THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
MISCELLANEOUS APPLICATION NO. 361 OF 2015
(Arising out of H.C.C.S. No. 719/1997, Constitutional Petition No. 03/2008 and Constitution Appeal No. 05/2010)
ATTORNEY GENERAL :::::::::::::::::::::::::::::::::::::::::: APPLICANT
M/S GOODMAN AGENCIES LTD & OTHERS ::::::::: RESPONDENTS
BEFORE: HON. JUSTICE STEPHEN MUSOTA
The learned Attorney General brought this application by way of originating summons under Order 34 rule 1 of Civil Procedure Rules, Section 59 of Civil Procedure Act and Section 9 of the Government Proceedings Act for determination of the following questions “who is entitled to receive payments of the judgment in HCCS No. 719/1997, Constitutional Petition No. 3/2008 and Supreme Court Constitutional Appeal 5/2010?”
The Attorney General claims no interest in the proceeds of the above matters.
The background to this application was concisely put in the affidavit in support sworn by Mr. Denis Bireije, a Commissioner in the Directorate of Civil Litigation in the Attorney General’s Chambers as follows:
The respondents, M/S Goodman Agencies Ltd and others filed HCCS 719 of 1997 in the High Court at Kampala against the applicant claiming money for recovery of the value of motor vehicles and special damages which were unlawfully illegally impounded by soldiers of the Uganda Peoples Defence Forces (UPDF).
A consent judgment was subsequently entered for the sum of Ug. Shs. 1,320,172,842= being replacement cost/value of the 10 trucks and Ug. Shs. 12,865,375,000= as loss of earnings and costs of Ug. Shs. 300,000,000=.
At the time of consent the only defendant was Goodman Agencies. However, there was an application by Emmanuel Hatangimbabazi, Felesi Leonidas and Janvier Busogi, Misc. Appl. 690/2001, arising out of HCCS 719/1997 to be joined as parties. The application was granted by JPM Tabaro J on 12/3/2003. The effect of this was that the applicants became persons in whose favour the consent decree was passed and so became entitled to the fruits of judgment.
At one point the High Court added Hassa Agencies as a party after the consent which one of the respondents, Goodman Agencies, disputed and as a result, the High Court referred the matter to the Constitutional Court through Constitutional Petition No. 3/2008. The Constitutional Court delivered its judgment in the said petition and upheld the petition by Goodman Agencies against Hassa Agencies (K) Ltd and awarded interest on the decretal sum at the rate of 24% per annum.
Consequently Hassa Agencies (K) Ltd filed a Constitutional appeal to the Supreme Court. Thereafter the Attorney General filed cross-appeal challenging the award of 24% per annum interest in favour of Goodman Agencies and its co-plaintiffs. When Hassa Agencies (K) Ltd failed to deposit Shs. 200,000,000= as security for costs within 48 days its appeal was struck out. The cross appeal by the Attorney General was maintained and was allowed in part. The interest allowed was reduced to the rate of 6% per annum from the date of the consent judgment in the High Court till payment in full.
Thereafter, a mandamus order was issued compelling the Permanent Secretary/Secretary to the Treasury, Ministry of Finance, Planning and Economic Development to pay the respondent. However, several claimants have written to the Attorney General demanding payment as directors of the respondent company claiming to be entitled to the proceeds of the judgment. Amongst the claimants who have written to the applicant are Kalson Ngolobe as Director, Mark Mutiibwa Mugalula as Director on the one hand and Nicholas Were as shareholder/director on the other. Mr. Nicholas Were alleges that he is the only shareholder and director of the company and Mr. Kalson Ngolobe and Mark Mutiibwa Mugalula are not and have never been directors of the respondent company.
The applicant avers that there is no collusion whatsoever between the applicant and any of the claimants and it is just and equitable that this application be granted by court pronouncing itself on who is entitled to the proceeds of the judgment in the cases and the amounts due.
