Digitek Advertising Ltd v Corporate Dimensions Ltd Final Draft Ruling (HCT-00-CC-MA 424 of 2005) [2005] UGCommC 43 (20 July 2005)

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{\insrsid6698400 \chftnsepc \par }}\sectd \linex0\headery708\footery708\colsx708\endnhere\titlepg\sectlinegrid360\sectdefaultcl\sectrsid685129\sftnbj {\footer \pard\plain \s15\ql \li0\ri0\widctlpar \tqc\tx4320\tqr\tx8640\pvpara\phmrg\posxc\posy0\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid1604243 \fs24\lang2057\langfe1033\cgrid\langnp2057\langfenp1033 {\field{\*\fldinst {\cs16\insrsid9441044 PAGE }}{\fldrslt { \cs16\lang1024\langfe1024\noproof\insrsid11807733 2}}}{\cs16\insrsid9441044 \par }\pard \s15\ql \li0\ri0\widctlpar\tqc\tx4320\tqr\tx8640\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0 {\insrsid9441044 \par }}{\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}} {\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid5448415 \fs24\lang2057\langfe1033\cgrid\langnp2057\langfenp1033 {\insrsid14427215 REPUBLIC OF UGANDA \par \par IN THE HIGH COURT OF UGANDA AT KAMPALA \par \par HCT-00-CC-MA-0424-2005 \par \par (Arising from HCT-00-CC-CS-0429-2005) \par \par DIGITEK ADVERTISING LTD APPLICANT \par \par VERSUS \par \par CORPORATE DIMENSIONS LTD RESPONDENT \par \par \par }{\b\ul\insrsid14427215\charrsid12132060 BEFORE: THE HONOURABLE MR. JUSTICE FMS EGONDA-NTENDE \par \par RULING \par }{\insrsid15861250 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid10946123 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \ql \fi-360\li720\ri0\sl360\slmult1\widctlpar\jclisttab\tx720\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin720\itap0\pararsid5448415 { \insrsid10946123 Digitek Advertising Ltd, hereinafter referred to as the applicant, seeks a temporary injunction to issue against Corporate Dimensions Ltd, hereinafter referred to as the respondent, to restrain the respondent from engaging in outdoor advertising using the lighted electronic display signs and L. E. D. technology pending the determination of the head suit. This application is supported by the affidavits of Shiraz Meghani, the }{ \insrsid918320 managing director of the applicant, Simon Muhumuza, Josephine Karugonjo both of Kampala City Council and Jonathan Muwonge, an engineer.}{\insrsid2060255 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid918320 \hich\af0\dbch\af0\loch\f0 2.\tab}}{\insrsid918320 This application is opposed by the respondent supported by an affidavit sworn by Mr. Joseph Magala-Nyago, its managing director. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid918320 \hich\af0\dbch\af0\loch\f0 3.\tab}The facts in this application are simple and not in dispute. The applicant has an agreement with Kampala City Council, dated 8}{ \super\insrsid918320\charrsid918320 th}{\insrsid918320 December 2003, in which the council purports to grant the applicant exclusive rights for 3 years to outdoor advertising using ligh ted electronic display signs in Kampala City. Following this agreement the applicant established an outdoor lighted electronic display sign at plot 20 Kampala Road. It accepts business from persons and companies that wish to advertise using the media loca ted at this place. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid918320 \hich\af0\dbch\af0\loch\f0 4.\tab} The respondent is the holder of a licence from Kampala City Council allowing it to offer outdoor advertising services in Kampala City Council and a licence from the broadcasting council to operate motion picture bill boards. It has a bill board at plot 16/18 Luwum Street in Kampala on which it is carrying on advertising business. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid918320 \hich\af0\dbch\af0\loch\f0 5.\tab}It is the contention of the applicant that }{\insrsid9395679 the business of the respondent carried on at plot 16/18 Luwum Street, Kampala, is in breach of its right to exclusively carry on the business of ou}{\insrsid2821289 t}{\insrsid9395679 door advertising by lighted electronic display signs and L. E. D technology.}{\insrsid4395083 Ms Verma Jivram, learned counsel for the applicant, submitted that for a temporary injunction to be g}{\insrsid9651135 ranted the applicant must prove}{ \insrsid4395083 firstly that it has a filed a suit for restraining the respondent }{\insrsid9651135 from }{\insrsid4395083 continuing with the infringement of the applicant}{\insrsid9651135 \rquote s right or rights and that such suit has a probability of success. Secondly that it must be shown that the injury suffered by the applicant is irreparable for which a monetary award would not be adequate compensation. And in event of a doubt the matter should be resolved on a balance of convenience. }{\insrsid10055166 Ms Jivram referred to the cases of }{\i\ul\insrsid10055166\charrsid10758804 Kiyimba Kaggwa v Katende [1985]H. C. B. 43 and Giella v Cassman Brown & Co. Ltd [1973]E. A.358}{\insrsid10055166 in reference to the law with regard to grant of temporary of injunctions. