Sietco v Noble Builders (U) Limited (Civil Appeal 31 of 1995) [1997] UGSC 21 (3 April 1997)

## **THE REPUBLIC OF UGANDA**

## **IN THE SUPREME COURT OF UGANDA**

## **AT MENGO**

#### **(CORAM: WAMBUZI, C. J, ODOKI, JSC, TSEKOOKO, JSC)**

## **CIVIL APPEAL NO. 31 OF 1995**

### **BETWEEN**

#### **SIETCO : APPELLANT**

#### **AND**

## **NOBLE BUILDERS (U) LTD.: RESPONDENT**

*(Appeal from a judgment of the High Court Of Uganda at Kampala (Mr. Justice F. M. S. Egonda-Ntende) Dated the 13th day of February, 1995 in HCCS No. 174 of 1990)*

### **JUDGMENT OF WAMBUZI, CJ**

This appeal is against the decision of the High Court ordering the appellant to pay slightly over US \$1.2 million to the respondent and dismissing the appellant's counter claim of slightly over US\$1.7 million.

The action arose out of a building contract between SIETCO, the appellant, which is Chinese Corporation, engaged in road construction and building business and Noble Builders (U) Limited, the respondent, which is a limited liability building company engaged in construction business in Uganda. The appellant had contracted with the United Nations Development Programme to build an office block and a residential estate in Kampala. The appellant sub-contracted the work to the respondent.

The respondent's claim was for the balance of the money agreed to be paid to it by the appellant. The counter-claim was for work not done or badly done in breach of contract.

The appeal was on 17 grounds but 2 of these, grounds 14 and 15 were abandoned by Mr. Katende, counsel for the appellant. In his opening remarks, Mr. Katende criticised both the trial Judge and Counsel for the manner in which the trial was conducted leading to a failure of justice and he asked the Court to allow the appeal and set aside the judgment of the Court below, dismiss the respondent's claim, allow the appellant's counter-claim or order a retrial before another Judge.

Grounds 1, 2, 3 and 4 are really different aspects of the same ground that the lower Court erred in proceeding on an amended plaint which had not been amended in accordance with the law. The amendment had not been applied for nor granted. The suit was a nullity ab initio as the respondent was a non-existent person.

On 31st May, 1994, there was an application in the lower Court to amend the plaint to attach documents, two lists of which had been filed in Court on different dates but had not been annexed to the plaint. This application was granted in the following terms,

> *"The oral application to amend the plaint to include an annexed list of documents is granted. However, in view of the fears expressed by Mr. Bwengye, I will order that an amended plaint with the list annexed be served upon Counsel for the defendants within 7 days from today who will be free to react to such amendment in the next 15 days".*

The amendment was made, that is to say, a list of documents was attached to the amended plaint. However, in addition, three other amendments were made. First the plaintiff's name in the original plaint was "Noble Builders Co. Ltd. but in the amended plaint the name was "Noble Builders (U) Limited". The expression "(U)" had been inserted in place of the expression "Co.". This amendment was underlined.

Secondly, the address of the plaintiff had been altered in the amended plaint to read "c/o Byenkya, Kihika & Co. Advocates, 4th Floor, Spear house, Jinja Road, P. O. Box 16401, Kampala" instead of "c/o Sam Kuteesa Advocates, Investment House, Plot No. 25, Kampala Road, P. O. Box 10109, Kampala".

Thirdly, prayer (b) in paragraph 9 of the amended plaint had been altered to read,

- "(a) interest on (a) at the rate of 12% from the date of filing suit until payment in full" instead of - "(b) interest on (a) at the rate of 12% from the date of judgment until payment in full", in the original plaint.

The latter two amendments were underlined. Mr. Katende argued that none of the amendments complied with the provisions of Order 16 rule 19 which permitted the plaintiff to amend his plaint without leave. The leave given by the Court in this case covered only the lists of document which were attached. Mr. Katende relied on the cases **of Adonia Nakudi vs. Chrisant K. Mukasa** Civil Appeal No. 2 of 1986 (Unreported) for compliance with Order 6 rule 19 and **Makula International Limited vs. H. E. Cardinal Nsubuga & Anor** Civil Appeal No. 4 of 1981 (Unreported) that failure to comply with a statutory provision is an illegality which a court of law cannot sanction. Learned Counsel submitted that the proper order for this Court to make in the circumstances is for a retrial as in the **Nakudi case** (supra).

Mr. Katende submitted further that the amendment to the name of the plaintiff was not an amendment but a substitution of a party which in this case was not in conformity with the provisions of Order 1 rule 10. Learned Counsel relied on the case of **Reliable African Insurance Agencies vs. National Insurance Corporation** 1979 HCB 58. Learned Counsel further submitted that for four and a half years, the proceedings were in the name of a company which did not exist and that accordingly the proceedings were null and void. He relied on the cases of **Fort Hall Bakery Supply Co. vs. Fredrick Mungai Wangoe** 1959 EA 474, **Tetlaw vs. Orela Limited** [1920] 2 Ch. 24 and others.

In answer to grounds 1 - 4 of the appeal, Mr. Byenkya, for the respondent, submitted that in paragraph 3 of the original plaint, two building contracts entered into between the appellant and Noble Builders Company Limited were admitted by the appellant in its written statement of defence in paragraph 5. The appellant cannot now deny the identity of the plaintiff. Noble Builders Company Limited was a mere misdescription of the respondent... The appellant must have known the proper name of the plaintiff which appeared in the two agreements attached to the plaint. He argued that the amendment was to correct a misnomer of an identifiable person and not a substitution of a different person and that the amendment caused no injustice.

There was a Court order allowing the amendment of the plaint although counsel conceded that the amendment went beyond what had been permitted by the Court. Counsel submitted that it was now too late to raise the issue as Counsel had more than ample time and opportunity to raise the issue in the lower Court. The appellant filed an amended defence in answer to the amended plaint and there was no objection to the amended plaint.

