Court name
Supreme Court of Uganda
Judgment date
31 May 2011

Kabu Auctioneers & Court Bailiffs v FK Motors Ltd (Civil Appeal-2009/19) [2011] UGSC 24 (31 May 2011);

Cite this case
[2011] UGSC 24
Coram
Tsekooko, JSC
Tumwesigye, JSC
Kisaakye, JSC

THE REPUBLIC OF UGANDA

IN THE SUPREME COURT OF UGANDA AT KAMPALA

 (CORAM: ODOKI, CJ., TSEKOOKO, KITUMBA, TUMWESIGYE, KISAAKYE, JJ.S.C.

CIVIL APPEAL NO. 19 OF 2009

BETWEEN

KABU AUCTIONEERS & COURT BAILIFFS

MULJIBHAI MADHV ANI & CO. LTD.:::::::::::::::::::::::::::::::::::::::::::::::::: APPELLANTS

AND

F. K. MOTORS LIMITED :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT

[Appeal arising from the Ruling of the Court of Appeal at Kampala (Mpagi­ Bahigeine, Byamugisha and Kavuma, JJ.A) dated 16tft July, 2009, in Civil Miscellaneous Application No. 72 0/2006, arising out 0f Court 0f Appeal Civil Appeal No. 920/2003]

 

JUDGMENT OF KISAAKYE, JSC.

Kabu Auctioneers & Court Bailiffs (the 1st appellant) and Muljibhai Madhvani (the 2ndappellant) instituted this appeal against the ruling of the Court of Appeal by which the Court ordered the appellants to pay to the respondent, F. K. Motors Ltd, 2,300,000,000/= Uganda Shillings, as the value of goods seized in distress.

 

The brief background to this appeal is as follows. The respondent was a tenant of the second appellant at Plot 11, Old Port Bell Road, from November 1st 1999. The respondent defaulted in the payment of their rent and by March 28th, 2001 owed the second appellant 32,154 US Dollars in rental arrears. The respondent made several arrangements with the second appellant to pay off the arrears, which all failed to yield the desired results. Subsequently, the second appellant issued several reminders and demands which were too not heeded.

On March 28th, 2001, the first appellant, acting on the orders of the lawyers of the second appellant, Shonubi Musoke & Co. Advocates, closed up the premises which the respondent was renting for non-payment of rent. All the property the respondent had inside the premises was locked up.

Following the closure of the respondent's premises, the respondent filed H.C.C.S. No. 501 of 200 1 against the appellants for general damages for breach of contract of its Tenancy Agreement; specific damages and costs for the unlawful closure of its rented premises and for the retention of its property, contrary to the Distress for Rent (Bailiffs) Act. The respondent subsequently filed an amended plaint where it prayed for the following orders:

(a) release of their property worth US $109,000 that was still locked up;

(b) specific damages of Shs. 147,000,000/=

(c) general damages of loss of business image;

(e) interest on (a) and (b) from the date of fitting till payment in full. "

 

The specific damages the respondent sought were laid out in paragraph 12 of the amended plaint as follows:

particulars of specific damages

  1. Loss of daily earning of 1,000,000/= for 70 days with effect from the 28th March 2001,     i.e. 70,000,000/=;
  2. Loss of Avis franchise deposit 25000… i.e. 63, 000,000/=
  3. Loss of wage bill 14,000,000
  4.  Repair indemnity 23,000,000/=."

Although the sum total of the respondent's claims was higher, it apparently excluded the last head of repair indemnity and only made a gross claim of specific damages of 147,000,000/= Uganda Shillings.

The case was heard by Justice Zehurikize, who dismissed the suit with costs to the appellants and also entered judgment in favour of the 2nd appellant for, among others, rental arrears of US $32,154. The learned Judge also allowed the second appellant to sell off the respondent's properties, to satisfy the appellants' decree. He also ordered that the respondent was free to take the remainder of its properties after the satisfaction of the appellants' decree.

