Kitgum District Administration v Print and Stationary Supplies Uganda Limited (Civil Appeal 44 of 1998) [1999] UGCA 58 (30 March 1999)

THE REPUBLIC OF UGANDA

IN THE COURT OF APPEAL OF UGANDA

AT KAMPALA

CIVIL APPEAL NO. 44 OF 1998

HON. MR. JUSTICE C. M. KATO, J. A. CORAM: HON. MR. JUSTICE J. P. BERKO, J. A. & HON. LADY JUSTICE C. B. N. KITUMBA, J. A.

KITGUM DISTRICT ADMINISTRATION....................................

## **VERSUS**

PRINT & STATIONERY SUPPLIES (U) LTD....................................

(Appeal from the ruling and order of the High Court of Uganda at Kampala (Mr. Justice I. Mukanza) of the 23<sup>rd</sup> day of February, 1996 in Civil Suit No. 926 of $1994.)$

## **JUDGMENT OF THE COURT:**

This is an appeal by the defendant from the ruling of the High Court delivered on the $23<sup>rd</sup>$ day of February, 1996 in a Civil Suit No. 926 of 1994.

The brief facts are as follows:-The Print and Stationery Supplies (Uganda) Ltd, (the respondent) is a limited liability *Company. Kitgum District Administration (the appellant) was a* corporate body established under the Local Administrations Act of The respondent and appellant entered number of 1967. agreements whereby the respondent supplied the appellant with stationery and building materials amounting to Shs. 18,874,150/=. When the appellant failed to pay the respondent filed High Court Civil Suit No. 926 of 1994 on 21/12/94 claiming the sum of Shs. 18,874,150/=, as special damages, general damages for breach of contract, interest and costs.

Before the institution of the suit the Local Administrations Act of 1967 under which the appellant was established was repealed by The Local Governments (Resistance Councils) Statute of 1993, (Statute No. 15). The 1993 Statute established the Kitgum District Resistance Council to replace the Kitgum District Administration.

When the case came up for hearing, Mr. Kinyera P'Lodi, who appeared for the defendant (now appellant) raised two preliminary objections. It is only the first objection that concerns us. The objection was that the suit was misconceived because it was brought against a non-existent party. According to Counsel, Kitgum District Administration ceased to exist with effect from December 31<sup>st</sup> 1993 when Local Governments (Resistance Councils) Statute came into force and repealed the District Administrations Act of 1967 under which the Kitgum District Administration was established. This is because a District Council is a body corporate with perpetual succession and has a common seal and may sue or be sued in its corporate name. It was contended that as the suit was instituted in the name of a nonexistent party, the plaint could not be amended.

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The learned trial Judge over-ruled the preliminary objection and held that the Suit was instituted in the name of the wrong party through a bonafide mistake, and in order to determine the real matter in dispute, the court could order any other person to be substituted or added under Order 1 r 10 of the Civil Procedure *Rules. The Judge, however, did not proceed to amend the Plaint.*

There were two grounds of appeal which were argued together under a broad proposition that the learned trial Judge misdirected himself in holding that the appellant could be substituted under Order 1 r 10 of the Civil procedure Rules, having admitted that the Suit was instituted against a wrong defendant. It was argued that the Local Administrations Act, of 1967 was repealed by S. 48 of the Local Governments (Resistance Councils) Statute, 1993 which came into effect on 31<sup>st</sup> December 1993. Therefore when the Suit was filed on 21<sup>st</sup> December 1994 the Kitgum District Administration did not exist. The action ought to have been brought against the Kitgum District Resistance Council. Since the action was instituted against non-existent entity, the new resistance council cannot be substituted. In support of his argument learned counsel referred to the cases of **Sajjabi** v

## Timber Manufacturers Ltd (1978) HCB 202 and Pathak v Mrekwe (1964) EA 24.

On behalf of the respondent, it was submitted that the Kitgum District Administration, as an administrative organ of the District, existed and continue to exist. It is only the name that has changed. The parties continued to correspond in the old name. The office stamps and correspondence were in the old name. Corporate bodies do change names. That does not mean the corporate body no longer exists. In the instant case the local Government area remain as before; only the name that was changed. It was further contended that in the written statement of Defence it was not pleaded that the appellant did not exist and therefore the preliminary objection was misconceived. The appellants annexed documents to the written statement of Defence which bore the name of Kitaum District Administration.

It was contended finally that the objection was a mere technicality and ought not to be entertained in view of the *provisions of Article 126(2)(e) of the Constitution.*

In reply, Mr. P'Lodi contended that it was wrong to say that a change of name does not affect the existence of a corporate entity. The name was changed by Statute and that affected the corporateness of the District. It was further contended that there was no need to plead in the written statement of Defence that the council did not exist. That was implied in para 15 of the defence. *Finally that article 126(2)(e) of the Constitution does not apply as* following the provision of the law is not a technicality.

