Uganda Legal Information Institute - Legal Professional Conduct https://old.ulii.org/tags/legal-professional-conduct en Nyandusi v Oyuko (CIVIL APPLICATION NUMBER 0032 OF 2018) [2018] UGCA 29 (23 May 2018); https://old.ulii.org/ug/judgment/court-appeal-uganda/2018/29 <section class="field field-name-field-flynote field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Flynote:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/tags/cl" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">CL</a></li><li class="field-item odd"><a href="/tags/late-filing-and-extension-time-appeal" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Late filing and extension of time to appeal</a></li><li class="field-item even"><a href="/tags/condonation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Condonation</a></li><li class="field-item odd"><a href="/tags/legal-professional-conduct" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Legal Professional Conduct</a></li></ul></section><div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"><div> <p>THE REPUBLIC OF UGANDA</p> <p> IN THE COURT OF APPEAL OF UGANDA AT KAMPALA</p> <p>CIVIL APPLICATION NUMBER 0032 OF 2018</p> <p>5 WILLIAM ODOI NYANDUSI ::::::::::::::::::::::::::: APPLICANT</p> <p>VS</p> <p>JACKSON OYUKO KASENDI :::::::::::::::::::::: RESPONDENT CORAM:</p> <p>10     HON. MR. JUSTICE STEPHEN MUSOTA, JA</p> <p>RULING</p> <p>The applicant is seeking for an extension of time to file an appeal against the ruling and orders of the High Court given by Hon. Mr.</p> <p>15 Justice Henry Kawesa on 8<sup>th</sup> February, 2017. The application was filed in this court on 29<sup>th</sup>, January 2018; 11 months after judgment had been delivered. It is supported by the affidavit of Mr. WilliamOdoi Nyandusi deponed on 2<sup>nd</sup> January 2018. The application is brought under Rules 2(2) of the Judicature (Court of 20 Appeal Rules) Directions S.l 13-10, Section 33 of the Judicature Act Cap 13, Section 98 of the Civil Procedure Act and Order 52 Rule 1, 2 and 3 of the Civil Procedure Rules.</p> <p>The grounds upon which the application is premised are contained in the affidavit of the applicant and are:</p> <p>25 1. That Judgment was entered in Civil Appeal No. 104 of 2013 on the 8<sup>th</sup> February 2017 in favour of the Respondent in the High Court of Uganda at Mbale.</p> <ol> <li>That the Applicant only learnt that Judgment had been entered for the respondent in the Civil Appeal mentioned</li> </ol> <p>herein above on the 29<sup>th</sup> August 2017 long after he could file an appeal.</p> <ol> <li>That the Applicant instructed Mr. Majanga Obel of Obel Majanga &amp; Co. Advocates to defend the Civil Appeal.</li> <li>That the said Mr. Majanga Obel, as his lawyer, informed him that he would let him know when judgment in the Civil Appeal would be delivered.</li> <li>That the Applicant only came to know that Judgment had been delivered when the Respondent started alienating parts of the estate and claiming he had full authority of the court.</li> <li>That the Applicant’s wife at his behest then visited the registry of Mbale High Court on 29<sup>th</sup> August 2017 and found that indeed Judgment in the Civil Appeal had been entered in favor of the Respondent.</li> <li>That the Applicant is dissatisfied with the judgment and intends to appeal it.</li> <li>That the Applicants Appeal has a likelihood of success.</li> <li>That the time within which to file a Notice of Appeal has passed necessitating an application to extend the time.</li> <li>That it is just and equitable in the in the circumstances that Court be pleased to extend the time for filing the notice of appeal.</li> </ol> <p>In the affidavit in reply deponed by Jackson Oyuk Kasede dated 7<sup>th</sup> May 2018, he contends that the applicant has not demonstrated that his intended appeal has merit and that this application is only intended to delay the finalization of the seven year long dispute. That the applicant filed this application five months after purportedly learning of the judgment which is clear evidence of lack of diligence. That the applicant’s claims that the respondent has cleared the estate land with intention of putting up a market overt are false.</p> </div> <p> </p> <div> <p>At the hearing of the application, Mr. Batanda Gerald appeared for the applicant while Mr. Andrew Wamina appeared for the respondent.