Saracen (U) Limited v Farsk Mat Restaurant Limited (Miscellaneous Application 2513 of 2023) [2024] UGCommC 335 (6 November 2024)

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [COMMERCIAL DIVISION] MISCELLANEOUS APPLICATION NO. 2513 OF 2023 (ARISING FROM MISCELLANEOUS APPLICATION NO. 776 OF 2019)** 10 **(ARISING OUT OF CIVIL SUIT NO. 704 OF 2019) SARACEN (U) LIMITED ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANT VERSUS FARSK MAT RESTAURANT LIMITED ::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT**

# 15 **BEFORE HON. LADY JUSTICE HARRIET GRACE MAGALA RULING**

# **Introduction**

The Applicant contracted the Respondent to render catering and messing services to the Respondent's security camps in Mbegu and Bulisa. The Respondent 20 commenced performing its duties under the contract. The Applicant undertook to settle her indebtedness on a monthly basis by end of March 2016. By the end of March 2016, the Applicant had paid USD \$ 134,345 (**United State Dollars One Hundred Thirty-four Thousand Three Hundred forty-five**). The Respondent filed a summary suit *vide* HCCS No. 704 of 2019 against the Applicant on 21st August

25 2019 for recovery of USD \$ 121,345 (**United States Dollars One Hundred Twentyone Thousand Three Hundred Forty-five**) being money owed by the Applicant for meals and catering services supplied to it by the Respondent.

- 5 The Applicant filed an application *vide* Misc. Application No. 776 of 2019 for leave to appear and defend. The same was granted before Hon. Lady Justice Jeanne Rwakakooko on condition that: if the Applicant failed to prove that they are not indebted to the Respondent, and actually made the necessary payments, the Respondent shall be compensated in costs; and evidence of the same was to be - 10 evaluated in the hearing of the main suit. During the proceeding of the suit, the Applicant raised a preliminary objection that the Respondent did not have *locus standi* to institute a suit, since the contract for the supply of catering and messing services was signed with Farsk Mat Restaurant and not Fask Mat Restaurant SMC Ltd. Court found that Farsk Mat Restaurant still had corporate status for the - 15 beneficial winding up of the business, and thus had *locus standi* to continue the suit.

On the 16th day of October 2023, this Court entered a judgment on admission against the Applicant/Defendant for the payment of USD \$ 125,345, with each party bearing their own costs.

- 20 This application was brought under sections 82 and 98 of the Civil Procedure Act Cap, Order 46 Rules 1,2 & 8 of the Civil Procedure Rules S. I No. 71-1 and section 33 of the Judicature Act. The Applicant now seeks for orders that: the judgment on admission in High Court Civil Suit No. 704 of 2019 be reviewed, set aside and the suit heard on its merits; the execution of the decree in High Court Civil Suit - 25 No. 704 of 2019 be stayed and the costs of this application be provided for.

The grounds of the application are supported by a sworn affidavit of Ms. Ruth Gertrude Auma, an advocate of the High Court but briefly are that: when the matter came up for mention on the 16th day of October 2023, the parties *had*

- 5 *intended* to explore a possible settlement out of court and request for another mention date to allow the same. She confirmed to the judge that there was a contract of supply of catering and messing services between the parties as indicated in the Written Statement of Defence and pleadings on record. That the trial judge entered a judgment on admission based on that confirmatory - 10 statement only. That this confirmation was not an admission of liability nor a confirmation of the alleged debt owed to the Respondent. This was a mistake apparent on the face of the record as the existence of the contract and amount stipulated therein was never in dispute. That the Applicant had raised a number of triable issues in its Written Statement of Defence that are worth considering at 15 trial before judgment is entered. That it is in the interest of justice that this application for review is allowed and the judgment and decree of court in HCCS No. 704 of 2019 is set aside as to grant the parties an audience before this honourable court for the determination of the suit on its merits. - An affidavit in reply was sworn by Mr. Charles Nkwanga, the director of the 20 Respondent where he briefly stated that: a judicial officer has the power to enter judgment on admission, where a party confirms to the contents of the claim or answers in the affirmative the claims against him/ her. That the Respondent's claim was for breach of contract and petitioned court for remedies, Counsel for the Applicant acknowledged the contract and in their Written Statement of - 25 Defence, the Applicant does not allege part or full performance of the suit contract. That it is in the interest of justice that the application be dismissed with costs and the Respondent be allowed to benefit from the fruits of its labour.

