Caltex Oil (U) Limited v Petro Uganda Limited (MISCELLANEOUS APPLICATION NO. 190 OF 2004) [2005] UGHC 140 (22 April 2005)

Full Case Text

### THE REPUBLIC OF UGANDA

### IN HIGH COURT OF UGANDA AT KAMPALA

# MISCELLANEOUS APPLICATION NO. 190 OF 2004 (Arising from Civil Suit No. 172 of 2002)

# CALs fcX OIL UGANDA LIMITED : **P?**

### VERSUS

# PETRO UGANDA LIMITED DEFENDANT/RESPONDEN i

BEFORE: HON. JUSTICE J. P. M TABARO

### RULING

Petro (U) Ltd for an Order for the letter to grant a sublease in favour permanent injunction and general damages. Subsequent to the filing of the plaint an application for a temporary injunction was filed on 11th March, 2004, and argued by both parties through their Counsel; on 10th August, 2004 the ruling was reserved Mid, August, 2004 I was taken ill and hence it was not possible to deliver the ruling on the scheduled time. of the former, a for the 30th day of September, 2004. However, in the meantime, in On 4th March 2004 M/S Caltex Oil (U) Ltd filed a suit against M/S 10

pursued both in the Commercial Division as well as the Civil Division, of the High Court. Litigation commenced before the Land Division became ooerational. I he issues are highly involved but the background is I easy to define. are competitors in the trade, a explains the kind of enthusiasm that borders on passion in this Case, i he conflicting orders that effect the suit property are compounded by the fact that litigation over the matter has been Pai Lies to the Suit are Companies engaged in the oil industry, I here is no doubt that they sro rnmnauhvc in thp trade, a foci which

The suit property lies at Wobulenzi in the District of Luwero. It is I C known as Bulemezi Block 159 Plots 55/57 Wobulenzi. Thereon lies a Paraffin or Kerosene etc. Both oil companies claim to be entitled to operate the station. Service Station dealing in Oil products, presumably, Petrol, Diesel,

written sublease agreement with one Sam Kironde It is the case for the piaintiff/applicant that on 8th October 2002 it entered into a who was the registered proprietor of the head lease of the property

55/57 Wobulenzi. Bulemezi Block 159 Plots interest for a August, 1995. it would favour of the Standart *q of* the dealing or registration has been given to the plaintiff/appiicant May, 2003 and appears an instrument No 333841 with clearance to proceed with registration of the same. in question, that is plaintiff/appiicant (Caltex Oil (Uganda) Ltd, providing in or unless any such instrument effecting the property has been expressed to be subject to the claim by the Caveator or unless there is consent in writing to the dealing. The caveat was lodged on 28th Under the sublease the plaintiff allegedly acquired an **th** period of 17 years running from the 8U appear thereafter a caveat was registered in terms, that no dealing in the property should be effected until notice

Sam Kironde was recently involved in litigation in the Commercial Division of the High Court in connection with two civil suits, that is Sam Kironde, and HCCS No 1\$"" HCCS No 533 of 2002 Esther Matovu vs. litigation Sam Kironde's interests in the property in question; that is, Bulemezi Block 159 Plots 55/57 at Wobulenzi, were attached in 467 of 2002 J. E. K Balintuma Vs Sam Kironde. As a result of the

execution. before me, it would appear Petro Uganda Ltd purchased the property at a sale conducted by Court Bailiffs styled QuickWay Auctioneers and from the particulars or the receipt for Shs 100,000,000/= issued by the bailiffs to Petro Uganda Ltd. i hus on the face of it Petrol Uganda Ltd appears as purchaser of the interest that previously vested in Sam Kironde. Statement of Defence, the defendant/respondent in this application, 2004, is signed by to the Written records of the proceedings in the Commercial Division available According to the order Annexture C same time Sam Kironde was directed to give vacant possession to M/S Petro Uganda Ltd, was decided to take possession as au the the Registrar of the Commercial Division of the High Court. From the Petro Uganda Ltd. The order, dated 12th March, Court Bailiffs. I he date of sale is stated to be 5th February, 2004 t b

in its Defence may the defendant avers that the alleged sublease is a concoction which, in formal language, I suppose means fraud. Defendant states that the sub-lease agreement between Sam Kironde The sublease claimed by the plaintiff is contested by the defendant, I S