</p> <p>Counsel for the applicant submitted that Rule 2(2) of the Court of 5 Appeal Rules gives this court unfettered discretion to make such orders to avoid abuse of court process and to meet the ends of justice. Counsel gave a brief background to this application and submitted that the applicant was granted letters of administration by the Chief Magistrate Court of Tororo. The respondent, being 10 dissatisfied with that decision applied to court to have those letters revoked. The Chief Magistrates Court of Tororo dismissed the suit seeking to revoke the letters of administration. The respondent being dissatisfied appealed to the High Court challenging that decision and the High Court reversed the decision of the Chief 15 Magistrates’ Court. The applicant now files this application seeking to extend time within which to file a Notice of Appeal.</p> <p>That the applicant had instructed Mr. Majanga Obel to represent him in the appeal before the High Court and as counsel, he informed the applicant that he would give him an update on the 20 case which he never did. The applicant only got to learn that judgment had been passed by court when execution ensued.</p> <p>Counsel cited the authority of Julius Rwabinumi vs. Hope Bahimbisomwe Civil Application No. 14 of 2009 in which the applicants sought to file their memorandum of appeal 9 months out 25 of time and it was held that where there is mistake of counsel, this can be considered to be sufficient grounds to grant an extension of time. He prayed that this court be pleased to grant this application.</p> <p>In reply, counsel for the respondent opposed the application and submitted that the applicant did not adduce evidence to support his 30 allegation that he only came to know that judgment had been delivered when the respondent started alienating parties of the estate and claiming that he had full authority of the court. In</p> <p>addition, that it is not true that the delay has only been 5 months because the judgment was delivered in February 2017 and the applicant filed this application 29<sup>th</sup> January 2018 which is about 11 months.</p> <p>5 I have considered all the above circumstances and from the reading of Rule 5 of the rules of the Judicature Court of Appeal Rules, this Court has discretion to enlarge the time within which a party to an appeal may do an act if sufficient reason is shown for the enlargement.</p> <p>10 Rule 5 of the Rules of this court provides that:</p> <p>‘The Court may, for sufficient reason, extend the time limited by these Rules or by any decision of the Court/of the High Court for the doing of any act authorized or required by these Rules, whether before or after expiration of that time and is whether before or after the doing of the act and any reference in these Rules to any such time shall be construed as reference to the time as extended.<sup>9</sup></p> <p>The starting point, is to determine whether or not sufficient reason has been shown for the failure to act in time. According to the 20 affidavit of William Odoi Nyandusi, he only got to learn about the judgment when the respondent made an effort to execute. In essence, his counsel failed to follow up on the matter at the High Court.</p> <p>In determining whether or not this application for extension of time 25 within which to file an appeal should be granted under the above Rule, the paramount consideration is that there must be sufficient cause for the failure of the Applicant to file and serve a Notice of Appeal within time.</p> <p>The expression ‘sufficient reason’ is not defined anywhere in the 30 Rules of this Court. In the case of Rosette Kizito v Administrator General and others, Supreme Court Civil Application, No. 9 of</p> <p>1986, reported in Kampala Law Reports, Volume 5 of 1993 at page</p> <ol> <li>it was held that ‘Sufficient reason must relate to the inability or failure to take the particular step in time’.