The respondent, being dissatisfied with that decision, filed Civil Appeal No. 92 of 2003 in the Court of Appeal. On 22nd November 2005, the Court of Appeal allowed the appeal in part and held that the first appellant had acted unlawfully when it levied distress against the respondent's property without first obtaining a Certificate to act as a Bailiff, as was required by the Distress for Rent (Bailiffs) Act. It ordered the appellants to return the respondent's property which they had unlawfully locked up in

 

the premises the respondent had been renting. The appellants failed to return the respondent's goods.

On 29th July 2006, the respondent filed Miscellaneous Application No. 72 of 2006 by Notice of Motion citing the old Rule 1(3) which is actually Rule 2(2) of the Judicature (Court of Appeal) Rules. The respondent sought for orders that the appellants pay the monetary value of its properties which the appellants unlawfully attached and for the costs of the application.

On 16th July 2009, the Court of Appeal allowed the application and ruled that the value of the respondent's property was 2,310,000,000/= billion Uganda Shillings.

The appellants, being dissatisfied with the ruling of the Court of Appeal, filed this appeal, basing it on 12 grounds of appeal, which are reproduced and considered later in this judgment.

The appellants sought for the following orders:

  1. that the appeal be allowed           
  2. that the ruling/order of the Court of Appeal be set aside/quashed
  3.       That the Application No. 72 of 2006 be struck out;
    1. In the alternative, that the Court refers the matters back to the trial court for retrial of the issue of ascertaining the value of the goods;

e) Any other remedy the Court deems fit.

The appellants were represented by Noah Mwesigwa, Kenneth Sabagayunga and Andrew Kibaya from Shonubi, Musoke and Company, Advocates, and Kampala Associated Advocates. The respondent was represented by Andrew Bagaya and

 

Mathias Sekatawa. Both counsel for the appellants and the respondent made oral submissions.

Counsel for the appellants argued grounds 1,2,3, 5 and 11 together; grounds 4, 6, 7, 8 and 11 together and lastly, grounds 10 and 12 together. On the other hand, counsel for the respondent argued all the grounds together, with a specific focus on two issues: the inherent powers of the Court of Appeal to entertain the respondent's miscellaneous application and the value of the respondent's goods. I will first consider and dispose of grounds 1, 2, 3 and 5 together. Thereafter, I will consider ground 4 alone and conclude by considering the remainder of the grounds  of appeal.

  1. "That the Learned Justices of Appeal erred in law in that they ruled that the application was brought under the wrong law and/or rule and yet proceeded to entertain and substitute the wrong rule or law."

2. "That the Learned Justices of Appeal erred in law in that they proceeded to substitute the wrong law with an equally inapplicable and irrelevant rule in the circumstances of the matter.”

3. "That the Learned Justices of Appeal erred in law in that they did not properly appreciate, assess and interpret the decisions in the cases relied upon.”

5. "That the Learned Justices of Appeal erred in law in essentially sitting in appeal of their own decision and which was not supported by law or the facts of the matter."

 

The main issue which arises from grounds 1, 2 and 5 of appeal is whether the Court of Appeal erred in entertaining the Miscellaneous Application No. 72 of 2006.

With respect to grounds 1 and 2, counsel for the appellants submitted that the Court of Appeal could not apply its inherent powers under Rule 2(2) where there is a specific rule, and where it would result in the Court sitting in appeal of its own decision. Appellants' counsel argued that the Court of Appeal erred when it entertained the respondent's application after the Court found that it had been brought under the wrong rule [2(2)]. Appellants' counsel further faulted the Court of Appeal for substituting the wrong rule with yet another wrong rule (Rule 36), which was not only inapplicable but was also irrelevant.

Counsel argued that the right procedure was for the respondent to apply under rule 30 to adduce new evidence which they did not do. Appellant's counsel prayed that the court allows the appeal and sets aside the ruling of the Court of Appeal. In the alternative, they prayed that this court orders that the matter be referred back to the trial court to review and take evidence on the value of the property.

