East Africa General Insurance Company Limited v Madhvani and others (Civil Application No. 12 of 2001) [2001] UGCA 43 (1 May 2001)

Full Case Text

# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA **HOLDEN AT KAMPALA**

## CORAM: HON. JUSTICE C. M. KATO, JA. HON. JUSTICE S. G. ENGWAU, JA. HON. LADY JUSTICE C. N. B. KITUMBA, JA.

$10$

#### CIVIL APPLICATION NO. 12 OF 2001

#### **BETWEEN**

#### EAST AFRICA GENERAL INSURANCE COMPANY LIMITED::::::::::::::::::::::::::::::::::::

**AND**

- MANUBHAI MADHVANI] 20 1. - $2.$ HIMATLAL GANDESHA 1 ::::::::::::::::::::::::::::::::::: - $3.$ VIVEK ARAUJO $\mathbf{1}$

# RULING OF THE COURT (KATO J. A. dissenting).

This is a ruling on an informal application to be joined as a party, made by the Attorney General during the hearing of the application for stay of execution. It was made on his behalf by Mr. Joseph Matsiko, Senior State 30 Attorney, on 27.4.2001. This was after Mr. John W. Katende, learned Counsel for the applicant company had made his submissions on 9.4. 2001. Mr. Matsiko made his informal application under the inherent jurisdiction of this court as provided in rule $1(3)$ of the Rules of this court. Rule 1 $(3)$ states:-

" Nothing in these Rules shall be taken to limit or otherwise affect the inherent power of the Court, or the High Court, to make such orders as may be necessary for attaining the ends ofjustice or to prevent abuse of the process of any such court, and that power shall extend to setting aside judgments which have been proved null and void after they have been passed, and shall be exercised to prevent an abuse of the process of any court caused by delay."

Mr. Matsiko also relied on rules 42 (3) and 49 (l) of the Rules of this court which read together provide as follows: -

42 (3). " This rule shall not apply -

- (a) to applications made in the course of a hearing, which may be made informally; or - (b) to applications made by consent of all parties, which may be made informally by letter." - 49. ( l)"The notice of motion and copies of all affidavits shalt be served on all necessary parties not less than two clear days before the hearing."

At this stage, it is pertinent to give a brief background to the application for stay ofexecution. The application for stay arises from a civil suit, No.l728 of 2000, filed in the High Court pursuant to the provisions of section l4 of the Expropriated Properties Act No. 9 of 1982. In that suit the

)

Attorney General was one of the defendants. The suit was by way of a statutory appeal against the decision oflthe Minister of Finance by which he granted a certificate ofrepossession to the former original owners of the East Africa General Insurance Company Limited, the respondents inclusive. The Minister of Finance granted Certificate Authorizing repossession No. 3327 on 7 .12.2000.

Following receipt of the certificate of repossession, the I'1,2nd and 3"1 respondents took possession of the company premises and management and thereby putting an end to the possession and management of the company by the applicant. The applicant/plaintiff filed a suit in the name of the company to resist that take over. At the same time the officials of the company obtained an ex-parte interim order of injunction preventing the respondents frorn taking possession and management of the company. As a result the respondents vacated the company premises.

Before the plaintiff company suit was heard on merit, several preliminary objections were raised by Counsel for the respondents. The matter was adjoumed to allow Counsel for the plaintiff company to respond to the submissions of Counsel for the respondents on the preliminary objections. This was supposed to be on 27.2.2001. However, on that day the main suit of the plaintiff company was instead dismissed with costs without hearing it on merit. It was dismissed under Order 15 Rule 4 Civil Procedure Rules and the interim order of injunction was instantly discharged. On the same day (27.2.2001) a Notice of Appeal was filed in this court. The Attomey General is the l't respondent in that intended appeal.

o In the meantime, the respondents applied for a warrant of possession. They obtained the warrant and executed it against the offlcials of the plaintiff company. Once again the same officials obtained another interim order of injunction but this time from the Court of Appeal before a single judge. However, that interim order was also discharged and the respondents, on behalf of the repossessors by virtue of the certificate of repossession, are currently in occupation of the company premises, running business and management.