At the hearing of this application, Mr. Mwambusya represented the Attorney General. Mr. Sekabanja represented the 3rd, 4th and 5th respondents. Mr. Oketcha Michael appeared for Goodman Agencies and Kalson Ngolobe together with Mr. Bwire. A joint instruction notice was filed. Mr. Okuku and Mr. Semuyaba also appeared for Goodman Agencies on the side of Mr. Nicholas Were.
Several affidavits were filed in reply. All parties filed written submissions and supplemented the same with oral highlights.
I have considered this application as a whole, the affidavits and submissions by all learned Counsel. I am satisfied that this is a proper case for interpleader proceedings there being adverse claims to the same money by different claimants.
It is enacted under Section 59 of the Civil Procedure Act thus:
“Where two or more persons claim adversely to one another the same debt, sum of money or other property, movable or immovable, from another person, who claims no interest in it other than for charges or costs, and who is ready to pay …. That other person may institute a suit of interpleader against all the claimants ….”
From what I have gathered in this application two issues arise as follows:
- Who is entitled to the decretal sum and costs.
- How much is each party entitled to.
I will start by resolving issue No. 1.
Who is entitled to the decretal sum and costs?
The law is well settled that only a decree holder is entitled to the fruits of judgment. A decree holder is clearly defined under Section 2 of the Civil Procedure Act.
Section 2 (d) provides that a
“decree holder means any person in whose favour a decree has been passed or an order capable of execution has been made, and includes the assignee of such decree or order.”
Under Section 2(c) a decree is defined as;
“Decree means the formal expression of an adjudication which, so far as regards the court expressing it, conclusively determines the rights of the parties with regard to any of the matters in controversy in the suit and may be either preliminary or final ……”
Under Section 25 of the Civil Procedure Act, a decree follows judgment.
In the instant case therefore, the decree is clearly manifested in the consent judgment which disposed of the dispute between Goodman Agencies and others on the one hand and the Attorney General on the other. As per Annexture ‘C’ to the affidavit in reply of Nicholas Were dated 18/9/2015 and Annexture FL4 to the supplementary affidavit in reply by Felesi Leonidas it is clearly stated that;
“By consent of both parties let the judgment be entered for the plaintiffs in the following terms:
- The defendant do pay the plaintiffs a sum of UG Shs. 1,320,172,842= being replacement cost/value of the Ten (10) trucks.
- The defendant do pay the plaintiffs a sum of UG. Shs. 12,865,375,000= being loss of earnings.
- The defendant pays the plaintiffs UG. Shs. 300,000,000= being costs of the suit.
A clear reading of the above consent judgment means that the consent order/decree was in favour of Goodman Agencies, then by virtue of the order in Misc. Application 690 of 2001, Emmanuel Hatangimbabazi, Felesi Leonidas and Jovia Busogi.
Therefore advocates are not entitled to the fruits of a judgment. They only act as agents in a given suit as long as they still have instructions. It was held in Kenya Bus Services Ltd VS Muteti [1995 – 1998] EA 103 (CAK) that;
“Generally, an advocate is authorized to act as his client’s agent in all matters not faking within an exception which may reasonably be expected to arise for decision in the course of proceedings. An Attorney General is entitled to demand and receive moneys due to his client until such time as his instructions are withdrawn.”
The advocate’s agency lasts as long as instruction still exists.
In the instant case, instructions to both M/S Semuyaba & Co. Advocates and Okuku and Co. Advocates were withdrawn and other Counsel were instructed in their place. Goodman Agencies even specifically wrote to the Attorney General to pay all its monies to its account and not through any lawyers. A party is entitled to choose who to represent him/her in court.
In the instance case I have noted that both Mr. Okuku and Mr. Semuyaba appear to claim a stake in this case because they were involved in this case for long and believe are part of the claimants of the fruits of the judgment. This should not be the case because being an advocate does not entitle one to share in the fruits of the judgment.