Counsel for the respondent supported the ruling of the Court of Appeal.

As I pointed out earlier, the respondent brought Misc. Application No. 72 under Rule 2(2) of the Judicature (Court of Appeal) Rules. This Rule provides as follows:

"Nothing in these Rules shall be taken to limit or otherwise affect the inherent power of the court, or the High Court, to make such orders as may be necessary for attaining the ends of justice or to prevent abuse of theprocess of any such court, and tit at power shall extend to setting aside judgments which have been proven to be null and void after they have

 

been passed, and shall be exercised to prevent abuse of the process of any court caused by delay."

During the hearing of the application, counsel for the appellants raised a preliminary objection to the same having been brought under rule 2 (2). The Court of Appeal ruled against the objection at page 1 0 of its Ruling as follows:-

"It is trite rule 2(2) vests the court with unlimited power to rectify any injustice howsoever caused where there is no specific remedy prescribed. Rule 36, however, is prescribed for correcting errors and omissions.... We would however not dismiss the application on account of having been brought under the wrong rule. We would only substitute the wrong rule with the correct one, rule 36(1) and (2) in order to rectify an injustice. This procedure has been held to be in order as it does not cause any injustice to the opposite party."

Thereafter, the Court heard and disposed of the respondent's application under rule 36 (1) and (2). It is this decision to proceed to hear the application that counsel for the appellants argued was an error on the part of the court.

Rule 36 of the Judicature (Court of Appeal) Rules, which is headed "Correction of  Errors", provides as follows:

                                              (1) A clerical or arithmetical mistake in any judgment of the court or any error arising in it from an accidental slip or omission may, at any time, whether before or after the judgment has been embodied in a decree, be corrected by the court concerned, either of its own motion or on the application by any interested person so as to give effect to what was the intention of the court when judgment was given.

 

                       (2) An order of the court may at any time be corrected by the court, either of its own motion or on the application of any interested person, if it does not correspond with the judgment or ruling its purports to embody or, where the judgment or order has been corrected under sub rule (1) of this rule, with the judgment or order as so corrected."

Before arriving at its decision, the Court of Appeal quoted at length and relied on the case of Vallabhdas Karsandas Raniga v. Mansakhlal Jirura &Others (1965) EA 700, which considered the principles that apply to amending or varying an order of the court. "The learned Justices then concluded as follows:"

"We think there can be no better authority for the inherent matter than this. We are satisfied that rule 36 (1) and (2) is applicable and not rule 2 (2). "

Appellants' counsel contended that the applicable rule should have been Rule 30 and not Rule 36(1) and (2), as was held by the Court of Appeal.

(1) On any appeal from a decision of the High Court acting in the exercise of its original jurisdiction, the court may-

(a) reappraise the evidence and draw inferences of fact; and

(b) in its discretion, for sufficient reason, take additional evidence or direct that additional evidence be taken by the trial court or by a commissioner. (2) When additional evidence is taken by the court, it may be oral or by affidavit and the court may allow the cross-examination of any deponent.

      (3) ..... .

      (4) ..... "

 

I have carefully considered the submissions of counsel for the appellants. I partially agree with them on the point that Rule 30 was applicable to the extent of permitting the Court of Appeal to take additional evidence, if, in its discretion, it deemed it necessary to do so. In this particular case, however, the Court of Appeal indeed re-evaluated the evidence but did not take additional evidence because it arrived at the conclusion that there was enough evidence on the record to reach its decision.

I disagree with the submissions of counsel for the appellants that rule 36 was not applicable and relevant. Rule 36 is the one that vests power in the Court of Appeal to correct errors or omissions. The application before the Court was for an order to correct an omission on the part of the Court to make an alternative order that the appellant should pay the monetary value of the respondent's goods, in the event that the respondent's goods were no longer available. Rule 36 was therefore very relevant and applicable.