By Notice of Motion filed in this court on 14.3.2001, the intending appellant which was the plaintiff in the High Court, brought this applicarion for a stay of execution of the warrant of possession obtained in the High Court. Under rule 4l (l) of the Rules of this court, this application should have first been instituted in the High Court, but this procedure was not followed. According to the affidavit of Mr. Kakembo K. Katende, dated 13.3.2001, supporting the application, (paragraphs 27 - 30 inclusive) the reason for not filing the application in the High Court was that both the leamed trial judge and the Principal Judge who should have assigned the matter to another judge were not available in the station. The application was, therefore, first filed in the Court of Appeal which in such a situation must exercise the same jurisdiction as the High Court. However, the Attorney General was not joined as a party and that attracted the following correspondences: -

o Ministry of Justice and Constitutional Affairs Our Ref: l2l200l P. O Box 7183, Kampala.

Date: 01 April 2001.

## Thc Registrar Court of Appeal Kampala.

# RE: CIVIL APPLICATION N0. 12 OF 2001

### EAST AFRICA GENERAL INSURANCE COMPANY LTD.

Versus

### ATTORNEY GENERAL

The above application was flxed fbr hearing on 9'r' April 2001.

Unfortunately, Counsel representing the Attorney General in this matters i.e. the undersigned and Mr. Joseph Matsiko, Senior State Attomey, are

20 involved in Supreme Court Election Petition No. I of 200 I, Col Dr. Kizza llcsi e versus the Electoral Commission and another whose hearing will begin on 4'h April and end by 22"d April 2001

This is therefore to request that the above application be re-fixed for hearing in May 2001 or any other date convenient to Court, but not earlier than 22nd April200l.

(Signed) Deus K. Bymugisha 30 Ag. Director Civil Litigatlon c.c. Katende. Ssempebwa & Company Advocates c.c. Sebalu & Lule Advocates

On receipt of a copy of the above letter, M/S Sebalu & Lule responded as

follows:-

# SEBALU & LULE

Advocates, Commissioners for Oaths, notaries public, trrdemarks and prtent Ag€nts, Legal Consultants.

Ref-: SL/3634135620 Date: 2 April,200l.

#### The Registrar Court of Appeal Kampala. l0

Your Worship,

# COURT OF APPEAL CIVIL APPLICATION NO. 12 OF 2OOI EAST AFRICA GENERAL INSURANCE COMPLANY LTD vers us MANUBHAI MADHVANI & OTHERS

We act for the respondents.

We have now been served with the process in the above application. We have received copy of the letter dated 01 April 2001 from the Acting Director Civil Litigation copied to us and M/S Katende, Ssempebwa & Co. Advocates. Our clients claim through the Certificate Authorizing Repossession issued to them by the Minister of Finance, planning and Economic Development. A challenge to our clients' status and authority to repossess the suit property and business is necessarily a challenge to the validity and authority of the Certificate Authorizing Repossession. The competent party to answer and defend that challenge is the Attorney

General. The Attorney General is an original party to the suit as first defendant. Since this application and all the other causes by the Applicant/Appellant arise from Appeal suit No. 1728 of 2000 to which the Attomey General is the first defendant, the Attorney General is a necessary party to the intended appeal and all matters arising from the suit. Our clients therefore pray that hearing ofthe application be postponed to such a time as will be possible to secure the participation of the Attorney general. This case involves public policy, public interest and interpretation of a major legislation besides the concerns of the private interests of the repossessors.

Yours faithfully, 10

#### (Signed)

# SEBALU & LUE ADVOCATES & LEGAL CONST]LTANTS

L. L 'l'he Atlorney General Attn. Mr. Deus Byntugisha)

C. C. Katende, Ssempebwa & Co. Advocates Kampala.

#### 20

GSl-/bc.

Finally, Counsel for the applicant company responded to the above letters in the following manner:-

# Katende,Ssempebwa & Co.

Advocates. Solici tors, L.gsl Consultants, Commissioners for oaths, notaries public, t{x consultants, trademarks -10 and patent agents, receivers and liquidators, comp0ny secrataries

KS/CV/00/3967 Date: 3"rApril 2001.

The Registrar/Court of Appeal of Uganda.