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attachment. **1** commenced on the 8lh day of August, 1995. 1 he sublease agreement is dated 8 the agreement provides that the sublease shall be deemed to have back dated to defect the order if th October, 2002 but ana Caltex Oil (U) Ltd was

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1 he registration Sam Kironde already referred to in this ruling. Before this court in the presence of Currently Petro (U) Ltd is registered as proprietor. according to the particulars on the certificate of title was effected on registration transferred Sam Kironde's interest to Petro (U) Ltd as a result of the document warrant and execution in the two suits LG Petro (U) Ltd an interim order jf injunction was issued in favour of Caltex Oil (U) Ltd. It is not in dispute that the defendant/respondent (Petro (U) Ltd) took possession and was registered after the interim order of injunction was issued by court. Byenkya for Caltex Oil (U) Ltd and Mr. K. Ntambirweki for March, 2004 under Instrument No. 341729. appears as registered on 8th August, 1995; there is no doubt that the 23rd Mr. E.

that the High Court case of *KIYIMBA KAGWA [1985] HCB 43* summarises the principle applicable questions injunction. Mr. defendant/respondent. plaintiff/applicant, and Mr. Kandeebe Ntambirweki appears for the to deciding **of** this application involves the question as to which of the parties should nrrim,, uccuHy the suit property pending the determination, a^' 01 L^e suit' both Counsel rightly point out in their submissions *V HAJI KATENDE* for the E. Bvenkva appears

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**I** Before the applicant can secure an injunction it must show a prima established that without the injunction **I** irreparable injury, that is, loss that cannot be adequately atoned for the comparative prejudice that either party will suffer if the **to** injunction is granted against it. the applicant will suffer. facie case with probability of success. At the same time it has to be account the balance of convenience. Balance of convenience refers. by pecuniary damages. If there is doubt then court must take into

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because that Commercial Division imply establishes that Petro (U) Ltd did purchase Sam Kironde's interest after attachment of the letter's interest in **1** earlier referred to in this judgment. tenant cannot secure an eviction against the landlord would be tantamount to challenging the validity of the landlords title. Caitex Oil (U) Ltd subleased Sam Kironde's interest it became so to say Sam Kirondc "tenant", to be exact, Sam Kironde' sublease. The order given by the accordance with the decision of the court in the two judgments Another useful principle that court mus t address is the rule thec a There is no gainsaying that if it is true that

When this court gave the interim order of injunction, in favour of Caitex (U) Ltd Counsel for Petro (U) Ltd was present. Let it be advocate is an officer of court and as such he **]** extracted. In the present context it is difficult to appreciate mr.t,S Kandebe s argument that the interim order of injunction could not be binding until it was extracted and served on his client. His duty as an officer of this court was to inform his client of the decision of the emphasized that an cannot be heard to say that he is not bound by orders until they are He and instead did neither in the High <;— Commercial Division delivered by the Hon Lady Justice Arach *(U) Ltd* - *apph'cant/objector.* decision, that is in Misc. Appl. No 279 of 2004, arising from Misc. App. No 86 of 2004 both in HCCS No. 533 of 2002, that is *Caitex OH lb* regaro to the injunction that had been issued by court. was granted on 23-3-2004 prior to the ruling of have appealed against it or he might have applied to or 0.37 Civil Procedure Rules (CPR). marked to have his client installed on the premises without any Court court, jy Kp fjjq-'ug.eedi vvitn it, that is a different matter - he would vacate in terms f the commercial Amoko on 25-5-2004 the learned judge noted that the interim order

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*1. Petro (Uganda) Ltd - Respondent*

*2. Sam Kironde Respondent/Judgment debtor* and stated

**0** 12-7-2004. application for a temporary injunction which will be heard on In my view the suit and the interim order "• This interim order was granted pending the hearing of the

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the matter should be brought to the attention of the presiding judge io handle appropriately." **]** the sure adequately protect the interest if the applicant in property for the time being if the 1st respondent is not respecting the interim order of the court as is apparent than

It is apparent, and rightly so, that the ruling of the Commercial **J** Division was not meant to extinguish the interim order of injunction and whoever wishes so to involve the commercial court's ruling and in vain. orders to disregard this court's ruling and orders of injunction does so **10**