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- 5 The Affidavit in rejoinder was sworn by Ms. Ruth Gertrude Auma and briefly stated that the parties' intention to explore settlement out of court could not amount to judgment on admission rather, it preempted the parties' initiative to find a common ground and was entered prematurely. That an admission to the existence of a contract between the parties is not an admission of liability and - 10 cannot warrant a judgment on admission. That the existence of the contract between the parties was never in dispute rather, the Applicant herein averred elements of fraud and breach of fiduciary duty on the part of the Respondent.

### **Appearance and representation**

The Applicant was represented by M/s Kashillingi, Rugaba & Associates while the

15 Respondent was represented by M/s Galisonga &Co. Advocates. Both parties filed written submissions that have been duly considered by court.

#### **Issues for determination**

- 1. Whether the application raises grounds for review of the judgment in admission in HCCS No. 704 of 2019 - 20 2. What remedies are available to the parties.

# **Determination**

**Issue 1: Whether the application raises grounds for review of the judgment in admission in HCCS No. 704 of 2019?**

**Section 82 of the Civil Procedure Act Cap 282** provides that:

25 *"Any person considering himself or herself aggrieved-*

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- 5 *a) by a decree or order from which an appeal is allowed by this Act, but from which no appeal has been preferred; or* - *b) by a decree or order from which no appeal is allowed by this Act, may apply for a review of judgment to the court which passed the decree or made the order, and the court may make such order on the decree or* 10 *order as it thinks fit."*

# **Order 46 of the Civil Procedure Rules S. I No. 71-1** provides that:

*"(1) Any person considering himself or herself aggrieved-*

- *a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred; or* - 15 *b) by a decree or order from which no appeal is hereby allowed, and who from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his or her knowledge or could not be produced by him or her at the time when the decree was passed or the order made, or on account of some* 20 *mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him or her, may apply for a review of judgment to the court which passed the decree or made the order.*

*(2) A party who is not appealing from a decree or order may apply for a* 25 *review of judgment notwithstanding the pendency of an appeal by some other party, except where the ground of the appeal is common to the applicant and the appellant, or when, being respondent, he or she can*

5 *present to the appellate court the case on which he or she applies for the review."*

The Applicant submitted that the primary ground for seeking an order of review and setting aside the judgment on admission was that, the judgment was entered in error based on the statements of affirmation on the existence of the contract

10 between the parties. The confirmation was not an admission of liability nor a confirmation of the alleged debt owed to the Respondent, thus there are errors apparent on the face of the record.

According to the record of proceedings of 16th October 2023, this Court asked Counsel Ruth Auma direct questions, well within her knowledge, and she 15 answered all of them as follows:

> **"Counsel Ruth Auma- The matter is coming up for mention Court- Do you dispute that the Plaintiff rendered services? Counsel Ruth Auma- No. Court- Do you dispute the amount?**

20 **Counsel Ruth Auma- No.**

**Court- Judgment entered on admission on USD \$ 125,345 with each party bearing their costs."**

It was the Applicant's submission that those statements did not qualify as admissions in the premises of law and thus, judgment on admission was entered in 25 error, being a mistake on the face of the record that ought to be reviewed and set 5 aside. However, the Respondent submitted that the admission of existence of the contract and debt during the proceedings of court was quite clear and succinct.