Kampala - Uganda

Your Honour

# RE: CIVIL APPLICATION N0. l2 OF 2001 IIAST AFIIICA GENERAL INSURANCE COMPANY LTD. VERSUS MANUBHAI MADHVANI, HIMATLAL GANDESHA & VIVEK ARAUJO

We acknowledge receipt of the Attorney General's letter addressed to you of reference nurnber CAll2l2001 concerning the above captioned matter that has been copied to us and our response thereto is as hereunder;

As evident from pleadings, the Attomey General is not a party to application No. l2 o12001. He thus has no locus to move this court to adjoum the case.

As for the Reference, the Attomey is merely mentioned because he appears in the main suit/application we do not intend to proceed against him. And the matter before a single judge did not concern him and he did not submit on the issues, which are now being referred for determination to a full bench.

It should be noted that all along the Attomey General has been accusing us of delaying this case. Surprisingly, he is the same person who is attempting to delay it when a hearing date has been secured when he is not even a party to the applications.

We therefore notifu you that we are opposed to any request for adjournment and it should be on record that we are ready and set to proceed with both applications on the 9th April 2001 because any delay will occasion injustice to our client.

#### Yours faithfully,

#### (Signed)

## FoT: KATENDE SSEMPEBWA & COMPANY Advocates, Solicitors and legal Consultants

c.c. The Attorney general Attorney General's chambers Parliamentary Building

c.c. Messrs sebalu, Lule & Co. Advocates EADB Building.

c.c. East Africa General insurance Ltd.

as a co-respondent to this application.

DSD/

As a result of the above letters, the following points emerged: - First, it is quite clear that the Attorney General was deliberately omitted as a pafty to this application by Counsel for the applicant company. Secondly, on receiving the Hearing Notice for 9.4.2001 from court, the Attomey General wrote to court to give notice that he was interested in the application and wanted to be heard. He therefore sought for an adjournment to a date after the trial of the Presidential Elections Petititon No. I of 2001 in the Suprcmc Court, Col. Dr. Kizza Besigte Vs. Electoral Commission & Anor. The Attomey General's request was copied to the applicant's lawyers and to the respondents' lawyers, too. Thirdly, Counsel for the respondents also wrote a similar letter to the court, copied to the applicant's lawyers and the Attomey General, pointing out the necessity to join the Attorney General 20 30

o Despite that, the Attorney General \\ilS urrt joined as a party to the application. However, on 9.4.2001, the lreali,rg proceeded without the Attorney General. Apparently Mr. Gabriel llvarrrugisha Kamugisha, Senior State Attorney, was in court for a different ca:e ofld had no instructions regarding this application. The application rlrises two main grounds. First, the applicant company and its shareholders slrall sLrffer irreparable darna eif the execution of the Decree and Orders nrade thereurrder are not Secondly, that the application is necessarl' to safeguard and preserve the applicant's right of appeal.

At the trial, Mr. Katende subrnitted, intel rrlia, that the application is maintainable under the Rules of this courl because there is a Notice of Appeal in existence. He further subrnitted rlrat tlic appeal has a higlr chance ofsuccess and that it is fitting and proper that sta\ ofexecution be granted in order to preserve the right of appeal to tlris corrrt and not to render the intended appeal nugatory. The matter was adjoLrrned for further hearing on 27.4.2001. The Attomey General was servcd ri rth another Hearing Notice by the court.

After reading the pleadings in thc Iliglr Court, all the relevant documents including Notice of Motion and llfrc[rvits in support, it becornes absolutely clear that the central point of disprrte now befbre court in the form of application, arises from the decision of the Minister of Finance to grant a certificate of repossession to the lbrmer ou,ners of shares in the applicant company. The Minister of Finance granted Certificate authorizing repossession No.3327 on'7.12.2000 The points to be decided at this stage are first, whether the application by the Atl,rlne1, General to be joined as a party is properly before this courl. Secondly, whether it is necessary to join the Attomey General as a party and thirdly, whether this court has powers to do so.

