Ditai & 3 Others v Sanyu Africa Research Institute (SAFRI) & 6 Others (Miscellaneous Application 422 of 2023) [2024] UGHC 992 (22 October 2024)

Full Case Text

## THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA HOLDEN AT MBALE

# **MISCELLANEOUS APPLICATION NO. 422 OF 2023**

(ARISING FROM MISCELLANEOUS APPLICATION NO. 228 OF 2023)

#### (ARISING FROM CIVIL SUIT NO. 38 OF 2023)

- 1. DR. JAMES DITAI - 2. BALAMU MAGOOLA - 3. DAVID TABITYA - 4. MOSES MWIRAGUZU :::::::::::::::::::::::::::::::::::

#### VERSUS

- 1. SANYU AFRICA RESEARCH INSTITUTE (SAFRI) - 2. PROF. FLORENCE MIREMBE - 3. DR. SAM ONONGE - 4. PROF. ANDREW WEEKS - 5. DR. OTIM TOM CHARLES - 6. DR. JOHN BAPTIST WANIAYE - 7. MICHEAL MAWEDA ::::::::::::::::::::::::::::::::::::

# **BEFORE: HON. JUSTICE LUBEGA FAROUQ**

#### **RULING**

- 1. This application was brought under section 82, 98 and 99 of the Civil Procedure Act Cap 282 and Order 46 rule 1 and 8, Order 52 rule 1, 2. and 3 of the Civil Procedure Rules SI.71 for orders that- - (a) That the Ruling and Orders in Misc. Application No. 228 of 2023 passed by this Honorable Court on 22nd of November, 2023 be reviewed and set aside. - (b) Costs of the application be provided for. - 2. This application was supported by the affidavit sworn by DR. JAMES DITAI the $1^{st}$ Applicant and briefly averred as follows-

- (a) That the Respondents instituted High Court Civil Suit No. 38 of 2023 against the Applicants which is pending disposal in this court from which the Respondents further filed Misc. Application No. 228 of 2023 seeking for an order of a temporary injunction; - (b) That in the said Misc. Application No. 228 of 2023, Sanyu Africa Research Institute (SAFRI) Limited by Guarantee sought to be injuncted by the temporary injunction is not a party to the application and Uganda Registration Services Bureau (URSB) sought to enforce the temporary injunction is also not a party to the Application; - (c) He contended that both Sanyu Africa Research Institute (SAFRI) Limited by Guarantee and Uganda Registration Services Bureau (URSB) are legal entities with corporate personality with capacity to sue or to be sued in their respective names and ought to have been joined as parties in the Respondents application for a temporary injunction; - (d) That the ruling delivered by this honorable court in which an order for a temporary injunction was issued against Sanyu Africa Research Institute (SAFRI) Limited by Guarantee, a nonparty to Misc. Application No.228 of 2023 yet it deserves the right to be heard; - (e) The Applicant stated that upon passing through the ruling, it discovered new evidence on an important fact that counsel for the Respondents omitted disclosing to the Honorable court that Sanyu Africa Research Institute (SAFRI) Limited was not added as a defendant to the main suit, and was not a party to the application for a temporary injunction and yet orders were made against it at the time of the determination of the application; - (f) That there is a mistake/manifest and error apparent on the face of the record and it in the interest of justice that the ruling and orders in Misc. Application No.228 of 2023 be reviewed;

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- 3. This application was opposed by the affidavits in reply sworn by Dr. Benon Watume, Dr. Sam Onenge and Michael Mawenda who were authorized to swear on behalf of others averred as follows- - (a) That the temporary injunction sought orders against the applicants but not against Sanyu Africa Research Institute Ltd by Guarantee; - (b) That the temporary injunction was against the Applicant and the URSB was only notified by availing the Registrar with the copy of the order; - (c) That the Respondents sued the Applicants in their individual capacity challenging their individual actions that led to the registration and incorporation of Sanyu Africa Research Institute Ltd by guarantee; - (d) That the Registrar of Companies unaware of the fraudulent conduct of the Applicants was only moved by the Applicants to register Sanyu Africa Research Institute Ltd by guarantee; - (e) That the temporary injunction was issued against the Applicants as the directors of Sanyu Africa Research Institute Ltd by guarantee stopping them from altering its register at URSB pending the determination of Civil Suit No. 38 of 2023; - (f) That Civil Suit No. 38 of 2023 seeks to challenge the Applicants' actions of registering Sanyu Africa Research Institute Ltd by guarantee in the name of the $1^{st}$ Respondent as none members of the $1^{st}$ Respondent; - (g) That the suit is against the members of Sanyu Africa Research Institute Ltd by guarantee for illegally and fraudulently incorporating it. - (h) That the issue of not adding Sanyu Africa Research Institute Ltd by guarantee is not a new within the meaning of Order 4 rule $3(b)$ and there is no discovery of any new and important evidence that was not within the Applicants' knowledge;

