THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISC. APPLICATION NO. 46 OF 2015

(ARISING FROM CIVIL SUIT NO. 633 OF 2014)

SAI  ENGINEERS SYNDICATE LTD.......... DEFENDANT/APPLICANT

VERSUS

DAV ALI & CO ASSOCIATES................. PLAINTIFF / RESPONDENT

BEFORE: LADY JUSTICE FLAVIA SENOGA ANGLIN

RULING

By this chamber application, brought under S.5 CPA, S.4 (1) Partnership Act, 0.7r11 (a), (d) and (e) and 0.7 r 19 C.P.R, the Applicant/Defendant sought orders of this court striking out the plaint in High Court Civil Suit 633/2014, on the ground that it was barred and not maintainable in law.

Costs of the application were also applied for.

The application is supported by the affidavit of Mukoya Maureen, Advocate which was read and relied upon at the hearing.

There is an affidavit in reply deponed by David Mudoola Baboolana one of the partners in the Respondent /Plaintiff Associates.

The background to the application is that the Respondent / Plaintiff filed the suit against the Applicant / Defendant seeking to recover Shs. 65,960,000/- general damages, interest and costs.

The Plaintiff/Respondent claims to be a duly registered partnership with capacity to sue.It contends that the Defendant/Applicant entered into a contract with the Plaintiff/Respondent to offer its accountancy and other related services in or around 1998.That the Plaintiff/Respondent offered the said services between 1998 and June 2011, with the Defendant/Applicant verbally promising to pay, until the debt accumulated and the contract was terminated.

The Defendant/Applicant paid some installments which the Plaintiff/ Respondent acknowledges, but left a balance of Shs. 7,460,000/- outstanding.Later the Defendant/Applicant paid Shs. 500,000/- but has refused to clear the outstanding balance which now stands at Shs 65,960,000/-, hence the suit.

In their defence, the Applicant/Defendant denied the claims of the Plaintiff/Respondent; contending that following the termination of the Plaintiff/Respondent services in June, 2011, all outstanding arrears on services were fully and conclusively paid.They accused the Plaintiff/Respondent of fraud – paragraph 15 written statement of defence, claiming that the Plaintiff/Respondent were only trying to unjustly enrich themselves and applied for dismissal of the suit.

The Plaintiff/Respondent filed a reply to the Defendant’s written statement of defence

Later the Defendant / Applicant filed this application seeking the orders earlier referred to.

When the application was called for hearing on 16.03.15, Counsel for the Applicant/Defendant went through the supporting affidavit asserting that they wrote to the Registrar of Companies to verify the registration of the Respondents/Plaintiffs’ partnership; but were informed in reply that Respondent/Plaintiff was not registered and there was no record of it in the Registry. However, any other necessary information was requested for to enable further search – See paragraphs 2, 3, 4 and 5 – and Annexture B dated 19.11.14 and response from Registrar dated 21.11.14.

It was accordingly argued that in those circumstances, the Respondent/Plaintiff cannot sue and that the plaint ought to be struck out – paragraphs 7 and 8 of affidavit in support. S.5 Civil Procedure Act and the case of Kiliembe Mines Ltd. Vs. Uganda Gold Mines Ltd HC Miscellaneous Application 212/12, where Justice Kiryabwire held that “a nonexistent person cannot sue….” was relied upon.

The case of Makula International Ltd vs. Cardinal Nsubuga and Another C.A 04/81, which is to the effect that “An illegality once brought to the attention of court cannot be ignored….”, was also cited.

In respect to costs, Counsel argued that while Justice Kiryabwire in the Kiliembe Mines case (Supra) had made no order as to costs, the position was overturned in May, 2014, by Justice Madrama in the case of V.G Keshwala and Sons vs. M.M. Sheikh Dawood C.S. 43/2010 on the ground that “the party involved cannot be absolved from its obligation”.

It was further pointed out that the affidavit in reply had many annextures but some of them are not relevant to the application; the real issue being whether the Respondent/Plaintiff is a registered entity.

Court was urged to strike out the plaint and allow costs of the application.

In reply, Counsel for the Respondent/Plaintiff referred to the affidavit in reply of 16.02.15, stating that the Respondent maintains that it is a registered entity as per attached copies of the certificate of registration and the partnership deed – Annextures A and B respectively.

He argued that, while the search was made, the Registrar indicated that “any other information would enable them do further or better search”; and that accordingly the search was not conclusive.

And that on the other hand, the Registrar confirmed the existence of the partnership by certifying the certificate of registration and the deed. He prayed court to allow him tender in the documents allegedly certified by the Registrar. But court rejected his application for reasons to be set out later in this ruling.

Counsel then prayed that the application be overruled and court proceeds to determine the substantive issues at hand.He added that the Applicant/Defendant had had long dealings with the Plaintiff/Respondent.