In his application to be joined as a party, the Attorney General has informally relied on rules I (3), 42 (3) and a9 (l) of the rules of this court. Mr. Joseph Matsiko, representing the Attomey General, submitted that it was the Minister of Finance who issued a certificate for repossession and the Attorney General was a principal defendant in the main suit. In a Notice of l0 Appeal, the Attomey General is the first respondent. Learned Senior State Attorney submitted therefore that Attomey General should be a party on all matters relating to all the applications and intended appeal as he is the root cause of litigation. Mr. Godfrey Lule representing the respondents supported the Attorney General's application on the ground that if the Attorney General is left out that would prejudice the interests of the respondents whose claim is based on the certificate for repossession.

On the other hand, Mr. Katende opposed the application on the ground that the Attomey General is not a party to application for stay of 20 execution. He cannot therefore rely on rule 42 (3) (a) of the Rules of this court which allows only parties involved to make an informal application. According to counsel, the application for stay of execution does not affect the interests of the Attomey General and there is no specific rule under which this court is allowed to add a party especially in a matter which is part heard.

We think that the Attorney General could have safely brought his application by Notice of motion supported by affidavit evidence under rule 42 (1) of the Rules of this court. However, in **Boyes V. Gathure [1969] E. A. 385,** a wrong procedure was used to bring an application for removal of $\mathbf{E}$ . a caveat. On appeal, the then East Africa Court of Appeal held, among other things, that use a wrong procedure which did not go to the jurisdiction of the court and did not prejudice the appellant, (in this case applicant's application for stay of execution) would not invalidate the proceedings. We think that as long as the court has jurisdiction and inherent powers, it can ignore form and get on the substance if the matter is raised during a hearing, as in this case.

In our view, such a procedural error does not override substantive justice which must be administered without undue regard to technicalities. See: article 126 $(2)(e)$ of the 1995 Constitution. In any case under article 28(1) of the Constitution, a party is entitled to a fair and speedy trial in the interest of natural justice. Counsel for the applicant has not shown under what law, substantive or procedural, the Attorney General's participation should be denied especially as he was a principal defendant in the main suit and also 1st respondent in the intended appeal.

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As to whether it is necessary to join the Attorney General as a party. Mr. Matsiko submitted that the Attorney General was the principal and necessary party to the suit in the High Court. He is also a party to the intended appeal. The central point of contention in all the proceedings in the High Court and in this court arises from the certificate of repossession issued by the Minister of Finance. Learned Counsel argued that where a certificate

of repossession does not take effect the govemment is liable to pay high compensation to the former owners from public funds having regard to the value of the properties in issue. Mr. Katende for the applicant also concedes that the amount involved is in billions of shillings. In the premises, Mr. Matsiko submitted therefore that the Attorney General is interested in the appeal and in any proceedings which may have a bearing on the intended appeal.

Mr. Godfrey Lule associated himself with the above submissions. He, however, argued further that the Attorney General has shorfrufficient legal l0 interest to necessitate his addition as a party to defend that public interest. If left out, the Attomey General's interest might be affected by the result of the application on the ground that it might affect the effect of certificate of repossession whose sole purpose for issuance was to enable the former owners to repossess and manage their former properties. Without the Attorney General's participation, in counsel view, the court would be deprived of well balanced contributions by all parties concemed and might lead to a miscarriage ofjustice. What is important, according to him, is that the principles of natural justice and the constitutional right to fair hearing require that a person having a legal interest in the subject matter of the suit 20 should be given an opportunity to be heard, especially so where he applies. However, Mr. Katende argued that the Attorney General is not to be added as a party since he is not being sued and that the procedure in bringing his application is wrong.

It is clear to us that the main point of contention in all the proceedings in the High Court and also in this court arises from the certificate of

repossession issued by the Minister of Finance. If no certificate of repossession had been issued at all, there would not have arisen the suit, this application or the Notice of Appeal. We think that whatever is to be decided in this application will inevitably have a bearing on the certificate of repossession. Our observation is that the purpose of the suit in the High Court and the purpose of the application for stay of execution is to prevent the taking effect, temporarily or permanently, of the certificate of repossession on the ground that it is illegal, null and void and therefore can confer no right ofpossession upon its recipients, the respondents. Yet in the 10 High Court, the Attorney General supported the validity and effect of the certificate of repossession. Service of Hearing Notices on him by court was not a mistake he was a party to the suit and to the Notice of Appeal. By law he had to be served. In our view, his omission as a party to the application for stay ofexecution was a grave procedural error by the applicants.

