Alcon International Limited v National Social Security Fund (Civil Suit 133 of 2020) [2024] UGHCCD 177 (31 October 2024)

## **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [CIVIL DIVISION]**

#### **CIVIL SUIT NO. 133 OF 2020**

# **ALCON INTERNATIONAL LIMITED ::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF VERSUS NATIONAL SOCIAL SECURITY FUND ::::::::::::::::::::::::::::::::::::::::: DEFENDANT**

### **BEFORE: HON. JUSTICE SSEKAANA MUSA**

## *JUDGMENT*

The plaintiff brought this suit against the defendant seeking for the return of plant, machinery, equipment and building wrongfully detained since May 1998 in detinue or in the alternative, recovery of the value of the said plant, machinery, equipment and building materials, compensation for commercial loss, aggravated, special and general damages, interest and costs of the suit.

The plaintiff alleges that from the 21st July 1994 to 19th May, 1998, the plaintiff came in and erected 19 floors of a building in reinforced concrete for the defendant at Plot 1, Pilkington Road, Kampala known as Workers' House. On the 15th May, 1998, the defendant closed the plaintiff out of the construction site and denied it access to the site to remove its plant, machinery, equipment and building materials which were used to erect the building.

The plaintiff further alleges that the defendant commandeered and took away the plaint, machinery, equipment and building materials from its ownership and put it to their own use to its detriment. Despite several reminders by the plaintiff to return the plant, equipment, machinery and building materials, and the defendant deliberately refused to do so hence this suit.

The defendant filed its written statement of defence wherein it denied all the plaintiff's claims and stated that it shall raise preliminary objections that the suit is bad in law on grounds of res judicata, fraudulent misrepresentation and nondisclosure of cause of action. The defendant contended that the matter between the parties was heard and determined by Arbitration and the award confirmed by the High Court and Court of Appeal. The defendant further contended that Civil Appeal No. 15 of 2009 between the parties was heard by the Supreme Court which held that the plaintiff had no cause of action and ordered a retrial of the case. The case was retried as Civil Case No. 1255 of 1998 and was struck out for disclosing no cause of action.

The defendant contended that the retrial included matters which are claimed under the plaint in this suit. The current claims were raised both in the arbitral claim and in Civil Suit No. 1255 of 1998. The defendant further contended that it entered into a contract for construction of the Workers' House with Alcon International Ltd, a company incorporated in Kenya and was under the impression that it was dealing with such. It only became aware that it was dealing with a different company upon a decision of the Court of Appeal in Misc. Applic. No. 50 of 2007 where it established that Alcon International Limited had fraudulently assigned the building contract to the plaintiff without its knowledge and consent which was illegal and fraudulent.

The defendant further averred that upon termination of the contract with Alcon International Limited, all post termination issues were governed by the contract and that it refused to attend to the taking of the inventory. It therefore denied all allegations of deprivation of the plaintiff of its plant, equipment, machinery and damages suffered as a result.

The parties proposed several issues for determination by this court which are as follows;

- *1. Whether the plaintiff's claim is res judicata?* - *2. Whether the plaintiff's claim is bad in law or fraud, misrepresentation and illegality?* - *3. Whether the plaintiff's suit discloses a cause of action against the defendant?*

- *4. Whether the defendant is liable for the return or replacement value of the plaintiff's plant, machinery, equipment and building materials that were taken by the defendant?* - *5. What remedies are available to the plaintiff?*

The plaintiff was represented by *Mr. Oine Ronald* whereas the defendant was represented by *Mr. Tumusingize Barnabas* and *Mr. Musiimenta Ferdinand*.

The parties were ordered to file written submissions in the interest of time which were considered by this court in resolution of the issues.

The first three issues were raised by the defendant as preliminary points of law.

The Court shall therefore resolve the preliminary points raised by the defendant first before delving into the merits of this case.

#### **DETERMINATION**

## *Whether the plaintiff's claim is res judicata?*

The defendant submitted that the matters in issue between these parties have been previously heard and determined by the courts of law in Uganda and therefore res judicata. It defined the doctrine of res judicata as per the *Black's law dictionary, 9th Edition at page 1425* as; "*a thing adjudicated; an issue that has been settled by judicial decision. It is also an affirmative defence barring the same parties from litigating a second lawsuit on the same claim or any other claim arising from the same transaction or series of transactions that could have been but was not raised in the first suit."*

Counsel submitted that a matter is res judicata where the right claimed has already been adjudicated upon and cannot again be placed in contest between the same parties. *See: Mulla, The Code of civil procedure, 16th Edition, page 156.* The doctrine of *res judicata* is embodied in section 7 of the Civil Procedure Act which bars the court from trying issues that have been directly and substantially in issue and finally decide between the same parties in a former suit. This effectively includes any matter which might and ought to have been made a ground of defence or attack.

It was submitted that to determine whether an issue or suit is *res judicata*, three elements ought to be proved as stated by the *Supreme Court in Karia and Another v. Attorney General and others [2005] 1 EA 83* to be that; there has to be a former suit or issue decided by a competent court; the matter in dispute in the former suit between the parties must also be directly or substantially in dispute between the parties in the suit where the doctrine is pleaded as a bar, and the parties in the former suit should be the same parties or parties under whom they or any of them claim, litigating under the same title.