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- (i) That there was no new and important fact that was concealed by counsel for the Respondents; - (i) That the Applicants were the Respondents in Misc. Application No.228 of 2023 and were represented by $M/S$ Balenzi & Co. Advocates and MS Preudens Law Advocates and were at all material times aware that Sanyu Africa Research Institute Ltd by guarantee and URSB were not made parties to the suit; - (k) That the dispute before this court is against the officers of Sanyu Africa Research Institute Ltd by guarantee for registering it in the name of the $1^{st}$ Respondent; - (1) That the injunction is clear both in language and content; it is against the Respondent not the whole world; - That there is no mistake or error apparent on the record $(m)$ warranting the review by this court; - (n) That this Application discloses no grounds warranting review of this honorable court.

#### 4. Legal Representation

5. Counsel Achilles Kazibwe jointly with Ofwono John Paul and Nanguru Edmund represented Applicants. Counsel Sharon Murungi represented the Respondents.

### 6. Submissions

7. At the hearing, parties were given schedules to file submissions and they all complied. I will consider them in the determination of this matter.

### 8. Preliminary objection

9. Counsel for the Applicant raised a preliminary objection as to the competence of Civil Suit No. 38 of 2023 and Miscellaneous Application No. 228 of 2023. I will however consider it later in the body of this ruling.

#### Issues as framed by the Applicant's counsel; 10.

- (a) Whether the Applicants are aggrieved persons within the meaning of section 82 of the Civil Procedure Act Cap 282? - (b) Whether this application satisfies the criteria for review of the ruling in Miscellaneous Application No.228 of 2023? - **Analysis of court** 11. - Issue No.1: Whether the Applicants are aggrieved persons within the 12. meaning of section 82 of the Civil Procedure Act Cap 282? - Section 82 of the Civil Procedure Act Cap 282 provides that-13.

"Any person considering himself or herself aggrieved-

(a) by a decree or order from which an appeal is allowed by this Act, but from which no appeal has been preferred; or

(b) by a decree or order from which no appeal is allowed by this Act, may apply for a review of judgment to the court which passed the decree or made the order, and the court may make such order on the decree or order as it thinks fit."

Order 46 (1) of the Civil Procedure Rule SI.71 provides that- $14.$

> (1) Any person considering himself or herself aggrieved-(a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred; or

> (b) by a decree or order from which no appeal is hereby allowed, and who from the discovery of new and important matter of evidence which, after the exercise of due diligence, was not within his or her knowledge or could not be produced by him or her at the time when the decree was passed or the order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him or her, may apply for a review of judgment to the court which passed *the decree or made the order.*"

- In Ladak Abdallah Mohmmed Hussein V. Isingoma Kakiiza SCCA 15. No.8 of 1995 (unreported), it was held that "any person who has suffered a legal grievance which has wrongly deprived him of something can institute a review". It includes even parties who were not part to the matter. (See: Mohammed Alibhai V. W. E Bukenya Mukasa and Departed Asian Property Custodian Board SCCA No.56 of 1996.) - Counsel for the Applicants submitted that the trial court erred when 16. it issued an injunctive order which affected Sanyu Africa Research Institute (SAFRI) Limited by guarantee which was not a party to the proceedings. - The above implies that the aggrieved party is Sanyu Africa Research 17. Institute (SAFRI) Limited by guarantee but not the Applicants herein. SAFRI Ltd by guarantee is a body cooperate with the capacity to sue and be sued. Therefore, if it was aggrieved with the orders issued under Misc. Application No. 228 of 2023, it ought to have brought this application by itself. - Following the guidance in the provisions of the law cited above and 18. the averments in the affidavit in support, the Applicants are not aggrieved parties. - Secondly, the law requires that for the applications of this nature to 19. succeed, there must be discovery of new and important matter of evidence. However, looking at the prayers that were sought in Misc. Application No. 228 of 2023 in which the Applicants actively participated, the Respondents sought the order below-

temporary injunction doth issue restraining the $\boldsymbol{a}$ Respondents and or their agents, assignees and or any other person directly dealing with or acting under the Respondents' authority from altering or dealing in any way with the register of Sanyu Africa Research Institute (SAFRI) Ltd by **Guarantee** at URSB office or tampering with the $1$ st applicants project activities, bank accounts, offices and office premises or tax identification numbers or any documents in URA office, not to alter any documents or transfer any property in custody of the respondents, maintain the current status quo until disposal *of the substantive application.*"

