Rohi Investment Limited v Fenghua Limited (Miscellaneous Application 2270 of 2023) [2024] UGCommC 162 (17 April 2024)

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [COMMERCIAL DIVISION] MISCELLANEOUS APPLICATION NO. 2270 OF 2023 [ARISING FROM MISCELLANEOUS APPLICATION NO. 1056 OF 2023]** 10 **[ALL ARISING FROM CIVIL SUIT NO. 595 OF 2023] ROHI INVESTMENT LIMITED ] APPLICANT VERSUS** 15 **FENGHUA LIMITED ] RESPONDENT**

**Before: Hon. Justice Ocaya Thomas O. R**

## 20 **RULING**

## **Background**

This is an application premised under Order 9 Rule 27 of the Civil Procedure Rules. The Application seeks orders that the Order in HCMA 1056 of 2023 be set aside and costs of the 25 Application be in the cause.

The Respondent filed Civil Suit No. 595 of 2023 by specially endorsed plaint against the Applicant. The Applicant filed HCMA 1056 of 2023 seeking unconditional leave to appear and defend. The Application was dismissed under Or 17 r 4 of the Civil Procedure Rules. The

- 30 Applicant seeks to set aside the order dismissing the said application, and contends that the said application was fixed without indication of the judge before whom it was. When the Applicant's advocate attended court, they discovered from the Registrar of this court that the same application was pending before myself. - 35 The Applicant contends that its counsel took measures to have the matter fixed for hearing and that the Respondent filed an affidavit in reply on 31 August 2023. The Applicant

5 contends that before it could file a rejoinder, the matter was fixed for hearing on 11 September 2023 at 9:00 AM but the Applicant's advocates could not attend court owing to a hospital emergency affecting the Applicant's Counsel's loved ones.

The Applicant contends that its application demonstrates sufficient cause for reinstatement 10 of HCMA 1056 of 2023.

The Respondent opposed this application. Principally, the Respondent contends that this application is incompetent as the order dismissing HCMA 1056 of 2023 was one on the merits and that the failure by the Applicant's counsel to attend court is not sufficient cause 15 warranting the setting aside.

#### **Representation**

The Applicant was initially represented by M/s Mugenyi & Co. Advocates and subsequently at the hearing of the application by Katende, Ssempebwa & Co. Advocates while the

20 Respondent was represented by M/s Kampala Associated Advocates.

#### **Evidence and Submissions**

The Applicant led evidence by way of an affidavit in support deponed by Ababuza Baguma Laurel, an Advocate practicing with M/s Mugenyi & Co. Advocates, the Applicant's initial 25 retained counsel. The Respondent led evidence by way of an affidavit in reply deponed by Daisy Bwango, its legal officer.

All parties with leave of court filed written submissions in support of their respective cases. I have considered all the submissions of the parties before coming to the ruling below, suffice

30 to say that I have not seen the need to reiterate the same below.

## **DECISION**

## **PART A: Decision on Preliminary Point of Law**

35 A preliminary objection raises a pure point of law which is usually on the assumption that all the facts pleaded by the other side are correct. It is thus based on a commonly accepted 5 set of facts as pleaded by both parties. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. Preliminary objections relate to points of law, raised at the outset of a case by the defence without going into the merits of the case. In any preliminary objection therefore, there is no room for ascertainment of facts through affidavit oral evidence. See **Yaya Farajallah v Obur Ronald & Ors HCCA 81/2016, Edmond**

## 10 **Musoke & Ors v DFCU Bank & Ors HCCS 178/2019**

It is trite law that a preliminary point of law can be raised any time before judgment. See **Charles Sserunjogi v Tony Nkuubi HCOS 7/2019**.

- 15 In determining a preliminary point of law, the court must consider the pleadings and assume the contents therein to be correct. See **Mukisa Biscuit Manufacturing Co v West End Distributors [1969] EA 696, N. A. S. Airport Services v Attorney General [1959] EA 53, Rev George Lubega & Anor v Luwero Town Council & Anor HCCS 193/2009.** - 20 The Respondent contends that the impugned application was dismissed under Order 17 Rule 4 and the said orders are final orders which cannot be vacated by an application to set aside.

# **Order 17 Rule 4** provides

"Where any party to a suit to whom time has been granted fails to produce his or her evidence, or to cause the attendance of his or her witnesses, or to perform any other act

25 necessary to the further progress of the suit, for which time has been allowed, the court may, notwithstanding that default, proceed to decide the suit immediately."