Counsel submitted that the three elements to adjudge this matter as being *res judicata* are present. According to the plaint in High Court Civil Suit No. 1255 of 1998 and the arbitration claim filed by the plaintiff against the defendant in 1998, the plaintiff under paragraph 8 of the claim, sought to recover "Capital Loss – plant and machinery in the sum of USD. 1.974,000". The arbitrator found in favor of the plaintiff and among others awarded it USD. 2,781,528.52 being for losses suffered as a result of seizure of plant, machinery, equipment and building materials. The said award was later confirmed by both the High Court and Court of Appeal of Uganda.

Counsel submitted that while the arbitral award was later set aside by the Supreme Court in the Civil Appeal No. 15 of 2009, the matter was remitted to the high court for retrial. At this point, the plaint/claim under the High Court Civil Suit No. 1255 of 1998 retained its original character with a claim for plant, machinery, equipment and building materials. This suit was later determined conclusively by Miscellaneous Application No. 940 of 2018 in which the suit was dismissed for nondisclosure of a cause of action.

To date, no appeal has been preferred by the plaintiff against the ruling in the said application that determined High Court Civil Suit No. 1255 of 1998. Counsel therefore submitted that the question as to the alleged seizure of the plaintiff's plant, machinery, equipment or recovery of their value, has been substantially determined conclusively or one could say there was a reasonable expectation that it should have handled as an issue in High Court Civil Suit No. 1255 of 1998.

In regards to the matter in the former suit between the parties being directly or substantially between the parties in the suit where the doctrine is pleaded as a bar, counsel submitted that it is clear that the claim in High Court Civil Suit No. 1255 of 1998 included the claim for plant, machinery and equipment and was therefore handled under the former suit.

Counsel further submitted that whereas the action in the said suit was premised on breach of contract as the cause of action, the plaintiffs had an opportunity to raise the issue as to whether the defendant is liable for the return or replacement value of the plaintiff's plant, machinery, equipment and building materials that were taken by the defendant" in the retrial of Civil Suit No. 1255 of 1998 but they did not do so.

Counsel therefore submitted that from the pleadings filed in court by the plaintiff, the issues being raised in this suit were directly and substantially raised in High Court Civil Suit No. 1255 of 1998.

In respect of the requirement that the parties in the former suit should be the same parties litigating under the same title; it was submitted that when Civil Suit No. 1255 of 1998 was filed, the defendant assumed that the plaintiff in the case was Alcon International Limited, a company incorporated in the Republic of Kenya. Indeed, this went on through arbitration, confirmed by the High Court and it was after the plaintiff filed Court of Appeal Misc. Applic. No. 50 of 2007 that it was discovered by the defendant and the court that party that had indeed filed Civil Suit No. 1255 of 1998 and the arbitration claim was the plaintiff. Consequently, when the matter was remitted to the High Court for retrial, the plaintiff maintained its position as the plaintiff in Civil Suit No. 1255 of 1998 which had been filed by the said plaintiff against the defendant.

Counsel therefore submitted that the issues raised by the present suit were not only directly but also substantially in Civil Suit No. 1255 of 1998 and finally decided between the same parties in the said suit vide Misc. Applic. No. 940 of 2018 and are thus barred by the doctrine of *res judicata*.

Plaintiff's counsel submitted that the pre-requisites to establish a successful plea of the doctrine of *res judicata* are not present in the instant case and that the plaintiff was not privy to the proceedings in Arbitration Cause No. 4 of 2001, High Court Misc. Application No. 417 of 2001 and initially, High Court Suit No. 1255 of 1998. The plaintiff only became a party to the proceedings following the Court of Appeal's ruling in Civil Application No. 50 of 2007, Alcon International Ltd – vs – Kampala Associated Advocates.

Counsel further submitted that it is not in dispute that Alcon International (K) Limited; the contractor and Alcon International (U) Ltd; the plaintiff are distinct legal and corporate entities. That said, there is no evidence on record to prove or even suggest that in claiming Capital loss, plant and machinery in Arbitration Cause No. 4 of 2001 and High Court Civil Suit No. 1255 of 1998, the contractor was acting on behalf of or litigating under the name / title of the plaintiff so as to bar the plaintiff's claim for its plant, machinery and equipment in this suit.

The plaintiff submitted that paragraph 4(a) of the claim categorically reveals that claimant in the arbitration was the contractor and the cause of action was founded on the building contract executed by the parties on 21st July 1994. The plaintiff, as held by the Supreme Court in Civil Appeal No. 15 of 2009 and the High Court in Misc. application no. 940 of 2018 was not a party to that contract.

Counsel submitted that it is now trite law that where a defence of *res judicata* is pleaded, the burden to prove the prerequisites of the defence entirely lies on the defendant. In *Onzia Elizabeth – vs- Shaban Fadul HCCA No. 09 of 2013*, *Hon. Justice Stephen Mubiru* held that the burden of proving *res judicata* was on the respondent and it is not a pure question of law which could be resolved on basis of the submissions of counsel alone but a question of mixed law and fact.