I am in a way persuaded by the arguments put forward by Mr. Byenkya. Copies of the two contracts between the appellant and respondent for the construction of an office building and a housing estate were attached to the plaint as annextures A and B. The contents were in the names of Noble Builders (U) Limited which was the proper name of the respondent. The appellant must have therefore been aware of the proper name of the respondent. The appellant in its written statement of defence admitted paragraph 1 of the amended plaint thereby admitting the description of the plaintiff. The wrong name was not objected to in the lower Court. On the persuasive authority of **Davies vs. Elsby Brothers** (1961) WLR 170 1 would call this a misnomer which could have been corrected and not a substitution of a new party. In that case the plaintiff issued a writ against "Elsby Brothers - a firm" claiming damages for negligence in respect of injuries he sustained while he was an employee of the defendants. The business of Elsby Brothers was taken over by a limited liability company, Elsby Brothers Limited. Before the writ was served it was amended by striking out the words "a firm" and adding the word "Limited" to "Elsby Brothers" and the writ as amended was served.

Elwes J. allowed the defendant's appeal from the Registrar's refusal to set aside the writ on the ground that the company was substituted as defendants after the claim against them had become statute barred.

The plaintiff appealed. The appeal was dismissed on the ground that the firm and the company were two separate entities and there being nothing on the writ to indicate that it must have been intended for the company, the original description of the defendants on the writ was not a mere misnomer and the Court had no power to allow by amendment the substitution of a new party, the company, as defendants. The same principles apply in the case of a plaintiff.

Here the plaintiff in the original plaint was Noble Builders Co. Limited and in the amended plaint was "Noble Builders (U) Limited" substituting "(U)" for "Co.". The same entity, a Company named wrongly. To the plaint were attached two agreements, the subject matter of the dispute, both of which indicate that the dispute was with **Noble Builders (U) Limited** the name inserted in the amended plaint.

The second amendment complained of was the substitution of the plaintiff address indicating the address of the plaintiff's lawyer. This amendment was wrong but completely unnecessary. A notice of change of Advocates had been filed and nothing really turns on the change of address, it was not in issue and in any case the appellants admitted it in their amended written statement of defence and never challenged it at any stage in the lower Court.

The third amendment complained of was in respect of interest from the date of filing in the amended plaint as opposed to from the date of judgment in the original plaint. Mr. Byenkya submitted that the grant of interest is a matter of law for the Court to decide and not for pleadings. He relied on section 26 (2) of the Civil Procedure Act which reads as follows,

> *"(2) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the Court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the Court thinks fit".*

Mr. Byenkya relied on the cases of **Riches vs. Westminster Bank Limited** (1943) 2 ALL ER 725, **Whittam vs. W. J. Daniel and Co. Ltd**. (1962) 1 QB 271 and others. In the **Riches'** case **(supra**), Lord Greene M. R had this to say on section 3 of the Law Reform (Misc. Provisions) Act, 1934 of Great Britain,

> *"Oliver J., awarded interest at 4 per cent, for the appropriate period on the appropriate amount, exercising his discretion under that section. It was said, first of all, that he had no power to exercise that discretion, because there was no claim in the statement of claim for interest and that, therefore, without an amendment of the pleadings, at any rate, the Judge could not act under the section. In my opinion, that argument is ill-founded. There is nothing in the section to indicate that the claim must be pleaded, or that the statement of claim must say that, at the trial the plaintiff, if successful, will ask the Judge to exercise his discretion. There is nothing in the section which suggests the necessity of that, and, for myself, I cannot see how it can be read in".*

In my view all the three amendments complained of were contrary to the law as no leave was given. But,

- (1) The appellant did not challenge any of these amendments in the lower Court. - (2) The appellant filed an amended written statement of defence and answered the amended plaint without any objection. - (3) Each party knew what case it had to face and adduced evidence in the lower Court on the pleadings as they stood. - (4) I find no failure of justice because of any of the amendments. - (5) Except in the case of the first amendment there was no complaint in the memorandum of appeal and the appellant should not have been allowed to raise these matters at that stage, and lastly - (6) Any Court would have granted the first amendment to correct the misnomer of the plaintiff.

Grounds 1 - 4 must therefore fail.

Ground 5 complained that the learned trial Judge did not exercise his discretion judicially and cited five instances where,

- 1. The learned trial Judge refused an adjournment to enable the appellant to be represented by Counsel of its own choice. - 2. The learned trial Judge refused an adjournment to enable new Counsel of the appellant to study the record and to take full instructions from the appellant. - 3. The learned trial Judge refused an adjournment to enable Counsel for the appellant to take instructions before cross-examination. - 4. Issues were framed in the absence of briefed Counsel for the appellant and the learned trial Judge refused an application by the appellant's Counsel to add new issues. - 5. It was alleged that the learned trial Judge virtually accepted submissions made by the respondent's Counsel but rejected all the submissions made by the appellant's Counsel.

The fifth instance was disallowed as it did not comply with rule 84 of the Rules of this Court which requires the memorandum of appeal to set forth concisely and under distinct heads, without argument or narrative the grounds of objection to the decision appealed against, specifying the points which are alleged to have been wrongly decided.

As regards the first complaint, Mr. Katende argued that on the 31st May hearing had been fixed without the participation of the appellant's lawyers, at that time. On that day Counsel for the appellant asked for an adjournment on the ground that he could not proceed with the case because he did not have the case file which had not been released to him by the previous lawyer who had withdrawn from the case.

The second complaint was that a new Counsel for the appellant had been denied time to study the record and take full instructions.

In respect of the 3rd complaint, learned Counsel for the defendant submitted that Counsel for the appellant applied for an adjournment to take instructions before cross examining a witness which was refused.

Learned Counsel submitted that in all these three applications for adjournment there were valid reasons given but the learned trial Judge failed to exercise his discretion judicially by refusing the adjournment.

The fourth complaint related to an application by Counsel for the appellant to frame additional issues. Mr. Katende complained that a ruling was given on other issues but there was no ruling one way or the other on the application to frame additional issues.