**Section 2(x)** of the Civil Procedure Act provides

""suit" means all civil proceedings commenced in any manner prescribed."

Miscellaneous Applications are suits under Section 2(x). See **Japan Auto World v Magala &**

# 30 **Ors HCCS 73/2016, DAPCB v Musa Balikowa & Anor HCMA 61/2023**

This means that the provisions of Order 17 Rule 4 are applicable to them. There being no attendance by the Applicant or their advocate, the court, as correctly noted by Counsel for the Respondent, proceeded under the above order to render a decision on the Application's 35 merits.

5 Commercial Disputes ought to be resolved quickly and expeditiously to avoid a thrombosis in the economy created by too much money being tied up in courts. This was the reasoning for the formation of the Commercial court. This is not to mean that the court will rush through proceeds to resolve disputes in any which way. The court will avail both parties an equal opportunity to be heard and for the matter to be resolved in accordance with the law.

10 See **Gids Consult Ltd & Anor v Naren Metha HCMA 864/2022**

In summary suits, this expeditiousness is even more important. The rationale for summary procedure has been summarised in the long-standing decision of **Post Bank (U) Ltd v Abdul Ssozi SCCA 8/2015** where the Supreme Court held thus:

- 15 "Order 36 was enacted to facilitate the expeditious disposal of cases involving debts and contracts of a commercial nature to prevent defendants from presenting frivolous or vexatious defences in order to unreasonably prolong litigation. Apart from assisting the courts in disposing of cases expeditiously, Order 36 also helps the economy by removing unnecessary obstructions in financial or commercial dealings." - 20

Accordingly, whereas the filing of a summary suit does not mean that the claim is established until the defendant demonstrates otherwise, it means that such Applicant ought to be diligent and prudent, as summary procedure in commercial disputes abhor a non-diligent or imprudent party.

The court therefore, recognizing the above context, rendered a determination on the merits of the Applicant's application and dismissed the same and award judgment in default under Order 36 Rule 4. Having rendered the said decision, it meant that both the impugned application and the head suit was determined. Having rendered a ruling and a judgment in

- 30 default as above, this court is functus officio in respect of HCMA 1056 of 2023 to the extent ofthis application. This application is therefore fatally defective as this court is functus officio and therefore not clothed with jurisdiction to grant the reliefs sought and accordingly it is dismissed See **Major Ronald Kakooza Mutale v Balisigara Stephen CACA 121 and 277/2020, Egwedi Basil v Eroku James HCMA 10/2010, Mayanja Joshua Kajubi v** - 35 **Wasswa Amon Bwoogi & Anor HCMA 44/2016**

## 5 **PART II: Decision on the Merits of the Application**

Owing to my decision above, it follows that I do not need to render a decision on the merits of this application. However, for completeness, I provide here my decision on the merits of this application.

10 **Order 9 Rule 27** of the CPR provides thus:

"In any case in which a decree is passed ex parte against a defendant, he or she may apply to the court by which the decree was passed for an order to set it aside; and if he or she satisfies the court that the summons was not duly served, or that he or she was prevented by any sufficient cause from appearing when the suit was called on for hearing, the court shall make

- 15 an order setting aside the decree as against him or her upon such terms as to costs, payment into court, or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit; except that where the decree is of such a nature that it cannot be set aside as against such defendant only, it may be set aside as against all or any of the other defendants also." - 20 We must state here that applications for setting aside under Order 9 Rule 27 are distinct from applications under Order 9 Rule 12. In both rules, an Applicant will be applying to set aside an ex parte judgment (except in some circumstances where judgment is entered under Order 50]. The Judgment is exparte because it is achieved at after the participation of only one side to litigation. [see **National Resistance Movement v Kampala Modernity & Printers Ltd**

#### 25 **HCMA 6 of 2016**]

Indeed, most of the judgments which will be sought to be set aside under Order 9 Rule 12 or Order 9 Rule 27 will be judgments issued after some sort of default by a litigant. So, how does a party know under which rule to proceed? It depends on the default that allegedly caused 30 the issuance of the judgment.

A party will proceed under Order 9 Rule 12 if the judgment was granted under the preceding rules (**that is Order 9 Rule 6, Order 9 Rule 8, and Order 9 Rule 10**] or under **Order 50**. On the other hand, a party will proceed under **Order 9 Rule 27** where an exparte judgment


5 has been given under any of the other rules of the CPR. [See **Nicholas Roussos v Gulamhussein Habib Virani & Anor SCCA 9/1993**].