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid9651135 \hich\af0\dbch\af0\loch\f0 6.\tab}}{\insrsid9651135 Ms Verma Jivram contended that the applicant had filed a suit that had a probability of success as it had exclusive rights to the use of the LED signs and technolo gy in Kampala granted to it by City Council of Kampala. Secondly the damage the applicant was suffering was irreparable in so far as the respondent had undercut the applicant\rquote s prices when it came on market and the applicant was forced to lower its charges. }{\insrsid10055166 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid9651135 \hich\af0\dbch\af0\loch\f0 7.\tab}}{\insrsid9651135 And in case the balance of convenience had to be considered this should be in favour of the applicant, to protect its rights from infringement by the respondent.}{\insrsid10055166 }{\insrsid9395679 The respondent basically contends that it is authorized by the Broad Casting Council to use motion picture bill boards and Kampala City Council for outdoor advertising.}{\insrsid13846907 Secondly that it is not privy to the contract between the applicant and Kampala City Council, and is therefore not bound by its terms.}{\insrsid9395679 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid4877179 \hich\af0\dbch\af0\loch\f0 8.\tab}}{\insrsid4877179 Mr. Ssozi, learned counsel assisting Mr. Bbosa for the }{\insrsid10758804 respondent}{\insrsid4877179 submitted on three points and Mr. Bbosa, lead learned counsel for the }{\insrsid10758804 respondent}{\insrsid4877179 submitted lastly on some other three points. Mr. Ssozi agreed with Ms Jivram\rquote s summation of the law relating to the grant of temporary injunctions but a dded that the purpose of a temporary injunction was to preserve the status quo, and not to alter it. In the instant case a temporary injunction would alter the status quo, rather than preserve it, and it ought not to be granted for that reason. He referre d to the case of }{\i\ul\insrsid4877179\charrsid10758804 Kiyimba Kagwa v Katende (Supra)}{\insrsid4877179 in support of this position. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid4877179 \hich\af0\dbch\af0\loch\f0 9.\tab} Mr. Ssozi further submitted that the applicant had failed to establish that the injury it alleges to suffer is irreparable injury that cannot be atoned by way of damages.}{\insrsid13924308 All the losses of the applicant }{\insrsid4094637 can }{ \insrsid13924308 be quantified in monetary terms. He further submitted that the balance of convenience in this case ought }{\insrsid4094637 not }{\insrsid13924308 to be considered as the application }{\insrsid4094637 is }{\insrsid13924308 without merit. No doubt therefore arises to lead a consideration of the balance of convenience. But even if balance of convenience was considered, it would lie with not granting the injunction. The grant would cause much more damage to the respondent \rquote s business which would be ground to a halt rather the non-grant that leaves both parties operating until the final determination of the questions to be investigated in this suit.}{\insrsid4877179 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid13924308 \hich\af0\dbch\af0\loch\f0 10.\tab}}{\insrsid13924308 Mr. Bbosa submitted that this case had no probability of success in so far as the }{\insrsid10758804 respondent}{\insrsid13924308 were not privy to the contract between the applicant and the Kampala City Council, and cannot therefore be liable on it. Mr. Bbosa further submitted that this suit was premature in so far as it failed to comp}{\insrsid4094637 ly with the conflict resolution mechanism}{\insrsid13924308 in the agreement between the applicant and Kampala City Council which calle d for arbitration in case of disputes arising. Lastly Mr. Bbosa submitted that this suit was brought in bad in faith with the aim of throwing the respondent out of business.}{\insrsid883813 It would ought not to be allowed to succeed. Evidence of bad faith is implicit from Annexture}{\insrsid10758804 s}{\insrsid883813 J and K to the applicant\rquote s affidavit in support of the application, showing the motivation for bringing this application, which is an attempt to hold its prices in the market.}{\insrsid13924308 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid883813 \hich\af0\dbch\af0\loch\f0 11.