Mr. Byenkya for the respondent supported the decision of the learned trial Judge on all issues raised by the appellant. He submitted that all orders were discretionary and relied for the discretional exercise of powers by the Courts on the cases of **Mbogo vs. Shah** 1968 EA 94 and **Muhindra Vs Muhindra** (1953) 20 EACA 56.

As regards the first complaint the learned trial Judge considered the matter in this way,

> *"On the 16th February 1994 the hearing of this case was adjournment to the 31st May 1994 with instructions that the defendants be served directly as their Counsel at the time had successfully applied to withdraw from the conduct of the defendant's case. Since then the defendant retained another firm of advocates James Matsiko Advocates. When the case was called this morning, Mr. Bwengye who appeared on behalf of the defendant applied for an adjournment on two grounds.*

> *The first ground was that Mr. James Matsiko who has personal conduct of this case is out of the country and presumably before his departure had instructed him to only apply for an adjournment and not to proceed with the hearing of the case. Secondly, it was submitted that the defendants had indicated that they wish to attend court but their witnesses were away in China.*

> *Counsel for the plaintiff opposed this application strongly arguing that this is an old case involving substantial sums of money. The delay in its hearing*

*would cause injustice to the plaintiff. He also submitted that no sufficient cause had been shown. The court was not told where Mr. Matsiko had gone and* when.

*Secondly that the defendant's witnesses were not necessarily needed for today's hearing.*

*Order 15 rule 1 (1) of the Civil Procedure Rules governs the prosecution and adjournment of suits. It provides:-*

*'The Court may, if sufficient cause is shown, at any stage of the suit grant time to the parties, or to any of them, and may from time to time adjourn the hearing of the suit'.*

The Courts discretion is to be exercised if sufficient cause is shown to exist.

I have been told that Mr. James Matsiko the Advocate having personal conduct of this case is away from Uganda. I have not been told when he left the country. Does the absence of an Advocate from the court on the date of hearing of a suit in which he appears amount to sufficient cause for an adjournment? I would think not. That alone cannot be sufficient otherwise whoever required an adjournment would just send a message to court to say he is away or will be away from court and without more, the court will adjourn the hearing of the suit.

I would think such an advocate would have to disclose to court why he is away. He should explain why he is unable to honour a court fixture for without his explanation there is no matter upon which a court can weigh whether or not sufficient cause has been established".

The learned trial Judge considered the second reason which is not relevant to this appeal and concluded,

> *"I agree with counsel for the plaintiff that no sufficient cause has been established to warrant the adjournment of this case. Court fixtures ought to be taken a little more seriously than the conduct exhibited by the defendant. The application for adjournment is refused as no sufficient cause has been established".*

Before the 31st May 1994 when the application for adjournment was made the record reads as follows,

# *"Counsel for the plaintiff*

*This case has finally come for hearing after approximately 4 years. Today's hearing date was fixed on the basis of an application by the defendant. We consented to that. We have 3 witnesses in Court. We are ready to proceed with the hearing of this matter.*

# *Counsel for the defendant*

*My Partner Dr. Khiddu who had the personal charge just sent me a note this morning that he contracted fever last night and is unable to come to Court and proceed. I am praying that this case be adjournment sine die. Costs in the cause".*

Counsel for the plaintiff strongly opposed the application then the record continues, **"***Court:-*

*Mr. Kasolo, where is the note you received from Dr. Khiddu?*

# *Mr. Kasolo:-*

*I did not receive a note; I received a message from his daughter this morning.*

# *Court:-*

*I am saddened by the approach Mr. Kasolo has taken in arguing this case. In the first instance he claimed he had received a note from his partner that he is sick. When I asked for the note he changed his story and stated that he had instead received a verbal message through his partner's daughter that he is sick. These verbal acrobatics by Mr. Kasolo point irresistibly to the conclusion that Mr. Kasolo, more probable than not, is not telling this Court the truth. I am unable to take his word. This case has had a long history of delays and like any other matter comes before this Court it ought to be dealt with expeditiously".*

The learned trial Judge referred to Order 15 rule 1 which regulates adjournments and concluded that no sufficient cause had been established and accordingly refused the adjournment.

Counsel for the defendant applied for a short adjournment of two hours to obtain the file which was granted. At the resumed hearing Counsel had failed to trace Counsel who had the file and accordingly could not proceed with the case. He was given leave to withdraw from the conduct of the case. There was an adjournment granted by the Court to enable the plaintiff's Counsel to serve the defendants directly and to advise them of the next hearing date. The record indicates that on the same day the hearing date of 31st May 1994 was granted to Counsel for the plaintiff.

On the 31st May, 1994 Mr. Bwengye appeared for the appellant and from the Court record it appears he told the Court that his firm took over the case three months before and that Khiddu Makubuya, the previous Counsel of the defendant, had refused to handover the client's file. He said his instructions from another Counsel from his firm were merely to ask for an adjournment and not to conduct the case.

Regarding the second complaint the learned trial Judge held,

*"This suit was filed sometime early in 1990. Since then parties have been busy with interlocutory matters until the 31st May, 1994 when the hearing of the main suit commenced and it was adjourned to today for further hearing.*

*7 days ago the plaintiffs filed an application for security for costs and fixed the same for hearing today. It appears to have been served on the plaintiffs on the 15th September, 1994, 2 days after filing. On 19th September, 1994 the plaintiffs filed an affidavit in reply and served a copy thereof on the defendant's Advocate. In the meantime the defendants retained two more Advocates, Mr. Nsubuga Mubiru and Mr. Muguluma to assist Mr. James Matsiko to defend the suit. As a result of the last 2 matters the defendants are not in a position to proceed with the hearing of their own application.*

*I am not sure what the defendants imagined when they decided to file their application 7 days ago and served it on the other party, 5 days ago*. *Did they imagine the plaintiff would not file an affidavit in reply when they fixed the application for hearing today? The defendants elected to fix the application this morning on the same day as the hearing of the case was to proceed. In fixing it at such short notice they cannot have been taken by surprise at the short notice of the affidavit in reply. The desire to seek instructions to file an affidavit in reply to an affidavit in reply seems to imply that there may be no end to the filing of the pleadings. I am not sure whether an affidavit in reply to an affidavit in reply can be filed without leave of Court specifically for that purpose. Without deciding point one or the other, I do not think this forms sufficient cause in the circumstances of this case to occasion an adjournment.*