Generally, where a party proceeds by the wrong law [for instance under Order 9 Rule 12 instead of Order 9 Rule 27], the same is not fatal for as long as the court is clothed with

10 jurisdiction to hear the matter and the procedure utilised can accommodate the application. [See **Saggu v Roadmaster Cycles (U) Ltd 2002 1EA 258**]

**Order 9 Rule 27** provides for setting aside of a judgment/decree in two instances

- (a) Where service of summons was not duly served - (b) A party was prevented from attending the hearing by sufficient cause

## 15 See **Dennis Ahairwe v Standard Chartered Bank HCMA 1851/2023**

Is good cause the same as sufficient cause? In Uganda, the expressions "Good Cause" and "Sufficient Cause" have been used interchangeably, and to mean the same thing.

In the Indian Case of **Parimal v Veema Civil Appeal No. 1467 of 2011**, the Indian Supreme 20 Court defined "Sufficient Cause" this way;

""Sufficient Cause" is an expression which has been used in large number of Statutes. The meaning of the word "sufficient" is "adequate" or "enough", in as much as may be necessary to answer the purpose intended. Therefore, word "sufficient" embraces no more than that which provides a platitude which when the act done suffices to accomplish the purpose

- 25 intended in the facts and circumstances existing in a case and duly examined from the view point of a reasonable standard of a cautious man. In this context, "sufficient cause" means that party had not acted in a negligent manner or there was a want of bona fide on its part in view of the facts and circumstances of a case or the party cannot be alleged to have been "not acting diligently" or "remaining inactive". However, the facts and circumstances of each case - 30 must afford sufficient ground to enable the Court concerned to exercise discretion for the reason that whenever the court exercises discretion, it has to be exercised judiciously."

In the case of **Arjun Singh v. Mohindra Kumar & Ors., AIR 1964 SC 993** the Indian Supreme Court has this to say about "good cause" and "sufficient cause":

5 "The only difference between a "good cause" and "sufficient cause" is that the requirement of a good cause is complied with on a lesser degree of proof than that of a "sufficient cause."

I note that the CPR uses "good cause" and "sufficient cause" in different instances. For instance, "good cause" is used in **Order 1 Rule 15, Order 36 Rule 11 and Order 9 Rule 21**.

10 On the other hand, the CPR uses "sufficient cause" in **Order 9 Rule 18, Order 9 Rule 26, Order 43 Rule 16 and Order 43 Rule 18**, among other instances.

A review of these rules quickly shows that the expression "sufficient cause" is used where a litigant must explain their default, or failure to take a step as directed by the law or court.

- 15 In my view, "good cause" and "sufficient cause" are not the same. "Good Cause" requires a party to show a legally sufficient reason why court should exercise a discretion in their favour. Good cause may exist in spite of a party's own mistake; for instance good cause may favour allowing a party amend a pleading to include a party who was mistakenly excluded or to amend their trial bundle and include a document they mistakenly forgot to include. - 20 "Sufficient Cause" implies a much higher standard, requiring a party to show that they are not guilty of a default, or that it cannot be attributable to them. For instance, where an unrepresented party is hospitalised on the day of court, and accordingly an exparte decree is entered against them, there is sufficient cause to set it aside, since their failure to attend court is not a fault of their own.

I do not believe the rules committee were being colourful when they used "good cause" in one instance, and "sufficient cause" in another. They intended to apply two different standards.

30 Setting aside a decree is not a routine or simple exercise of judicial power. Once a decree is entered, it is ordinarily the end of the matter. However, the court is given unique powers to set aside its decisions either by way of appeal, review or setting aside in certain limited circumstances. 5 Therefore, the standard for sufficient cause is much higher than that for good cause, and requires a party seeking the intervention of court to be free of culpability for the default causing the application.

Clearly, from the above rule, the applicable standard is sufficient cause and not good cause 10 as asserted by counsel for the Applicant.

It was contended by the Applicant that its counsel was prevented from attending court because members of his family were unwell. The Applicant asserted this to be a mistake of counsel which ought not be visited on it.