This can be illustrated by the leading judgment of Tsekooko, JSC in Francis Nansio Micah V. Nuwa Walakira. Surrrcme Court Civil A DDEA I N0.21 of 199.1 (unreported). That case concemed, among other things, a stay of execution of a warrant issued by the High Court. Before the hearing on merit, both parties by consent agreed to a stay. As a result, the court stayed the execution. At the trial, one of the points to be considered was ')(t joini:r of parties. Two parties had been joined as co-defendants but court struck ^ out one of them as having been wrongly joined. The case went up on appeal to the Supreme Court. Notice of Appeal was not served on the party whose name was struck out on the ground that he could be sued separately on his own in a different suit in respect of the same matter.

Failure to serve a party whose name was struck out was raised and revisited by Tsekooko, JSC who had this to say at page 7 lines 5 - l0:

"On hearing of the appeal Counsel for the respondent took the point that Hammeed and the two companies were persons directly affected by the appeal and should have been served with the Notice of Appeal under Rule 76 (l) of the Court of Appeal Rules. It was common ground that they had not been served."

ln Il.uithibo V. Nyinsi. Court of Aprreal, Civil Apneal N0.21 of 1982, Tsekooko, JSC reproduced this excerpt: t0

> " The point is this. The object of the rule and of the proviso is that the rights of a party likely to be directly affected by the result of an appeal should not be affected without the party being provided rvith an opportunity of being heard."

At page 8, lines 26 - 28, Tsekooko, JSC remarked:

(

" It dose not appear that an appellant can deliberately choose not to serve a party who will be directly affected by the appeal."

At page 9, after reviewing some court decisions in other common law jurisdictions, Tsekooko, JSC went to say at lines 4 - l0 thus: -

" These decisions illustrate the necessity to serve notice of appeal on a litigant who had been a party to the litigation in the court below essentially because such litigant must be given an opportunity of being heard on a matter in an appeal that might affect his interest. ln my vierv consideration of the grounds of appeal in this appeal rvould lead to decisions affecting the Court bailiff."

IO In that passage "court bailiff' refers to the party who was not a party to the proceedings after his name had been struck out.

The cited case concerned Notice of Appeal while the instant case concems application for stay of execution only. Further, the cited case concemed service of Notice of Appeal, while the instant case concerns joinder or nonjoinder of a party. Counsel for the applicant company emphasized that the rule to serve affected only persons who were cited as parties to the proceedings on the application. Mr. Katende went on to say that since the Attomey General was not cited in the application the rule dos6 not affect him. So the question is: whether a person who was a defendant in the court below but not cited in the subsequent proceedings brought in the court above should or should not be regarded as a party to the proceedings. hr4

The answer is on page 8 line 29 in Francis Micah case (supra) where Tsekooko, JSC found:

> " Gilloolv v. Gilloolv (1950) 2 AII E. R. ll8 is authority for the proposition that a party served in the proceedings in

the court below is a party for purposes of our Rule 76 (l) whether he appeared in the court below or not. Further an unsuccessful defendant who appeals must serve notice of appeal against a successful defendant."

And at page 9, line 2:

## " The reason is that the other defendants might have been interested in the results ofthe appeal,"

l0 We are of the opinion that although we are dealing with service of notice of application rather than service of notice of appeal, the underlying principle is the same. It applies to all proceedings including applications in this court, The reason is two fold. The first aspect of it is that the person (here the Attorney General) must have been a party to the proceedings in the court below even if he did not participate as a party. The second aspect is that if such person would be interested or affected in the result of the proceedings, that is to say here, in the results of the application for stay, he should bejoined as a party.

Mr. Matsiko contended rightly, in our view that the Attorney General is interested and might be affected by the result of the application on the ground that it might affect the effect of the certificate of repossession to the former owners of the company. We think that the purpose of service of Notice of Appeal or Notice of Application on those who were involved in the court below is to give them opportunity to elect whether or not to participate in the proceedings if they feel that they might be interested in, or affected by, the results. The Attomey General was served with the hearing

notices by the court and feels that he might be affected by the results and has shown that he is interested in the results and desires to be heard. No legal right is shown to bar the Attomey General who was a party in the suit in the court below from participating in the interlocutory proceedings in this court where Notice of appeal is pending and the Attorney General is a party. It is not also shown to us that by joining the Attomey General as a party the interests of the applicant company shall be prejudiced in any way. The concern of Mr. Katende about costs is not sound law or legal practice for us to leave out a necessary party for the sake of reducing costs in this l0 application. In our view, costs normally follow the event or else they are in the discretionary power of the court.

