Rutetebya v BF Suma Uganda Limited (Miscellaneous Application 891 of 2024) [2024] UGCommC 311 (27 September 2024)

Full Case Text

## THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION)

# MISCELLANEOUS APPLICATION NO. 0891 OF 2021 (ARISING FROM CIVIL SUIT NO. 0065 OF 2023)

RUTH RUTETEBYA :::::::::::::::::::::::::::::::::::: **VERSUS**

BF SUMA UGANDA LIMITED ::::::::::::::::::::::::::::::::::::

(Before: Hon. Justice Patricia Mutesi)

#### **RULING**

#### **Background**

The Applicant brought this application by notice of motion under Section 98 of the Civil Procedure Act and Order 9 Rule 12 and Order 52 Rules 1 of the Civil Procedure Rules seeking orders that:

- 1. The Interlocutory Judgment entered against the Applicant in Civil Suit No. 0065 of 2023 on 30th March 2023 be set aside. - 2. The Applicant be granted leave to file her defence in Civil Suit No. 0065 of 2023 out of time. - 3. Costs of this application be provided for.

Briefly, the grounds of this application are that:

- 1. There is a justifiable cause warranting grant of the prayers sought. - 2. The Applicant was prevented from filing her defence by a good cause. - 3. Failure to file a defence in time was occasioned by a mistake of the former - counsel of Pearl of Africa Hotel, the 1st Defendant in Civil Suit No. 0065 of 2023 ("the main suit"), where the Applicant was an employee. - 4. The Applicant learnt about the court proceedings late through a friend who had seen the hearing notice in a newspaper advert on $3^{\text{rd}}$ May 2024. - 5. The Applicant has a plausible defence with very high chances of success in that she was merely an employee of the 1st Defendant. - 6. The Applicant has never connived with the said 1st Defendant nor been fraudulent or made any misrepresentations to the Respondent.

- 7. The Applicant will suffer greatly if the main suit is decided without hearing her out on account of failure to file a defence. - 8. This Application has been filed without delay. - 9. It is in the interest of justice that this application is granted.

The application is supported by the affidavit of the Applicant. She told the Court that she is the 2nd Defendant in the main suit. She worked as the Sales Executive Officer at Pearl of Africa Hotel ("the 1st Defendant") for 8 years until sometime in 2023. That she learnt about the court proceedings in the main suit through a friend who had seen the hearing notice in the main suit in a newspaper advert on 3rd May 2024. Thereafter she immediately instructed her lawyers, M/S Anthony Ahimbisibwe Advocates & Solicitors, to follow up on the matter and advise her accordingly.

The Applicant revealed that when her lawyers checked on the Court record on 6th May 2024, they advised that there was a judgment already entered against her. They further advised that she needed to seek permission of the Court to file a defence and give her side of the story. It was after the interaction with her said lawyers that she recalled being served with court documents about the main suit in a closed envelope during her employment in the 1st Defendant. She had forwarded that envelope to the 1st Defendant's in-house lawyers as it was the practice for all cases against the 1st Defendant. The 1st Defendant's lawyers had assured her that they would handle the case since it had arisen within the course of her employment. She later left the 1st Defendant's job for another job only to learn that there was still an ongoing case against her and that the 1st Defendant's lawyers had not filed her defence.

- Finally, the Applicant stated that she did not file a defence as that was the fault of the 1st Defendant's lawyers. She would now like to file a defence because she was only acting as an employee for the $\mathbf{1}^{\text{st}}$ Defendant when the facts in the main suit arose. She also stated that she will suffer greatly if the case is determined in her absence. - . The Respondent opposed the application through an affidavit in reply sworn by its Sales Executive, Mr. Musana Samson. He stated that the Applicant admits being served with the summons in the main suit. She has also admitted that she was never vigilant to follow up on the main suit despite having knowledge of it.

That she had all the time and opportunity to be part of the proceedings in the main suit but she chose to ignore them and close herself out.

Mr. Musana further revealed that the Applicant has at all material times, been aware of the main suit to the extent that she has on several occasions, taunted the Respondent about the case. That since the main suit has already been heard and is at judgment writing stage, this application is a mere afterthought intended to delay delivery of that judgment and to frustrate the Respondent. He contended that the application should be rejected as it actually shows that the Applicant handled the main suit in an indolent manner. Alternatively, if this application is to be allow the same, it should be pleased to condition that decision on prior deposit of security.

