THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL COURT)
MISCLLANEOUS APPLICATION NO. 150 OF 2011
(ARISING FROM CIVIL SUIT NO.393 OF 2010)
TUSKER MATTRESSES (U):::::::::::::::::::::::::::::::::::::::::APPLICANT/DEFENDANT
VERSUS
ROYAL CARE PHARMACEUTICAL LTD::::::::::::::::::::::RESPONDENT/PLAINTIFF
BEFORE HON. LADY JUSTICE HELLEN OBURA
RULING
This is a ruling in an oral application by counsel for the applicant for leave to amend the law under which the application is made. He sought to substitute O36 rules 10 and 11 of the Civil Procedure Rules as the main rule under which this application is brought and leave O9 r12 as the alternative rule.
His contention is that judgment that was obtained by the respondent under O9 r 6 was erroneous because this is a summary suit where default judgment should have been entered under O36 of the Civil Procedure Rules. He further contended that this application was also erroneously brought under O8 r 1(2) and O9 rules 12 and 27 when it should have been brought under O36 r11.
The background of this application is that on the 14th February 2011 the applicant was granted conditional leave to appear and defend Civil Suit No. 393 of 2010. The applicant was given 15 days from the date of that ruling within which to comply with the condition and file a written statement of defence. It appears the applicant did not comply with the condition and consequently did not file a written statement of defence within the prescribed time.
Records show that on the 11th March 2011, counsel for the respondent wrote to counsel for the applicant reminding them that their client (applicant) had defaulted on court order dated 14th February 2011. Counsel for the respondent informed counsel for the applicant that if they did not receive the amount claimed in court as well as their cost by 1.00pm that day, they would be constrained to apply for judgment.
On 16th March 2011, counsel for the respondent wrote to the Deputy Registrar, Commercial Division informing her that the applicant had defied the order of Court and prayed that judgment be entered under O9 r 6 of the Civil Procedure Rules. Judgment was accordingly entered on that same day and a decree extracted for a sum of shs.400,000,000=(Four hundred million) plus interest thereon at court rate from date of judgment until payment in full and costs of the suit.
The applicant then filed this application where it is seeking for orders that:
1)
A stay of execution of the decree in Civil Suit No. 393 of 2010 doth issue against the respondent.
2) Judgment in Civil Suit No.393 of 2010 be set aside.
3) The applicant be grated leave to file its defence out of time.
4) Costs of this application be provided for.
The application is supported by the affidavit sworn by Mr. Hassan Ali Abdi which for purposes of this ruling I will not allude to. Affidavit in reply was sworn by Ms. Tatiana Emorshkina a director in the respondent company.
When this application came before me for hearing on the 4/4/2011, counsel for the applicant applied to amend the application for reasons already stated earlier in this ruling. He cited two authorities to support his argument that O 36 r 11 gives court wide discretionary power to set aside a default judgment under that order.
Counsel for the respondent opposed the application on the ground that O36 r10 is not applicable in this application because it applies at the time an application for leave to appear and defend is being considered. He argued that the direction anticipated under O36 r 10 were duly given when this court directed that the written statement of defence be filed within 15 days.
As regards O36r11, counsel submitted that this is equally not applicable because judgment in the main suit was properly entered under O9 r 6 of the Civil Procedure Rules. That judgment was entered after the applicant was granted conditional leave to appear and defend the summary suit but failed to comply with the condition and consequently did not file a written statement of defence within the time prescribed by the court.
He contended that it was after the default by the applicant to file a defence that the respondent applied for and obtained judgment under O9 r6.
He argued and rightfully so in my view that it would not be proper to bring this application under O36 r 11 because that rule only applies where a decree is obtained under O36 r3 (2) upon default by the defendant to apply for leave to appear and defend.
Finally on the applicant’s reliance on O36 r10 for extension of time, counsel submitted that that was not proper because extension of time is governed by O51rules 6 and 7 of the CPR which is not included in this application. He prayed that the application for leave to amend be disregarded so that the application proceeds for hearing.
In rejoinder counsel for the applicant submitted that O36 r10 according to the head note provides for “orders for further conduct of the suit” and not during initial application for leave as submitted by counsel for the respondent. He contended that this rule applies where leave has already been granted either unconditionally or conditionally as in this case. With regard to O9 r6, counsel contended that it only applies in the ordinary suits where summons to file a defence is issued and not complied with.
On the application of O36 r 11, counsel contended that it applies to all the decrees obtained under O36 of the CPR. He argued that the decree the applicant seeks to set aside should have been entered under O36 since this was a specially endorsed plaint. He reiterated his earlier prayer that leave be granted to him to amend the laws under which the application is brought.