)

In yet another case showing the necessity ofadding an interested party to proceedings is further illustrated by the decision in the case of Mohamed Allibhai V. W. E. Bukenya Mukasa and the Depa rted Asians Propertv Custodia n Board. Sunreme Court. Civil Anneal No. 56 of 1996. unre ortctl . In that case the appellant, Allibhai, was not a party the original proceedings before the High Court which was between the two respondents, W. E. Bukenya Mukasa and Departed Asians Property Custodian Board. The High Court proceedings ended into a consent judgment which the appellant claimed had deprived him of his interest in the suit property. He successfully applied for a review and his opponents appealed to the Supreme Court.

The leading judgment was written by Karokora, JSC and he was supported by Wambuzi, C. J and Odoki, JSC as they then were. Their Lordships noted that the appellant was not involved in the litigation which

resulted in the consent judgment sought to be reviewed/set aside. Karokora, JSC was of the view that despite the consent judgment, he was and he is still free to pursue his rights in the Court of Law. This principle was followed fiom the Indian case of Kawdu V. Berar Ginnine Co. Ltd, Akot and Others (1929) AIR Naepur 185.

In that case Narayan was not a party to the proceedings. He applied to be joined as a respondent and his application was allowed. He contested the appeal on merit and succeeded in getting it dismissed. However, Kawdu l0 resisted the application on the ground that the applicant lacked Locus Standi as he was not a party to the proceedings which resulted in the Order sought to be reviewed.

On appeal by Kawdu, it was held by the Court of Appeal inter alia:-

"Narayan was undoubtedly entitled to move the lower court for a review of its Order under section l5l of CPC (equivalent to our section l0l Civil Procedure Act). Narayan was known to appellant as a director of the company during its existence and subsequently as a purchaser of its assets after its extinction and as the person who had successfully opposed the winding up proceedings started by the appellant... With the object of avoiding all possible objections which he might have raised, the appellant deliberately omitted to make Narayan a parfy either to the first appeal or to the proceedings in Misc. Jud.

Case No. 46 of 1927 and secured an Order in the latter case behind his back, highly prejudicial to his vested interest."

The courl went on and stated:

" I cannot therefore, conceive of a more flagrant example of an abuse of the process of the Court than the one taken advantage of by the appellant in securing an Order from the Court ex-parte, the very necessary opponent in the case, This was therefore pre-eminently a case in which the inherent powers of the court could be legitimately exercised by it in removing the apparent injustice done to Narayan in order to prevent an abuse of its process......t'

It is significant to note that the appellant's conduct in the proceedings was found to be very bad indeed although Narayan was not a party at all to the suit for which reason he was purportedly left out in the application. In the instant application the Attomey General was left out where he was the principal party in the suit and a party to the Notice of Appeal. We find that the principles stated in Narayan's case (supra) were followed by the Supreme Court which principles we find applicable in the present application. The applicantl deliberately left out the Attomey general whose objections are well known. In our view, this was a flagrant abuse of the process of court, which court should not condone but to use its powers to prevent.

In the result, we would grant the informal application to join the Attorney General as a co-respondent to this application (Civil Application No. 12 of 2001) with costs to the applicant Company.

Dated at Kampala this Similar day of Many. 2001.

S. G. ENGWAU,

## **JUSTICE OF APPEAL**

Cres Clumba C. N. B KITUMBA,

**JUSTICE OF APPEAL.**

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$\mathbf{1}$

# TIiE REPUBLIC] OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT IGMPALA CIVIL APPLICA'I'ION NO. I2 OF 2OOI

### CORAM: HON. JUSTICE C. M. KATO, JA. HON. JUSTICE S. G. ENGWAU, JA. HON. LADY JUSTICE C. N. B. KITUMBA, JA.

#### EAST AFRICA GENERAL INSTIRANC E COMPANY LIMITED :: :: :: :: :::: : :: :]: APPLICANT l0

### VERSUS

| I | NIANUBIIAI NIADIHVANI | | | |---|-----------------------|--|--| | | | | |

- HIIIIATLAI, GANDESHA RESPONDENTS 2 - VIVEK ARAT]JO 3

### RtILING OF C. M. KATO, J. A. (dissentine)

This ruling concerns an infonnal and verbal application rnade by Mr. Matsiko, Senior State Attorney, to have the Attorney General joined as a co-respondent in part heard proceedings for stay ofexecution 2t)

