KCB Uganda Limited v Kasekende (Labour Dispute Miscellaneous Application 184 of 2022) [2022] UGIC 63 (14 March 2022)

Full Case Text

# **THE REPUBLIC OF UGANDA**

#### **IN THE INDUSTRIAL COURT OF UGANDA AT KAMPALA**

#### **LABOUR DISPUTE: MISCELLANOUS APPLICATION No.184 OF 2022**

**Arising miscellaneous application no. 158 of 2022 and execution application 5 No. 135 of 2022)**

**KCB UGANDA LIMITED APPLICANTS**

**VERSUS**

**KASEKENDE MUJUZIARISTARCO RESPONDENT**

**io BEFORE:**

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# **1. THE HON. HEAD JUDGE, LINDA LILLIAN TUMUSHME MUGISHA PANELISTS**

**1. MS. HARRIET MUGAMBWA NGANZI**

- **2. MR. FX MUBUUKE** - **3. MR. FIDEL EBYAU S5**

### **RULING**

This application is brought under Section 76 and 98 ofthe Civil Procedure Act and Orders 50 and 52 ofthe Civil Procedure Rules seeking orders that:

**1.** The ruling and Order ofthe Acting Registrar, in Miscellaneous Application

**20** No. 158 of 2022, dated 21/11/2022, which found the Claimant to be in contempt ofCourt and the resultant penalty of a fine ofUgx.30,000,000/- be set aside.

2. Costs ofthe Application be provided for.

**25** The grounds ofthe Application are contained in the affidavit deponed by LeilaLinda Najjembe, an Advocate employed as legal Manager of the Applicant and are summarised as follows:

1. That whereas on 4/11/2022, the Applicant through its legal department was served with a Garnishee Nisi dated 2/11/2022, requiring the Applicant to appear in court on 8/11/2022, for purposes of confirming the balances /bank statement relating to a current account held by the Uganda Printing and Publishing Corporation(UPPC) with the Applicant under Account Number 2291143077 and in respect ofa fixed deposit account held by the UPPC under the same Account Number,(A copy of the order was attached as Annex. "LLNI), the Applicant's Operations department to whom the Order was relayed to provide the necessary particulars/ statement relating to the 2 accounts after blocking all transactions relating to UPPC and confirmed to the Legal department that indeed UPPC only operated the said current Account with a balance ofUgx. 40,133,018/-at the time and it did not operate a fixed deposit account with the Applicant as set out in the garnishee order nisi or at all.

2. That, this information was relayed to before she drafted her response to the garnishee Order Nisi requiring the Applicant's appearance on 8/11/2022, and it was only after the Applicant's lawyers (H&G Advocates) notified her that, at the hearing on 14/11/2022, Counsel for the Respondent sought for an order of discovery ,to establish that UPPC did operate a fixed deposit Account with the Applicant and also prayed for an order for a fine of Ugx.30,000,000/- as a penalty for concealment and non- disclosure as ordered by court in the Garnishee order Nisi, that she sought further confirmation from the operations

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department and she established that, indeed UPPC did have a fixed deposit on the same Account Number 2291143077 but on its instructions, the Operations Department had terminated it on 11/11/2022, after her first affidavit was filed and that was the reason the sum of Ugx.l billion held on the said account was later credited to UPPC's current account on that date.

- 3. That upon receipt of this information she immediately prepared and caused the filing in court a supplementary affidavit attached as "LLN3" explaining the earlier miscommunication about UPPC's fixed deposit account and further clarifying that the actual balance on the current account after termination of the fixed deposit account was Ugx. 1 billion and accordingly attached a new bank statement reflecting the same. - 4. That when the matter came up on 15/11/2022, counsel for the applicant together with counsel for UPPC appeared in court and clarified the miscommunication as stated above to court and further that by letter dated 11/11/2022, UPPC terminated the fixed deposit account and instructed the applicant to transfer the funds held thereon, to its current account in satisfaction of the judgement debt due to the Respondent and there was no intention on UPPC's part to conceal the said account from court. - 5. Therefore, based on the above reasons, she prayed that the Acting Registrars ruling issued on 21/11/2022, which found the applicant to be in contempt of court ought to be set aside because the applicant did not deliberately conceal information relating to UPPC's fixed deposit account from court and the Acting Registrar erroneously disregarded and failed to properly evaluate the undisputed evidence on the record from the applicant to the said effect. - 6. That under ordinary banking practice customer's deposits on their instructions, may be withdrawn from a customer 's account and placed on a fixed deposit account to enable such a customer to earn attractive interest dn