</li> </ol> <p>In Sabiiti Kachope and 3 others v Margaret Kamuje, Supreme 5 Court Civil Application, No. 31 of 1997, Oder JSC, (as he then was), it was held that:</p> <p>Tor applications of extension of time such as the present one, a mistake or Negligence of the applicant’s Counsel maybe accepted as a proper ground for granting relief such as the 10 leave to file out of time. The discretion of Court is not fettered as long as sufficient reason has been disclosed to justify court’s exercise of its discretion in favor of the Applicant. In the present application, the inordinate delay was caused by the Applicant’s previous Counsel. Therefore, the Applicants 15 have shown sufficient reason to justify the Court’s discretion in their favor. ’</p> <p>I will also refer to the case of Seperia Kyamulesiire v Justine Bikanshire Bagambe, Civil Appeal No. 20 of 1995, where Justice Karokora, JSC, then, was of the view that:</p> <p>20 ‘It is now settled that errors or omission by Counsel are no longer considered fatal to the applicant under Rule 4 of the Rules of this Court unless there is evidence that the applicant was guilty of dilatory conduct in the instructions of his lawyer. ’</p> <p>25 Taking the above into account, I find that the applicant had</p> <p>sufficient reason for not filing his appeal in time because it was as a result of the mistake of his former Counsel whom he had instructed to follow up the case in the High Court but failed him.</p> <p>In the circumstances of this case, refusal to grant leave to extend 30 time to file an appeal would cause an injustice to the applicant</p> <p>since the delay was as a result of mistake of his Counsel which should not be visited on the innocent litigant.</p> <p>In the result, an extension of time being sought is hereby granted.</p> <p>The Notice of Appeal is to be filed within 7 days from the date 5 hereof.</p> <p>I so order.</p> </div> <p> </p> <div> <p> </p> <p> </p> </div> <p> </p> <div> <table align="right" cellpadding="0" cellspacing="0" style="height:34px; mso-element-frame-height:25.2pt"> <tbody> <tr> <td> <p> </p> </td> </tr> </tbody> </table> <div style="clear:both;"> </div> <p> </p> <p> </p> <p>Dated this 23<sup>rd</sup> May 2018</p> </div> <p> </p> <div> <p> </p> </div> <p> </p> <div> <table align="right" cellpadding="0" cellspacing="0" style="height:56px; mso-element-frame-height:41.75pt"> <tbody> <tr> <td> <p> </p> </td> </tr> </tbody> </table> <div style="clear:both;"> </div> <p> </p> <p> </p> <p> </p> </div> <p> </p> <p>Hon. Mr. Justice Stephen Musota</p> <p> (Justice of Appeal)</p> <p> </p> </div></div></div><div class="view view-download-button view-id-download_button view-display-id-entity_view_1 view-dom-id-4adee14d2ebc28f39e82a0faad936058"> <div class="view-content"> <div class="views-row views-row-1 views-row-odd views-row-first views-row-last"> <div class="views-field views-field-field-download"> <div class="field-content"><a href="https://old.ulii.org/system/files/judgment/court-appeal-uganda/2018/29/court-appeal-uganda-2018-29.pdf" target="_blank"><img src="https://africanlii.org/sites/default/files/Download-Button-red.png" width="180"> </a>, <a href="https://old.ulii.org/system/files/judgment/court-appeal-uganda/2018/29/court-appeal-uganda-2018-29.docx" target="_blank"><img src="https://africanlii.org/sites/default/files/Download-Button-red.png" width="180"> </a></div> </div> <div class="views-field views-field-field-download-1"> <div class="field-content"><iframe class="pdf" webkitallowfullscreen="" mozallowfullscreen="" allowfullscreen="" frameborder="no" width="100%" height="600px" src="/sites/all/libraries/pdf.js/web/viewer.html?file=https%3A%2F%2Fold.ulii.org%2Fsystem%2Ffiles%2Fjudgment%2Fcourt-appeal-uganda%2F2018%2F29%2Fcourt-appeal-uganda-2018-29.pdf" data-src="https://old.ulii.org/system/files/judgment/court-appeal-uganda/2018/29/court-appeal-uganda-2018-29.pdf">https://old.ulii.org/system/files/judgment/court-appeal-uganda/2018/29/court-appeal-uganda-2018-29.pdf</iframe> </div> </div> </div> </div> </div> Fri, 06 Jul 2018 09:28:44 +0000 Eunice Logose 28703 at https://old.ulii.org Sudhir Rupaleria (MISC. APPLICATION NO. 1063 OF 2017) [2017] UGCOMMC 153 (21 December 2017); https://old.ulii.org/ug/judgment/commercial-court-uganda/2017/153 <section class="field field-name-field-flynote field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Flynote:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/tags/cl" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">CL</a></li><li class="field-item odd"><a href="/tags/fiduciary-relationship-between-attorney-and-client" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Fiduciary Relationship Between Attorney and Client</a></li><li class="field-item even"><a href="/tags/legal-professional-conduct" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Legal Professional Conduct</a></li></ul></section><div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"><p><strong>THE REPUBLIC OF UGANDA</strong></p> <p><strong>IN THE HIGH COURT OF UGANDA AT KAMPALA</strong></p> <p><strong>(COMMERCIAL COURT)</strong></p> <p><strong>MISC.  