The facts that led to this ruling are as follows. The applicant company, the East Africa General Insurance Co. Ltd. (which I shall hereinafter refer to as the applicant) instituted a civil suit in the High Court against the 3 respondents: Manubhai Madhvani, Hirnatlal Gandesha, Vivek Arauj o (whorn I shall refer to as respondents hereinafter) and the Attorney General of Uganda. The suit was dismissed ex parte. The applicant filed an application in this court for stay of execution under Civil Application No.l2 of 2001. The application rlid not include the Attorney General as one of the respondents. On 91412001 the hearing of the application commenced in the presence of the counsel for both parties. After Mr. Katende had finished his submission on behalf

of the applicant the matter was adjourned to 271412001 at the request of Mr. Lule to enable him prepare his reply.

On 271412001 when the application came up for further hearing, Mr Matsiko appeared for the Attorney General and moved the court that he should be heard. After he had been pemritted to address the court, he verbally applied for the Attorney General to be added as one of the respondents in the application for stay of execution. He argued that the Attorney General was a principal defendant in the main suit as it was the Minister of Finance who issued the repossession certificate to the other respondents in respect of the suit property therefore it was only proper that the Attorney General should be added as a respondent. The application was made under Rules 1(3) and a2(3Xa) of the Rules of this court. Mr. Lule who appeared for the other respondents supported Mr. Matsiko's application.

On his part, Mr. Katende counsel fbr the applicant, opposed the application on the ground that the applicant has no complaint against the Attorney General as far as the stay of execution is concerned. He contended that the applicant's interest is only in the people who took possession of the property. He argued that there was no provision under which the Attorney General could be added after counsel for the applicant had closed his case According to him provisions of Rule 42(3)(a) only applies to those who are already a party to the proceedings not outsiders. In his view the Attorney General should have made a formal application ifhe wanted to be added as a fourth respondent.

There is one pertinent question which must be answered before the merits and demerits of this application can be considered. That question is whether this application was properly presented before this court informally under rule 2(3)(a) of the rules of this court instead of being

2()

formally brought by a notice of rnotion under rule 42( I ) of the satne rules. The rule reads as lbllorvs:

"42 (l) Subject to sub-rule (3) and to any other rule allolving informal application, all applications to the Court shall be by motion, which shall state the grounds of the application.

(2) A notice of motion shall be substantially in the Form A in the First Schedule to these rules and shall be signed by or on behalf of the applicant.

- (J) This rule shall not apply---- - (a) to applications made in the course of a hearing, which may be made informally; or

### (b) to applications made by consent of all parties, which may be made informally by letter."

In my view, this application was wrongly presented under rule a2(3)(a) It ought to have been lodged under rule a2(l) by a notice of motion supported by an affidavit under rule 43(l) My understanding of sub-rule tlrree of the rule is that such an infonnal application can only be rnade during the hearing of an appeal or application as a matter of urgency and in rnatters which ordinarily do not require evidence such as an applicatron for adjournment or correction of a minor typing error in the pleadings. To extend the sub-rule to cover all sorts of applications is to render sub-rule one rneaningless. The application of rule 42(3)(a) should be limited to those matters arising during the hearing of a particular case and between parties already involved in the case otherwise the provision shall be open to blatant abuse by unscrupulous litigants who would only corne to the court to ask for redress inforrnally disregarding all the nrles ofprocedure, a situation which must be avoided at any cost. l0

l(l

I am aware of the provisions of Article 126(2)(e) of the Constitution which reads:

" 126(2)(e) In adjutlicating cases of both a civ-il and criminal natu.", the courts-shall, subject to the larv, apply the follorving principles---

- (a) - (b) - (c) - (d) - (e) substantive justice shall be administered without undue regard to technical ities. "

l{)