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the same, for a specified term and after withdrawal the said deposits would no longer be reflected on the bank statement/balance relating to the customer's current account, save for interest earned thereon or until the termination /expiry of the term. Accordingly a financial institution does not issue bank statements relating to fixed deposit accounts and only issues a certificate to the holder of a fixed deposit account, confirming the existence, ofthe fixed deposit amount, interest payable and the term ofthe said account.

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- 7. Therefore, us, the sum ofUgx.l billion held by UPPC under the fixed deposit Account could not have been reflected on the bank statement /balance in respect of UPPC's current account at the time she deponed her first affidavit because the said fixed deposit account was yet to expire or be terminated. In any case, the Applicant derived no material gain or benefit in deliberately concealing, from court the details ofUPPC's fixed deposit account at the time offiling her first affidavit or at all. - 8. She was of the view that, in the absence of evidence to the contrary the, Acting Registrar, should have reached another conclusion, the misstatement having been subsequently rectified in her supplementary affidavit, rather than the finding that the Applicant was in contempt and issuance of an order for a fine of Ugx.3 0,000,000/ as a fine. In any case the applicant did not occasion any loss to the judgement creditor as it immediately put a freeze on UPPC's current account as soon as the Gamishe Order Nisi was issued.

The Respondent did not file a reply.

#### **ISSUES FOR RESOLUTION**

**1. Whether the DR erred in finding that the applicant was in contempt of court?**

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#### **a fine of ugx. 30,000,000/- for contempt 2. Whether the DR erred to award of court?**

Blacks law dictionary 7th edition defines contempt of court as "conduct that defies the authority and dignity ofcourt. Halisbury's laws ofEngland [volume 9,4th edition classifies contempt in 2 categories, *criminal contempt which is committed by words or acts that impede Administration ofJustice and Civil contempt which arises when there is disobedience to judgement, Orders or other court process and involves privatejury. "*

110 **In Murisa Nicholas vs Attorney General HCMA No. 35/2012,** cited in **The Uganda Civil Justice Bench Book, 1st Edition,** it was observed that: *" the essence oflitigation as a processs ofjudicial administration is lost if orders issued by court through the setjudicial process, in normalfunctioning ofcourts are not complied with in full by those targeted and or called upon to give due compliance/effect. A state ..."* **In Jack Erasmus Nsangiranabo vs Col. Kaka -the director ofInternal**

115 120 **Security Organisation & the AG HCMANo 671 of 2019,** Court citing Lord Artikin in **Andre Paul Terrence Ambar Appeal No. 46 of 1935 vs Attorney General of Trinidad and Tobago(Trinidad and Tobago)[1936] 1 AllER &04[1936AC 322,** stated that *"... any the power to punish contempt ofcourt is a specialjurisdiction which is inherent in all courtsfor the protection ofthe public interest in the proper administration ofjustice.... Every judicial officer presiding over courtproceedings has the power to punishfor contempt..*

A Garnishee is called upon to give due compliance to Court Judgements.

It is the position of the law that following principles must be established when making a finding on contempt of court:

125 **1. Existence of a lawful order**

# *2.* Potential contemnor's knowledge of the order

# 3. Potential contemnor's failure to comply, that is disobedience ofthe order.

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## 1. Existence of a lawful order

130 It is not in dispute that a Garnishee Order Nisi was in the instant case, was Acting Registrar on 14/10/2022 and it was duly received by the Applicant on 4/11/2022. In the circumstances there existed a court order to be complied with.

