Apolo Hotel Corporation Ltd v Geoffrey Oryema and Ors (Civil Appeal-2006/12) [2007] UGSC 68 (21 September 2007);
Company Law, Shareholders, Property Law, Land, Land Dispute
THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA
AT MENGO
(CORAM: ODOKI, C.J, TSEKOOKO, MULENGA, KANYEIHAMBA,
KATUREEBE, JJ.S.C)
CIVIL APPEAL NO. 12 OF 2006
BETWEEN
APOLO HOTEL CORPORATION LTD ::::::::::::::: APPELLANT
AND
1. GEOFFREY ORYEMA }
2. STEVEN BALISANYUKA}
3. DANIEL MULUUTA }::::::::::::::::::::: RESPONDENTS.
4. JACK WASSWA }
5. ROBERT MUGISHA }
JUDGMENT OF KATUREEBE, JSC
The background to the suit is as follows:
The respondents had been employed in various capacities at Kampala Sheraton Hotel between 1990 and 1997. In 1997, the respondents were dismissed from service on grounds they considered unlawful. In 2002, they filed a Civil Suit in the High Court, No. 165 of 2002 against the Appellant claiming for payment of terminal benefits, general damages for wrongful dismissal with interest on the decretal sums as well as costs of the suit.
Before the hearing of the suit, the appellant filed a Notice of Motion in which the appellant raised a preliminary point of law namely, that the appellant was a wrong party to the suit because the respondents have never been its employees. During the hearing of the motion it was argued that the appellant had neither recruited, employed nor dismissed the respondents. The appellant contended that it did not own Apolo Hotel as owner or successors to Apolo Hotel Corporation. The learned trial judge accepted this submission and held that the appellant only owned the land on which the hotel stood while the Government of Uganda owned the business She dismissed the suit. Dissatisfied with the decision, the respondents appealed to the Court of Appeal, on five grounds of appeal. The first ground was abandoned while grounds second and fourth were argued together. The gist of those grounds was that the learned trial judge had misdirected herself in law and fact in holding that Apollo Hotel Corporation, the appellant’s predecessor, did not own or operate the Sheraton Hotel, but that it was owned by the Government of Uganda and operated by Sheraton Overseas Management Corporation as agent of the Government.
The ownership of the Hotel, variously known as Apolo Hotel, Kampala International Hotel, Sheraton Hotel, Kampala, etc became the core issue for decision on appeal. As Twinomujuni, JA, put it in his lead judgment at page 4:
1.
2.
Mr. Siraj Ali, counsel for the respondents, fully supported the findings and conclusions of the Court of Appeal. He argued that ownership of property is a question of law. In determining ownership, regard must be had to the instrument conferring ownership. In this case one had to consider the Apolo Hotel Corporation Act, No. 6 of 1967 which established the corporation as a statutory body with mandate to own and manage a Five – Star Hotel. Counsel further submitted that even when the name of the Hotel was changed to Kampala International Hotel by Decree No. 34 of 1971, ownership of that Hotel still remained with Apollo Hotel Corporation.
It was his view that the Government of Uganda committed an illegality by signing the Management Agreement with Sheraton Overseas Management Corporation. This agreement to him, should have been signed by a Board of Directors on behalf of the Corporation and not by a Minister on behalf of the Uganda Government. Counsel argued further that the appellant company was formed under the Public Enterprises Reform and Divestiture Act, 1993, and took over the assets and liabilities of the Sheraton Hotel Kampala. He cited object 3(a) of the Objects of the Appellant Company’s Memorandum of Association. He contended, that since the respondents had been dismissed by Sheraton Hotel Kampala on 15th May 1997, they had been prior to their dismissal, employees of Apolo Hotel Corporation by virtue of the Apolo Hotel Corporation Act. He supported the holding of the Court of Appeal that Apolo Hotel was legally owned by the appellant as legal successors to Apolo Hotel Corporation, and that the Government of Uganda had been a mere shareholder in the company. He contended further that the respondents had been recruited by Sheraton Overseas Management Corporation as agent of the owner of the Hotel, the language of the appointment letters notwithstanding. He asserted that Apolo Hotel Corporation owned the Hotel by operation of law and therefore people who worked for the Hotel were employees of the corporation. He asserted further that the learned trial judge had no basis in law or in fact to hold that the Apolo Hotel Corporation owned the land upon which the hotel was situated, but that the business of the Hotel was owned by the Government.
According to section 3 of the Apollo Hotel Corporation Act, the Apolo Hotel was clearly owned by the corporation. The relevant part reads as follows:-
(a)
(b) to encourage and attract travel to Uganda.”
Counsel for the respondents asserted that the government committed an illegality in signing a Management Agreement for the Hotel without going through the Board of Directors. Counsel could not say how this had come about as, indeed, he could not answer the question whether the Hotel was functional at the time Government signed the Management Agreement with Sheraton Overseas Management Corporation.
The learned Justice of Appeal refers to “confusion introduced in the ownership question,” and suggests that appellants (present respondents) may name the government as co-defendant. That would still have to be resolved by evidence and legal argument in the High Court, since the Government may as well also argue that it was not the proper party to be sued.
Nevertheless, the learned Justice of Appeal concludes that the
defendant was the proper defendant in the suit.
