Paramal Patel and 2 Others v Uganda Medium Industries Limited (Civil Appeal 268 of 2018) [2021] UGCA 220 (28 October 2021)

Full Case Text

## THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA AT I{AII{PALA

### CIVIL APPEAL NO. 268 OF 2018

(Aising from Mbate High Court Ciuil Su# 1Vo. O79 of 2003)

### 5 1. PARIMAL B. PATEL

### 2. DAWASON K. WERE

t/a United Cortrt Brokers & Auctioneers

3. UGANDA SPUN PIPE LTD APPELLANTS o Versus

## 10 UGANDA MEDIUM INDUSTRIES LTD :::::::::::: RESPONDENTS CORAM: HON. WSTICE cHEBoRIoN BARISHAKI, JA

HON. JI,STICE STEPHEN MUSOTA, JA

HON. JUSTICE CHRISTOPHER MADRAMA, JA

# 1s JUDGMENT OF HON. JUSTICE STEPHEN MUSOTA JA

o This is an appeal against the decision of Hon. Justice Kawesa Henry in Mbale H. C. C. S No. 079 of 2003.

### Background

The respondent was, until the 14th of october 7gg7, atenant in the premises comprised in plot No. 16/LgA Bunyoli Road Mbate belonging to the 3.d appellant and managed by the 1"t appellant. The 3'd appe,ant obtained the premises by virtue of a repossession

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certificate. The premises were under the control and management of the 1st appellant. On 14th October 1997, the 2nd appellant entered upon the said premises, locked them up and took away property in distress to recover 1,869,000/= on instructions of the $1^{st}$ appellant. At the time of locking up the premises, the respondent had property and business articles valued at Ugs. $65,542,500/$ and this property was taken away by the $2^{nd}$ appellant in distress for rent. The respondent's case is that at the time of distress for rent, the $2nd$

appellant did not have a certificate as required by law and as such, his actions were unlawful. The learned trial Judge entered judgment 10 for the respondent and dismissed the appellant's counter-claim for his expenses during the distress for rent.

The appellants were dissatisfied with the judgment and orders of the trial Judge and filed this appeal on the following grounds;

- 1. The learned trial Judge erred in law and fact when he did not properly evaluate the evidence on record. - 2. The learned trial Judge erred in law and fact when he found the $1^{st}$ and $2^{nd}$ appellants liable in the damage to the respondent in the circumstance of the case. - 3. The decision complained against had occasioned substantial 20 miscarriage of justice to the respondents.

#### Appearances

$\mathsf{S}$

At the hearing of the appeal, Mr. Mayoka Bwayo appeared for the appellants while Mr. Habakurama Elias represented the respondent.

Both counsel opted to adopt their written submissions. 25

### Appellant's submiss ions

For the appellant, counsel submitted that the 3.d appellant has never entered into tenancy agreement with the respondent. The tenancy agreement at the material time existed between the 3.d appellant and Edirisa Karenget Musiwa and not the respondent herein. counsel submitted that the demand notices exhibited as Exh. pES and pE7 were addressed to Edirisa Karenget Mr-rsiwa in his capacity as a tenant to the 3"t appellant. The documents exhibited as Exh. pEg and PE10 were dated l4/lo/1997 after the termination of the tenancy relationship between the 3'a appellant and the said Edirisa Karenget Musiwa.

counsel argued that Edirisa Karenget Musiwa, the respondent,s director, disclosed to DW2 that he was the tenant to the said premises and not the respondent. counsel prayed that this court finds that Edirisa Karenget Masiwa was the tenant to the 3.a appellant and not the respondent.

counsel submitted further that the learned trial Judge entered judgment for the respondents without specifying which of the appellants was to bear liability of discharging the sarne. The 1.r appellant was a disclosed agent of the 3.d respondent and discharged his duties within the scope of his authority bestorved from the 3.d appeliant. The 2"c appellant was a disclosed agent of the respondent and discharged his duties within the scope of authorit5r. The learned trial Judge did not speci\$ t].e extent liability of each of the parties to the respondent. 20 3'c his of 25

### Respondent's subm issions

For the respondent, it was argued that the learned trial Judge properly evaluated the evidence on record and came to a correct conclusion that it was the respondent who was a tenant in the suit premises and not E. K Musiwa. The respondent,s exhibit pEX3, being receipts for payment of rent, bore the narnes Uganda Medium Industries as the tenant.