In relation to the laws regarding admissions; **Section 16 of the Evidence Act Cap 8** defines an admission as:

*"…a statement, oral or documentary, which suggests any inference as to a* 10 *fact in issue or relevant fact, and which is made by any of the persons, and in the circumstances, hereinafter mentioned."*

**Order 13 Rule 6 of the Civil Procedure Rules S. I No. 71-1** provides that:

*"Any party may at any stage of a suit, where an admission of facts has been made, either on the pleadings or otherwise, apply to the court for such* 15 *judgment or order as upon the admission he or she may be entitled to, without waiting for the determination of any other question between the parties; and the court may upon the application make such order, or give such judgment, as the court may think just."*

In my considered opinion, the Applicant seems to state in this application that her 20 confirmation to the existence of the contract only does not amount to an admission to liability. It seems to me that the Applicant stresses that it only admitted to the contract and has forgotten that she also confirmed to court that she was indebted to the Respondent. The intent of the above provision is to enable a party to obtain a speedy judgment in accordance with the admission of 25 the other party, and also to prevent frivolous defences from standing in the

plaintiff's way of obtaining expeditious judgment. (see; *Uganda Pulp & Paper Mills Ltd vs. Katon Manufacturers Ltd & 2 Ors HCCS No. 4 of 2022).*

5 Putting the related laws into context, this court entered the judgment on admission as it thought just; upon the Counsel for Applicant's oral admission to the existence of the contract between the parties, her indebtedness to the Respondent, and therefore there was a breach of contract on the part of the Applicant and a case for recovery of the outstanding sums was made out.

## 10 According to **Section 17(1) of the Evidence Act**,

*"Statements made by a party to the proceedings or by an agent of any such party, whom the court regards, in the circumstances of the case, as expressly or impliedly authorized by him or her to make them, are admissions."*

In the case of *Edison Kanyabwera vs. Pastori Tumwebaze SCCA No. 6 of 2004,* 15 court relied on the **A. I. R Commentaries: The Code of Civil Procedure by Manohar and Chitaley, Volume 5, 1908**, where it was stated that:

*"In order that an error may be a ground for review, it must be one apparent on the face of the record, i.e. an evident error which does not require any extraneous matter to show its incorrectness. It must be an error so manifest* 20 *and clear that no court would permit such an error to remain on the record. The error may be one of fact, but it is not limited to matters of fact, and includes also error of law."*

In the instant case, in my considered opinion, Counsel Ruth Auma's confirmatory statements, on behalf of the Applicant, implied that the Applicant made oral 25 admissions to the existence of a contract and her indebtedness to the Respondent. This in my view, does not prove any error apparent on the face of the record by this Court in entering the judgment on admission. Counsel Ruth Auma made confirmatory statements in court on behalf of the Applicant and the same are

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5 deemed admissions. The argument that they did not qualify as admissions in the in law is not tenable.

I am also guided by the brief background of this matter and I have had to go back and look at the Applicant's defence to the suit and all documents attached to the Plaint. The existence of a contract is not disputed. The Applicant had actually

- made a payment plan of USD \$ 255,905 dated **10th** 10 **October 2014**. The Applicant following a meeting she had with Mr. Charles Nkwanga (Respondent's Director), made an undertaking that she would make partial monthly installment payments of postdated cheques of **USD 15,000** to the Respondent, clearing the outstanding balance by **November 2014**. - In a demand notice dated **24th** 15 **July 2019**, the Respondent informed the Applicant that she still owed her **USD \$ 121,345**. I have not come across any piece of evidence showing that the Applicant paid the outstanding balance. The Applicant only informs this court that the contract expired on 31st March 2015, she fulfilled her obligations in the contract (claims raised in the Misc. App. No. 776 of 2019 - 20 without proof). The fact that a contract expired does not absolve a party to the contract if obligations under the said contract were not met and or fulfilled by the time the contract lapsed. The Written Statement of Defence does not explicitly prove payments to the Respondent. The Applicant only raised claims as to breach of fiduciary duty and fraud on the part of Mr. Charles Nkwanga as director of the - 25 Respondent, the Plaintiff's non-existence as a legal person and the suit being bad in law and still without any proof of payment of the amount claimed or sought to be recovered by the Respondent/Plaintiff.