## Potential contemnor's knowledge of the order

As was stated in **Jack Erasmus Nsangiranabo vs Col. Kaka** (supra) , *"It is the general principle ofthe law that a person cannot be held in contempt ifhe or she*

- 135 *has no knowledge ofthe court order. A party who knows an order regardless of whether, in view ofthe party the order is null and void, regular or irregular cannot be permitted to disobey it by reason ofwhat the party regards the order to be. It is notfor thatparty to choose whether or not to comply with such an order. The order must be complied with in totality... "* - 140 145 The Affidavit evidence adduced by Leila Linda Najjemba in the instant case is to the effect that, on 4/11/2022, the Applicant through its legal department was served with a Garnishee Order Nisi, requiring the Applicant's appearance in court on 8/11/2022, for purposes of confirming the balances /bank statement relating to a current account held by the Uganda Printing and Publishing Corporation(UPPC) with the Applicant under Account Number 2291143077 and in respect of a fixed deposit account held by the UPPC under the same Account Number.

According to her by the time she filed her initial affidavit in response to the Garnishee Order Nisi, the information she had acquired from the Applicant's operations department was to the effect that all transactions relating to UPPC's current account Number 2291143077 in the Applicant had been blocked and it was confirmed that, UPPC only operated a current account with a balance ofUgx.40,133, 018/-, but it **did not** operate a fixed deposit account with the Applicant. It was also hei evidence that, it was only after she was notified by the Applicant's Lawyers(H&G Advocates), that Counsel for the Respondent sought for an order for disclosure , alleging the existence of a fixed deposit account held by UPPC with the applicant, on the same Account, that she sought further clarification from the Operations Department, which subsequently confirmed to her that indeed UPPC operated a fixed deposit account, but the account had been terminated on the instructions of UPPC on 11/11/2022 following which, a sum of Ugx.l billion held on the fixed deposit Account was credited onto UPPC's current Account Number 2291143077.

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Given this evidence, it is clear that the Applicant's Legal Department relayed the Garnishee Order Nisi, to its Operations Department on 4/11/2022, seeking confirmation about the balances/bank statements relating to **a current Account held by UPPC with the applicant under account number: 2291143077 and in respect of a fixed Deposit Account held by UPPC under the same account number.** This was in preparation for the Applicant's appearance in Court, on 8/11/2022, to show

170 We have no doubt in our minds that, by 4/11/2011, the Applicant through both its Legal and Operations Departments, was aware of the existence of the Garnishee Order Nisi, which required the Applicant to disclose the balances/ bank statements relating **to a current Account and a fixed deposit account held by UPPC under account number 229114307.**

cause why the Garnishee Order Nisi should not be rendered absolute.

**3. Potential contemnor's failure to comply, that is disobedience of the order.**

175 180 185 190 It was Najjemba's evidence that, when the Legal Department relayed the Gamishe Order Nisi requiring to the Applicant's appearance in court on 8/11/2022, for purposes confirming the balances /bank statement relating to **a current account held by the Uganda Printing and Publishing Corporation(UPPC) with the Applicant under Account Number 2291143077 and in respect of a fixed deposit account held by the UPPC under the same Account Number,** the Operations Department, confirmed that UPPC **did Not** hold a fixed deposit account with the Applicant and it was only after Counsel for the Respondent insisted on seeking an order for disclosure, alleging the existence of a fixed deposit account held by UPPC with the Applicant, that the Operations Department disclosed that in fact UPPC, did hold a fixed deposit with it, but the Account was terminated on the instructions of the UPPC, by letter dated 11/11/2022. In order of chronology, this was 7 days after the Operations Department received the Garnishee Order Nisi requiring the Applicant to make this disclosure on 8/11/2022 and according to Najjemaba , the Operations department confirmed that UPPC **did not** hold a fixed deposit account with the applicant.

We do not subscribe to the argument by Najjemba that, the ordinary banking practice in whereby customer's deposits on their instructions, could be withdrawn from a customer's account and placed on a fixed deposit account to enable such a customer to earn attractive interest on the same specified term and after withdrawal the said deposits are no longer reflected on the bank statement/balance relating to the customer's current account save for interest earned thereon or until the termination /expiry of the term, applied to the circumstances in the instant case, because the termination of the fixed deposit occurred on 11/11/2022, yet the Garnishee Order Nisi required the Applicant to disclose its existence and balances thereon on 8/11/2022. Therefore, the argument that, the UPPC had instructed the Applicant to

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teiminate the fixed deposit, which according to the Applicant's Operations Department was terminated on 11/11/2022, does not hold water, because by 8/11/2022, the fixed deposit account was still in existence and the Applicant was aware that it did and it was under an obligation to disclose its existence and the balances thereon on 8/11/2022, to enable UPPC's due compliance with this court's Order.