counsel further submitted that the appellants are jointly and severally liable to the respondent for the damages arising out of the 10 appellant's acts against the respondent. counsel arguecl that the appellant's acts were unlawful and tortious as the purported distress for rent rvas done in total contravention of the provisions of the Distress for Rent (Bailiffs) Act. Further, that the appellant did not distrain any of the respondent's properties but instead locked the 1s respondent's properties inside the demised premises. These illegal actions of the second appellant were sernctionerl by the first appellant and as such, all the appellants are jointly and severally liable for the actions against the respondent.

counsel argued that the decision of the learned trial Judge was 20 reached at after proper evaluation of evidence on record and no miscarriage of justice was occasioned to the appellants.

### Consideration of the appeal

This appeal raises two issues for this court to determine namely;

1. Whether the respondent was a tenant to the 3.d appellant

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2. whether all the apperlants are jointry ancl severalty liabte in clamages to the respondent.

This being a Iirst appellate court entertaining an appeal from the High court that acted in the exercise of its original jurisdiction in making the decision the subject of this appeal, Rule BO(1) of the Judicature (court of Appeal Rules) Directions sets out the duty of this court as a first appellate court, being to re-appraise the evidence adduced at the trial and draw inferences therefrom. The Supreme court in Kifamunte Henry v uganda sccA No. 1o of 1997 has expounded on the duty of a first appellate court being to:

o 10

"......reconsider the mateials before the tial Judge. The appellate Court must then make up its own mind., not d.isregard"ing the Judgement appealed from, but fullg weighing and. consid.ering it',

The supreme court also elaborated in the same case that while the Iirst appellate court has a duty to review the eviclence on record and to make its own conclusions of fact, the same court must do so making allowance for the fact that it did not have the advantage of the trial ,I,dge of hearing and seeing the witnesses testify. Thcrefore, on a case turning on credibility of a witness, the impression made by the trial Judge should always be respected by the appelate court unless there are circumstances to justify departure by the appellate Court from the findings of the trial Judge. 15 20

The above principles will be followed in resolving the grounds of this appeal.

The appellant's case is that the respondent was never a tcnant to the 3'a appellant and that it was one Edirisa Karenget Masirva rvho had a tenant-landlord relationship with the 3.a appellant.

5 In the witness statement of pw 1, Edirisa Karenget Musiwa, he stated that after incorporation of the respondent company, all the businesses and assets run by him were purchased and taken over by Uganda Medium Industries Ltd a,d right from incorporation, the respondent became tenant on the suit property which was run by the Departed Asians Properties custodian Board. Thereafter, the name Uganda Medium Industries Ltd was inscribed and written in bold capital letters on the exterior walls of the premises. o 10

On the 15d, day of July 1994, pW1 received a letter as Managing Director oI the appellant company from M/s Kintu and Co. Advocates, informing the respondent to directly pay rent to the said law frrm. The law firm was to collect rent on behalf of Anglo African Lirnited, which company was an agent of the 3.d appellant. In August 1996, the 1"t appellant served the respo,dent a letter advising the respondent to no longer deal with SN Gandesha of Kintu and co. Advocates but deal with the l"t appellant directly and the letter was exhibited as P4. Following receipt of that letter, the respondent started paying rent to the r"t appellant in the n€unes of Ugand.a

Pw1, Pw2 and PW3 stated that the said premises had bold writings on the exterior wall to wit;

25 UGANDA MEDruM INDUSTRIES LTD

Medium Industries Ltd.

From the evidence on record, Uganda Medium Indtrstries Ltd is a registered legal entity as evidenced by exhibit pl. Exhibit pE3 also exhibited as DEl was addressed to the respondent company, Uganda Medium Industries Ltd plot 16/16A Bunyori Road work shop Mbale and it stated;

"We haue instructionsfrom MS Anglo African Limited the agent of the Registered Propietor of the aboue plot to manage the aboue plot and collect rent from Aou, alTange to meet the under signed" or Mr. P. B Patel to negotiate a schedule of payments of the alTears to auoid further action to recouer the arrears."