#### Issue arising

Whether the Interlocutory Judgment entered on 30th March 2023 in Civil Suit No. 0065 of 2023 should be set aside as against the Applicant.

### **Representation and hearing**

At the hearing, the Applicant was represented by Mr. Emmanuel Tandeka of M/s Anthony Ahimbisibwe Advocates & Solicitors while the Respondent was represented by Mr. Joshua Kalaabi of M/s Octave Advocates & Legal Consultants. I have carefully considered the submissions of counsel, the laws and authorities they cited and all the other materials on the record while deciding this application.

## Determination of the issue

# Whether the Interlocutory Judgment entered on 30th March 2023 in Civil Suit No. 0065 of 2023 should be set aside as against the Applicant.

The impugned Interlocutory Judgment of 30th March 2023 in the main suit does not set out the provision of the law under which it was entered. However, since the plaint in the main suit included a prayer for an unliquidated demand in the form of general and punitive damages, it appears to me that the starting point for analysing the legality and propriety of the impugned Interlocutory Judgment is the is the law applicable to interlocutory judgments in general. This law as set out in Order 9 Rules 8 and 9 of the Civil Procedure Rules. These Rules provide that.

#### "8. Assessment of damages."

Where the plaint is drawn with a claim for pecuniary damages only or for detention of goods with or without a claim for pecuniary damages. And the defendant fails or all defendants, if more than one, fail to file a defence on or before the day fixed in the summons, the plaintiff may, subject to rule 5 of this Order, enter an interlocutory judgment against the defendant or defendants and set down the suit for assessment by the court of the value of the goods and damages or the damages only, as the case may be, in respect of the amount found to be due in the course of the assessment.

## 9. Assessment where some defendants have filed a defence.

Where the plaint is drawn as is mentioned in rule 8 of this Order and there are several defendants of whom one or more files a defence, and another or others fail to file a defence, on or before the day fixed in the summons, the court, subject to rule 5 of this Order, may assess the value of the goods and the damages or either of them, as the case may be, as against the defendant or defendants who have not filed a defence at the same time as the trial of the suit against the other defendant or defendants and may proceed to pass judgment in accordance with the assessment."

Order 9 Rule 8 of the Civil Procedure Rules deals with situations in which a suit has only one defendant who fails to file a defence or several defendants who all fail to file a defence to the suit. The Rule allows Court to enter an interlocutory judgment against the sole defendant or all the defendants in the case and then set down the suit for formal proof and assessment of damages or the value of the goods in issue.

On the other hand, Order 9 Rule 9 of the Civil Procedure Rules deals with cases which involves more than one defendant and one or some of the defendants file a defence(s) to the suit while others do not. The provision allows Court to assess the value of the goods in issue and, or, damages sought at the trial of the case and to appropriate liability for that value of goods or damages in the judgment.

In my considered view, there is nothing in the wording of Order 9 Rule 9 of the Civil Procedure Rules, whose entire text I have reproduced above, which permits the Court to enter an interlocutory judgment against the defendants who did not file defences in suits involving several defendants. The literal construction of the

Rule is, simply, that the Court has power to assess damages or the value of the goods in issue, as the case may be, against the defendants who did not file defences at the same time as the trial of the suit between the plaintiff and the defendants who filed defences. This would imply that courts do not have the power to enter interlocutory judgments in suits involving several defendants against those defendants who do not file defences.

However, such a literal construction would lead to an obvious absurdity. It would be bizarre for one to suggest that, under Order 9 Rule 8 of the Civil Procedure Rules, a court is empowered to enter an interlocutory judgment against a sole defendant who does not file a defence to a suit but the court does not have a similar power under Order 9 Rule 9 to enter an interlocutory judgment against a defendant who has not filed a defence, only due to the fact that there are other defendants in the case some of whom also did not file a case while others filed.