APPLICATION NO. 1063 OF 2017</strong></p> <p><strong>(ARISING FROM CIVIL SUIT NO. 493 0F 2017)</strong></p> <p><strong>SUDHIR RUPARELIA :::::::::::::::::::::::::::::::::::::::::::::::::::::::APPLICANT</strong></p> <p><strong>VERSUS</strong></p> <p><strong>1. MMAKS ADVOCATES</strong></p> <p><strong>2. AF MPANGA ADVOCATES (BOWMANS UGANDA)</strong></p> <p><strong>3. CRANE BANK LIMITED (IN RECEIVERSHIP)</strong></p> <p><strong>4. BANK OF UGANDA :::::::::::::::::::::::::::::::::::::::::::::::::RESPONDENTS</strong></p> <p> </p> <p><strong><u>BEFORE: HON JUSTICE DAVID K WANGUTUSI</u></strong></p> <p><strong><u>RULING</u></strong></p> <p>In the application Sudhir Ruparelia, referred to as the Applicant seeks declarations against MMAKS Advocates, AF Mpanga Advocates – Bowman’s Uganda, Crane Bank Limited (in Receivership) and Bank of Uganda, referred to in these proceedings as the 1<sup>st</sup>, 2<sup>nd</sup>, 3<sup>rd</sup> and 4<sup>th</sup> Respondents.</p> <p>The declarations he seeks are:</p> <ol> <li>That the 1<sup>st</sup> and 2<sup>nd</sup> Respondents are conflicting in acting for the 3<sup>rd</sup> and 4<sup>th</sup> Respondents and therefore in violation of the advocate client relationship and the Advocates (Professional Conduct) Regulations.</li> <li>That the lawyers in the 1<sup>st</sup> and 2<sup>nd</sup> Respondents are potential witnesses in HCCS 493 of 2017 and should be barred from representing the 3<sup>rd</sup> and 4<sup>th</sup> Respondents in the suit.</li> <li>An injunction and or restraining order against the appearance and or acting as Counsel for the 3<sup>rd</sup> and 4<sup>th</sup> Respondents in HCCS 493 of 2017.</li> </ol> <p>The application is grounded on the following:</p> <p>That before the suit, the Applicant was a client of the 1<sup>st</sup> and 2<sup>nd</sup> Respondents, and in representing and advising him they became aware of facts which could be prejudicial to him. That because of that relationship the appearance of the 1<sup>st</sup> and 2<sup>nd</sup> Respondent on behalf of Plaintiffs who have taken him to court could be a violation of the advocate – client relationship.</p> <p>Secondly, that the claim in HCCS 493 of 2017 raises issues and claims that were obtained during the interaction between the Applicant and the 1<sup>st</sup> and 2<sup>nd</sup> Respondent as client and advocate. That the 1<sup>st</sup> and 2<sup>nd</sup> Respondents have divulged some of the confidential and privileged Information and are likely to divulge more if allowed to continue appearing in HCCS 493 of 2017.</p> <p>Thirdly that the facts and issues as discerned in the pleadings and annexed documents many of which point at the direct involvement of the 1<sup>st</sup> and 2<sup>nd</sup> Respondents bring forth the need to summon them as witnesses if the Applicant is to properly defend himself.</p> <p>Fourthly that the interaction between the Applicant and the 1<sup>st</sup> and 2<sup>nd</sup> Respondent created a fiduciary relationship which obligation was violated when they accepted instructions to sue the Applicant, an act that gives rise to conflict of interest.</p> <p>Fifthly that the 1<sup>st</sup> and 2<sup>nd</sup> Respondent have acted in breach of the Advocates Act, Cap 267 and the Advocates (Professional Conduct) Regulations.</p> <p>Sixthly that the  3<sup>rd</sup> and 4<sup>th</sup> Respondents are at fault for appointing the 1<sup>st</sup> and 2<sup>nd</sup> Respondents, knowing very well that the latter had all along acted for the Applicant. That such appointment was in bad faith, whose intention was to enable the 3<sup>rd</sup> and 4<sup>th</sup> Respondent get an advantage to the prejudice of the Applicant.</p> <p>On these grounds the Applicant sought an injunction against the 1<sup>st</sup> and 2<sup>nd</sup> Respondent’s appearance in the suit against the Applicant.</p> <p>The 1<sup>st</sup> and 2<sup>nd</sup> Respondent in reply contend that they acted for the 3<sup>rd</sup> Respondent and not the Applicant. That in that case they could not have come across any facts which are prejudicial to the Applicant.