Corporate Security Services Uganda Limited v Davern Hardware Limited (Miscellaneous Application 53 of 2023) [2024] UGHC 942 (20 September 2024)

#### THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA HOLDEN AT HOIMA

### **MISCELLANEOUS APPLICATION NO.53 OF 2023** [Arising from Civil Suit No.20 of 2023]

# CORPORATE SECURITY SERVICES (U) LTD:::::::::::::::::::::::::::::::::::: **VERSUS**

## DAVERN HARDWARE LTD::::::::::::::::::::::::::::::::::::

#### BEFORE: HON. JUSTICE BYARUHANGA IESSE RUGYEMA

## **RULING**

- [1] In this application by Chamber Summons brought under **S.98 CPA** O.7 r.12 CPR and other enabling laws, the Applicant is seeking the following orders: - (a) An order to strike out the plaint in *Civil Suit No. 20 of* 2023 for being bad in law. - A declaration that the Respondent is a non-existent entity $(b)$ incapable of commencing a suit against the Applicant. - Costs of the application. $(c)$

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[2] The grounds upon which this application is based are set out in the affidavit in support of the application deposed by a one Johnson Mwangi, the General Manager of the Applicant company and opposed by a one Jatinder, the Director of the Respondent company.

#### Background

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The Respondent herein instituted Civil Suit No. 20 of 2023 $[3]$ against the Applicant company seeking among others, a declaration that the Applicant breached a contract it executed with the Respondent.

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- [4] When the plaint was served on the Applicant, through its lawyers Ms Invictus Advocates, Kampala, filed a written statement of defence (WSD) and intimated interalia, that at the earliest opportunity, it shall raise a preliminary objection on a point of law to the effect that the suit is frivolous and vexatious which does not disclose a cause of action against the defendant etc. and proceeded to carry out a search with the Uganda Registration **Services Bureau** (URSB), the sole custodian of the data base of all companies in Uganda to establish whether the Respondent company is a duly registered company capable of suing or being sued. - $[5]$ By a letter dated $12^{th}$ of July, 2023, the office of the Registrar General, URSB responded that the Respondent company was not reflected in its data base. - $[6]$ On the strength of the foregoing letter from the office of the Registrar General, the Applicant commenced the present application seeking for an order to strike out the plaint in Civil Suit No. 20 of 2023 for being bad in law and a declaration that the Respondent is a non-existent entity incapable of commencing a suit against the Applicant.

### **Counsel legal representation**

$[7]$ The Applicant was represented by Mr. Njogu James of M/s Invictus Advocates, Kampala, while the Respondent was presented by Mr. Alibankoha Norbert of M/s Alibankoha & Co. Advocates. Hoima. Both Counsel filed their respective submissions for consideration in the determination of this application.

**Issues for determination:**

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Whether the Respondent company has capacity to $[8]$ $(a)$ commence a suit against the Applicant.

(b) What remedies are available to the parties.

Issue No. 1: Respondent Whether the company has capacity to commence a suit against the Applicant.

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- [9] Counsel for the Respondent submitted that the Respondent company is duly registered in Uganda with proof of certified annexures attached to the affidavit in reply deposed by Jatinder, the Director of the Respondent company. The annexures are the Respondent's Certificate of Incorporation, Notice of situation of the Registered office and the Registered postal address of the Respondent (Company Form 18 under S.116 of the Act), Notification of Appointment of Directors and Secretary of the Respondent (Company Form 20 under S.192 (1) (4) of the Act) and Company Activation on the URSB Company Register. Counsel concluded that the Respondent is existent and that the response from URSB was based on the records available at that moment and that the status could have changed in case of additional information. That therefore, the instant application is premature since the Applicant company did not make multiple searches with URSB to establish the existence of the Respondent. - [10] Counsel for the Applicant on the other hand submitted that the annexures attached to the affidavit in reply i.e. a Certificate of incorporation and Company Forms 18 & 20 are not certified documents and therefore their authenticity is questionable especially in light of the fact that URSB confirmed in writing that the Respondent does not exist as a legal entity. - [11] I have carefully studied both submissions of Counsel and closely scrutinised the annexures attached on the affidavit in reply of the Respondent's director which the Respondent relies on to justify that the Respondent company does exist, was duly registered and is therefore capable of suing and being sued. - [13] It is settled principle of law that only incorporated companies have capacity to sue and be sued in their own names as enunciated in the case of Salmon Vs Salmon & Co. Ltd [1897] A. C.22 (HL). Also, in Sabric Building & Decorating Contractors Ltd vs A. G, C. A. No. 21/2025, Court of Appeal observed that for a company to exist legally, it must conform, as of law, to the Company Act No. 1 of 2021, as regards its incorporation and