Counsel further submitted that whereas the defendant heavily referred to the plaint in High Court Civil Suit No. 1255 of 1998 to buttress its pleas of *res judicata*, the plaint was never adduced in evidence. He thus submitted that that notwithstanding, it is evident from ExD.3 that the claimant in Arbitration Cause No. 4 of 2001 (which emanated from HCCS no. 1255 of 1998) was the contractor and not the plaintiff. Counsel submitted that the plaintiff was only substituted for the contactor in Civil Appeal No. 02 of 2004 and subsequently, the retrial of HCCS No. 1255 of 1998 after it was referred to the High Court by the Supreme Court.

During the retrial, the plaintiff's application for amendment of pleadings in HCCS No. 1255 of 1998 was dismissed which meant that the plaintiff proceeded on the earlier pleadings in HCCS No. 1255 of 1998 wherein the cause of action was premised on the building contract to which the plaintiff was not a party and on the basis of which, the plaintiff had no cause of action. It is therefore not surprising that HCCS No. 1255 of 1998 was never determined on its merits but was dismissed on a preliminary objection, for failure to disclose a cause of action against the defendant.

To date, there is no final decision of a competent court on the merits, in a suit between the plaintiff and the defendant, in respect of the plaintiff's plant, machinery and equipment. While relying on *Onzia Elizabeth – vs- Shaban Fadul HCCA No. 09 of 2013* (supra), counsel stated that the court held that to give effect to the plea of *res judicata*, the matter directly and substantially in issue must have been heard and finally disposed of in the former suit. Therefore, where the decision was not made on the merits of the suit, the matter cannot be *res judicata*.

## *Analysis*

I have considered the parties' pleadings, evidence and submissions in respect of this issue for consideration by this court. The thrust of defendant's case is that the plaintiff's claim before this court is *res judicata*.

There is wealth of authorities on the doctrine of *res judicata*. *Section 7 of the Civil Procedure Act* provides that no court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try the subsequent suit or the suit in which the issue has been subsequently raised, and has been heard and finally decided by that court.

The Court of Appeal in *Ponsiano Semakula vs Susane Magala & Ors [1993] KALR 213* explained the doctrine of *res judicata* as follows; -

*"The doctrine of res-judicata, embodied in s 7 of the Civil Procedure Act, is a fundamental doctrine of all courts that there must be an end of litigation. The spirit of the doctrine succinctly expressed in the well-known maxim: 'nemo debt bis vexari pro una et eada causa' (No one should be vexed twice for the same cause). Justice requires that every matter should be once fairly tried and having been tried once, all litigation about it should be concluded forever between the parties. The test whether or not a suit is barred by res-judicata appears to be that the plaintiff in the second suit trying to bring before the court in another way and in the form of a new cause of action, a transaction which he has already put before a court of competent jurisdiction in earlier proceedings and which has been adjudicated upon. If so, the plea of resjudicata applied not only to points upon which the first court was actually required to adjudicate but to every point which properly belongs to the subject of litigation and which the parties, exercising reasonable diligence might have brought forward at the time".*

As submitted by counsel, the Supreme Court in *Mansukhlal Ramji Karia & Anor v Attorney General & 2 Ors Civil Appeal No. 20 of 2002* laid down the minimum conditions to be satisfied under for section 7 of the Civil Procedure Rules to include;

- *a) There have to be a former suit or issue decided by a competent court.* - *b) The matter in dispute in the former suit between parties must also be directly or substantially in dispute between the parties in the suit where the doctrine is pleaded as a bar.* - *c) The parties in the former suit should be the same parties, or parties under whom they or any of them claim, litigating under the same title.*

The Court with approval cited *HCCS 553 of 1966; Ismail Karshe Vs Uganda Transport Ltd cases on Civil Procedures and Evidence, Vol.3 page.1,* where Sir Udo Udoma, held that once a decision has been given by a court of competent jurisdiction between two persons over the same subject matter, neither of the parties would be allowed to relitigate the issue again or to deny that a decision had in fact been given, subject to certain conditions. I shall then consider the conditions set out under section 7 of the Civil Procedure Act and the authorities cited above to the facts before me. Alcon International Limited filed a claim for arbitration against the defendant and Ssentoongo & Partners claiming for special damages, general damages, a declaration for wrongful termination and indemnification of third party claims. Alcon International Limited claimed that the respondents wrongfully entered and imposed security on the site on 28th April, 1998 thereby obstructing the works, interfered through unreasonable and vexatious default notices, purported to terminate the contract and wrongfully seized the claimant's plant, machinery and material at the site and stores

Alcon International Limited averred that these several acts constituted breaches of the contract resulting into loss and damage and claimed special damages amounting to US\$ 28,851,209.75 and general damages for termination of the contract, loss of earning for non-use of the plant and machinery, injury to reputation, loss of business and consequential losses.

