Multiple ICD Limited v J and M Airport Road Hotel/Apartments & Leisure Centre Ltd (Civil Appeal No. 145 2012) [2014] UGCA 137 (10 September 2014)

Full Case Text

### THE REPUBLIC OF UGANDA

## IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

## CIVIL APPEAL NO. 145 2012

MULTIPLE ICD LIMITED ....................................

#### **VERSUS**

#### J AND M AIRPORT ROAD HOTEL/

## APARTMENTS & LEISURE CENTRE LTD............. RESPONDENT

[Appeal against the Ruling delivered on 02.10.2012 by His Lordship Hon. Justice Vincent Tiwangye Zehurikize in *High Court Miscellaneous Application No. 159/2011.* Arising from Civil Suits Nos 147 and 288 of 2009

# CORAM: HON. MR. JUSTICE S. B. K. KAVUMA, JA HON. MR. JUSTICE A. S. NSHIMYE, JA HON. MR. JUSTICE REMMY KASULE, JA

### **JUDGMENT OF THE COURT**

The appellant being aggrieved by the Judgment of the High Court (Civil Division) at Kampala delivered on $2^{nd}$ October 2012 by the Hon. Justice Vincent Tiwangye Zehurikize now appeals to this court on the following grounds.

1. That the Learned Trial Judge erred in law and fact in holding that Miscellaneous Application No. 159/2011 does not disclose grounds upon which an application for setting aside a Consent Judgment can be made.

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2. That failed the Learned **Trial** Judae to properly *evaluate/analyze the Appellant's pleadings on record thereby* arriving at a wrong conclusion that the application did not disclose grounds upon which the application could be made *hence dismissing it.*

The appellant seeks for this court the following orders;-

10 *a) This Appeal be allowed.*

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- b) Court *(Civil) Division Ruling/Orders* passed in. Miscellaneous Application No. 159/2011 (Arising from Civil Suits Nos. 147/288 of 2009) J and M Airport Road,' Hotel/Apartments and Leisure Centre Limited Versus Multiple ICD Limited, and Multiple ICD Limited Vrs. J and M Airport Road Hotel/Apartments, and Leisure **CentreLimited,** be set aside. - c) The High Court (Civil Division) proceeds to hear Miscellaneous $20$ Application No. 159/2011 Multiple ICD Limited Vrs. J and M Airport Road Hotel/Apartments and Leisure Centre **Limited** on its merits.

At the hearing of this appeal Mr. Kituma Magala learned counsel $25$ appeared for the appellants while Ms. Kasande-Murangira appeared for the respondents.

The appellant brought an application at the High court under Section 33 of the Judicature Act and Section 98 of the Civil Procedure Act seeking to set aside a consent Judgment that had been entered between the appellant and the respondent in High

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Court Civil Suit No. 142 of 2009 and High Court Civil Suit No. 228 of 2009 which suits had been consolidated. The consent Judgment is dated 20th May 2010.

In that application it was contended for the appellant in this appeal that the consent Judgment had been entered and recorded by both parties with a fatal omission, error and or mistake without due regard to the Government taxes which were to be paid by the applicant before the sale of the property, the subject matter of the consent Judgment.

**10** The subject matter of the consent Judgment were goods that had been imported by the respondent herein in four freight containers valued at Ugshs. 614,412,432 inclusive of taxes, as at May 2010.

The value of the said goods, exclusive of taxes was said to be Ugshs. 375,802,034.84/-

**15** At the hearing of the application at the High Court counsel for the respondent herein raised preliminary objections to that application as follows

- *1. That there was no application before court.* - *2. That there were no grounds for setting aside a consent Judgment.* - **20**

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*3. That the application was improperly before the trial Judge.*

The learned trial Judge upheld the second objection and dismissed the application, hence this appeal.

Mr. Kituma- Magala learned counsel for the appellant argued both grounds of appeal together.

**5** He submitted that the learned Judge failed to evaluate the evidence and thus arrived at a wrong conclusion.

That had he evaluated the evidence properly, he would have found that the appellant had signed the consent Judgment when he (appellant) was not in possession of all the material facts.