*The retention of extra Counsel in the circumstances of this case can not be a ground for adjourning an application that was fixed for hearing by the defendants and their Counsel who is still on record.*

*Consequently, I am unable to grant this application for adjournment".*

Regarding the third complaint the record indicates that the second witness of the respondent was first examined by Counsel for the respondent and was then crossexamined by Mr. Matsiko Counsel for the appellant at the end of which Counsel said presumably to the witnesses "Thank you. That is all". There is no indication from Mr. Matsiko that any of his colleagues were to cross examine the same witness on any particular issue. Apparently the defendant was on that occasion represented by three Advocates. The record reads

## *"Mr. Nsubuga-Mubiru*

*I wish to examine the witness but I wish to pray for an adjournment.*

*Court:*

*Proceed with your cross-examination".*

Then Mr. Nsubuga-Mubiru cross-examined the witness. His cross-examination covered the same area as had been covered by Mr. Matsiko regarding the plan for laying pipes and changes by the Chinese which the witness opposed.

I am surprised that the complaint was ever made. First of all the witness had already been cross-examined by Counsel for the appellant. There was no indication as to why the witness should be cross-examined again by the same side. No reason whatever was given as to why the second Counsel for the appellant wanted an adjournment about which leading Counsel for the appellant had said nothing.

In my view none of the three decisions complained of is clearly wrong because of any mis-direction on the part of the learned trial Judge. He considered all relevant matters and gave reasons.

I see no merit in the fourth complaint. The law as to framing issues is as follows:

Order 13 rule 1(5) of the Civil Procedure Rules provides,

*"(5) 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 may appear 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".*

Rule 5 of the same Order provides in sub rule (1),

*"(1) The Court may at any time before passing decree amend the issues or frame additional issues on such terms as it thinks fit, and all such amendments or additional issues as may be necessary for determining the matters in controversy between the parties shall be so made or framed".*

The record indicates that an application was made to the Court to frame additional issues but Counsel did not say what the additional issues would have been. In his judgment the learned trial Judge referred to the application but did not give any ruling on it.

In his address to the Court learned Counsel for the appellant did not raise the matter nor refer to any necessity to frame further issues. In his submission before us Mr. Katende did not refer to any matters which required additional issues to have been framed or indeed that any miscarriage of justice occurred as a result of such omission.

At the end of the case for the respondent in the Court below, Counsel for the appellant made an application to make specific amendments to the Written Statement of Defence. He also said

*"I also wish to make an application that we be allowed to frame additional issues. At the beginning of the hearing of this case Mr. Bwengye who had come to adjourn the case was instructed to proceed with hearing although he had intimated that he knew nothing about this case. He made an attempt to frame issues. He intimated that some additional issues could be added to Court after study of the file. Under the Civil Procedure Act S. 101 this Court is empowered in the interest of injustice to make an order that additional issues be framed even after this stage. There is no prejudice to any party at this stage if fresh issues were reframed. I refer to Order 13 rule 5(1) of the CPR. That is all".*

I have already set out the provisions of Order 13 rule 5(1).

Learned Counsel in the Court below, it would appear, merely echoed what earlier Counsel had said. He did not go on to say what the additional issues would be, just as he spelt out what amendments to the Written Statement of Defence he was, at the same time, applying to make.

According to the record learned Counsel for the appellant was present in Court when the ruling was delivered on the 24th October 1994. He did not raise the issue either then or during his submission at the close of the evidence. As the record stands, it is not possible to say whether the additional issues were necessary for determining the matters in controversy between the parties. I don not see that the failure of the learned trial judge to rule on this application occasioned any miscarriage of justice. The application was incomplete and incapable of being ruled upon.

Ground 6 reads as follows:

*"The learned trial Judge erred in law and on the facts when on the 5th day of November 1993 he ordered the striking off of part of the applicant's counter-claim involving a claim of US\$1,300,000,00(United States Dollars one million three hundred thousand only) in so far as:*

*(a) He gave a wrong interpretation to the words used in the pleadings in general and to paragraph 16 of the counter-claim in particular;*

- *(b) He defined the word "tricks", which word he conceded had several diverse meanings, to mean "fraud"; and* - *(c) Instead of making an order for further and better particulars, he dismissed part of the appellants counter claim without taking into account the colossal sums involved".*

I do not think I need consider paragraph (c). The amount of money involved has nothing to do with whether or not a claim should be struck out.

Because of what I have already discussed in my judgment, I need only deal with Mr. Katende submission on this ground relating to interpretation of the word "tricks". Learned counsel contended that the word "tricks" is not used in Order 6 rule 2 which requires particulars in case of pleadings relying on fraud and that therefore the learned trial Judge had erred in his interpretation of the word "tricks" to mean fraud. That justice demanded that the learned trial Judge should have ordered the provision of further and better particulars to get the proper meaning. Learned Counsel relied on the case of **Habib Javer Manji and Another v. Vir Singh 1962 EA 557.**

On this point the learned trial Judge considered the arguments on both sides and said:

"*The word 'tricks' has several diverse meanings including:*

*'A clever act or plan meant to deceive or cheat someone'. Longman Dictionary of Contemporary English page 1133 which appears to be the meaning intended when the word was used in the written statement of defence and counter-claim. I am therefore inclined to agree with the plaintiff's and defendant's counsel that Para. 16 of the counter-claim set out a claim of US\$1,300,000.00 based on fraud.*

*However whereas the plaintiff asserts that no particulars of fraud were given the defendant asserts that there are sufficient particulars in all the pleadings taken together. We must therefore examine what particulars are essential in a claim based on fraud and if need be what are the consequences of a claim that does not contain the necessary particulars".*

It appears that in the Court below counsel on both sides agreed that "tricks and other strategies" in the pleadings meant fraud. Counsel for the respondent claimed no particulars of fraud were given contrary to Order 6 rule 2 whilst Counsel for the appellant maintained that the necessary particulars were given. As Mr. Byenkya submitted, he could not see how the respondent could have asked for particulars if the appellant maintained that particulars had been given.