The above notwithstanding, appellants counsel's submission that the Court of Appeal should only have proceeded under Rule 30 is not valid. A reading of Rule 30 does not show that it only applies in a mutually exclusive way with Rule 36. In my opinion, Rule 30 would only come into play in dealing with the substantive issue of determining the monetary value of the respondent's goods. However before the court could do so, it needed to resolve the question whether it had jurisdiction to hear the application, before it, which it did by ruling that it was vested with these powers under Rule 36.

I have noted that the Court of Appeal in hearing the respondent's application was fully conversant with its duty and role, which it summarized at page 11 of its ruling

 

As follows:

“The application before court is for compensation in monetary terms of the applicant's goods, which were unlawfully distrained by the 1st respondent at the instance and application of the 2nd respondent. At the hearing of the appeal, it was never disclosed by the respondents that the goods had already been sold. The court then proceeded to give judgment for the return of the goods unaware that there were no goods to be returned but which fact was very well known to the respondents. There was therefore no alternative order for payment of their value which is the usual standard order, leaving discretion with the court to make an appropriate order under the circumstances of the case. Though it was vehemently contended for the respondents that no alternative order was sought, the prayers in the memorandum of appeal, read in part:

'It is proposed to ask the court for an order that:-

1………………………

  1. This appeal be allowed and judgment entered for the appellants as prayed in the amended plaint in the lower court.
  2. Any other remedy deemed fit and proper for the appellants'

It is thus not correct that no alternative order was prayed for. We inadvertently omitted to utilize and give effect to this prayer (3) under the mistaken belief that the goods were in existence. "

It is clear from the above quotation that the learned Justices clearly and rightly understood the application as requiring them to correct an omission to order for

 

payment of monetary value in the event that goods could not be returned. Rule 36 was applicable and relevant. I would therefore find no merit in Grounds 1 and 2 which should fail.

With respect to Ground 3, counsel for the appellants did not make any specific submission on this ground. Since counsel for the appellants failed to specifically canvass this ground, I take it that they abandoned it, hence making it unnecessary for me to rule on it.

On ground No.5 of the appeal, appellant's counsel did not make any submissions to show how the learned justices of Appeal had sat in appeal of their own decision.

 

It is an undisputed fact that the Court of Appeal has power, under Rule 36, to correct its judgments and orders before or after passing judgment, provided the conditions set out in the rules are met. This position has been well spelt in Raniga v. Jivraj (supra) and in Lakamashi Brothers Ltd. ~ Raja & Sons (1996) EA 313. This Court has also pronounced itself on this issue in the case of Uganda Development Bank v. Oil Seeds (U) Ltd. Supreme Court Civil Application No. 15 of 1997, where it laid down three principles upon which the court will exercise jurisdiction to correct errors in its decisions.

The Record of Appeal and the Court's ruling clearly focused on the issue of the determining the value of the respondent's goods, which could not be returned as ordered, because they were non-existent by the time the Court of Appeal ordered for their return. In hearing this application, the Court of Appeal was merely exercising the powers vested into it under Rule 36 of the Judicature (Court of Appeal) Rules. I have found no reason to fault the learned Justices for their decision. Ground 5 of appeal should fail.

 

I find that the Court of Appeal was right to entertain this application under rule 36. I also find that the application clearly fell under the ambit of the rule and the principles laid down in Uganda Development Bank Ltd. v. Oil Seeds Ltd. Civil Application No. of 1997, when the Court would be entitled to correct mistakes or omissions in its judgment so as to show its intention in the judgment.

I will now consider ground 4 of this appeal, which was framed as follows:

"That the Learned Justices of Appeal erred in law in that they held that the applicant was entitled to the monetary value of the goods attached."