**10 15** That the material fact which at the time of signing the consent was not in the knowledge of the appellant, was that the taxes payable on the goods, the subject matter of the consent Judgment had not been ascertained. That upon being ascertained the taxes were to be paid by the appellant. Learned counsel contended that, the appellant became aware of the above facts five months after the consent Judgment had been signed.

Ms. Kasande - Murangira, learned counsel for the respondent, on other hand opposed the appeal and raised a number of preliminary objections to it. She contended that the notice of appeal herein had been filed out of time.

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That the order appealed from was made on 2/10 /2010.

That the same was filed at the High Court on 8/10/2012 and filed in this court on 18/10/2012 after more than 14 days from the date

of the Ruling and order of the High Court. She contended that the notice of appeal was not signed by the Registrar of this court, and as such there was no appeal before this court. That the appellant had failed to comply with the provisions of **Rule 76 (2)** of the Rules of this Court.

She further contended that the notice of appeal was never served upon the respondent as required by **Rule** 78 **(1)** of the Rules of this Court. She stated that the notice of appeal was filed on 10/10/2012 but filed in this court on 18/10/2012.

**10** She also contended that the appellant did not pay filling fees in this court when it filed the notice of appeal as required by **Rule 104(1)** of the Rules of this Court.

She prayed for the notice of appeal to be expunged from the Court record.

**15 20** Learned counsel for the respondents further submitted that the order from which the appeal emanates is a nullity as it was issued on 02/10/2012 and yet it is dated 17/10/2012. She submitted that Order 21 Rule 7 of the Civil Procedure Rules require that the decree and Order bear the date of the Judgment or Ruling respectively. That the order appealed from is neither dated nor sealed and that it was never approved by the respondents.

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Learned counsel also submitted that the letter requesting for proceedings was not served upon the respondents' counsel and that there was no proof of service on court record.

She prayed for the appeal to be struck out.

**5** In the alternative but without prejudice to the above submissions, learned counsel for the respondents in reply submitted that the appellant had failed to fault the learned Judges in any way.

That the grounds upon which a consent Judgment can be set aside were not proved. That there was no allegation or proof of any fraud.

**<sup>10</sup>** That the learned Judge had properly evaluated the evidence.

That a consent Judgment can only be set aside on limited grounds which were set out in the case of *Attorney General &> 20 Others versus James Kamoga: Civil Appeal No. 8 of 2004 (SC).* (unreported).

**<sup>15</sup>** She prayed for the appeal to be dismissed.

We have carefully listened to the submissions of both counsel. We shall take them into account in resolving this appeal.

We have also read the authorities provided to us, and we are grateful to counsel for the same.

**20** We would like to state at the outset that the preliminary objections by Ms. Kasande - Murangira in this court ought to have been raised at the earliest stage of the appeal and not in reply.

Be that as it may, because the preliminary objections related to matters of mixed law and fact, they ought to have been raised by way of a substantive application under the following Rules of this court:-

**5 10** Under **Rules** 82 of Rules of this Court in respect of striking out a notice of appeal on account of failure to take essential steps in prosecuting the appeal. Under **Rule** 83 on failure to serve a letter requesting for proceedings, and under **Rule 84** on failure to institute an appeal with the prescribed time. All applications brought under the above mentioned Rules are by way of notice of motion, supported by evidence adduced by way of affidavit. The respondent under this procedure therefore, has an opportunity to reply to the issues of fact raised therein by way of affidavit in reply.

**15** In this particular case both issues of law and fact were raised from the bar. The respondent was not accorded a reasonable opportunity to reply to the issues of fact. The reply to issues of fact was thus also made by counsel from the bar.

The law, as we understand it to be, only permits parties to raisK objections at any time, provided they relate only to issues of law. The objections raised by Ms. Kasande - Murangira were largely issues of fact and ought to have been presented by the notice of motion.

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Be that as it may, we shall address the issues raised since Mr. Kituma-Magala did not object and did in fact reply to all the preliminary objections raised.