I do not see that the case of **Habib Javer Manji** (supra) is helpful in the present case as the particulars in that case were not required by law. Besides the appellant having admitted in the Court below that the pleadings alleged fraud, I do not think they can come to this Court and argue the contrary. In my view this ground of appeal should fail.

Ground 7 reads as follows:

*"The learned trial Judge erred in law and on the facts when he decided to expunge from the record evidence concerning the appellant's purchase of materials on the ground that the same was not pleaded"*

Mr. Katende referred to the issues which had been proposed by Counsel for the respondent, particularly issue number 4 which was:

*"Whether the defendant paid the plaintiff and if so, how much and if not, whether the defendant was justified in withholding payment"*

Learned Counsel submitted that the evidence which was expunged was led specifically to answer this issue that therefore the Court was bound to accept it especially so as the issues were drawn up by the respondent's Counsel.

The learned trial Judge dealt with the matter in this way.

*"As DW1, Bai Rukun was testifying this morning Mr. Byenkya objected to the admission of a portion of his evidence that dealt with:*

- *(1) Purchase of materials by UNDP of US\$201,185.91* - *(2) Purchase of materials and payment for labour directly by SIETCO worth US\$466,762.53.* - *(3) Payment by SIETCO to their sub-contractors of US\$265,943.91.*

*He submitted that this was a third attempt to smuggle in a claim rejected by this Court. He submitted that the present state of the claim does not allow the defendant to adduce evidence of these matters as it amounts to be a clear departure".*

He then considered the argument of Counsel for the appellant and the law relating to pleadings and concluded:

*"Pleadings will govern the scope of the case and deliberate (delineate) areas upon which evidence ought to be adduced. A departure from the pleadings during the giving of evidence would normally lead to the party departing being precluded from leading such evidence beyond his pleadings. See Byrd v. Naun (1877) 7 CHD 287*

*In the instant case the defendants have stated that they are not claiming the amounts of money upon which the objection to that portion of evidence is made. It apparently is intended only to explain why payments may have been withheld from the plaintiff. If that is the case for the defendant, then it is not stated in its pleadings. It is taking the plaintiff by surprise after the closure of the plaintiff's case. If this is a defence to the plaintiff's claim or a set off it should have been set out in the Defendants Written Statement of Defence and Counter-claim. Not having done puts this lime of evidence beyond the defendants. They cannot be allowed to introduce it in the evidence at this stage".*

Mr. Katende's argument before us was not raised in the Court below but the learned trial Judge dealt with it in this way,

*"It could have been contended for the defendant, but it was not, that issue No. 4 'whether the defendant paid the plaintiff and if so how much and if not whether the defendant was justified in withholding payment' opens this matter and would therefore allow the defendants to call the evidence objected to. Since it was not raised, perhaps, it is unnecessary to consider the same. Nevertheless, my view is that this issue would have to be looked at only in light of the pleadings as it is the pleadings that give rise to issues. Evidence on whether the defendant was justified in withholding the payments, must be in line with the case for the defendant as disclosed in its Written Statement of Defence and Counter-claim. As this line of evidence objected to is not part of the case for the defence as disclosed in its pleadings it is expunged from the record of evidence".*

I am unable to fault the learned trial Judge's conclusion and in my view ground seven must fail.

Following the decision to expunge certain evidence from the record, Counsel for the appellant applied to amend the Written Statement of Defence.

He said,

*"In light of your ruling, I would like to apply Order 6 rule 18 for leave to amend our pleadings so as to accommodate this particular evidence which in my humble submission is crucial to the defendant's case. This amendment would not occasion any prejudice to the plaintiff. It is in the interests of justice so that all material aspects of this case are brought up. I want to add (g) to Para 15:*

*'(g) Failure to purchase materials'".*

The application was opposed and was rejected by the learned trial Judge. This rejection gives rise to ground 8 which is:

*"The learned trial Judge erred in law when he dismissed the appellant's application for leave to amend the pleadings on the 29th day of November, 1994 which dismissal was greatly prejudicial to the appellant's case".*

In his judgment the learned trial Judge dealt with the matter in the following terms,

*"Subsequent to my order above the defendant applied to amend the Written Statement of Defence and Counter-claim and add to the particulars of the plaintiff's breaches in paragraph 15 the paragraph to read, '(g) Failure to purchase materials'. After hearing Counsel, I declined to allow the application and I now give my reasons.*

*This proposed amendment was inadequate in so far as it did not give notice of the exact nature of the intended claim against the opposite party. It did not include a claim for any specific sum of money or allege specifically the materials that the plaintiff ought to have bought but failed, compelling the defendant to purchase the materials.*

*If there were omissions by the plaintiff in the performance of this contract for which the defendant wanted to claim money or seek a set off, the omissions like the omission to purchase materials by the plaintiff and the cost that the defendant was put to as a result thereof would have to be stated in order for the adverse party to have adequate notice of the case it has to meet. This is more so, where, as in the present case, the defendant has already incurred the expense as the evidence of DW4 indicated. This proposed amendment did not achieve this and was for that reason accordingly rejected".*

The reasons given by the learned trial Judge were insufficient, according to Mr. Katende, to justify rejection of the amendment. Learned Counsel cited the case **of Harji Karsam vs. Monjee Ranjhavjee (1943) EACA 10** and others to the effect that an amendment should be freely given if thereby the real substantial question can be raised between the parties and multiplicity of legal proceedings avoided.

Order 6 rule 18 of the Civil Procedure Rules under which the application to amend was made provides as follows:

*"The Court may, at any stage of the proceedings, allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may seem to be necessary for the purpose of determining the real questions in controversy between the parties"*

I find the cases relied on by Mr. Katende unhelpful as they relate to amendments to plaints before the trial. In my view the learned trial Judge considered the question before him, gave reasons and I am unable to say that he came to the wrong conclusion.

