 

Similarly, in National Insurance Corporation vs. Mugenyi& Co. Advocates [19871] HCB 284,  it was held that what constitutes ‘sufficient cause’ depends on facts of each individual case and the test to be applied, is whether the Applicant intended to attend court and did the best he could to attend but in vain.

 

I agree with the Applicant’s Counsel that this definition falls within the scope of the many decisions made by the High Court.  It has been held that a Counsel’s mistake should not be visited upon the litigant. See BancoArabeEspanol vs. Bank of Uganda Supreme Court Civil Appeal No. 8 of 1998

 

The current position of Courts with respect to cases of this nature is that Court will order a reinstatement even in instances where no sufficient cause has been shown so as to rule out any possibility of occasioning an injustice. See Girado vs. Alam& Sons (U) Ltd [1971] 1 EA 448; East Africa Hyper Market Ltd vs. DragadosConstructiones HCMA No. 1333 of 1998 reported in [1999] KALR 844. The case at hand requires that justice be done and that Counterclaim in Civil Suit No. 156 of 2013 be reinstated. The liquidated Judgment of UGX 210,000,000/= entered in favour of the Respondents and the award of interest of 8% per year and costs should be set aside.

 

Before I take leave of this Application, I take note of the Respondent’s contention in the Affidavit of Mr. Stephen Buchana that the 2 Affidavits are not properly before Court on the basis that they do not bear a receiving stamp of Court. I would like to defer. I find that the failure to stamp the documents was an omission by the Court Staff who received on the Notice of Motion. This is because all the Applicant’s documents were bound together. Hence, the fact that only the Notice of Motion was received must have been an omission on part of Registry Staff which fact should not lead to striking out of the Application.

 

For the foregoing reasons, I order that:-

  1. The dismissal Order of the Applicant’s Counterclaim in Civil Suit No. 156 of 2013 is hereby set aside;

 

  1. the Liquidated Judgment of UGX 210,000,000/= entered in favour of the Respondents is also hereby set aside;

 

  1.  the award of interest of 8% per year is set aside; and

 

  1. The Order for Costs pursuant to the dismissal of Civil Suit No. 156/2013 is hereby set aside. Costs in the cause.

 

                                      

Signed:________________________________________

Hon. Lady Justice Elizabeth Ibanda Nahamya

J U D G E

04th AUGUST, 2014