\tab}}{\insrsid883813 Ms Jivram stated the law correctly with regard to the grounds necessary before a grant of a temporary injunction could be made. }{ \insrsid4350471 In respect of temporary injunctions sought under Order 37 Rule 2 of the Civil Procedure Rules, the main suit must be seeking an injunction against the defendant. The suit ought to have a probabi lity of success. The injury alleged to have been suffered by the applicant must be irreparable. An award of damages would not be adequate compensation for the same. In case of doubt with regard to the foregoing the court may then consider the balance of convenience. And as was pointed out by Mr. Ssozi, the purpose of the grant of the injunction would be to preserve the status quo until the determination of the questions in issue. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid883813 \hich\af0\dbch\af0\loch\f0 12.\tab}}{\insrsid883813 Though with regard to the first consideration}{\insrsid1275208 , that is the existence of a}{\insrsid883813 suit with }{ \insrsid1275208 a }{\insrsid883813 probability of success, I am inclined to agree with the disquiet expressed by }{\i\ul\insrsid883813\charrsid10758804 Odoki, J.,}{\insrsid883813 (as he then was) in }{\i\ul\insrsid883813\charrsid10758804 Kiyimba Kaggwa v Katende (Supra)}{\insrsid4350471 over the use of expressions like \lquote probability of success\rquote or \lquote prima facie}{\insrsid1275208 case}{\insrsid4350471 \rquote at this stage}{\insrsid883813 . }{\insrsid13053290 I prefer to state that the applicant must show that there is a serious question or questions to be investigated in the suit, and this }{\insrsid4350471 is }{\insrsid13053290 evident on the material submitted to court, showing that the applicant has an arguable case.}{\insrsid883813 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid11280241 \hich\af0\dbch\af0\loch\f0 13.\tab}}{\insrsid11280241 In}{\insrsid13846907 my view}{\insrsid1275208 , this case raises a question}{\insrsid13846907 of fundamental constitutional importance }{\insrsid1275208 with regard to}{\insrsid13846907 the right of persons in this country to enjoy fundamental rights and freedoms enshrined in the constitution of this country}{\insrsid1275208 , and in particular freedom of speech and expression}{\insrsid13846907 . Article 29 (1) of the Constitution provides, }{\insrsid10758804 \par }\pard \ql \li1440\ri1440\widctlpar\aspalpha\aspnum\faauto\adjustright\rin1440\lin1440\itap0\pararsid10758804 {\fs20\insrsid13846907\charrsid10758804 \'93 Every person shall have the right to--- (a) freedom of speech and expression, which shall include freedom of press and other media;\'94. }{\fs20\insrsid10758804\charrsid10758804 \par }\pard \ql \li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid10758804 {\insrsid10758804 }{\insrsid13846907 The limitation to the enjoyment of this right is set out in Article 43}{\insrsid4094637 . The limitation }{\insrsid13846907 includ es prejudice to the enjoyment of other fundamental or human rights and freedoms by other persons or public interest. These limitations must not be beyond what is acceptable and demonstrably justifiable in a free and democratic society. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid13846907 \hich\af0\dbch\af0\loch\f0 14.\tab}}\pard \ql \fi-360\li720\ri0\sl360\slmult1\widctlpar\jclisttab\tx720\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin720\itap0\pararsid5448415 { \insrsid13846907 Outdoor advertising is a form of speech or expression, a specie of commercial speech which is protected by the right to freedom of speech and expression. }{\insrsid14178485 See }{\i\ul\insrsid14178485\charrsid14178485 RJR-MacDonald Inc. v The Attorney General of Canada and others [1995] S. C. R. 1999}{\insrsid14178485 . }{\insrsid13846907 Lighted electronic display signs and motion picture bill boards are included in the \lquote the other media\rquote and thus are constitutionally protected.}{\insrsid14178485 If the right of one person is to be limited or if the enjoyment of this right is to be exclusive to one person, and denied to the rest of other peop le interested in enjoying this right in Kampala, then justification for this limitation, must pass constitutional muster.}{\insrsid13846907 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid685129 \hich\af0\dbch\af0\loch\f0 15.\tab}}{\insrsid685129 To pass constitutional muster it must be shown by the person who asserts the limitation that the enjoyment of the right curtail}{ \insrsid10758804 s}{\insrsid685129 }{\insrsid10758804 or }{\insrsid685129 pr ejudices the enjoyment of other fundamental rights and freedoms by other persons or that it is in the public interest that such limitation be imposed. And such limitation as is imposed must be acceptable and demonstrably justifiable in a free and democrat ic society. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid685129 \hich\af0\dbch\af0\loch\f0 16.\tab} On the papers before me I see nothing, in the enjoyment of the right to freedom of speech and expression by the respondent, that points to prejudice of other fundamental rights enjoyed by other persons, including the applicant, or the public int erest that would be served, by imposing the limitation. On the contrary the limitation, in the form of the exclusivity clause in the agreement between Kampala City Council and the applicant seems to serve purely private interests, that is profit of one }{ \insrsid6764189 company}{\insrsid685129 . \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid14178485 \hich\af0\dbch\af0\loch\f0 17.\tab}}{\insrsid14178485 I am not satisfied that a}{\insrsid883813 n arguable case}{\insrsid14178485 }{\insrsid883813 has been put forward}{ \insrsid14178485 that such a constitutional right can lawfully and constitutionally}{\insrsid4094637 be}{\insrsid14178485 limited or curtailed by an agreement between Kampala City Council and }{\insrsid4094637 the a}{\insrsid14178485 pplicant, without more. Obviously this is a matter that will arise during the trial of this case and at this stage I am constrained from discussing it in greater length especially as it was not a matter that was argued by the parties, but was raised }{ \i\insrsid14178485\charrsid883813 suo motto}{\insrsid14178485 by the court. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid6312999 \hich\af0\dbch\af0\loch\f0 18.\tab}}{\insrsid6312999 In the main suit there is a prayer for an account of the profits or earnings of the respondent from its operation of}{\insrsid4094637 a motion picture billboard}{\insrsid6312999 at Plot 16/18 Luwum Street, Kampala. There are }{\insrsid1275208 also }{\insrsid6312999 claims for general and punitive damages. }{\insrsid1275208 In the supporting affidavit}{\insrsid4725176 of Mr. Meghani}{ \insrsid1275208 to the application, it has been shown that the applicant has been compelled to consider to lower its prices in light of the rates offered}{\insrsid4725176 by}{\insrsid1275208 the respondent to its customers. Ms Jivram referred to this matter as the undercutting of the prices of the applicant, leading to irreparable injury. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid1275208 \hich\af0\dbch\af0\loch\f0 19.\tab}It appears to me that it is clearly possible to quantify this loss, and put a monetary value to it. One would be }{\insrsid5448415 able }{ \insrsid1275208 to }{\insrsid5448415 take the total number of}{\insrsid1275208 customers of the respondent}{\insrsid5448415 and apply the rates to them that the applican t was initially applying, and you would then get the alleged loss inflicted on the applicant by the entry into an exclusive market by the respondent with lower prices. It is also possible to determine this alleged injury simply by an account of the profit s of the respondent in this line of business, which probably would be a better approximation of the actual loss, if any suffered, by the applicant. The applicant has done this in the main suit by seeking for an account.}{\insrsid1275208 \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid1275208 \hich\af0\dbch\af0\loch\f0 20.\tab}The applicant has failed to show that it will suffer irreparable injury that damages or a money award cannot sufficiently atone.}{\insrsid5448415 }{ \insrsid6312999 I am }{\insrsid10758804 satisfied that if the applicant}{\insrsid6312999 }{\insrsid4094637 is}{\insrsid6312999 suffering any injury such injury can be adequately compensated by an award of damages. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid5448415 \hich\af0\dbch\af0\loch\f0 21.\tab}}{\insrsid5448415 As both Ms Jivram and Mr. Ssozi seeme d to agree, the respondent has been in this business for the last seven or so months, just slightly less than the Applicant, by less than a month. The status quo is that each party is operating its own line of business at a different location within the c ity of Kampala. Granting a temporary injunction at this stage would not be preserving the status quo but altering it before the questions in issue are fully investigated. \par {\listtext\pard\plain\lang2057\langfe1033\langnp2057\insrsid6312999 \hich\af0\dbch\af0\loch\f0 22.\tab}}{\insrsid6312999 For those reasons I am }{\insrsid5448415 satisfied}{\insrsid6312999 that this application must fail. It is dismissed with costs.

\par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid5448415 {\insrsid6312999 Dated at Kampala}{\insrsid4094637 this }{\insrsid10758804 20}{\super\insrsid10758804\charrsid10758804 th}{\insrsid10758804 }{ \insrsid6312999 day of July 2005 \par \par \par \par \par \par FMS Egonda-Ntende \par Judge \par }}