Ground 8 must therefore fail.

I have a little difficulty in appreciating the appellant's complaint in ground 9. It reads:

*"The trial Judge erred in law and on the facts when he relied on the evidence of PW2 and PW3 which evidence was greatly out weighed by the evidence of other witnesses in the proceedings in particular that of DW1, DW2, DW3, DW4 and DW7".*

I think this ground offends rule 84 of the Rules of this Court as it does not say where the learned trial Judge went wrong in relying on the evidence of the 2 respondent's witnesses as against the five appellant's witnesses. Credibility or proof of any fact is not determined by the number of witnesses testifying on each side.

Be that as it may, learned Counsel submitted that the issue was how well or badly the work had been done. Learned Counsel argued that the work had been so badly done by the respondent that it had to be redone by the appellant and in the process the appellant incurred over one million United States dollars doing work which the respondent should have done. Two witnesses Matia Kyobe (PW2) and Abdu Hagiz Babu (PW3) testified for the respondent and 4 witnesses Bai Rukun, Tang Min Shang, Jackson Muhwezi and Du Ming (DW1) (DW2) (DW3) & DW4 respectively testified for the appellant on the issue. In effect learned Counsel criticised the learned trial Judge for accepting the evidence of the two plaintiff's witnesses, who did not possess any professional qualifications and rejected the evidence of well qualified professionals like DW2, and Engineer and DW3, an independent witness. There was evidence from the four defence witnesses of work which had been so badly done that it had to be redone. There was also evidence of the cost involved. Learned Counsel criticized the learned trial Judge for awarding the full contract sum to the respondent despite the defects. In fact learned Counsel in his arguments covered ground 10 as well to the effect that the learned trial Judge erred in holding that the respondent had fully performed the contract. This ground in a way provides some clarification to the complaint in ground 9.

In this regard the issue before the Court was whether the plaintiff performed the contract within its terms. The learned trial Judge considered the evidence and concluded,

*"From all the evidence on record, I am satisfied that by the time the plaintiff was asked to leave the site on 1/3/89, it had performed virtually all the items of the Project. There may have been some defects and perhaps omissions".*

In the somewhat similar case of **Walji Jather Kanji and Another vs. Elias Freed 1959 EA 1071** the appellants were Building Contractors. In a written contract they undertook to erect for the respondent on his land at Mombasa, with materials to be supplied by the respondent, a block of 12 flats and a block of 12 garages and boys' W. C's. The contract specified that the appellant agreed to build the said works,

*".... completely and entirely in accordance with the plans and specifications referred to above and to the satisfaction of the owner (i.e. the respondent) and the Municipal Board of Mombasa".*

In an action on the contract by the appellant to recover certain moneys allegedly due for certain works, the respondent admitted the contract but denied that the work had been "completed according to the reasonable satisfaction of the defendant".

On this issue Forbes, VP had this to say,

*"It is, I think, well established that where a lump sum contract (and for this purpose I think the instant contract is analogous to a lump sum contract) is substantially completed, liability cannot be repudiated on the ground that the work, though substantially performed, is in some respects not in accordance with the contract: H. Dakin & Co. Ltd. vs. Lee (1), [1916] I KB 566; Hoening vs. Isaacs (2), [1952] 2 ALL ER 176. In H. Dakin & Co. Ltd. vs. Lee (1) Ridley, J., said at p. 568:*

'*It is said ...that because in respect of three small matters the work was not carried out in accordance with the specification the plaintiffs are not entitled to recover any part of the contract price. The work was in my opinion substantially completed, and the defendant has had the benefit of it, for she has been living in the house ever since* the repairs *were finished. But it is contended that the authorities compel us to hold that the defendant, who has got the benefit of all the work that was done, is not liable to pay anything for it because in those respects the contract has not been absolutely complied with. If that were the law we should be bound to follow it, however much one might regret having to do so, for I think it would be productive of very great injustice. It seems to me, however, from the authorities that where a building or repairing contract has been substantially completed, although not absolutely, the person who gets the benefit of the work which has been done under the contract must pay for that benefit. On the other hand, if the builder has refused to complete his work, or if the work done is of no use to the other party, or if the work is something entirely different from what was contracted for, then the builder can recover nothing*".

In the case before us I am unable to fault the learned trial Judge in his findings. I accordingly find no merit in grounds 9 and 10 which should fail.

Ground 11 complained that the learned trial Judge erred in law and fact when he disallowed the appellant's claim for penalty moneys. Mr. Katende argued that the date for completion was stipulated in Clause 8 of the Contract as 1st August, 1988 for the office block and 14th November, 1988 for the housing units. The work was completed in March 1992, when the final certificate for payment was released. There were no extensions and therefore penalty moneys amounting to US\$741,510 as claimed in the counter-claim ought to have been allowed.

The learned trial Judge dealt with this matter as follows,

*"Exh. P7 sets out the position of the defendant on penalty monies. And this is that both parties must abide by the decision of Habitat Engineers on time limit. The office block, Habitat Engineers found a 1/2 week as the period for the unaccountable delay. Consequently the defendant was not penalised for delay. On the housing units the unaccountable delay was 7 weeks but the defendant was not penalized as UNDP entered the housing units before date of practical completion. Since the defendant's position was that the plaintiff must abide by the Habitat Engineers decision, the decision was that the defendant would follow that the plaintiff cannot be penalised for delay. I would so find".*

Exhibit P7 is a letter addressed to the Manager; Noble Builders by the Project Manager SIETCO UNDP Project dated 15th May 1988 on the subject of Extra Work and Time Extension for UNDP Project. It reads,

*"As you have already discussed with Mr. Pan, I am told to confirm to you that if Habitat Engineers agrees to extend the time limit, we have no objection whatever time they give, you have to accept.*

*For the rates of extra work, we do not know whether they will accept or not.*

*Manager's suggestion is that we should leave it for the Habitat Engineers whatever additional work and rate they accept we shall pass on you.*

*You should trust our Company and should not worry about such small things, you should speed up the work, and please bring more mason to speed up the work".*

In his evidence, Raghbir Singh Sandhu (PW1) testified,

*"When extra work came we asked for extra time and they confirmed to us that if the Consultants agree they have no* *objection. We received a letter from SIETCO dated 15th May, 1988".*

This letter is Exhibit P7. According to the record, there was no objection to the letter when it was tendered as an Exhibit.