The Arbitration court ruled in favor of Alcon International Limited thereby awarding it US\$ 1,248,786.33 for breach of the co-financing agreement, US\$ 3,435,727.00 as the value of unpaid work, US\$ 2,781,528.52 for the seized plant, machinery and material as per the list produced by the contractor, US\$ 1,392,428.12 as loss of profit; all amounting to a total sum of US\$ 8,858,469.97 and costs of the arbitration.

It is the plaintiff's contention that it was never privy to the proceedings in Arbitration Cause No. 4 of 2001 and later High Court Civil Suit No. 1255 of 1998; which emanated from the arbitration proceedings between the parties therein. The plaintiff contends that it only became a party to the proceedings following the Court of Appeal Ruling in Civil Application No. 50 of 2007 and later Civil Appeal No. 02 of 2004 and subsequently the retrial of HCCS No. 1255 of 1998 as referred back to the High Court by the Supreme Court.

A clear look at the record of court shows that the parties before the arbitration court were the Alcon International Limited; the plaintiff herein and National Social Security Fund. These were the 'same parties' before the High Court in Civil Suit No. 1255 of 1998. A further scrutiny of Civil Applications No. 50 of 2007 and Civil Appeal No. 02 of 2004, Supreme Court in the Civil Appeal No. 15 of 2009 and subsequently the retrial of HCCS No. 1255 of 1998 leaves no doubt that the plaintiff before this court was the party therein.

It would be inconceivable to imagine that Alcon International Limited Kenya which did not own the plant and machinery and other equipment could have gone to court to claim for the same and further had no claim as to the plant and machinery would file an arbitration claim in the circumstances. Furthermore, the Supreme Court in Civil Appeal No. 15 of 2009 made its pronouncement as to the party involved in Civil Suit No. 1225 of 1998 to have been Alcon International Limited Uganda which performed the terms of the contract and not Alcon International Limited Kenya. It found that the Alcon International Limited; the plaintiff herein could not claim based on the agreement entered into by the Defendant and Alcon International Limited Kenya and as such, had no cause of action. The matter was sent back for trial before the High Court wherefrom the defendant filed Misc. Civil Application No. 940 of 2018 seeking to strike out the plaint in High Court Civil Suit No. 1255 of 1998. Thus Court before Hon. Justice David Wangutusi (as he then was) took cognizance of this finding and had the suit dismissed for lack of cause of action.

Indeed, no appeal has been preferred by the plaintiff against the ruling in the said application vide Misc. Civil Application No. 940 of 2018 that determined High Court Civil Suit No. 1255 of 1998. In the circumstances therefore, it is clear that there was a former suit vide High Court Civil Suit No. 1255 of 1998 which was heard by the High Court and an appeal before the Court of Appeal and subsequently the Supreme Court which ordered for a retrial hence the final determination thereof.

It suffices to note that the plaintiff's claim is for the return of plant, machinery, equipment and building materials wrongfully detained by the defendant since 1998 and/ or recovery of the value of the said plant and equipment. A thorough look at the claim in the High Court Civil Suit No. 1255 of 1988 clearly shows that the plaintiff therein raised issues to do with the said plant, machinery and equipment which were the retained by the defendants upon termination of the contract with Alcon International Limited. There was a reasonable expectation that it should have handled as an issue in High Court Civil Suit No. 1255 of 1998.

This essentially means that the matter in dispute before this court and in the Civil Suit No. 1255 of 1998 is directly or substantially between the same parties before this court and as such, subject to the doctrine of res judicata. The plaintiff's suit is an afterthought; where it is becoming wiser by bringing this suit independent of the contract entered into by Alcon International Limited Kenya based on a tort or conversion having failed to succeed under the Civil Suit No. 1255 of 1998.

Having found that the parties herein were the same parties and the subject matter for which the plaintiff seeks this court's adjudication substantially the same as before the High Court in Civil Suit No. 1255 of 1998 and as determined by the Supreme Court in Civil Appeal No. 15 of 2009 and further Misc. Applic. No 940 of 2018, I find that the matter before this court is *res judicata* and thus barred by statute.

## *Whether the plaintiff's claim is bad in law or fraud, misrepresentation and illegality?*

Defence counsel defined misrepresentation according to the *Black's Law dictionary, 9th Edn, pg. 1091 as the act of making a false or misleading assertion about something with the intent to deceive*. He further defined fraud as the intentional perversion of the truth according the case of *Fredrick Zaabwe vs Orient Bank & Ors SCCA No. 4 of 2006*. He further noted that fraud is further defined as a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment. He stated that a misrepresentation is fraudulent if the maker knows or believes that the assertion is not in accord with the facts or knows that he does not have the basis that he states or implies for the assertion.

Counsel also defined an illegality as per the *Black's Law Dictionary* to mean *an act that is not authorized by law*. He contended that the plaintiff's claim is marred with illegalities and based on fraud and fraudulent misrepresentation that led to the illegal entry onto the defendant's premises from which the plaintiff's should not derive benefit. He stated that it is not disputed that without the defendant's knowledge or consent, the plaintiff entered onto its premises.