> It is true that relationship between the two oil companies is one of competitors. But there is such thing in business is unfair competition. All players in business, whether humble or powerful are enjoined to observe the law of the land and to obey all court orders; any dissatisfied litigant can have recourse to appeal, review, and in case £5 of injunctions to variation, discharge or vacation of any particular injunction. It is not open to Petro (U) Ltd to disregard on court

to be dean hands. submissions made by Petro (U) Ltd **J** be allowed to benefit from its own illegality. contravention of the law, contend that the status quo maintained Incidentally is that acquired after breaking the law. equitable remedies. with are tainted with illegality in that it injunctions and specific performance orders are He who comes to equity must come order, may violate it, and after occupying the suit property .n come to the suit property in violation of a court order. No party can

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Parties to this dispute are oil companies with a stake to goodwill, convenience with the difference that Caltex Oil (Uganda) Ltd claims to have acquired its interest earlier. equally. I would say both parties equally compete for balance of fO

**2** *756.* I note that Petro (U) Ltd appears on the, certificate of title as registered proprietor. I am alive to the principle that a bone fide purchaser without notice for value gets good title which can only be LS impeached on the ground of fraud - *FIRVERIDO NANJI [1962] E. A.* in the present case needless to assert Petro (U) Ltd was

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respondent/defendant. registered with knowledge that Caltex Oil (Uganda) Ltd claimed interest as purchase of a sublease from Erise Kironde. Hence this principle in the present circumstances does not tell in favour of the

**1** is that it is an occupation and 3 **3** since the purpose of an injunction is to preserve the status quo then **1** it should be left in occupation of the suit property. The short answer to the submission is that Petro (U) Ltd is in illegal occupation of the **3** Service Station, currently, since the interim order of injunction was **3 1** granted in favour of the applicant/plaintiff that is, Caltex Oil (Uganda) **3** Ltd for it claims to have been in occupation of the suit premise. Prior to any interest lodged or claimed by Petro (U) Ltd - that is the only appear to suggest that M/S Total (U) Ltd might be interested in the suit property but it is not a party to this case and hence no move need be said about it dissolving in this ruling terms or affects any i he gravermen of the respondent, case status quo that is entitled to protection by court. Since documents violated by itself. The application for a temporary injunction is

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**to** the awarded party not litigating herein. Costs are applicant/plaintiff, that is, Caltex Oil (Uganda) Ltd.

**J. P. M.** Tabaro

Judge

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13-4-2005

deliver the ruling, under 0.18 &. 2 (3) CPR. Order: As I am unwell the deputy registrar (Civil) is directed to

**J. P. M labaro**

**Judge**

**13-4-2005**

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## THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA MISC. APPLICATION NO 190 OF 2004 ARISING OUT OF CIVIL SUIT 172 OF 2004

CALTEX OIL (U) LIMITED

PLAINTIFF/ APPLICANT

## **VERSUS**

PETRO UGANDA LIMITED

--------- DEFENDANT/ RESPONDENT

**ORDER**

This matter coming up for up on the 22nd day of April 2005, before the Hon. Justice J. P. M Tabaro and delivered for ruling by the Deputy Registrar presence of Ms Florence Nabuuma for the plaintiff/ applicant and Mr. K. Ntambirweki defendant / Respondent; -

IT IS HEREBY ORDERED AS FOLLOWS; -

- $1-$ That the occupation of the suit property known as Bulemezi Block 159 pbts 55/57 Wobulenzi by the defendant/respondent is illegal as it is in violation of the Interim Order of injunction issued by the court on the $23^{\text{rd}}$ day of March 2004. - $2-$ That consequently the applicant/ respondent is entitled to be in possession of the suit premises. - $3-$ That a Temporary Injunction is granted in favour of the applicant/ plaintiff (Caltex Oil Uganda Limited) to preserve its right to occupation of the suit premises which was the status quo at the time of filing the suit and the defendant/respondent, its agents, servants and or successors are ordered not to interfere with the applicants occupation of the suit premises. - That the defendant/respondent pay costs of the application 4-

We approve-COUNSEL FOR THE APPLICANT

COUNSEL FOR THE RESPONDENT

Given under my hand and the seal of this Court this....................................

**EXTRACTED BY: -**BYENKYA, KIHIKA & CO ADVOCATES 4TH FLOOR, SPEAR HOUSE, PLOT 22 JINJA ROAD, P. O. BOX 16401, KAMPALA

D/REGISTRAR $200$ SIG