We propose to deal with one procedural matter first, before considering the merits of the appeal. During the argument on the preliminary objection, learned counsel for the respondent submitted that the preliminary objection was misconceived as it was not pleaded in the written statement of defence that the appellant did not exist and therefore the suit cannot be maintained against it. That was said to be contrary to Order 6 r 27 of the Civil *Procedure Rules.* The learned trial judge held that the defence complied with Order 6 r 27 when it pleaded in paragraph 15 "The defendant shall aver that the plaintiff's plaint is contradictory and <u>vexatious</u> in substantial particulars and

shall move the court that it be struck out as being untenable".

Ord 6 r 27 of the Civil Procedure Rules provides:

"Ord 6 r 27 Any party shall be entitled to raise by his pleading any point of law, and any point so raised shall be disposed of by the court at or after hearing: Provided that by consent of the parties, or by order of the court on the application of either party, the same may be set down for hearing and disposed of at any time before the hearing."

With due respect to the learned judge, we are unable to see by what stretch of imagination an averment that the plaint is "contradictory and "vexatious" can raise a legal point that the suit is not maintainable on the ground that the Kitgum District 20 Administration did not exist. In our view the proper defence should have been:

## "The plaint is not maintainable, having been filed against a defendant that did not exist and that the suit is bad in law":

or something similar to the amended written statement of defence in Babubhai Dhanji Pathak v Zainab Mrekwe (1964) EA 24 where it was pleaded, inter alia:

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"That the *original plaint* was $not$ maintainable, having been filed by a deceased person, and that the suit had abated".

But as there was no cross-appeal on that point, we do not wish to say more beyond what we have said.

As regards the merit, we think there is substance in the argument of counsel for the respondent that it was only the name of the body or entity charged with the administration of the district that was changed and that the superstructure remained the same and existed and consequently the new corporate body can be

substituted for the old one. There are provisions in Statute No.15 of 1993 that underline this contention. The first provision is S. 50(1) which vests all properties and assets which were vested in the District Administration immediately before the commencement of the Statute in the District Resistance Council, subject to all interests, liabilities, charges and obligations and trusts affecting that property. This Section transferred all the assets and liabilities of the former District Administration to the present District *Resistance Council.* The subject matter of the suit was stationary and building materials supplied to the old council. The liability to $10$ pay for them is by law transferred to the new council. Sub Section 2 of Section 50 made pending court proceedings, court actions and iudaments or orders which were enforceable by or against the District Administration enforceable by or against the District Resistance Council as they would have been enforced by or against the District Administration that existed before the commencement of the Statute. Again by S. 51 all persons who were councillors immediately before the commencement of the Statute are deemed to have been elected under the Statute and also officers or employees of the council immediately before the 20 commencement of the Statute are deemed to have been appointed under the Statute and hold office until they are removed under the provisions of the Statute. Section 49 has validated all actions taken before decentralisation. The Section provides:

> "S. 49 Anything done or made before the commencement of this Statute in relation to the decentralisation of duties and powers, which acts would have been done or made under this Statute, shall be deemed to have been done or made under this Statute".

Since the Kitaum District Resistance took over the assets and liabilities of the erstwhile Kitgum District Administration and also absorbed its councillors and staff, it would be unjust and inequitable to argue that the present Kitgum District Resistance Council cannot be substituted for the former Kitgum District Administration in a suit to recover a debt connected with its The Kitqum District Administration was improperly functions. *joined as defendant. The proper defendant ought to have been*

the Kitgum District Resistance Council. In our view the objection is more of a technicality than substance.

S. 12 of the Judicature Statute vests this court with powers of the court of original jurisdiction. The Section provides:

> "S. 12 For purpose of hearing and determining an appeal, the Court of Appeal shall have the powers, authority, and jurisdiction vested under any written law in the court from exercise of original jurisdiction of which the appeal originally manated"

The High Court could have, under Ord 1 rule 10(2) of the Civil Procedure Rules struck out the name of Kitgum District Administration that was improperly joined and substituted the name of Kitaum District Resistance Council. This the court failed to do. In the exercise of the powers under S. 12 of the Judicature Statute we order that the names of Kitgum District Resistance *Council be substituted for the Kitgum District Administration.*

In the result we see no merit in the appeal and the same is dismissed. The respondent will have the costs of the appeal and the court below.

Dated at Kampala this $\frac{3}{3}$ day of $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\frac{1}{3}$ $\$

C. M. Kato Justice of Appeal.

J. P. Berko Justice of Appeal.

CNEX, City C. B. N. Kitumba Justice of Appeal.

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