That from 21st July 1994 until the determination of Court of Appeal Civil Appeal No. 50 of 2007, the plaintiff represented itself to be Alcon International Limited, a company incorporated in the Republic of Kenya with whom the defendant had contracted. Counsel also stated that the plaintiff concealed its true identity from the defendant for the intent to deceive and mislead it. That the plaintiff's actions were for its own gain and to the detriment of the defendant who believed that it was dealing with an experience contractor with the requisite expertise to conclude the project.

Counsel submitted that during the cross examination, PW1 confirmed the said misrepresentation and confirmed that from 21st July 1994 to 15th May, 1998, the plaintiff came and erected 19 floors of the building even when Alcon International Uganda had not won the bid for the construction of Workers House and when there was no contract between the plaintiff and defendant.

DWI in his testimony under paragraph 20 of his witness statement stated that the Court of Appeal in Civil Applic. No. 50 of 2007 found that while the contract was awarded to Alcon Kenya, the construction works were in fact carried out by the plaintiff, Alcon (Uganda). This is when the defendant learnt of the plaintiff's and Alcon, Kenya's fraud on the implementation of the contract. Counsel therefore stated that from the evidence on the record, it is abundantly clear that the plaintiff's fraud and misrepresentations were effective and from 1994 until 2007, the defendant believed that the person on the site for execution of the contract was Alcon International Limited, Kenya.

Counsel further submitted that it is not in dispute that the plaintiff during the bidding process was found to be devoid of the experience in construction of buildings with the specifications of Worker's House, which is why it was not selected as the best bidder. However, through fraud, it entered onto the defendant's premises and proceeded with the construction of the Worker's House. He submitted that the misrepresentations admitted by PW1 were not merely fraudulent but were also injurious to the defendant and the plaintiff should not be allowed to benefit from such actions that are abhorred by the court and frowned upon by the public policy.

Counsel invited this court to consider the holding in *Lazarus Estates Ltd vs Beasley [1956] 1 Q. B 702* where court held that no court in this land will allow a person to keep an advantage he has obtained by fraud. No judgement of a court, no order of a minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved but once it is proved it vitiates judgments, contracts and all transactions whatsoever. He therefore prayed that the court finds that the plaintiff's entry onto the defendant's premises was a result of fraud and it cannot be allowed to take an advantage from an admitted fraud.

On the issue of illegality, counsel submitted that the plaintiff's actions were illegal in nature as the assignment between it and Alcon International Limited, Kenya did not fulfill the requirements necessary under the law and any claim based on the actions arising from the assignment should be entertained by court. He stated that it is not in dispute that the plaintiff's claim for plant, machinery and building materials emanated from illegal assignment and entry onto the defendant's premises. He stated that it is for these reasons that Kitumba JSC in Civil Appeal No. 15 of 2009 found that the proceedings in the case were tainted with fraud and illegalities and therefore could not stand. Counsel submitted that these illegalities once brought to the attention of the court override all other considerations as held in *Makula International Limited vs His Eminence Cardinal Nsubuga & Anor SCCA No. 4 of 1981*.

Counsel therefore prayed that the suit be rendered bad in law for fraud, misrepresentation and illegal actions of the plaintiff that allowed them access to the defendant's premises.

Plaintiff's counsel submitted that having obtained a 19-floor building in reinforced concrete, the plaintiff is unable to understand what loss was occasioned to the defendant. He stated that from paragraph 8 to n ExD.1, it is evident that it is the contractor and the plaintiff that incurred losses of over USD 23,800,000 and no evidence of loss accruing to the defendant has been adduced in court.

Counsel submitted that the plaintiff's claim for its plant, equipment, machinery and building material cannot be construed as a benefit/ advantage to the plaintiff. Its

claim is not only bonafide but also is acknowledged by the defendant. Suffice to note that in August, 2004 long after the termination of the building contract, the defendant appreciated the need to rightfully compensate the plaintiff for its plant, equipment, machinery and building materials that had been left at the construction site in 1998.

He further submitted that the defendant has repeatedly misapplied the doctrine of *"ex turpi causa non oritur actio"* so as to wrongfully detain the plaintiff's suit properties. The defendant's conduct amounts to unjust enrichment and ought to be condemned by this court. Counsel also submitted that the defendant's arguments pertaining to illegality, fraud and misrepresentation premised on the building contract are diversionary and are being maliciously resuscitated by the defendant to defeat the plaintiff's claim. The defendant's assertions and submissions in this regard are *res judicata* having been earlier settled in Supreme Court Civil Appeal No. 15 of 2009 and HCCS No. 1255 of 1998. He therefore prayed that the defendant's objections on this issue be overruled for being misconceived.

## *Analysis*

The defendant contended that the plaintiff's claim is bad in law for fraud, misrepresentation and illegality. The courts of law have extensively defined and adjudicated on what amounts to fraud, misrepresentation and illegality.

Fraud has been defined by the Supreme Court in the case of *Fredrick Zaabwe vs Orient Bank & Others SCCA No. 4 of 2006* to mean the intentional perversion of the truth by a person for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or her or to surrender a legal right. It is a false representation of a matter of fact whether by words or by conduct, by false or misleading allegations or concealment of that which deceives and it is intended to deceive another so that he or she shall act upon it to his or her legal injury.