- 15 I must note that both illness and a mistake of mistake of counsel can constitute sufficient cause warranting the setting aside a judgment and/or decree under **Order 9 Rule 27**, but not always. See **Dennis Ahairwe v Standard Chartered Bank HCMA 1851/2023, Francis Ajuna v Attorney General HCMA 689/2022** - 20 First, a failure of counsel to attend does not excuse the failure of a representative of the Applicant to attend court. In **Fred Byamukama & Anor v Micheal Katungye HCMA 773/2023**, I dealt with failure of a party and their counsel to attend court being raised as sufficient cause under Order 9 Rule 27 thus:

"In the instant case, the mistake complained of was the omission by the applicants' former 25 counsel to attend court. The fact that a party has engaged an advocate is not by itself an excuse for a party not to attend court. The party ought to attend court, view the proceedings and, where applicable, participate. An advocate is there in supportive role, working to assist the client in their matter (be it claim or defence).

30 As I held in **Femisa International Limited & Anor v Equity Bank (U) Ltd HCMA 357/2022**, the act of engaging an advocate does not constitute an abdication of the litigant's duty to diligently pursue their claim or defence. The client must consistently check with their advocate and find out the progress of the suit.

5 Accordingly, there, this reason does not explain why the Applicant did not have a representative in court who could either request for more time to instruct another advocate or propose alternative arrangements in light of the above non-attendance.

Secondly, as correctly noted by the Counsel for the Respondent, the Applicant neither named 10 nor particularized the character of these illness, the severity or the relationship with the persons affected. It could be argued as probable that the illnesses could have been simple colds to distant members of the family of counsel for the Applicant. Whereas I note that the Applicant asserted that the reason for failure to present this evidence is to protect the confidentiality of the affected persons, at the very least, counsel could have redacted the 15 identifying details in the evidence or sought leave to adduce the same in camera. Without that evidence, the court did not have the evidence of the circumstances preventing attendance which it could weigh as against the above standard. It is trite law that courts base their decisions on evidence and not assumptions, abstractions or innuendos. See Also **Centenary Bank v Federation of Association of Uganda Exporters Limited & Ors HCCS**

20 **474/2016, Luswata Mary Veronica v Exim Bank HCMA 1118/2023, Smile Communications Limited v ATC Uganda HCMA 2314/2023, Vantage Mezzanine Fund II Partnership & Anor v Commissioner Land Registration & Ors HCMA 2484/2023.**

Moreover, I am inclined to believe that the major reason for non-presentation of this 25 evidence is either its lack of existence or its being contrary to the Applicant's assertions, given that the Applicant could have taken multiple measures as noted above to present the evidence while simultaneously protecting the confidentiality of the affected persons. As a general rule of evidence, where a party fails to produce material evidence, the court may enter an adverse inference that such evidence would have been harmful to their case. See

#### 30 **Amos Ocan v Oyoo Wilson HCCA 51/2016**

Even if it was to be said that the failure of counsel to attend court was a mistake which ought not to be visited on the applicant, the same result would hold. Why?

35 For those reasons therefore, I find that the Applicant has not made out sufficient cause for grant of the reliefs sought.

5 It is trite law that mistake, error, negligence or error on the part of the counsel should not imputed on their client. [**Banco Arabe Espanol v Bank of Uganda SSCA No. 8 Of 1998**] The plea of mistake of counsel is not a magic wand. As held in **Kateyo Eliezer v Makerere University LCMA 147/2021**, the legal proposition that a mistake or error of an advocate should not be visited on his client is not absolute; it depends on the circumstances of a given

10 case.

Further, it is now settled law that inordinate delay and negligence to observe or ascertain plain requirements of the law are not mistakes of an advocate from which a client can be excused. [**See Bishop Jacinto Kibuuka v Uganda Catholic Lawyers Fraternity & Ors** 15 **696/2018, Kalyesubula Fred v Obey Christopher HCMA 171/2016, Eriga Jos v Vuzzi Azza & Ors HCMA 9/2017**]

However, a mistake of an advocate in failing to attend court, without more, is negligence to observe plain requirements of law and is not among the threshold of mistakes of an advocate 20 which cannot be imputed on their client. See **See Bishop Jacinto Kibuuka v Uganda**

- **Catholic Lawyers Fraternity & Ors 696/2018, Kiyimba Moses Prince v Centenary Bank HCMA 1633/2022, Femisa International Limited v Equity Bank Limited HCMA 357/2022, Akuwati Kalyesubula v Bank Of Africa HCMA 944/2022** - 25 The above therefore cannot constitute good cause. Moreover, it is trite law that instructions are given to a firm of advocates and not a specific advocate. See **Okodoi George & Anor v Okello Opaire Sam HCMA 143/2016, Green Meadow Limited v Patrice Namisono HCMA 1368/2022** - 30 The Applicant does not explain why, if one advocate was indisposed, others did not attend or if indeed there were no advocates to do so. The court cannot assume these facts, and this evidence having been not presented, the court returns the finding that the Applicant did not establish sufficient cause. - 35 The Applicant contended that the "mishap" was also a function of the ECCMIS system. He contended that the head application was filed and validated on 17 July 2023 and the

5 Respondent filed a reply on 31 August 2023. The Applicant contends that the application, on 6 September 2023, was fixed for hearing on 13 September 2023 when Counsel for the Applicant was unable to attend.