**5 10** agree. It was contended by counsel for the respondent that the notice of appeal was filed out of time. She however, conceded that it was filed in the High Court on 8/10/2012, the Ruling of the High Court having been delivered on 2/10/2012. Rule 76 (2) of the Rules of this court requires that a notice of appeal be filed within 14 days after the date of the decision against which it is desired to appeal. Counsel stated from the bar that the notice of appeal was filed in this court on 18 /10/2012 and therefore was out of time. We do not

**Rule 76 (1)** stipulates as follows

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*"Any person who desires to appeal to the court shall give notice in writing which shall be lodged in duplicate with the Registrar ofthe High Court."*

A notice of appeal in respect of an appeal to this court from the High Court therefore is only filed in the High Court and not in this court. **Rule 77** of the Rules of this Court stipulates as follows:-

**20** *"On receipt of the notice of appeal, the Registrar of the High Court shall immediately send one copy of it to the Registrar. "*

It is not the duty of the appellant to lodge a notice of appeal in this court. That is the duty of the registrar of the High Court. No time limit is set for doing this.

**5 10** There is therefore no requirement for the Registrar of this court to sign the notice of appeal, except in so far as his signature signifies the date on which it was lodged in this court. The absence of the signature of the registrar of this court on a notice of appeal does not invalidate it in anyway. The first schedule to the Rules of this Court sets out Form B as a format for a notice of appeal under Rule 76. That form has no provision for a signature of the Registrar of this Court.

The two objections are therefore misconceived and without any merit whatsoever they are accordingly dismissed.

**15** The other objection that the notice of appeal was served on the respondent on 10/10/2012 before it was filed in this court is also misconceived and without merit for the reason given above.

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The objection raised by counsel that the appeal was a nullity because the respondent had not paid fees upon filing a notice appeal in this court is also misconceived, for the reasons already given. The notice of appeal is not filed in this Court. It is filed only in the High Court. Therefore no fees are payable in this court in respect of a notice of appeal from the decision of the High Court.

**20** As already stated the notice is only transmitted to this court by the Registrar of the High Court. This court is alive to the fact that in practice, counsel for the intended appellant or the appellant is the one who transmits the notice of appeal to this court. That however, is not a legal requirement. There is no requirement for payment of fees upon that transmission. This objection also has no merit and is misconceived. We accordingly dismiss it.

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It was submitted by counsel for the respondent that the order of the High Court appealed from does not comply with the provisions of order 21 Rule 7 of the Civil Procedure Rules and that this appeal is a nullity as it is founded on a defective order. That the order was in addition not approved by the respondent.

**15 20** We have scrutinized the order the subject of this objection. We find that the extracted order expresses the decision of the High Court that Miscellaneous Application No.0159 of 2011 was dismissed with costs. Respondent's counsel did not explain to this court in which way the order did not reflect the decision of the trial court. There was also no evidence that the respondent's counsel had objected to the order at the earliest on being served with the Record of Appeal. The mere fact that the applicants had not required the respondent's counsel to endorse their consent on the order does not without more on the part of the respondent, render the extracted order to be invalid. It is a mere procedural irregularity.

The requirements for institution of appeals in this court are set out in Rule 83 (1) of the Rules of this Court which states as follows:-

## "83 (1) Institution of appeals.

Subject to rule 113 of these Rules, an appeal shall be instituted in the court lodging in the registry, within sixty days after the date when the notice of appeal was lodged-

- a) a memorandum of appeal, in six copies, or as the *registrar shall direct;* - b) the record of appeal, in six copies, or as the *registrar shall direct;*

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c) the prescribed fee; and

- d) security for the costs of the appeal." - We are satisfied that the appellant substantially complied with the $20$ law as to lodgment of an appeal.

This objection is also misconceived and has no merit whatsoever. It is dismissed.

The last objection was that the appellant did not serve the $25$ respondent with a letter requesting for proceedings as required by Rule 83 (3) of the Rules of this court. And that there was no proof of service on record.

Rule $83(3)$ is applicable only in cases in which the intended appellant seeks an automatic extension of time beyond the 60 days 30 set out in the Rule 83 $(1)$ .

The respondent sought to set aside the consent Judgment and to vary the terms of the consent by claiming extra payments. He was successful at the High Court.

On appeal it was submitted for the respondent that the consent had resulted from a mistake of counsel who thought that the consent entitled the respondent to more than Tz shs. 65,000 set out in the consent Judgment.