In *Kampala Bottlers Ltd vs Damanico (U) Ltd, SCCA No.22 of 1992*, it was held that fraud must be strictly proved, the burden being heavier than one on balance of probabilities generally applied in civil matters. It was further held that the party must prove that the fraud was attributed to the transferee. It must be attributable either directly or by necessary implication, that is; the transferee must be guilty of some fraudulent act or must have known of such act by somebody else and taken advantage of such act.

It is not in dispute that the plaintiff was not a party to the contract entered into between the defendant and Alcon International Limited Kenya which had the duty to carry out the construction of the defendant's offices. However, the plaintiff well knowing that it did not win the bid for the construction of the said premises came onto the premises and took on the construction of the same without any contract with the defendant. It suffices to note that it is under the performance of the terms of this contract that the plaintiff now seeks to recover its plant, machinery and equipment from the defendant.

It is indeed true that the plaintiff was fraudulent when it entered onto the defendant's premises well aware that it did not win the bid and had no contract with the defendant under the guise of being Alcon International Limited Kenya. The defendant was kept in the dark of its real identity until the same was uncovered in Civil Applic. No. 50 of 2007. I agree with the plaintiff in as far as its submission that these assertions were settled by the Supreme Court in Civil Appeal No. 15 of 2009 and HCCS No. 1255 of 1998 and found in favour of the defendant.

As stated by the defendant, an illegality once brought to the attention of court overrides all questions of pleadings including any admissions made thereon. As was held by the *Supreme Court in Makula Internantional (supra),* a court of law cannot sanction that which is illegal. The plaintiff cannot seek to recover from a transaction in which he was illegally performing without any contractual relationship with the defendant.

In the circumstances, this objection is upheld as against the plaintiff.

## *Whether the plaintiff's suit discloses a cause of action against the defendant?*

## *Defendant's submissions*

The defendant while citing *Fakrudin Vallibhai Kapasi & Anor vs Kampala District Land Board & Anor Civil Suit No. 570 of 2015* submitted that to demonstrate a cause of action, only a plaint and the attachments must be perused and the existence of a right to bring a suit must be established at the time of filing the plaint lest the court is left guessing as to the plaintiff's capacity. Counsel stated that a cause of action is disclosed where the plaint demonstrates the existence of a right which has been violated and the liability of the defendant for the violation of such right. He stated that Order 7 rule 11 (a) of the Civil Procedure Rules makes the nondisclosure of a cause of action a ground for the rejection of a plaint and ultimately the dismissal of the suit.

Counsel stated that paragraph 3 of the plaint describes the plaintiff's cause of action being for the return of machinery, equipment and building materials wrongfully detained by the defendant since May, 1998 in detinue or in the alternative, recovery of the value of the said plant, machinery, equipment and building materials, compensation for commercial loss, aggravated, special and general damages and costs. He stated that the plaintiff's claim lies in the tort of detinue; however, the pleadings and annextures thereto do not disclose the elements of the said cause of action.

Counsel stated that detinue is a common law cause of action to recover personal property wrongfully taken or withheld by another. That a cause of action in detinue lies at the suit of a person who has an immediate right to possession of the goods against a person who has actual possession of them and who upon proper demand fails or refuses to deliver them up without lawful excuses. For one's pleadings to disclose a cause of action in detinue, they must show that the property belongs to the plaintiff, the property is unlawfully held by the defendant, a demand is made by the plaintiff and there is a refusal by the defendant to return the goods upon demand without justifiable reason.

It was submitted for the defendant that according to the plaint under paragraph 4, it is pleaded that on 15th May, 1998, the defendant closed the plaintiff out of the construction site at Plot 1 Pilkington Road and denied it access to the site to remove its plant, machinery, equipment and building materials used to construct the building. The plaintiff attached a list of said equipment as Annexture A. That whereas it is an admitted fact that the plant, machinery, ad materials that were left on the site belonged to the plaintiff and had to be removed to allow to construction of the building to be completed, no evidence has been adduced of the unlawful nature in which they were kept or retained.

Counsel submitted that the plaintiff has failed to show any evidence of unlawful detention of its property by the defendant. That rather, the defendant adduced evidence to show that the plaintiff was invited to value the said property, machinery, equipment and materials which in no uncertain terms it declined. He therefore submitted that the failure to prove the unlawfulness of the detention of the property goes to the heart of the claim and this has not been proved.

In respect of the demand being made by the plaintiff and refusal to return the goods, the defendant submitted that whereas the plaintiff avers that it made several demands for return of its property under paragraph 4 (d) of the plaint; it did not attach any of the its demands and none was entered into evidence on the court record during hearing.