</p> <p>Deposing specifically on behalf of the 2<sup>nd</sup> Respondent, William Kasozi its Managing Partner in paragraph 4 of the 2<sup>nd</sup> Respondent’s Affidavit in Reply states;</p> <p>4. <em>“That prior and without prejudice to my more detailed depositions below, I wish to state the following fundamental and immutable facts:</em></p> <ul> <li><em>At no time since its founding in 2003 has AF Mpanga, Advocates acted for the Applicant. None of our Partners and Associates have ever been engaged or in any way executed any instructions for the Applicant.</em></li> <li><em>It follows from the fact that I have stated in (a) above, that we AF Mpanga , Advocates are not aware of any facts which may be prejudicial to the Applicant in conduct of his defence of HCCS No.493 of 2017 by virtue of his having been our client.</em></li> <li><em>All of the facts that we know about this case are as a result of being Advocate for the 3<sup>rd</sup> Respondent upon the instructions of the 4<sup>th</sup> Respondent who is the former’s Receiver and </em></li> <li><em>The Advocate –client relationship between AF Mpanga, Advocates and the 3<sup>rd</sup> and 4<sup>th</sup> Respondents in HCCS No. 493 of 2017 means that neither Mr. David F. K Mpanga, who has had direct day to day conduct of this matter, nor any other Partner or Associate is a competent and compellable witness for the Applicant on any of the matters that the Applicant and Azim Tharani assert in their respective affidavit</em>.”</li> </ul> <p>Turning to the 1<sup>st</sup> Respondent, her contention that the Applicant was not her client and that as such she was not privy to prejudicial facts relevant to the claims the subject of this suit is brought out in the Affidavit of Ernest Sembatya a Partner in the 1<sup>st</sup> Respondent.</p> <p>He deposes in paragraph 3 as follows;</p> <p><em>3……. “That the Applicant SR states that he has been advised by his lawyers Kampala Associated Advocates and that he believes that advice to be true that by virtue of MMAKS Advocates having been lawyers of the 3<sup>rd</sup> Respondent (Crane Bank) in which he is a shareholder and director, MMAKS Advocates were also his lawyers. This is patently wrong legal advice and SR’s belief is clearly mistaken…. SR is not and has never been a client of MMAKS Advocates.”</em></p> <p>He continues in paragraph 4 in these words;</p> <p><em>“SR states that the 1<sup>st</sup> Respondents were one of the Panel lawyers of Crane Bank and provided advice to Crane Bank’s Board trainings. This is conceded and the 1<sup>st</sup> Respondent shall add that it still continues to act for Crane Bank (albeit now in Receivership). The present suit against SR is one of the matters that the 1<sup>st</sup> Respondent has been instructed by Crane Bank to conduct.”</em></p> <p>Talking about the claim namely the five (5) monetary and one (1) property claims by Crane Bank against SR, Ernest Sembatya deposed in paragraph 6;</p> <p><em>“These facts had been fraudulently concealed by SR and his associates/co-conspirators prior to the issuance of PWC’s Forensic Audit Report. It cannot therefore be said and neither does SR aver in his Affidavit that he disclosed to the 1<sup>st</sup> Respondent any matters pertaining to this fraud. Accordingly the contention that the 1<sup>st</sup> Respondent is privy to prejudicial facts relevant to the extraction claims the subject of this suit and obtained other than from PWC Forensic Audit Report is untrue.”</em></p> <p>From the foregoing excerpts, the 1<sup>st</sup> and 2<sup>nd</sup> Respondent freely concede that they worked and represented the 3<sup>rd</sup> Respondent.  They also concede that all the time they have represented the 3<sup>rd</sup> Respondent, the Applicant has been a shareholder and director. Their contention however is that while they represented the 3<sup>rd</sup> Respondent which is a corporate person on its own, they did not represent the Applicant.</p> <p>The issue here now is to find out whether in the course of representing the 3<sup>rd</sup> Respondent, they also handled matters with the Applicant, which are going to arise in HCCS No. 493 of 2017.</p> <p>Part of the answer to the question lies in  the pleadings. Paragraph 8 of the Plaint reads;</p> <p><em>“The 1<sup>st</sup> Defendant founded the Plaintiff in 1995 and has been a Director and Vice Chairman of the Board of the Directors since its foundation.”