From the evidence on record, although Mr. Were Nicholas is a shareholder in Goodman Agencies Ltd, he is no longer a Director in the Company. There is no doubt that Goodman Agencies Limited is a legal personality with corporate status. This means that it is separate and distinct from its members and shareholders. According to Annextures A, B and C of the affidavit in reply of Kalson Ngolobe dated 25th September 2015, the shareholders of Goodman Agencies Ltd are;
- Nicholas Were
- Kalson Ngolobe
- Mark Mutiibwa Mugalula, and
- Wandera Stephen.
None of the above shareholders has a right to claim for any money owing plus interest from Goodman Agencies Ltd. The company is the one to claim the money in its own right.
Whereas it is true that Nicholas Were appears on all records of the proceedings as representing Goodman Agencies Ltd, this does not mean that he remains a Director even after being lawfully removed. The new Directors are Kalson Ngolobe, Mark Mutiibwa Mugalula and Wandera Stephen. Therefore both Mr. Okuku and Mr. Semuyaba can represent Mr. Nicholas Were but not the company that no longer wants them.
Regarding the legal fees for work done by Mr. Semuyaba and Mr. Okuku, the two lawyers are entitled to claim the same and be paid by Goodman Agencies Ltd. This position is in fact conceded by Goodman Agencies Ltd and the directors. The said lawyers have to be paid their legal fees for work done in the High Court, Constitutional Court and the Supreme Court by Goodman Agencies Ltd.
The UGX 300,000,000= in the consent judgment in HCCS 719 of 1997 should therefore be paid to M/S Semuyaba & Co. Advocates and M/S Okuku & Co. Advocates equally.
How much of the decretal sum is each party entitled to?
The consent judgment did not specify the amounts that each of the plaintiffs were entitled to. This could partly be because the consent was previously entered into before other parties were joined as plaintiffs.
In Nicholas Were’s affidavit in reply under paragraph 25 Annexture ‘C’, he attaches the correspondences that led to the consent judgment wherein the amount agreed as compensation for loss of earnings is Shs. 12,865,375,000= and replacement value of the trucks was put at UG Shs. 1,320,172,842=. The costs as already stated were assessed at UG. Shs. 300,000,000=. Therefore to determine how much each party is entitled to, the plaint and the negotiations and correspondences leading to the consent are helpful. Another source of guidance are the affidavits filed by the parties.
Since the consent judgment did not distribute/divide the decretal sum, all plaintiffs/respondents are entitled to an equitable share of the settlement sum. In the circumstances therefore and considering what the 3rd, 4th and 5th plaintiffs/respondents claimed (see submissions of M/S Sekabanja & Co. Advocates) each will be entitled as follows:
- 3rd plaintiff/respondent is entitled to Shs. 93,999,345= value of the motor vehicle and Shs. 1,286,375,000= as loss of earnings.
- 4th plaintiff/respondent is entitled to Shs. 176,319,984= value of the motor vehicle and Shs. 1,286,375,000= as loss of earnings.
- 5th plaintiff/respondent is entitled to Shs. 141,238,316= value of the motor vehicle and Shs. 1,286,375,000= as loss of earnings.
- Goodman Agencies Ltd is entitled to the balance of Shs. 9,914,865,197= as loss of earnings.
Regarding the proceedings in the Constitutional Court and Supreme Court, Goodman Agencies Ltd is the only party entitled to be paid the costs there from. But as conceded by the respondents, in addition to the costs in the consent judgment, the costs awarded in Constitutional Petition 3 of 2008 and Supreme Court Constitutional Appeal No. 5 of 2010 shall be paid to the lawyers of M/S Semuyaba Iga & Co. Advocates and M/S Okuku & Co. Advocates. All the awards shall carry interest at 6% per annum as decreed by the Supreme Court from 2nd September 2005 to date.
Each party shall bear its costs of this application.
I so order.
J U D G E