Oriental Insurance Brokers Ltd v Transocean (U) Ltd (Civil Appeal 55 of 1995) [1997] UGSC 11 (1 October 1997)

## **THE REPUBLIC OF UGANDA**

IN THE SUPREME COURT OF UGANDA AT MENGO

(CORAM: ODER, J. S. C, TSEKOOKO, J. S. C. AND KAROKORA, J. S. C) CIVIL APPEAL NO. 55/1995

## **BETWEEN**

ORIENTAL INSURANCE BROKERS LTD ::::::::::: APPELLANT

AND

TRANSOCEAN (U) LTD :::::::::::::::::::: **RESPONDENT**

(Appeal from the judgment and decree of the High Court of Uganda at Kampla (E. S Lugayizi, J.) dated 7<sup>th</sup> November 1994 IN

HIGH COURT CIVIL SUIT NO. 256 OF 1993

JUDGEMENT OF TSEKOOKO, J. S. C

I have had the advantage of reading in draft the judgment prepared by my learned brother, Oder, J. S. C, and agree with his conclusions.

The appellant was at the time material to this case an Insurance Broker. On 15<sup>th</sup> November 1988, by letter of the same date (exh.p.1) the respondent appointed the appellant as the respondent's Insurance Broker. The letter allocated the appellant the following classes of insurances:

$^{\prime}$ (a) Fire and allied risks, (b) Burglary, and (c) Motor.

On $17^{\rm th}$ June 1992 the respondent terminated the services of the appellant by letter (exh.pl1). By then the respondent owed the appellant a sum of shillings $46,126,653$ = arising from the appellant's work for the respondent as Insurance Broker. In reality the money consisted of premiums from which the appellant would earn his commission. Because the respondent failed to pay the said money to the appellant, the latter brought an action in the Court below to recover the same.

In its written statement of defence the respondent denied liability and in the alternative pleaded in paragraph $6$ thereof that:-

"6 ....................................

- a) the said claimed amount of shillings $37,679,104=$ and shillings 8,372,549= to National Insurance Corporation Limited respectively does not belong to the plaintiff. - b) the plaintiff has no authority, express implied, to sue the defendant for money owed (if at all) to third parties. - $c)$ the defendant has always been willing to effect payments $% \left\vert \mathbf{r}\right\rangle$ of any indebtedness it may be owing to the said National Insurance Corporation Company and Universal Insurance Corporation Company Limited either directly or vide their authorised agent/agents.

$\overline{2}$

.o d) One of the alleged creditors National Corporation, has already expressed desire to meet the defendant with a view of working out palment of its outstanding premium without any to the plaintiff.'I Insurance directly a mode of re fe rence

> The effect of the averment in para.6(a) above is that the respondent would avoid payment of the appellant, s commission which the appellant could have had to deduct if the premiums were paid through the appellant.

> At the beginning of the trial Mr. appellant at the trial proposed words - Sse kandi. issues ..pr""..,t01th. the following who in

> > We have agreed with Iearned counsel that for determination is whether defendant any money to plaintiff and if so how much?,, issue owe s

Evidence was led by both parties. The two counsel addressed the j udge,

In the course of writing his judgment the learned judge stated at page 8, that -

> "I will not get bogged down by the issues agreed upon herein by counsel.,,

The learned judqe then proceeded to reframe and expand the issues into four, namely :-

l) "Whether the defendant owed the plaintiff any money.

2) rt so, in commission, what prem j-um form was the said debt? (Vias it or both? )

- 3) Depending on the answer obtained from issue 2 above, whether the plaintiff was entitled to sue the defendant like it did in this suit in a bid to recover what it was entitled to from the defendant? - obtained from $4) If the$ answer issue 3 above is in affirmative, exactly how much money did the defendant owe the plaintiff?"

The first and the fourth issues are the issue or issues which were framed at the beginning of the trial, $\mathbf{t}$ hough they were combined as one issue.

The judge answered the issues against the appellant. He then dismissed the suit holding that the plaintiff had no right to sue. It is the framing of issues by the learned judge while writing his judgement and without reference to the parties which is the subject of complaints in grounds one and two $\circ$ the memorandum of appeal. The complaints state -

- 1. "The learned trail judge erred in law in deciding the appellant's claim on issues other than the ones the parties agreed upon before the commencement of the trial. - $2.$ The learned trial judge having decided not to get bogged down by the two issues agreed upon the parties erred in law to have proceeded to determine the suit on his own issues without first raising the said issues to the parties to afford an opportunity to the parties or any of them if it so wished to adduce further evidence on the new issues

$\overline{4}$

and to make such approPriate legal submlsslon before the end of the trial."

Mr. Ssekandi for the appellant quite correctly conceded that the trial judge had powers to amend or alter issues' But learned counsel contended that in this case the learned judge should not have amended or introduced new issues without reference to the Parties. Mr. Kiapi, counsef for the respondent supported the course adopted by the learned trial j udge .

There is no doubt that it is |the trial judge who frames the issues. Equally there is no doubt that a court may at any time before passing a decree amend the issues or frame additional issues. Order 13 Rule 1(5) is the authority for the former proposition and for the Iatter proposition Order 13 RuIe 5 is the authority. Order 13 RuIe 1(5) reads as follows: -

> "At the hearing of the suit the court shall, after reading the plea{ings, if anY, and after such examination of the parties or their advocates as may appear necessary, ascertain upon what material proposition of law or fact the parties are at variance, and shall thereupon proceed to frame and record the issues on which the righf,decision of the case appears to depend. "

Order 13 Rule 5(1) reads:

O

"The Court may at any amend the issues or such terms as it time before passing a decree frame additional issues on thinks fit, and aII such

amendments or additional issues as may be necessary for determining the matters in controversy shall be so made or framed".