- On perusal of the above prayer, it is clear that the injunctive order 20. which was being sought by the Respondents was against SAFRI Ltd by guarantee but the Applicants who actively participated in that application did not object to the same. In the law of equity, the Applicants are estopped from instituting this application since the matter which they are claiming to be new was apparent on the face of the record. - The Applicants are therefore not aggrieved parties herein. 21. - Be the above as it may, I will now determine whether the application 22. raises any grounds for review as below. - Issue No.2: Whether this Application satisfies the criteria for review 23. of the ruling in Miscellaneous Application No.228 of 2023? - In answering this issue, this court will be guided by the principles 24. enshrined in the provisions of the law cited above. - The first principle: **Discovery of new and important matter** 25. - Counsel for the Applicants submitted that the Applicants are 26. aggrieved by the ruling, as the Respondents are not members of Sanyu Africa Research Institute (SAFRI) limited by guarantee and have no standing to bring the derivative action. That Sanyu Africa Research Institute (SAFRI) limited by guarantee itself was not a party to the proceedings, nor was the Uganda Registration Services Bureau (URSB) yet the injunctive reliefs were improperly directed at its directors. - Counsel for the Respondents on the other hand submitted that 27. SAFRI Ltd by guarantee not being a party to the main suit is not a new and important matter of evidence that was overlooked. He argued that it is the duty of the Applicants to demonstrate the discovery of new and

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important matters of evidence which after the exercise of due diligence was not within their knowledge or could not be produced by them at the time when the order was made by the court. Counsel contended that the directors of SAFRI Ltd by guarantee were aware that SAFRI Ltd by guarantee was not a party to Civil Suit No. 38 of 2023 and if they desired it to be a party, they would have applied to have it added.

28. Under paragraph 9 of the affidavit in support it was averred that upon passing the ruling, the Applicants discovered new evidence on an important fact that counsel for the Respondents omitted disclosing to this honorable court that SAFRI Limited by guarantee was not added as a defendant to the main suit and was not a party to the temporary injunction and yet orders were made against it at the time of the determination of Misc. Application No. 228 of 2023.

29. In Busoga Growers Co-operative Union Ltd V. Nsamba & sons' Ltd HCMA No. 123 of 2000(unreported), it was held that-

> "The applicant did not claim that he had discovered some new and important matter of evidence which in spite of exercise of due diligence was not within his knowledge at the time of judgment was entered and did not swear any affidavit indicating what grievances he had against the decree passed against him."

- In the instant case, when you look at the Chamber Summons for 30. Miscellaneous Application No. 228 of 2023 it is apparent that the prayer which was sought by the Applicants/Respondents was to be made against SAFRI Ltd by guarantee. This further applies to the prayers in Civil Suit No. 38 of 2023 from which this application arises. In the Plaint, paragraphs 7 and 9 specifically the particulars of fraud clearly point to incorporation of SAFRI Ltd as the origin of the cause of action for Civil Suit No. 38 of 2023. - 31. Given that background, the fact that the order in Misc. Application No.228 of 2023 was made against SAFRI Ltd by guarantee is not a new

and important matter that was not within the knowledge of the Applicants even after the necessary due diligence. The presence of SAFRI Ltd by guarantee was within the Applicants knowledge and for that reason, it was incumbent upon them as parties who participated in Misc. Application No. 228 of 2023 to bring it to the attention of court that the person against whom the orders for temporary injunction were being sought, was not a party to it but they did not.

- The duty to bring that fact to the attention of court was not for 32. counsel for the Respondents alone but it was for all counsel on both sides since they are all officers of court. - The inclusion of SAFRI Ltd by guarantee in the orders made in Misc. 33. Application No. 228 of 2023 is therefore not a new and important fact. - The 2nd principle: *Error* **on the face of record** 34. - Counsel for the Applicants submitted that the court erred in 35. granting injunctive orders against the directors of SAFRI limited by guarantee (a non-party to Civil Suit No. 38 of 2023 and the attending application) by the $1^{st}$ Respondent which is a non-existing entity. - Contrary to the above however, counsel for the Applicants in his 36. submissions in rejoinder admit that SAFRI has ever existed as an NGO. He particularly submitted that the 1st Applicant as a promoter of a Non-Government Organization applied for and reserved the name Sanyu Africa Research Institute (SAFRI) on behalf of applicants and other members not party to the suit with the Registrar of Companies on 9th September, 2013, and after applied for a permit to operate as a local NGO to the National Board for Non-government Organization (National Bureau for Non-government Organization/NGO Bureau now) at the Ministry of Internal Affairs. - He further contended that on 20th of September, 2013 upon the NGO 37. Board verifying that all the members were Ugandans, they officially registered Sanyu Africa Research Institute (SAFRI) as a local NGO. They

kept on renewing the operation permit until 15th of November, 2021 when it was incorporated as a company limited by guarantee.