Counsel submitted that it is settled law in detinue that no wrong is assumed to exist until the refusal to deliver up on demand made by the person entitled to make a demand. The demand must be specific for the delivery of goods in question and must also have been made by the owner of the goods or some person in his name and with his authority as stated in *Nixon vs Sedger (1890) 7 TLR 112 C. A and Abdu Ochaki & 98 Ors vs British American Tobacco (2017)*. He submitted that proof of demand and subsequent refusal by the defendant to honour such demand without unlawful justification are required to demonstrate a cause of action.

He therefore submitted that the pleadings as filed by the plaintiff did not sufficiently disclose a cause of action in detinue against the defendant.

The plaintiff submitted that during cross examination, DWI conceded that ExD6, ExD.7 AND ExD8, these being the impugned invitations to the plaintiff were never received by the plaintiff. He submitted that the defendant's assertions pertaining the numerous invitations to value the plant, machinery, equipment and building material are therefore baseless and not sustained by evidence.

As regards the demand for the return of its plant, machinery, equipment and building materials, the plaintiff submitted that the law does not prescribe the form that the demand must take. Counsel stated that the original plaint in High Court Civil Suit No. 1255 of 1998 as well as the statement of claim in Arbitration Cause No. 4 of 2001 suffices as proper demands for the return of the plaintiff's equipment. The necessity of the demand is to notify the defendant that it is holding onto the plaintiff's properties without lawful justification which was clearly achieved by the High Court Civil Suit No. 1255 of 1998 and Arbitration Cause No. 4 of 2001.

In respect of the assertion that the plaintiff's claim for the replacement value of plant, machinery and equipment being time barred under section 3 (1) (a) of the Limitation Act, counsel stated that it is trite law that detinue is a continuing tort and therefore cannot be barred by limitation. Counsel relied on the case of *J. A Osama vs Transocean (U) Ltd HCCS No. 1385 of 1986* where it was held that so long as the wrongful detention of the chattel continues, the cause of action arises *de die dem* (from day to day and that case, the plaintiff can recover or such portion of the tort as lie within the limitation period prescribed by the statute limitation even though the first commission of tort procured outside the time prescribed by law.

Counsel therefore submitted that the defendant's objections to the competence of the plaint are unfounded, misconceived and legally untenable and prayed that this court finds that the plaint discloses a cause of action against the defendant and that it is liable to pay the plaintiff's plant, machinery and equipment.

## *Analysis*

To appreciate this matter, it is important to consider the Rules of Procedure of this Court. *Order 4, Rule 1 (2) of the Civil Procedure Rules* requires that a plaint complies with Order 6 and 7 of the Civil Procedure Rules. A plaint must contain facts constituting the cause of action and when it arose and one that does not disclose a cause of action must be rejected.

To establish whether a cause of action exists, only the plaint and its annextures must be looked at by the court. A cause of action has been defined to mean every fact which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgement of the court. It is a bundle of facts which taken with the law applicable to them, gives the plaintiff a right of relief against the defendant. I wish to restate that to disclose a cause action, the plaint must show he/ she had a right, the right was violated and the defendant is liable. See; *Kapeka Coffee Works Ltd vs NPART CACA No. 3 of 2000, Wycliffe Kiggundu vs Attorney General Civil Appeal No. 27 of 1993, Attorney General vs Tinyefuza Constitutional Appeal No. 1 of 1997, Auto Garage vs Motokov [1971] EA 514,*

In the circumstances, does the plaintiff have a cause of action against the defendant? The question will be answered by looking at the plaint and any annextures attached thereto. There was only one annextures being a copy of the list of the plant, machinery and equipment and building materials. In the plaint, it is pleaded under paragraph 3 that;

*"The plaintiff's claim against the defendant is for the return of the plant, machinery, equipment and building materials wrongfully detained since May, 1998 in detinue or in the alternative, recovery of the value of the said plant, machinery, equipment and building materials, compensation for commercial loss, aggravated, special and general damages, interest and costs.*

The plaintiff alleges that defendant commandeered and took away the said plant, machinery, equipment and building materials from its ownership despite several demands and has deliberately failed and/ or refused to hand over the said property.

From the foregoing averments, it is clear that the plaintiff alleges that it owned the property, plant and equipment and building materials to which it owned as of right and the defendant has done something in violation of this right. The plaintiff's cause of action is therefore in detinue.

Detinue consists in a wrongful withholding of the Plaintiff's goods. It does not matter whether the person or the wrong doer; that is the detainee of the goods obtained possession of the detained goods lawfully or illegally or by seizure. What is relevant is the wrongful retention of the chattel after demand. It is therefore material that, to sustain an action in detinue, there must be demand by the plaintiff

and on receipt of this notice; the persistence in keeping the chattel by the defendant would give rise in detinue. See: *Nalubega Ruth t/a Nyonyi Traders vs DL Properties Ltd & Anor HCCS No, 294 of 2021*

The essence of detinue is that the defendant holds onto the property belonging to the plaintiff and fails to deliver the property to the plaintiff when a demand is made. The goods must be in the custody of the defendant at the time the demand for them is made before an action in detinue can succeed. The cause of action in detinue is the refusal of the defendant to return the goods to the plaintiff after the plaintiff has made a demand for them.