The Court of Appeal for East Africa rejected the above argument and held that the respondent had signed the compromise after confirming its correctness and that the terms of the consent were clear. That the consent could not be a set aside.

The court observed and held as follows at P. 269;-

*"The circumstances in which a consent judgment may be interfered with were considered by this court in Hirani v. Kassam (1952), 19 E. A. C. A. 131, where the following passage from Seton on Judgments and Orders, 7th Edn., Vol. I, p. 124 was approved:*

*"Prima facie, any order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and on those claiming under them ... and cannot be varied or discharged unless obtained by fraud or collusion, or by an agreement contrary to the policy ofthe court... or if*

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The respondent sought to set aside the consent Judgment and to vary the terms of the consent by claiming extra payments. He was successful at the High Court.

The court observed and held as follows at P. 269;-

*"Prima facie, any order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and on those claiming under them* ... *and cannot be varied or discharged unless obtained by fraud or collusion, or by an agreement contrary to the policy ofthe court*... *or if*

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*consent was given without sufficient material facts, or in misapprehension or in ignorance of material facts, or in generalfor a reason which would enable the court to set aside an agreement.*"

*No such circumstances have been shown to exist in* **or** *this case. There is no suggestion of fraud or collusion. All material facts were known to the parties, who consented to the compromise in terms so clear and unequivocal as to leave no room for any possibility of mistake or misapprehension. As WINDHAM, J. said, in the introduction to the passage quoted above from Hiran's case, a court cannot interfere with a consent judgment except in such circumstances as would afford good ground for varying or rescinding a contract between the parties.*

*had jurisdiction to review and interpret the compromise It follows from the above that in my view, although the judge to entertain the application agreement, no good^ grounds were shown to justify varying or rescinding it. The application" should have been dismissed.^ A*

**25** The above principles were reiterated by the Uganda **Supreme** *Court in Attorney General and Uganda Land Commission versus*

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*James Mark Kamoga and James Kamala: Civil Appeal No. 8 of 2004* when it stated as follows:-

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*"It is an as a new contract a well settled principle therefore that a consent decree has to be upheld unless it is vitiated by a reason that would enable a court to set aside agreement such fraud, mistake, misapprehension, on contravention of court policy. This principle is on the premise that a consent decree passed on the terms of between the parties to the consent Judgment."*

a We agree with above statement of the law. We only wish to emphasize that anything that vitiates a contract also vitiates consent Judgment, and that includes an illegality.

**15** *We* do not agree with Mr. Kituma -Magala that the consent Judgment was entered into without sufficient facts. Both parties must have been fully aware that the goods were subject to Government taxes. The appellant cannot claim that it was unaware of that material fact. The appellant describes itself in the plaint in High Court Civil Suit No. 288 of 2009 as follows:- *&*

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*"a limited liability company incorporated in Uganda conducting business of an inland container depot"*

By the very nature of the appellant's business they were well aware that the goods, the subject of the consent judgment were subject to taxes.

The learned trial Judge stated at page 12 in his Judgment as follows

> *"in the instant case the grounds upon which the application is followed are mainly that the consent was entered with fatal omission, error and or mistake with due regard to what the taxes of Government would be imposed.*

> *That upon payment of the taxes payable the applicant would not be adequately compensated as it would get much less than the respondent owed it ......*

> *agreement or an order made in the presence of and with consent ofparties" , Payment of taxes cannot be a ground or reason which would enable court to set aside an*

We agree with the learned trial Judge.

**20** The appellant failed to prove that there were sufficient grounds upon which a court would set aside a consent Judgment.

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We accordingly find no merit in this appeal which is dismissed. We uphold the order of the High Court dismissing the application to set aside the consent Judgment.

The appellant shall bear the costs of this appeal and those in the court below.

**Dated** at **Kampala** this $10^{10}$ $P_{\mathsf{W}}$ day of $\ldots$

HON. MR. JUSTICE S. B. K. KAVUMA **JUSTICE OF APPEAL**

HON. MR. JUSTICE A. S. NSHIMYE **JUSTICE OF APPEAL**

r Cle HON. MR. JUSTICE REMMY KASULE

**JUSTICE OF APPEAL**

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