I do not agree with the appellant,s argument that they dealt with Edirisa Karenget Musiwa, the Managing Director of the respondent company in his personal capacity. It is well settled law that once a company is registered as a limited liability company, it acquires the legal personality capable of being sued in its own right. This was elucidated in Salmon v Salmon t1892 AC 22, where the court authoritatively held that; a company or corporation is a legal entity separate and set apart from its members or shareholders. This lcgal personality is an artificial one which is distinguishable from natural personalit5r. The possession of a legal personality implies that a company is capable of enjoying rights ancl being subject to duties, separately from its members, directors or shareholders. From the foregoing, a company has a right to own property distinct from its members as was established in the case of 15 2t)

Macaura v Nothern Assurance Co. Ltd IL9ZS AC 619 HL 25

o 10

It is my considered view that the learned trial judge properly considered the evidence on record and came to a conclusion that the respondent was a tenant of the appellants on plot 16/16L Bunyori Road in Mbale.

5 The second issue is whether all the appellants are jointly and severally liable in damages to the respondent. The 3.d defendant came into possession of the suit propertSr by virtue of repossession from the departed Asians custodian Board. The propert5r was under the control and management of the l"t appellant. The 2"d appellant entered into the said premises with instructions from the 3.d appellant, locked up the premises and took away tJre property allegedly irr distless to recover Ug. Shs. l,869,OOO/=. 10

The learned trial Judge ordered that thc appellants pay special damages of Shs. 65,572,5001=, 78,131,OO0/= in general damages, and interest at the court rate on the special damages.

It is well settled that an appellate court will not interfere with the award of damages made by the trial court unless the assessment of such damages by the trial court was based either on an erroneous principle of law, or the award was outrageously high or ridiculously low, so as not to reflect the measure of damages the successful partlz to the suit ought to have been awarded. Authorities abound in support of these propositions of law.

The orders of the learned trial Judge were made as against the appellants jointly and severally. The damages accrued to the respondent were caused by the appellants jointly and as such, the

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1st, 2nd and 3rd appellants are jointly and severally liable in damages to the respondent. The appellants did not appeal against the quantum of damages awarded by the trial court. I shall not interfere with the same.

5 For the reasons in this judgment, this appeal fails and is therefore dismissed with costs to the respondent.

I so order.

O Dated this ./C' day of 0(X 2021

Stephen Musota JUSTICE OF APPEAL

### THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

### CIVIL APPEAL NO. 268 OF 2003

(Arising from Mbale High Court Civil Suit No. 079 of 2003)

CORAM: (Cheborion Barishaki, Stephen Musota, Christopher Madrama, JJA.)

- 1. PARIMAL PATEL - 2. DAWASON K. WERE t/a United Court Broker & Auctioneers - 3. UGANDA SPUN PIPE LTD::::::::::::::::::::::::::::::::::::

### **VERSUS**

#### UGANDA MEDIUM INDUSTRIES LIMITED::::::::::::::::::::::::::RESPONDENT

### JUDGMENT OF CHEBORION BARISHAKI, JA

I have had the benefit of reading in draft the judgment of my brother Hon. Justice Stephen Musota JA and I agree with the analysis, conclusions and the orders he has proposed.

Since Christopher Madrama JA also agrees, the appeal stands dismissed with costs to the respondent.

It is so ordered.

......day of.................................... Dated at Kampala this......

Cheborion Barishaki

Justice of Appeal

### THE REPUBLIC OF UGANDA,

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

# (C0RAM: CHEB0RI0N, MUSOTA AND MADRAMA, JJA)

# CIVIL APPEAL NO 258 OF 2017

(ARTSTNG FRoM MBALE H|GH CoURT CtVtL SU|T N0 079 0F 2003)

# r. PARTMAL B. PATEL)

- 2. DAWSoN K. WERE) t/a United Court Brokers & Auctioneers) - 3. UGANDASPUN PIPE LTD} . APPELLANTS o VERSUS

UGANDA MEDIUM SCALE INDUSTRIES LTD} RESPONDENTS

JUDGMENT OF CHRISTOPHER MADRAMA, JA

Ihave had the benefit of reading in draft the judgment of my [earned brother Hon. Mr. Justice Stephen Musota, JA.

I agree with him that the appea[ ought to fait for the reasons he set out in the judgment and I have nothing usefuI to add.

Dated at Kampata the-fdayof oc\ 2021

ristopher Madrama

Justice of Appeat