In the case of **Rosette Kizito v Administrator General SCCA 2/1990**, the Supreme Court 10 guided that the reason advanced as sufficient cause must relate to the inability to perform an act or take a step within the time stipulated for it to amount to good cause. For instance, a party cannot claim that they were prevented by illness from failing to attend court leading to a decree being entered against them exparte, yet such decree was entered for reasons unrelated to the same, such as the failure to file a defence. See also **Green Meadow Limited**

### 15 **v Patrice Namisono HCMA 1368/2022**

Even if those contentions were to be believed, the court dismissed the application for want of merit, rather than any delays in the ECCMIS system and therefore, the reason asserted is not related to the reason informing the decision of court. This premise is also uncompelling.

Accordingly, I return the finding that the Applicant has not demonstrated sufficient cause for the grant of this application.

### Good Cause

- 25 I must add however, that even when there isn't "sufficient cause", the court will still be empowered to grant certain reliefs if "good cause" exists. For instance, where a complex dispute raising important questions of law of public importance exists, and a party to litigation fails to file a defence and serve it in time, and brings an application for extension of time, there might be good cause to extend time, the good cause being the need to provide a - 30 judicial interpretation and guidance on the questions of law of public importance. See **Green Meadow Limited v Patrice Namisono HCMA 1368/2022, Mount Meru Millers v Atlas Cargo HCMA 806/2022**

This is in exercise of this court's inherent powers under Section 98 of the Civil Procedure Act.

35 Under that provision, the court is empowered to make orders in the interests of justice. See **Green Meadow Limited v Patrice Namisono HCMA 1368/2022, Kagumaho Musana v**

# 5 **Rama and 3 Others HCMA 933 of 2019 and Tullow Uganda Limited & Anor v Jackson Wabyona & Ors HCMA 443/2017, Stanbic Bank Limited v Kesacon Services Limited HCMA 724/2023**

The interests of justice favour the resolution of disputes on the merits, within the framework

# 10 of the law. See **ATC Uganda Limited v Smile Communications Ltd HCMA 621/2023, Katto Patrick v Dirk Ten Brink HCMA 791/2023**

This court having considered the merits of the head application, which application this seeks to save and cause a re-visiting of, and having pronounced itself on the same, I find that the 15 circumstances of this application do not reveal good cause warranting the exercise of this court's inherent powers.

### **Costs**

As a rule of law, costs ordinarily follow the event and a successful litigant receives his or her 20 costs in the absence of special circumstances justifying some other order. Where the successful party has been guilty of some misconduct, an order of costs may not be granted. See **Section 27(2) Civil Procedure Act, Harry Ssempa v Kambagambire David HCCS 408/2014, Iyamuleme David vs. AG SCCA NO.4 of 2013, Candiru Alice v Amandua Festo & Anor HCCS 19/2014, Anglo-Cyprian Trade Agencies Ltd v. Paphos Wine Industries** 25 **Ltd, [1951] 1 All ER 873**.

I note that whereas the same was not the reason for issuance of the impugned decision or a sufficient reason for setting aside, Counsel for the Applicant's lack of familiarity with the ECCMIS system likely played a role in their handling of the head application. Accordingly, I

30 find that the interests of justice favour both parties meeting their costs for this application.

## **Conclusion**

In the premises, the Applicant's application fails and I make the following orders:

- (a) This application is fatally defective as this court is functus officio and therefore not - 35 clothed with jurisdiction to grant the reliefs sought and accordingly is dismissed. - (b) This application does not disclose merit and is accordingly dismissed.

5 (c) Each party shall bear its costs.

I so Order

**DATED** this\_\_\_\_\_\_\_\_\_\_day of\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_2024, delivered electronically and 10 **UPLOADED** on **ECCMIS**. 17th April


15 **Judge**

**17th April 2024**