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5 In my humble opinion, this only points to the fact that the Applicant made evasive denials in her defence and is taken to have admitted to every allegation of fact in the specially endorsed plaint. In **Mulla The Code of Civil Procedure 16th Edition Volume 2, at pages 1965 & 1966,** it was stated that:

*"The Defendant must take each fact which is alleged against him* 10 *separately*, *and say that he admits it, or denies it or does not admit it. 'It is not merely denial which is meant, but the rule covers non-admission, for [the defendants] is to deal specifically with every allegation of fact he does not admit the truth. Every allegation of fact in the plaint will be taken to be admitted if it is not denied specifically or by necessary implication or stated* 15 *to be not admitted.*

> *Where a defendant denies an allegation of fact in the plaint, he must not do so evasively, but answer the point of substance."*

In the case of *Nevia Company Ltd vs. Biersdorf AG CACA No. 172 of 2014,* court relied on the decision in *Choitram vs. Nazari [1976-1985] EA 53* to state that:

20 *"…that before entering judgment on admission, the admissions have to be plain and obvious, and clearly readable because they must result in judgment being entered. They must be obvious on the face of them without requiring a magnifying glass to ascertain their meaning. Much depends on the language used. The admissions must leave no room for doubt that the parties passed* 25 *out of the state of negotiations onto a definite contract. The circumstances must be such that if, upon a purposeful interpretation of admissions of fact, the case is plain and obvious that there is no room for discretion to let the matter go for trial, then nothing is to be gained by having a trial. The court*

5 *must not exercise its discretion in a manner which renders nugatory an express provision of the law."*

The Court of Appeal also relied on the decision in the case of *Juliet Kalema vs. William Kalema CACA No. 95 of 2003,* when it clearly stated that:

*"The object of Order 13 Rule 6 of the Civil Procedure Rules S. I No. 71-1 is to* 10 *enable a party to obtain judgment speedily at least to the extent of the admissions. Such admissions can be made on the pleadings or verbally of the use of the word 'otherwise' in the rule. The rule is for the benefit of both parties. However, before the court can act under the rule to enter judgment, the admission of the claim must be clear and unambiguous. This would, in* 15 *my opinion, infer that obtaining judgment on admission is not a matter of right but a matter of exercise of judicial discretion, regard being had to all circumstances of the case."*

Going back to the court proceedings of 16th October 2023, the Court engaged Counsel Auma to determine whether the Defendant either disputed the contract 20 or sums outstanding, to which Counsel Auma unequivocally admitted to not having a dispute to any. This notwithstanding, the application for leave to appear and defend was granted on condition that the Applicant proved to this court that she actually made the payments. As already shown above, in the Applicant's written statement of defence she failed to show that the Respondent's claim was

25 not valid. I should also not be forgotten that at some point the Applicant raised a preliminary objection on a point of law that the Respondent's had no legal capacity to institute a claim against her. The objection was out rightly dismissed by this court. In my view, this court entered the judgment on admission justly

5 while exercising her judicial powers as it deemed fit, to which I find no error or mistake made.

I therefore find that the matter did not require to proceed for trial where the Applicant had no defence.

In regard to setting aside execution of the decree, the Respondent in reply stated 10 and submitted that she had not commenced any execution proceedings in this honorable court. The Applicant did also not adduce evidence in this court as proof that execution proceedings has ensued against it. Therefore, the prayer to stay the execution of the court decree is baseless and unfounded.

Considering all the reasons given above and all the circumstances put into

15 consideration, the Applicant has not shown any error apparent on the face of the record that merits a decision for this court to review and or set aside its decision. This application is hereby dismissed with each party bearing their own costs.

**Dated and signed at Arua this 18th day of October 2024.**

**Harriet Grace MAGALA**

**Judge**

**Delivered online (via ECCMIS) this ……………….. day of ……………………. 2024.** 06 November