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The Applicant had an obligation to disclose the existence of the fixed deposit in compliance with the Garnishee Order Nisi, but it did not do so, yet it was aware of the Order and the existence ofthe fixed deposit account which was still in operation by 8/11/2022, having only been terminated on 11/11/2022.

215 220 225 We do not accept the argument that, there was any miscommunication regarding what was required ofthe Applicant because the Garnishee Order Nisi clearly stated that the Applicant was required to disclose balances/ bank statements of **a current account held by the Uganda Printing and Publishing Corporation(UPPC) with the Applicant under Account Number 2291143077 and in respect of a fixed deposit account held by the UPPC under the same Account Number.** We have already established that the Applicant was aware of the existence of the order, Najjemba having confirmed that it was received by its legal Department on 4/11/2022, subsequently the Operations Department from which the Legal Department sought this information stated that, after blocking all UPPC's transactions, it confirmed that UPPC **did not** operate a fixed deposit account whereas it did and clarified that it did operate one although it instructed the Applicant to terminate it on 11/11/2022. The termination of the fixed deposit Account as already discussed, occurred 6 days after the Applicant was required to disclose its existence. In the circumstances the Applicant's non- disclosure, amounted to

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disobedience of the Garnishee Order concealment and deliberate and intentional Nisi. **J**

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The applicant as Garnishee had the primary responsibility in assisting court to enforce its orders, against UPPC but it disobeyed the Garnishee Order Nisi.

230 It is therefore our finding that the Acting Registrar was correct to make a finding that the Applicant had deliberately failed to comply with the order and this amounted to contempt of Court.

## **2. Whether the DR erred to award a fine of Ugx.30,000,000/- for contempt of court?**

235 The DR awarded the Respondent a fine of Ugx.30,000,000/- as a penalty for contempt of court.

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The laws of Uganda do not prescribe punishments for contempt of court, therefore , Courts rely on common law decisions, where punishments for contempt of court are provided under the contempt of Court Act (1981). This notwithstanding courts have emphasized that the disobedience of civil orders, is a very grave act which shall not be condoned.

The Deputy Registrar having found that, the Applicant was in contempt, for concealing the existence of HPPC's fixed deposit account moreover with the knowledge that its disclosure was necessary to ensure the enforcement of the Garnishee Order Nisi, was correct to exercise herjurisdiction in accordance with the principles of equity, to penalize the contemnor in the instant case, with a fine ofUgx.30,000,000/-.

**Was this fine excessive?** We associate ourselves with the holding in **Stanbic Bank(U) Ltd vs Commission General Uganda Revenue Authority, MA No**

**42 of 2010(2011] UGcomml03,** which was cited in **Nsangiranabo vs Col. Kaka** (supra), that, disregard of an order of court is a matter of sufficient gravity, whatever the order maybe and court never acts in vain. Under the common law civil contempt is punishable by way of committal to Civil prison or by way of sequestration. By concealing the existence ofUPPC's fixed deposit account with a balance ofUgx. 1 billion and only declaring the current account with an amount ofUgx.40,133,018/- was so grave that, in our considered opinion the contemnor should have been issued a higher penalty than the fine of Ugx. 30,000,000/ which was handed down by the Deputy Registrar.

In our considered view the registrar exercised leniency in this case. Given that the Balance of Ugx. 190,652,471/- has already been made absolute against the Applicant, we uphold the fine Ugx.30,000,000/- as a penalty.

The application is dismissed. No order as to costs is made.

We so order

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delivered and signed by:

265 **l. THE HON. HEAD JUDGE, LINDA LILLIAN TUMUSIIME MUGI**

## **PANELISTS**

**1. MS. HARRIET MUGAMBWA NGANZI**

**2. MR. FX MUBUUKE**

270 **3. MR. FIDEL EBYAU**

**DATE: 14/03/2022**

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