Additionally, it is illogical to the suggest from the literal construction of Order 9 Rule 9 that courts cannot enter interlocutory judgments in suits involving several defendants against all those defendants who do not file defences, since the Rule only expressly allows the Court to assess damages or the value of the goods in issue against all such defendants at the trial. If the Rule required the Court to also normatively assess whether or not such defendants are liable for the claim, it would and should have said so expressly. Instructing the Court to only assess the damages and, or, value of goods due as against the defendants who did not file defences implies that the liability of those defendants is no longer in issue at the trial and that all that remains to be settled is the extent of that liability.

It is the duty of this Court to ascertain the true intention behind legislation that is brought before it. In The Commissioner General, Uganda Revenue Authority V Edulink Holdings Ltd & 2 Ors, HCCA No. 0178 of 2021, this Court also held that legislation should be interpreted in light of the logical implications necessary to fully effectuate and implement its purpose. In view of those principles, it is my considered view that the despite not saying so expressly, the framers of Order 9 Rule 9 of the Civil Procedure Rules intended that courts would be able to enter interlocutory judgments against any and all defendants who would not file their defences in a suit involving several defendants and then proceed to try the suit as against the defendants who would have filed their defences. At that trial, the

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courts would then be able to assess the value of goods and, or, damages due from all defendants in the suit, including those who had not filed defences.

I, therefore, find that the impugned Interlocutory Judgment of 30th March 2023 was entered under Order 9 Rule 9 of the Civil Procedure Rules.

I have carefully examined the content of the impugned Interlocutory Judgment. It is in the form of a request for an interlocutory judgment by way of ordinary letter from the Respondent's lawyers which was endorsed and sealed by the Learned Deputy Registrar of the Court. My first observation is that the request for interlocutory judgment was made against all the Defendants in the main suit. Accordingly, when that request was endorsed and sealed, it was, in effect, issued as against all the Defendants in the main suit. This was erroneous since, as the Court record reflects, the 3rd and 4th Defendants in the main suit (Grand Moesha Hotel & Suits and Bartholomew Favor Chiraz, respectively) filed a joint defence to the main suit on 13th February 2023, 17 days before the said Interlocutory Judgment was entered.

The affidavit of service of summons in the main suit confirms that the $3^{\text{rd}}$ and $4^{\text{th}}$ Defendants had been served with a summons to file a defence on 30th January 2023. In filing their joint defence on the Court record on 13th February 2023, they were still within the prescribed time. It was, therefore, erroneous for the Learned Deputy Registrar to enter the impugned Interlocutory judgment against all the Defendants yet the 3rd and 4th Defendants had filed a defence within the time allowed. To that extent, the impugned Interlocutory Judgment was only properly entered against the 1st Defendant and the Applicant herein.

The Applicant has now applied to this Court to have the impugned Interlocutory Judgment set aside as against her. She brought this application under Order 9 Rule 12 of the Civil Procedure Rules which allows the Court to set aside, on terms as may be just, any judgment passed pursuant to any of the preceding Rules of that Order. An interlocutory judgment passed under Order 9 Rule 9 of the Civil Procedure Rules is one of those that "are passed under any of the preceding Rules of this Order" within the meaning of Order 9 Rule 12 thereof. It Can this be set aside by the Court upon such terms as may be just.

The locus classicus on this question is the case of Nicholas Roussos v Gulam Hussein Habib Virani, SCCA No. 9 of 1993 in which the Supreme Court explored

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the tests applicable to the consideration and grant of an application brought under the then Order 9 Rule 9 (now Rule 12) of the Civil Procedure Rules. Citing several authorities, the Supreme Court affirmed that the said Rule gives courts a wide discretion to be exercised judiciously in light of the facts, circumstances and merits of a particular case. The Court stated that, under Order 9 Rule 9 (now Rule 12), the main concern of the court is to do justice to the parties. It was also clarified that a court should always consider whether, in light of all the facts and circumstances both prior and subsequent to the judgment to be set aside, it would be just and reasonable to set aside or vary that judgment.