After listening to both counsels, I find only one main issue to determine and that is, whether the default judgment in civil suit No. 393 should have been entered under O36 of the CPR as opposed to O9r6. It is only when that issue is determined that this court will be able to decide whether or not to grant leave to the applicant to amend the application.
I wish to go straight to counsel’s contention that the default judgment should have been entered under O 36 of the CPR. I have thoroughly perused all the rules under O36 but I do not see the rule under which the default judgment in this case where leave had been granted to the applicant could have been entered.
First of all I agree with counsel for the applicant’s submission that O36r11 gives court wide discretionary powers to set aside any decree obtained under that order. However, there are specific rules that give the circumstances under which a decree can be obtained by the plaintiff.
O 36 rule 3 (2) applies where the defendant fails to apply for leave to appear and defend within the period fixed by the summons. O 36 r 5 applies where court refuses to grant leave upon hearing the application. O 36 r 6 applies where the defence set up by the defendant applies only to a part of the plaintiff’s claim or where any part of the claim is admitted. O 36 r 7 relates to a decree issued against one of several defendants who has no defence or who ought not to be permitted to defend.
None of the above scenarios relate to the circumstances of this case. In fact apart from O 36 r 3 (2) where the decree is entered upon default, the decree under the rest of the rules listed above are obtained when the application for leave is filed and the court is not satisfied with the defence given or a part of the claim is admitted. None of them relates to where leave is granted whether unconditionally or conditionally.
However, O 9 r 6 under which the judgment was entered provides that;
“Where the plaint is drawn claiming a liquidated demand and the defendant fails to file a defence, the court may subject to rule 5 of this order, pass judgment for any sum not exceeding the sum claimed together with interest at the rate specified, if any, or if no rate is specified, at the rate of 8 percent per year to the date of judgment and costs”.
Order 9 r 5 to which rule 6 is subject provides for the requirement for affidavit of service of the summons and failure of the defendant to file a defence to be filed upon the record if the plaintiff is desirous of proceeding upon default of filing the defence under any of the rules under that order. This is deduced from both the head note and the content of that rule. All that rule 5 demands is confirmation of the fact that the summons were served on the defendant and he failed to file a defence within the prescribed time.
I am of the considered opinion that where court grants leave to the applicant to file a defence in a ruling read in his/her counsel’s presence and gives/prescribes a time frame within which it should be done, judgment can be entered under O 9 r 6 if it is proved that he/she has failed to file a defence within the prescribed time. In the circumstances I find that judgment was properly entered under O9 r6 of the CPR and an application to set aside the same should be brought under O 9 r 12 and not Order 36 r 11.
Having critically analysed the rules under O 36 where a plaintiff can obtain a decree, I agree with counsel for the applicant’s submission that O 36 r 11 applies only to decrees obtained under O 36 r 3 (2). I am persuaded by the observation of my senior sister Stella Arach J (when she was at the Commercial Court Division), in the case of Zamzam Noel & Others v Post bank Ltd, MA. No. 530 of 2008 to the effect that;
“Rule 11 is clearly meant for an applicant who did not apply for leave to appear and defend a suit within the prescribed time and judgment in default of application for leave was entered against him as a result under O 36 r 3…….”.
In fact all the cases cited by the applicant’s counsel relate to a decree obtained under O 36 r 3 (2) of the CPR.
I do not therefore agree with counsel for the applicant’s argument that this court can set aside the decree obtained in Civil Suit No. 393 of 2010 under O 36 rules 10 & 11. Rule 10 in my firm view provides for “order for further conduct of the suit” where leave is granted whether conditionally or unconditionally and a defence is accordingly filed.
I also do not agree with his contention that this court can extend time under the said rule when O 51 rules 6 & 7 cited by counsel for the respondent are very explicit on extension of time. Just in case the applicant is desirous of rectifying this, leave is hereby granted to the applicant to amend the application in order to include this order for extension of time. This is done in order to avoid multiplicity of proceedings, a mischief section 33 of the Judicature Act seeks to address.
I wish to point out that citing a wrong provision of the law or failure to cite a provision of the law under which a party seeks a redress before court has been held to be a technicality which should not obstruct the cause of justice. It can be safely ignored in terms of article 126 (2) (e) of the Constitution. This was a Supreme Court ruling in Alcon International Ltd v The New Vision Printing & Publishing Co. Ltd and Another, Supreme Court Civil Application No. 4 of 2010.
On the whole, I decline to grant the application for leave to amend the application to include O 36 r 11 as prayed and order that the application proceeds for hearing. Cost of this application shall be in the main application.
I so order.
Hellen Obura
JUDGE
10/05/09
Ruling read in draft in open court in the presence of Mr. Paul Rutisya for the applicant, Mr. Nathan Osinde for the respondent who was represented by one of its directors and Ms. Ruth Naisamula Court Clerk.
10/05/11