I agree with this conclusion based on the analysis of the law, i.e. the Apolo Hotel Corporation Act and the Public Enterprises Reform and Divestiture Act. I agree with the learned Justice of Appeal that although the Government was the majority shareholder in Apolo Hotel Corporation, at all times the hotel belonged to the Corporation and not to its shareholder. Indeed, when it came to divestiture under the Public Enterprises Reform & Divestiture Act, what the Government divested itself of were its shares in the Corporation, which were then transferred to the Appellant. Indeed it has to be noted, and as argued by Counsel for the Respondents,` that the Appellant has in its Memorandum of Association the following objects:
hotel.”
In the result I would dismiss the appeal and order that the case be remitted to the High Court for proper trial. I would order that the costs of this appeal abide the trial in the High Court and those in the Court of Appeal be borne by the appellant as ordered by that Court.
Dated at Mengo this 21st day of September 2007
Bart M. Katureebe
Justice of The Supreme Court
THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA
AT MENGO
(CORAM: ODOKI; TSEKOOKO, MULENGA, KANYEIHAMBA,
KATUREEBE, JJ.S.C.)
CIVIL APPEAL NO. 12 OF 2006
BETWEEN
APPOLLO HOTEL CORPORATION LTD ::::::::::::::::::::::::::::: APPELLANT
AND
1.
2. STEPHEN BALISANYUKA
3. JACK WASSWA ::::::::::::::::::::::::::::::::: RESPONDENTS
4. DANIEL MULUUTA
5. ROBERT MUGISHA
{Appeal from the decision of the Court of Appeal at Kampala (Okello, Twinomujuni
and Kitumba, JJA} dated 30th August 2006 in Civil Appeal No. 31 of 2004}
JUDGMENT OF ODOKI, CJ
I have had the benefit of reading in draft the judgment prepared by my learned brother, Katureebe, JSC, and I agree with him that this appeal should be dismissed. I also agree with the orders he has proposed.
As other members of the Court also agree, this appeal is dismissed with orders as proposed by Katureebe JSC.
Dated at Mengo this 21st Day of September 2007
B J Odoki
CHIEF JUSTICE
THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA
AT MENGO
(CORAM: ODOKI, CJ, TSEKOOKO, MULENGA,
KANYEIHAMBA AND KATUREEBE, JJ.SC.)
CIVIL APPEAL NO. 12 OF 2006
BETWEEN
AND
1. GEOFFREY ORYEMA
2. STEVEN BALISANYUKA
3. DANIEL MULUUTA :::::::: RESPONDENTS
4. JACK WASSWA
5. ROBERT MUGISHA
[Appeal from the decision of the Court of Appeal at Kampala
(Okello, Twinomujuni and Kitumba, JJA,) dated 30th August, 2006 in Civil Appeal No. 31 of 2004]
JUDGMENT OF TSEKOOKO, JSC.
Reading through the record particularly the ruling of the High Court and the judgment of the Court of Appeal, I have no doubt in my mind that the learned trial judge errered when she struck out the appellant as defendant, without conducting a full trial. I think this is a case where the trial Court should hold a scheduling conference, sort out points of agreement and disagreement between the parties, frame issues thereafter and conduct a full hearing, unless the parties agree to settle the suit.
I therefore agree with my learned brother that this matter should be remitted to the High Court for trial. I would therefore dismiss the appeal. I would order that the costs of this appeal abide the trial in the High Court and those in the Court of Appeal be born by the appellant as ordered by that Court.
Delivered at Mengo this 21st day of September 2007.
J. W. N. TSEKOOKO
JUSTICE OF THE SUPREME COURT
THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA
AT MENGO
KATUREEBE, JJ.S.C.
CIVIL APPEAL NO. 12 OF 2006
BETWEEN
APPOLLO HOTEL CORPORATION LTD :::::::::::::::::::::::::::::::::::::: APPELLANT
AND
6.
7. STEPHEN BALISANYUKA
8. JACK WASSWA ::::::::::::::::::::::::::::::::::::::::: RESPONDENTS
9. DANIEL MULUUTA
10. ROBERT MUGISHA
(Appeal from the decision of the Court of Appeal (Okello, Twinomujuni and Kitumba
JJ.A.) at Kampala, dated 30th August 2006 in Civil Appeal No. 31 of 2004)
JUDGMENT OF MULENGA, JSC
I had the advantage of reading in draft the judgment prepared by my learned brother Katureebe, JSC. I agree with him that this appeal is without merit and that it ought to be dismissed. I also concur in the orders he proposes as to costs.
Dated at Mengo this 21st day of September 2007
J. N. Mulenga
Justice of Supreme Court
THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA
AT MENGO
(CORAM: ODOKI, C.J, TSEKOOKO, MULENGA, KANYEIHAMBA, AND KATUREEBE, JJ.S.C.)
CIVIL APPEAL NO. 12 OF 2006
BETWEEN
APPOLO HOTEL CORPORATION LTD ::::::::::::::::::: APPELLANT
AND
GEOFFREY ORYEMA
STEVEN BALISANYUKA
DANIEL MULUUTA :::::::::::::::::::::::::::::::RESPONDENTS
JACK WASSWA
ROBERT MUGISHA
JUDGMENT OF KANYEIHAMBA, JSC
I have had the benefit of reading in draft the judgment of my learned brother, Katureebe, J.S.C and I agree with his reasons and decision that this appeal be dismissed and the case be remitted to the High Court for trial. I also agree with the orders he has proposed.
Dated at Mengo, this 21st day of September 2006
G.W. Kanyeihamba
JUSTICE OF SUPREME COURT