In her supporting affidavit, the Applicant told Court that she was actually served with the court process in the main suit requiring her to file a defence but that she sent the envelope containing that process to the 1st Defendant's in-house lawyer, as was the practice for all court cases filed against the 1st Defendant. As such, there is no doubt that the main suit and the need to defend the same was actually brought to the Applicant's attention in time to enable her file a written Statement of defence. The Applicant's only explanation for her failure to file a defence to the suit is the alleged assurance she was given by the 1st Defendant1s in-house lawyer, a one "Counsel Derrick", that they would handle the matter on her behalf since it had arisen in the course of her employment.

I am in agreement with counsel for the Respondent that the Applicant's said explanation for her failure to file a defence to the main suit is unconvincing. She has not adduced any evidence to corroborate the alleged assurance from the $1^{\rm st}$ Defendant's in-house counsel or the claim that she actually forwarded the court process to him. Besides, even if she had actually forwarded the court process to him after which he gave her an assurance that he would handle the matter on her behalf, this application itself shows the Applicant's gross indolence because she admits having received the court process in time for her to file a defence at the start of 2023 but she then forgot about it for over a year until May 2024 when a friend told her about a hearing notice for the case in a newspaper.

Ordinarily, the Applicant's justification for her failure to file a defence within the prescribed time would not compel the Court to grant the orders sought. However, as I have found above, Order 9 Rule 12 of the Civil Procedure Rules under which this application was brought gives the Court a wide discretion to do justice for the parties in a case. In their submissions, especially those of the

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Respondent, the parties narrowed down the scope of relevant considerations in adjudging an application brought under Order 9 Rule 12 of the Civil Procedure Rules. I reiterate that the Court must always be alive to whether, in light of all the facts and circumstances both prior and subsequent to the judgment to be set aside, it would be just and reasonable to set aside or vary that judgment. (See Nicholas Roussos v Gulam Hussein Habib Virani (supra)).

Considering all the facts and circumstances of this case, it is my strong conviction that this application should succeed in view of the plausibility of the Applicant's defence. The Applicant annexed her draft written statement of defence to her supporting affidavit. Therein, she revealed that she intends to argue and prove at the trial, if permitted, that she is not liable to the Respondent in any way since the incident complained of in the main suit arose in the course of her employment in the $1^{st}$ Defendant.

It should be recalled that the main suit arose out of an alleged breach of contract which occurred when the Respondent hired the 1st Defendant's ballroom and paid for lunch and water to be provided at a workshop and customer recognition event scheduled for 21st September 2022. It is said that on that day, the parties disagreed over payment and that some of the services were not duly provided by the 1st Defendant. As the 1st Defendant's Sales Executive Officer who handled all the bookings for the 1st Respondent at the time, the Applicant was at the centre of this standoff.

For practical reasons, the Applicant's account of what actually happened before, during and after that event will go a long way in painting the full picture of the matters in controversy in the main suit for the Court. For legal reasons too, her attendance before Court could prove significant due to her employment status at the time of the incident complained of. This is a status which the Respondent even admitted in paragraph 3 of its plaint in the main suit. Since the Applicant's employment status in the 1st Defendant at the time is an agreed fact, evidence of the scope of her employment at the time could prove pivotal to the Court's assessment of existence and, or, extent of liability of the Defendants in the main Suit in view of the law and principles governing vicarious liability for contractual breaches along with tortuous and fraudulent acts.

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In the premises, the justice of this case favours a conclusion that the Applicant ought to be fully and unconditionally heard before the disposal of the main suit. Consequently, this application succeeds and I make the following orders:

- The Interlocutory Judgment of this Honourable Court entered on the Ĭ. record on 30th March 2023 in Civil Suit No. 0065 of 2023 is hereby set aside as against the $2^{nd}$ , $3^{rd}$ and $4^{th}$ Defendants therein. - The Applicant is hereby granted leave to file her written statement of ïi. defence out of time. - The Applicant shall file her written statement of defence to Civil Suit iii. No. 0065 of 2023 within 10 (ten) days from the date of this order. - The hearing of Civil Suit No. 0065 of 2023 is hereby reopened and the iv. Court shall fix and hear the Applicant's defence to the claims therein after the closure of pleadings in and consequent to, Order (ii) above. - Costs of this application shall abide by the outcome of Civil Suit No. $V$ . 0065 of 2023.

Patneadenter

Patricia Mutesi

JUDGE

$(27/09/2024)$

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