- The above background means the 1st Respondent has ever or is still 38. operated as an NGO with capacity to be sued. - It should be noted that the alleged incorporation of the NGO into a 39. company Ltd by guarantee is what the Respondents are contesting in the main suit. In that suit, they attached the constitution and the certificate of registration and incorporation for the 1st Respondent dated 20th of September, 2013. Which means if the Respondents are contesting the registration of the alleged NGO into a company ltd by guarantee, then the existence of the NGO still surfaces and it is therefore not a non-existing entity. - 40. Counsel for the Applicant further argued that the orders in Misc. Application No. 228 of 2023 were made against SAFRI Ltd by guarantee which was not a party to Civil Suit No.38 of 2023 nor the aforesaid application. - In FX Mubuuke V. UEB HCMA No. 98 of 2005, it was held that "for 41. a review to succeed on the basis of an error on the face of record, the error must be so manifest and clear that no court would permit such an error on the record".

The above principle was further elucidated in **Edison Kanyabwera** 42. V. Pastori Tumwebaze, Supreme Court Civil Appeal No.6 of 2004, where it was held that-

> "in order that an error may be a ground for review, it must be one apparent on the face of the record, i.e. an evident error which does not require any extraneous matter to show its incorrectness. It must be an error so manifest and clear that no court would permit such an error to remain on record. The error may be one of fact but it is not limited to matters of a fact and includes also error of law."

- From the prayers sought in Misc. Application No.228 of 2023 it was 43. obvious that if the application was to succeed, the said order would affect SAFRI Ltd by guarantee which was not a party to the application. It was therefore an oversight of court for failing to pronounce itself on the same hence, an error apparent on record. - In Northern India Caterers (India) V. Lt Governor of Delhi (1979), 44. the Supreme Court of India held that-

"A party is not entitled to seek a review of a judgment delivered by this court merely for the purpose of a rehearing and a fresh decision in the case. Normally the principle is that a judgment pronounced by the court is final and departure from that principle is justified only when circumstances of a substantial and compelling character make it necessary to do so."

- In the present case, although it is clear that the order in Misc. 45. Application No. 228 of 2023 affected SAFRI Ltd by guarantee which was not a party to the application, the same cannot be changed because the cause of action in Civil Suit No. 38 of 2023 arises from the alleged fraudulent registration of SAFRI Ltd by guarantee. It was further contended by the Respondents that after registration of SAFRI as Ltd, it took over properties which were originally for Sanyu Africa Research Institute as an NGO without the approval of the Respondents. - Therefore, for purposes of maintaining the status quo, the order 46. issued in Misc. Application No.228 of 2023 shall **NOT** be altered. - However, it is prudent that Sanyu Africa Research Institute Ltd by 47. guarantee be added a party to Civil Suit No. 38 of 2023. - Counsel for the Applicant in addition submitted that the order which 48. was issued under Misc. Application No. 228 of 2023 further affected URSB which was not a party. However, when you carefully read the order of this court, it only prevented alteration of the documents at URSB for Sanyu Africa Research Institute Ltd by the Applicants and

the same in my view does not require URSB to be added a party to the suit unless the patties deems it fit.

- The third principle: **Sufficient reasons** 49. - I have studied the submissions of counsel for the Applicants on this 50. principle and noted that what he submitted on, is already envisaged in the body of this ruling and I will not replicate it. - Preliminary objection; following my discussion in the body of this 51. ruling, I have established that the 1st Respondent still surfaces as a registered NGO since the registration of Sanyu Africa Research Institute as a company limited is contested. For that reason, the preliminary objection is overruled. - This application is accordingly entered in the terms below-52. - (a) The orders in Misc. Application No. 228 of 2023 are hereby upheld. - (b) Sanyu Africa Research Institute Ltd by guarantee shall be added as a party to Civil Suit No. 38 of 2023 since the cause of action arises from its alleged illegal incorporation. - (c) Costs of this application shall abide the results of the main suit. I so order.

ROUO LUBEGA KA Ag. JUDGE Ruling delivered via the emails of the advocates of the parties on 22nd day of October, 2024