Quite clearly the agreement as to the time schedule was varied and I am unable to find that the respondent was in default of the agreement as varied and as found by the learned trial Judge.

In my view ground 11 should fail.

Ground 12 was that the learned trial Judge erred in law and fact when he improperly excluded the appellant's evidence on the counter-claim. The learned trial Judge dealt with this matter in this way,

*"During the testimony of DW4, Mr. Du, objection was taken to the line of evidence that was being adduced to the effect that the defendants had purchased building materials for the construction of the ongoing works. Mr. Byenkya submitted that neither the written statement of defence nor the counter-claim set out a claim or set off for purchase of building materials by the defendant. This evidence would therefore be beyond the defendants pleadings. In reply, Mr. Lwanga stated that the purchase of these materials were covered by Para 17 (b) of the counter-claim - that is the corrective measures referred to therein. I ruled that the evidence relating to purchase of materials by the defendant for the construction works was beyond the defendants pleading and therefore not relevant to the matters in issue. I said I will give my reasons later and now I do.*

*The defendant claimed a sum of US\$986,840.75 being cost of corrective measures. On a reading of the counter-claim this related, in my view, to repairs and the cost thereof as there was no averment in the written statement of defence and counterclaim that the defendant purchased any materials for construction works. Any evidence therefore that was dealing with purchase of materials outside the claim of US\$986,840.75 was irrelevant to this claim.*

*For that reason and on the state of pleadings and the matters in issue I declined receiving evidence beyond the claim for US\$986,840.75. DW6 testified in support of this claim.*

*He asserted that these expenses were incurred between March 1st 1989 and April 1992, the period after the plaintiff left the site".*

In the instant case the learned trial Judge considered all the relevant matters, gave reason for his decision and I am unable to say that he came to the wrong conclusion. In my view ground 12 should fail.

Mr. Katende argued grounds 13, 16 and 17 together. I will, however, deal with them separately.

Ground 13 complains that the learned trial Judge grossly misdirected himself on the law and facts when he determined that the respondent was entitled to the whole of the contract price when the respondent had not fully and/or satisfactorily performed its part of the contract.

In my view this is in effect ground 10 put in a different form. Ground 10 which I have already dealt with complained that the learned trial Judge erred in holding that the respondent had fully performed the contract. I accordingly find no need to deal with ground 13.

Ground 16 was to the effect that the learned trial Judge erred in not properly addressing his mind to issue number 3 as a result of which he came to an erroneous decision regarding general damages for breach of contract; and ground 17 complains that the learned trial Judge generally misdirected himself in evaluating the evidence on record.

In my view both these grounds contravene rule 84 of the Rules of this Court in that neither ground specifies in what way the learned trial Judge erred.

Be that as it may, issue number 3 was whether the plaintiff performed the contract within its terms. In dealing with this issue, the learned trial Judge said,

> *"The question remains - Did the plaintiff perform the contract? On the evidence before this Court it's clear that there were problems in execution of this contract. These problems included quality of work in some respects especially during the execution of the finishes after the superstructure was completed. In an attempt to solve this particular problem the parties agreed that the defendant takes over supervision of the plaintiff's staff and workers to ensure that the quality of work was satisfactory. This was provided for under the Contract. Clause VI (vii) stated:-*

*'The Contractor shall accept employers' supervision anytime'*

In a letter Ex. P. 9 dated 22nd September, 1988, the defendant's Project Manager, DW2, wrote to the plaintiffs and stated part,

> *'You have no right to criticise any work done by the Chinese workers or their management. We have taken all over the supervision because of the speed and quality of the work. Manager wants all your foremen should get work order from SIETCO experts. They should not use*

*their method; we are fully responsible for the quality of the work'.*

DW1 and DW2 testified that when SIETCO took over supervision there was some improvement in the quality of the work.

It would appear to me that it was SIETCO's intention to fully assume responsibility for the quality of the work once they took over supervision. They stated so in no uncertain terms. Perhaps this did not necessarily release the plaintiff from the duty to execute the works in a satisfactory manner in accordance with the contract but it could very well raise problems in determining liability for defects in quality over works executed after the defendant took over supervision. At this stage all I can find is that when problems arose during the execution of the contract the parties met and a solution, in this particular case, in accordance with the contract was adopted to deal with the problem.

Exh. P10, the letter dated 5/1/1989 by DW2 to the plaintiff acknowledged that the office block was completed. It acknowledged that the residential housing Project was about to be completed. It called upon the plaintiff to co-operate with defendant in the preparation or determining final accounts between UNDP and the defendant. It also called upon the plaintiff to settle the final account with the defendant in 20 days. Exh. P11, a letter dated 1/3/89 written by DW2 to the plaintiff acknowledged that the housing Project was completed. The remaining work was to be handled by SIETCO workers and Engineers.

DW1 has testified in cross examination that by the time the plaintiff left the site, there was an office block occupied by UNDP. There were 16 housing units partially occupied by UNDP staff. He had earlier on in examination-in-chief stated:-

> *'We supervised Noble Builders workers until February 1989 when all the items of the Project are done. But this did not mean it was complete or of good quality. Noble Builders left the site from 1st March 1989'.*

From all the evidence on record, I am satisfied that by the time the plaintiff was asked to leave the site on 1/3/89 it had performed virtually all the items of the Project. There may have been some defects and perhaps omissions. The Contract provided for the handling of defects under Clause VI (v) which states:-

> '*If Resident Engineer finds any fault due to the wrong execution of work it will be corrected by the Contractor at his own cost'.*

If there were defects in the plaintiff's execution of work, it was under obligation, on this fact being brought to its notice, to remedy or make good or repair or correct such defects at its own cost.