 Counsel for the appellants contended that the learned Justices of Appeal erred in holding that the respondent was entitled to the monetary value of the goods the appellants unlawfully held. Counsel for the appellant also faulted the learned Justices of Appeal for failing to take judicial notice of the fact that execution had already been levied on the respondent's goods by themselves and other third parties, prior to the disposal of Civil Appeal No. 92 of 2003.

Counsel for the respondent, on the other hand, supported the ruling of the Court of Appeal. He submitted, on the issue of the appellants' challenge of the inherent powers of the Court of Appeal to order the payment of the monetary value of the respondent's goods. He argued that once the Court of Appeal found that distress was unlawful, the next consequential order was to order for the return of the goods.

He further argued that the Court of Appeal, however, did not order for the return of the goods because the appellants did not bring it to the Court's attention that by the time Civil Appeal No. 92 of 2003 was disposed off, the goods were no longer in existence. He further contended that if the appellants had informed the Court that the goods were no longer in existence, then the Court would not have made an order for the return of goods, but rather for payment of the value of the goods

 

which had been unlawfully retained. Lastly, respondent's counsel argued that the respondent did not know if the goods had been taken out of disputed premises.

I have reviewed the submissions of both counsels. I disagree with appellants' submissions made in support of this ground. In making their submissions and preferring ground 4 of the appeal, appellants' counsel were fully aware of the decision of the Court of Appeal in Civil Appeal No. 92 of2003, where the court had ordered for the return of the respondent's goods. The appellants did not appeal this decision. In addition, the record of appeal contains various correspondences originating from appellants' counsel to the respondent's counsel, informing them that the respondent's goods were no longer available. Given all the above, it was clear, even to appellants' counsel, that by the time the respondent filed Miscellaneous Application No. 72 of 2006, the Court of Appeal's decision in Civil Appeal No. 92 of2003 was not capable of being enforced, because the respondent's goods were no longer in existence. In the circumstances, an Order that the respondent was entitled to the monetary value of the goods was appropriate and necessary in order to give effect to the Court of Appeal's decision in Civil Appeal No. 92 of2003.

In light of the above, I find that the Court of Appeal did not err in holding that the respondent was entitled to the monetary value of its goods which the appellants had unlawfully distressed on, after it established that the goods it had ordered to be returned in its judgment in Civil Appeal No. 92 of 2003, could not be returned. This principle was reaffirmed by this court in Joy Tumushabe & Another v. Anglo-African Ltd. & Another, Supreme Court CA. No. 7 of 1999, where the court ordered for the return of the appellants' property as was proved to have been unlawfully removed and listed in accordance with the findings of the trial court or the payment of its value.

 

I have found no merit in Ground 4 of the appeal and it should fail. I will now consider grounds 6, 7,8,9, 10, 11 and 12 of appeal.

They were framed as follows:

  1. "That the Learned Justices of Appeal erred in law and in fact in that they purported to rely on and apply evidence that had neither been called nor canvassed at the hearing of the appeal."

7. "That the Learned Justices of Appeal erred in law in that they adopted a figure as the      monetary value of the goods unlawfully distrained and yet the same had neither been specifically pleaded nor specifically proved. "

            8.          "That the Learned Justices of Appeal erred in law in that they

found that the value of the goods pleaded in the Plaint was never proved and yet adopted a figure that was not pleaded or proved. "

"That the Learned Justices of Appeal erred in Law when they relied on the evidence of a witness who was not competent or qualified on the basis of the facts available to the court.

            10.         "That the Learned Justices of Appeal erred in law in that they

sought to shift the burden of proof from the respondent to the appellant. "

            11.         "That the Learned Justices of Appeal erred in law in that they

sought to base their findings on a now settled ineffective prayer for 'any other remedy deemed fit and proper' without any further

 

submission, evidence or proof and without the respondents having prayed for the value. "

                 12.         "That the Learned Justices of Appeal erred in law in that they did not

take judicial notice of the fact that execution had been levied pursuant to lawful court execution orders against the respondent's goods by the appellant and third parties and as a result of which their order would unjustly enrich the respondent."