According to *Winfield and Jolowicz on Tort 9th Edition at pg. 418*, the plaintiff must prove that he is entitled to immediate possession of the chattel and in case of any defect in his right to immediate possession, the action must fail. Secondly the plaintiff must prove that the defendant had detained the chattel after the proper demand had been made for its restoration. From the authorities above, it is essential for the plaintiff to prove that it delivered the chattels to the Defendant. Secondly the plaintiff has to prove that it made a demand for the chattels and the Defendant refused to deliver them.

It is therefore important to note that detinue consists a wrongful withholding of the plaintiff's goods and is the proper action to bring if the plaintiff wishes to recover possession of his goods, and not merely their value. Detinue is a continuing cause of action which accrues at the date of the wrongful refusal to deliver up the goods and continues until delivery up of the goods or judgement in the action for detinue. *Departed Asian Property Custodian Board versus Issa Bukenya; SCCA 92 of 1992*

The defendant alleged that the plaintiff's claim does not raise a cause of action in detinue since there was no demand of the goods. Indeed, a clear look at the plaint and the annextures attached thereto shows that there is no demand made by the plaintiff in respect of any plant, machinery, equipment and building materials to the defendant. As noted above, the plaintiff must show that demand for the property was made to the defendant and the defendant willfully held onto the property and refused to deliver them.

A thorough look at the plaint shows that there is no such evidence of demand of the property by the plaintiff from the defendant to establish the claim of detinue attached to the plaint. I do concur with the defendant that it is settled law that to demonstrate a cause of action, only a plaint and the attachments must be perused and the existence of a right to bring a suit must be established at the time of filing the plaint lest the court is left guessing as to the plaintiff's capacity.

In the circumstances, it is clear that the claim of detinue as against the defendant did not arise as there has never been demand of the plant, machinery, equipment and building materials from the defendant. In addition, there is no proof that the alleged property belonged to the plaintiff since the alleged property had earlier been claimed by Alcon International Limited incorporated in Kenya. Presenting a list of items at site should not infer that the plant and machinery and other materials belonged to the plaintiff.

In the alternative to the claim of detinue, the plaintiff claimed for the recovery of the value of the said plant, machinery, and equipment and building materials. It is important to note that the plaintiff alleged under paragraph 4 (b) of the plaint that the cause of action for recovery of the plant, machinery, equipment and building materials accrued to the plaintiff on the 15th May, 1998 after the contract had been terminated.

The *Limitation Act under section 3 (1) (a)* provides that an action founded on a tort shall not be brought after the expiration of six years from the date on which the cause of action arose. It is also settled law that unless the particular statute states so expressly, the court has no residual power to extend time set by an Act of Parliament. It is further the position of the law that a limitation statute is strict in nature and inflexible and is not concerned with the merits of the case. Noncompliance with the limitation period renders the suit a nullity. The Supreme Court in *Madhvani International SA v AG; SCCA No. 23 of 2010* cited with approval the case of *Hilton v Sutton Steam Laundry [1956]1 KB 73 where Lord Greene M. R at p.81* stated that;

*"But the statute of limitation is not concerned with merits, once the axe falls, it falls, and a defendant who is fortunate enough to have acquired the benefit of the statute of limitation is entitled, of course, to insist on his strict rights''.*

The Limitation Act imposes a period of limitation within which actions must be instituted in order to protect defendants from being vexed by stale claims relating to long-past incidents to which their records be unavailable and to which their witnesses have no accurate recollection. It is to encourage a plaintiff to institute proceedings as soon as it is reasonably possible to do so. Litigation should be brought within a reasonable time to enable the court deal with the cases promptly and justly.

The period of limitation begins to run as against a plaintiff from the time the cause of action accrues until when the suit is actually filed. As noted from the plaint, the plaintiff's cause of action arose on the 15th of May, 1998 and it is at this point that the claim arose. I am alive to the fact that a tort in detinue is a continuing tort. However, in the circumstances, I am not convinced that plaintiff's claim for the recovery of the value of the property arising from a tort is not time barred having arisen in 1998. The assertion of the plaintiff that the tort continues until date as against the defendant would be to defeat the purpose and essence of the provisions of the Limitation Act. The plaintiff ought to have filed a suit for recovery if at all the plant and machinery and other materials belonged to them as they contend. There is no justification for the prolonged delay to seek recovery after over 22 years, and this being a tort its cause of action ought to have been filed within 6 years as per section 3 of the Limitation Act.

Furthermore, it has been established, the plaintiff filed an Arbitration Cause No. 4 of 2001 and therefrom, HCCS No. 1255 of 1998 for the recovery of the value of the plant, equipment and machinery and cannot therefore not bring the same cause of action before this court under the guise of a continuing tort in detinue for which it is entitled to recovery of the value of the property.

I therefore find that the plaintiff has not established a cause of action in detinue against the defendant. This preliminary objection is therefore upheld.

Having upheld the all the preliminary objections raised by the defendant in respect of the plaintiff's suit, I shall not delve into the merits of this case.

This suit is dismissed with costs to the defendant.

I so order.

*SSEKAANA MUSA JUDGE 31st OCTOBER 2024*