This article has been interpreted by the Suprerne court and this court. The interpretation by both courts has been to the effect that the afticle was not intended to do away with the established rules of procedure ISee: Kasirlc llya ru h it ltsa&Co. Advocates v Ilgantla Develo lrmen t Ilirnli ( Su tt rcnre Clourt Civil A Dtreal No.2/97) and []ter Industries Ltd. v Attornev General (Su D reme Court Civil Arrnlication No.52/95) I

l0 The provisions of Rule l(3) of the rules of this court which elnpower this courl to exercise its inherent jurisdiction can only be invoked by the court after it (court) has been rnoved properly ln the instant case the wrong procedure was applied. There are cases where it has been held that inegularity in relation to tlre rules of procedure do not vitiate the proceedings if no injustice has been occasioned to the par-ties. In some of those authorities it has also been stated that as much as possible rules of procedure should be adhered to. In Mawii v Arusha General Store ll970l EA 137 at naee 138 it was held thus:

> "lt is, holever, in m1'r'icrv completely immaterial whether the procedure is rvhat it should have been. We have repeatedly said that rules of Procedure

are designed to give effect to the rights of the parties and that once the parties are brought before the courts in such a w'ay that no in iustice is causctl to cither then a mere irregularity in relation to the rule of Procedure would not result in vitiation of the proceedings. I should like to make it quite clear that this tloes not mean that the rules of Procetlure should not bc co nr l)lied rvith indeed thev should." (my underlining).

l0 The above quotation is a clear indication that the rules ofprocedure should always be adhered to except where no injustice is likely to be caused to either of the parties by ignoring thern. In the instant case it cannot be said that the applicant has not been prej udiced by the manner in which this application was made. In the first place, Mr. Katende, counsel for the applicant, came to court prepared to listen to Mr. Lule's reply to his (Katende's) submission which he had made on 91412001 but not to argue an application for joining a fourth respondent to the proceedings. Secondly Mr. Matsiko did not tell the court as to why he pref'erred to proceed under rule a2Q)@) and not rtle 42(1) although he dwelt so much on the issue of why the Attorney General should be joined as a party. Thirdly, although Mr. Katende subrnitted frorn the bar that the Attorney General was not.,loined in this application because the applicant had no cornplaint against him, that statement was not evidence. Had the application been made formally by notice of rnotion under rule 42( I ) both parties would not have been disadvantaged; because the Attorney General by way of affidavit would have explained fi.rily as to wrry he wished to be added as a respondent, likewise the appllcant would have been given a chance to explain in its affidavit in reply why it decided not to .loin rhe Attorney General as a respondent. In the absence of such evidence in

forrn of affidavits I cannot see how the court can form a balanced decision one way or the other. Mr Matsiko hirnself admitted having been served by court with notice in respect of the notice of motion for stay of execution and he discovered that the Attorney General was not made a party to those proceedings. The Attorney General cannot therefore be heard to say that he could not proceed under rule 42(l) because he was caught unawares when Mr Matsiko appeared in court on 271412001 . The Attorney General knew all along that his narne had been left out of the proceedings for stay of execttion so he had titne to file his application formally under Rule 42(l)with reasons as to why he wished to be added.

With due respect, I agree with Mr. Katende's contention that the application to join the Attorney General as a fourth respondent in Civil Application No.l2 of 2001 was improperly presented, it ought to have been brought formally under rule 42(l) of the rules of this court but not informally under rule a2Q)@) I find the informal application incompetent and I would relect it with costs to the applicant (the East Africa General Insurance Company Ltd.). In view of this holding I find it unnecessary to go into the merits of the application.

As rny Lords, Engwau, JA. and Kitumba, JA. hold a different view frorn mine, the ruling of the court by majority of two to one is as follows:-

(a) That the application to.lorn the Attorney General as a corespondent in Civil Application No.l2 of 2001 is granted.

That the Attorney General pays costs of this informal $(b)$ application to the applicant company

Dated at Kampala this $\frac{1}{2}$ day of $\frac{1}{2}$ day of $\frac{1}{2}$ day....................................

$\overbrace{\text{C. M. Kato}}^{\text{KATO}}$ **JUSTICE OF APPEAL**