Counsel for the appellants made several arguments in support of these grounds of appeal. First, they contended that the learned Justices of Appeal erred in law when

 

they granted the respondent's application, after they had found that the respondent

failed to prove its claim of $109,000 United States Dollars as pleaded in its amended plaint at the hearing of the suit by the High Court.

Secondly, counsel for the appellant submitted that the Court of Appeal erred when it adopted the figure of 2,300,000,000/= billion Uganda Shillings as the value of the respondent's goods which the appellants had retained and later sold. Counsel argued that adopting this figure was wrong because it had not been included in the respondent's pleadings and also because it was far in excesses of the 109,000 US Dollars that the respondent had claimed in its Amended Plaint.

Appellant's counsel further argued that Order 6 rule 1 and 9 of the Civil Procedure Rules required the respondent, as the party that brought the original suit in the High Court, to set out its claim in full and to also plead the facts upon which it was basing its claim. Counsel also cited Order 6 rule 7 of the Civil Procedure Rules in support of their submission that a party who wishes to depart from their pleadings would only do so through amendment of their pleadings. Appellants' counsel contended that if the respondent had wanted to amend its claim to be 2,300,000,000/= billion Uganda

 

Shillings, they should have done so as is provided for under the Civil Procedure Rules, but they never did so.

Counsel for the appellant relied on the case of Interfreight Forwarders (U) Ltd. v. East African Development Bank, Supreme Court Civil Appeal No. 33 of 1992, where this court declined to find the defendants liable for the crush and damage of the Plaintiffs brand new Volvo as a common carrier under common law. The court based its decision on the fact that the plaintiffs did not plead the matter of common carrier; did not frame it as an issue and did not lead any evidence to that effect during the hearing of the suit.

Counsel for the appellant also relied on the case of Walji v. Semakula, Supreme Court Civil Appeal No. 40 of 1995, where this court declined to award damages to the respondent even if it were to be assumed that the evidence adduced tended to prove special damages, on grounds that the respondent had not pleaded them in his pleadings.

Furthermore, counsel for the appellants submitted that having found in the substantive appeal No. 92 of 2003 that there was no unjust enrichment; the Court of Appeal erred when it subsequently adopted the same figure of 2,300,000,000/= billion Uganda Shillings that it had rejected earlier on.

Counsel for the appellants also drew court's attention to the fact that the trial judge ordered that the appellant were free to sell the respondent's property which was in their custody to satisfy the awards the court made in their favour. He therefore submitted that the appellant did not wrongfully sell the respondent's property as was alleged, as this was only done after judgment had been delivered by the High Court.

 

Appellant's counsel further submitted that execution took place before the respondent filed the appeal and that since the respondent never applied for a stay of execution, their lack of diligence should not be visited on the appellants.

Lastly, counsel contended that since the respondent failed to prove the value of its goods, the Court of Appeal should have either taken additional evidence or referred the matter back to the trial court.

Counsel for the respondent opposed the appeal in its entirety. In response to the appellants' contention that the respondent had only claimed 109,000 US Dollars in their pleadings, counsel for the respondent made several contradictory

 

submissions.

First, he asserted that while it is true that the respondent only claimed 109,000 US Dollars in its pleadings, it turned out in the course of the hearing that the goods were worth much more, amounting to 2,300,000,000/= billion Uganda Shillings. Despite this knowledge, counsel contended that there was no need for the respondent (the plaintiff then) to amend its pleadings filed in the High Court because the respondent's prayer was for return of goods. However, in response to the learned Justices' inquiry, he conceded that that there had been an oversight on the part of the respondent.

Counsel for the respondent later contended that despite this oversight, the value of the goods was properly established at the High Court through the testimony of PW2 and the Counter Certification of Value which had been tendered into evidence. He contended that the "veracity of