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The basic features of a company is a mode of operation. certificate of incorporation issued under S.22 of the Companies **Act.** An unincorporated organisation is not a legal entity capable of suing or being sued and a suit by an unincorporated body is a nullity. In Wasswa Primo Vs Moulders Ltd H. C. M. A. No. 685/2017 (Arising from C. S. No. 0434/2017), Court held that it is settled law that a suit by or against a non-existent party is no suit at law and suffers the fate of being dismissed.

[13] It is therefore incorporation that confers existence and corporate capacity on a company. In the instant case, the Applicant made a search to the office of the Registrar General, URSB seeking to establish whether the Respondent is a registered entity capable of commencing a suit and the URSB return dated 12/7/2023 was that:

"Á search conducted on our records revealed that Davern **Hardware** is not reflected in our data base."

It is the same Davern Hardware" that is reflected in Civil Suit No. 20 of 2023 as the Plaintiff. It is therefore not true and correct that the plaint reflected the name "DARVEN" hardware which is a different name from "Davern Hardware Ltd", the correct one.

[14] Counsel for the Applicant however went further to argue that the annexures to the affidavit in reply, proofs of the existence of the Respondent company were not certified and therefore are not authentic to be relied on by a court of law. Counsel for the Respondent however on the other hand, insisted that the documents were certified.

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[15] A close look at the annexures show that the annexures bear a typed word "CERTIFIED COPY". I find this to be a strange mode of certification of documents. A correct mode of certification of documents is that the certification must be countersigned by the certifying officer and in this case an officer of URSB who has custody of the documents in question. The word "CERTIFIED COPY" appearing on the annexures ought to have been accompanied by the endorsement of the certifying officer to satisfy that the document being certified is true and correct. The

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annexures in question in this case lack the signature of the certifying officer. Secondly, the annexures appear to be copies photocopied in colour and therefore inadmissible in evidence. **Thirdly**, as rightly submitted by Counsel for the Applicant, the annexures comprising of Company Forms 18 & 20 lack signatures of the responsible officers of the Respondent company i.e., the Director of the Secretary of the purported company and the two documents/forms do not bear the dates of the execution.

- [16] The above flaws mars the substance of the annexures and render them suspect. I in the premises accordingly find that the copies of documents are not duly certified and are therefore not authentic. Court cannot rely on the documents as proof that the Respondent/Plaintiff in Civil Suit No. 20 of 2023 is an existent registered entity capable of suing or being sued. As a result, I find that the Respondent company is non-existent with no capacity to commence a suit against the Applicant. - [17] Under S.27 (1) of the Civil Procedure Act, costs follow the event. This court having found that the Respondent company is nonexistent with no capacity to commence a suit against the Applicant, the **Civil Suit No. 20/2023** is accordingly struck out. I am not however sure whether a non-existent party can be condemned to pay costs. It would appear to me that a nonexisting party cannot pay costs, See, Gusii Mwalimu Investment Co. Ltd vs Gusii Mwalimu Savings Credit Co-op Society Ltd [2017] eKLR. In the premises, no order is therefore made as regards to costs. $\begin{array}{c}\n\mathbf{a} \mathbf{a} \mathbf{b} \\ \mathbf{a} \mathbf{c} \mathbf{b} \\ \mathbf{a} \mathbf{c} \mathbf{b} \\ \mathbf{a} \mathbf{c} \mathbf{b}\n\end{array}$

Dated at Hoima this 20<sup>th</sup> day of September, 2024.

$.$ **Byaruhanga Jesse Rugyema**

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