I accordingly answer issue number 3 in the affirmative and find that the plaintiff substantially performed the contract between the defendant and the plaintiff, though, there may be, subject to proof, some omissions and/or defects.

In my view, the learned trial Judge considered the relevant evidence and I am unable to find that he came to the wrong conclusion. See **Walji Jather Kanji's case (supra).**

In my view, and, for the reasons given in my judgment, the appeal should be dismissed with costs. I do not find it necessary to deal with the matters raised by Mr. Byenkya, Counsel for the respondent, that the learned trial Judge's decision should be affirmed on other grounds.

I might remark, however, that it would appear to me from the record that the appellant may well have had a problem of putting forward its case or defending itself through its pleadings.

In its cross appeal, the respondent claimed that the learned trial Judge erred in awarding only interest from the date of judgment to the date payment instead of awarding interest from the date of filing suit to the date of payment as prayed in the plaint.

Mr. Byenkya relied on the provisions of section 26 of the Civil Procedure Act and on a number of authorities.

In the amended plaint, the respondent prayed for,

- *"(a) a sum of US\$1,009,280.61;* - *(b) interest on (a) at the rate of 12% from the date of filing suit until payment in full".*

The provisions of section 26 (2) of the Civil Procedure Act have already been set out in this judgment.

The learned trial Judge said on the issue,

*"In the result I enter judgment for the plaintiff with costs in the sum of US\$1,254,567.97 (United States Dollars one million two hundred and fifty four thousand five hundred and sixty seven cents ninety seven). To this sum I shall add interest at 12% per annum from date of judgment till payment in full".*

The principle laid down by Lord Denning **in Harbutt's "Plasticine" Ltd. vs. Wayne Tank and Pump Co. Ltd**. (1970) IQB 447 seems to be,

*"An award of interest is discretionary. It seems to me that the basis of an award of interest is that the defendant has kept the plaintiff out of his money; and the defendant has had the use of* *it himself. So he ought to compensate the plaintiff accordingly".*

This principle appears to have been accepted in the case of **Mukisa Biscuit Manufacturing Co. Ltd. vs. West End Distributors Ltd**. (No. 2) 1970 EA 469. Spry, VP had this to say,

*"The principle appears clearly, I think, in the judgment of this Court in Prem Lata vs. Mbiyu, [1965] EA 592. That was a case concerning damages for personal injuries. The principle that emerges is that where a person is entitled to a liquidated amount or to specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interest from the date of filing suit. Where, however, damages have to be assessed by the Court, the right to those damages does not arise until they are assessed and there interest is only given from the date of judgment".*

In **J. K. Patel vs. Spear Motors Ltd**. Civil Appeal 4/91 (unreported) Seaton, JSC said,

*"The time when the amount claimed was due is the date from which interest should be awarded. In the instant case that date was the last time when the parties agreed on the total balance due".*

On the law and the authorities I must hold with respect that the learned trial Judge did not exercise his discretion judicially. He did not deal with the learned Counsel's submission in the Court below and gave no reason for not granting the prayer. I would in the circumstances allow the cross-appeal, set aside the order of the learned trial Judge to pay interest of 12% from judgment till payment in full and substitute therefore an order to pay interest of 12% from the date of filing suit until payment in full. I would give costs of the cross appeal to the respondent.

Order of the Court: As both the other members of the Court agree with my proposed orders there will be orders in those terms.

Given at Mengo this **3rd** day of **March**, 1997.

# **S. W. W. WAMBUZI CHIEF JUSTICE**

**I CERTIFY THAT THIS A TRUE COPY OF THE ORIGINAL.**

**W. MASALU MUSENE REGISTRAR, SUPREME COURT.**

# **THE REPUBLIC OF UGANDA**

# **IN THE SUPREME COURT OF UGANDA**

# **AT MENGO**

## **(CORAM: WAMBUZI, C. J., ODOKI, J. S. C., & TSEKOOKO, J. S. C)**

# **CIVIL APPEAL NO. 31 OF 1995**

### **BETWEEN**

**SIETCO : APPELLANT**

**AND**

**NOBLE BUILDERS (U) LTD. ::::::::::: RESPONDENT**

*(Appeal from a judgment of The High Court (Egonda-Ntende J) dated 13-2-95)* **IN**

## **High Court Civil Suit No. 174 of 1990)**

## **JUDGMENT OF ODOKI, J. S. C,**

I have had the benefit of reading in draft the judgment prepared by Wambuzi C. J. and I agree with it and the orders he has proposed. Delivered at Mengo this **3rd** day of **March** 1997.

**B. J. ODOKI JUSTICE OF THE SUPEME COURT**

**I CERTIFY THAT THIS A TRUE COPY OF THE ORIGINAL**

**W. MASALU MUSENE REGISTRAR, SUPREME COURT.**

## **THE REPUBLIC OF UGANDA**

## **IN THE SUPREME COURT OF UGANDA**

### **AT MENGO**

### **(CORAM: WAMBUZI, C. J., ODOKI, J. S. C., & TSEKOOKO, J. S. C)**

### **CIVIL APPEAL NO. 31 OF 1995**

### **BETWEEN**

### **SIETCO : APPELLANT**

**AND**

### **NOBLE BUILDERS (U) LTD: RESPONDENT**

*(Appeal from a judgment of the High Court Of Uganda (Egonda-Ntende, J.) dated 13th February 1995)*

# **IN CIVIL SUIT NO. 174 OF 1990)**

### **JUDGMENT OF TSEKOOKO, J. S. C.**

I have had the advantage of reading in draft the judgment prepared by my Lord the Chief Justice and agree that the appeal should be dismissed. I have nothing useful to add.

Delivered at Mengo this **3 rd** day of **April** 1997.

**J. W. N. TSEKOOKO JUSTICE OF THE SUPREME COURT.**

**I CERTIFY THAT THIS A TRUE COPY OF THE ORIGINAL.**

**W. MASALU MUSENE REGISTRAR, SUPREME COURT**