Order 13 Rules 1(5) and Rule 5 should be read together with the provisions of Order 18 Rules 4 and 5. These read as follows:

> $"R. 4.$ Judgment in defended suits shall contain a concise statement of the case. the points for determination, the decision thereon, and the reasons for such decision".

"R. $\mathfrak{S}$ . In Suits in which issues have been framed, the Court shall state its finding or decision with the reasons therefor, upon each separate issue unless the finding upon any one or more issues is sufficient for the decision of the suit".

Clearly Order 13 Rule 1(5) envisages that the Court frames issues in consultation with the parties. In Odd Jobs vs. Mubia (1970 E. A. 476, Law J. A., concluded his judgment at page 479 about framing issues $thus:-$

> "The prime responsibility to ensure that issues are framed lies on the Court; but in my view the advocates also have a duty to see that this requirement is complied with by the Court<sup>®</sup>.

As far as I am aware the practice in many Courts of trial in Uganda in suits where parties are represented by counsel, is that a trial judge would normally inquire from counsel if they have agreed on the issues. It is where counsel don't agree on issues agreed upon are at variance with the pleadings that the trial judge would normally proceed to frame the issues which he considers to be appropriate. I think it is because of that practice that the learned trial judge proceeded with the trial after Mr. Ssekandi, counsel for the plaintiff, had suggested the two issues with which Mr. Beyanda, the advocate who appeared for the respondent at the trial, agreed. 0. 13 R. 5(1) does not empower a trial judge to amend or add issues arbitrarily.

A case is tried on issues. This explains why order 13 rule 1(5) is worded as it is namely -

> "At the hearing of the suit the court shall, after reading the pleadings if any, and after such examination of the parties or their advocates as necessary, ascertain upon what material propositions of law or fact the parties are at variance, and shall, thereupon proceed to frame and record the issues on which the right decision of the case appears to depend". (Underlining added).

This sub-rule indicates that the trial proceeds on matters which are in dispute. Therefore, from the beginning of the trial the parties must know the issue which requires proof. In that way the parties are enabled to call evidence to prove or disprove issues as framed at the beginning of the trial. See Supreme Court Civil Appeal No. 18 of 1994 - Rukidi vs Iguru (unreported); Supreme Court Civil Appeal No. 10 of 1991 Kayondo vs. Co-operative Bank Ltd. (unreported).

O. 13 R. $5(1)$ is only permissive and allows the Court to amend issues where, it appears from the course followed at the trial that the issue(s) had been left to the court for decision: Odd Jobs . vs. Mubia (1970) E. A. 476. This is so in a case where evidence is led on an unframed issue and such evidence is challenged by the other party by cross-examination or calling of a witness in rebuttal. Paries must address the court thereon. In Odd's case

Duffus, P., referred to the Kenya's provisions of Order 14 Rules $1(5)$ and $5(1)$ which appear to be identical to our Order 13 Rules 1(5) and 5(1) and stated, at page $479(H)$ $that -$

"It is therefore, the duty of the court to frame such issues as may be necessary for determining the matters in controversy between the parties. Apart from these provisions, the court has wide powers of amendment and should exercise these powers in order to be able to arrive at a correct decision in the case and to finally determine the controversy between the parties. In this respect a trial court may frame issues on a point that is not covered by the pleadings but arises from the facts stated by the parties or their advocates and on which a decision is necessary in order to determine the dispute between the parties." (Underlining added).

In that case the real issue for determination and the issue on which the judgment was based was whether the contract was dependent on a condition precedent being carried out by the appellant. Although the issue had not been pleaded nor framed, evidence was led on it. Both parties called evidence on the issue before the hearing of evidence was closed. The most important aspect in the case of Odd's that no issues were framed at all before the communication ment of the trial.<br>Clearly Odd's case is thus distinguishable. In the circumstances I am persuaded by the arguments Mr. of Ssekandi that the trial judge erred in introducing the second and third issues belatedly while writing his judgment without consulting the parties or their advocates.

He ought to have postponed writirrg his judgment, drew the attention of counsel to his (judge, s) desire to amend the issues. He shoul-d have €5ffi1 an" advocate, s views whether they wished to call evidence on the new issues or whether they shouJ,d address him on the same before he concLuded his judgment. I think that such course of action is contemplated by Order 13 Rule 5(1) (supra). This course was particularly desirable in this case in which the trial judge dismissed the plaintiff, s case.

In my view and with due respect to the learned trial judge the appellant lras prejudiced by the procedure adopted by the Iearned j udge.

I think that grounds one and two ought to succeed. I would aIlow this appeal with costs to the appellant I would set aside the judgment and Order of the Court I would enter judgment for the appelJ.ant as prayed plaint and I wou].d award costs of this appeal and court beLow to the appellant, beLow. in the of the

, \*Y fizk, DeJ'ivared at !{engo thie ...t......... . day of ...?............ .l-g}l

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<sup>N</sup> Tsekooko Jus t ice of the Supreme Court,