In rejoinder, Counsel for the Applicant referred to paragraph 2, 3 and 4 affidavit in rejoinder, insisting that the Plaintiff/Respondent Company was not indicated in the Registrar’s system.

Further that long dealings with the Defendant’s is not evidence of registration of the partnership.That as matters stand, there is no partnership.Under 0.30 r. 1 and 2 C.P.R, partners are supposed to be named and indicated as “Trading as”, otherwise Respondent/Plaintiff has no capacity to sue.

Moreover that, under 0.6 r 8 C.P.R, a party is bound by its pleadings and therefore Respondent/ Plaintiff cannot file certified documents.

He reiterated earlier prayers.

Court has given the application and its supporting affidavits, affidavit in reply and rejoinder and the submissions of both Counsel the best consideration. I find that the issue is whether the main suit is properly before court or it is barred by law and ought to be rejected...

Order 0.7 r 11 C.P.R sets out situations under which a plaint shall be rejected.These include:

1. Where the suit appears from the statement in the plaint to be barred by any law.

While under S.5 of the C.P.A, courts have no jurisdiction to try suits of which its cognizance is either expressly or impliedly barred.

The application in the present suit is based on the contention that the Respondent/Plaintiff is not a registered entity and therefore cannot sue or be sued in that regard.

Looking at the plaint in the present case, paragraph 1 describes the Plaintiff/Respondent as “a duly incorporated partnership with capacity to sue….”

Yet, the Applicant/Defendant has availed to court a letter upon which inquiries were made at the Registrar of Companies and of the response received from there from- Annextures A and B respectively. – Paragraphs 2, 3, 4, 5 and 6 of the application.

The letter from the Registrar clearly indicates that the Plaintiff/Respondent is not registered and there is no record of it at the Registry; although the Registrar requested for further information to enable them do further and better search.

While Counsel for the Respondent argued that the search was not conclusive, the documents attached to the reply – that is the partnership deed and certificate of registration of 20.03.03, the documents are not certified as true copies.

As mentioned earlier, Counsel for the Respondent/Plaintiff tried to replace the above documents with those purportedly certified, he had not served copies on Counsel for the Applicant/Defendant. A close look at the documents while showing a stamp and signature and the name of the person allegedly certifying the Partnership Deed, there is no date indicated upon which the certification was purportedly done.

And while the Registration Certificate had a signature, it had neither stamp, nor name of the person who allegedly certified it nor date of certification.

The documents raised a lot of doubt as to their authenticity. The letter forwarding them to court was originally dated 10^th March, 2015, that was crossed out and replaced in ink with the 09^th, to March with the date on the Court receiving stamp. There was no signature besides the change.

The documents were accordingly rejected for those reasons.

Court was accordingly more persuaded by arguments of Counsel for the Applicant/Defendant to find that the Respondent/Plaintiff did not have any legal existence.

Court was fortified in its finding by holdings in decided cases that have established that in circumstances like those in the present case, “plaintiffs could not be recognized as having any legal existence, were incapable of maintaining an action and therefore court could not allow the action to proceed thus striking it out…” – refer to Kilembe Mines Ltd (Supra), where the case of Fort Hall Bakery Supply Co.  Vs Frederick Muigai Wangoe [1959] EA 74, was relied upon.

The same case was cited with approval by Justice Kasule (Ag. Judge as he then was) in the case of Trustees of Rubaga Miracle Centre Vs Mulangira Ssimbwa Misc. Applcn. 576/2006, where the Hon. Justice held that; “a suit in the names of a wrong plaintiff cannot be cured by amendment”.

See also the Court of Appeal (Constitutional Court) case of Uganda Freight Forwarders Association and Another Vs Attorney General and Another, Petition 22/2009, where the learned Justices held that; “It is an elementary principle of law that an unincorporated association is not a legal entity capable of suing or being sued. A suit by an incorporated body is a nullity”.

In the present case, without the Respondent/Plaintiff adducing any convincing evidence to the contrary, court allows the application and strikes out the plaint.

Costs: Decided cases have long established that “costs follow the event unless for good cause court orders otherwise”. 

But as pointed out by Counsel for the Applicant/Defendant, the position in cases of this nature has hitherto been to strike out the plaint with no order as to costs; on the ground that “a nonexistent person in law cannot pay costs”.  

However, the position was changed in the case of V.G. Keshwala & Sons Vs M.M. Sheikh Dawood (Supra), where Justice Madrama held that “the nullity of the action cannot absolve the parties and particularly the plaintiff from meeting its obligations…”

The party who swore the affidavit in reply in the present case indicated that he is a partner together with others. They should accordingly pay the costs in this case.

For all the reasons set herein, the application is allowed. The main suit is struck out with costs to the Applicant/Defendant.

FLAVIA SENOGA ANGLIN

JUDGE

18. 03. 15.