</em></p> <p>The Plaint then goes on in paragraphs 8.1, 8.2, 8.3, 8.4 and 8.6 to allege how the Applicant fully controlled the 3<sup>rd</sup> Respondent through other bodies, concluding in paragraph 8.6 as follows;</p> <p>“<em>By these means, at the time of the BOU’s aforementioned intervention in October 2016, the 1<sup>st</sup> Defendant beneficially owned 100% of the Plaintiff’s issued shares; and has all times material to this suit held and exercised a similar level of ownership and control ( as defined in Section 24 of the FIA )of the Plaintiff.”</em></p> <p>The Plaint as drafted and filed by the 1<sup>st</sup> and 2<sup>nd</sup> Respondents emphasizes the Applicant’s control in paragraph 8.7 in these words;</p> <p><em>“Similarly the 1<sup>st</sup> Defendant has at all material times been the dominant executive force in the Plaintiff, exercising close day to day control over its affairs and activities.”</em></p> <p>On the Applicant’s hold on the 2<sup>nd</sup> Defendant the Plaint in paragraph 8.8 reads;</p> <p><em>“The 1<sup>st</sup> Defendant is also the beneficial owner of and/or controls, the 2<sup>nd</sup> Defendant. The 2<sup>nd</sup> Defendant is an associate of the 1<sup>st</sup> Defendant within the meaning of section 3 of the FIA.”</em></p> <p>The Plaint also describes the 1<sup>st</sup> Defendant in Paragraph 9 as;</p> <p><em>“The 1<sup>st</sup> Defendant’s combined legal and beneficial ownership of 100% of the Plaintiff until October 2016 contravened section 24 of the FIA.”</em></p> <p>The description given to the Applicant by the 1<sup>st</sup> and 2<sup>nd</sup> Respondent was of a person who “<strong>exercises directly or indirectly a controlling influence over the financial institution, its major policies or strategies singly or in concert with a related person or group of related person.”</strong></p> <p>In referring to the Applicant as a “<strong>dominant executive force in the Plaintiff, exercising close day to day control over its affairs and activities”</strong> the 1<sup>st</sup> and 2<sup>nd</sup> Respondent paint a picture of the Applicant as one <strong>“entitled and has power to determine the appointment of the majority</strong> <strong>of the directors of that financial institution.”</strong> In addition, <strong>“the power to appoint or remove without concurrence of any other person, all or the majority of such directors.”</strong></p> <p>The 1<sup>st</sup> and 2<sup>nd</sup> Respondents also seem to allege when they refer to section 24 of the Financial Institutions Act, that the Applicant through his powers and authority could <strong>“prevent any person from being appointed a director without his consent.”</strong></p> <p>In the Plaint they allege that the Applicant owned 100% shares. In my view, they suggest that the 3<sup>rd</sup> Respondent was the Applicant and vice versa.</p> <p>As it stands, one can safely say that without the Applicant’s say, the 1<sup>st</sup> and 2<sup>nd</sup> Respondents could never be retained and where they were retained, the Applicant could sack them without seeking any ones approval. The picture painted of the Applicant is that the instructions to the Advocate came from him more than the 3<sup>rd</sup> Respondent. Under such an arrangement, a fiduciary relationship would be created more between the 1<sup>st</sup> and 2<sup>nd</sup> Respondents and the Applicant than with the 3<sup>rd</sup> Respondent.</p> <p>Furthermore, in a situation such as that one confidential material   prejudicial to the Applicant are more likely to emerge.</p> <p>The 1<sup>st</sup> and 2<sup>nd</sup> Respondents have stated that at no time did the Applicant ever reveal his or the 3<sup>rd</sup> Respondent’s secrets. The legal position however is that the Applicant now no longer needs to prove that he revealed any secrets because they are presumed to flow from the Applicant to the Respondents during their interaction even where the Applicant did not intend to reveal them.</p> <p>The presumption is that there is a possibility of disclosure and although some authorities state that the Applicant should plead the secret information he fears his advocate will reveal, recent authorities have come up to hold that such pleadings would be contrary to the intended secrecy.</p> <p>On this Judge Weinfeld in <strong>TC Theatre Corporation VS Warner Brothers</strong> <strong>Pictures, SDNY 195</strong> wrote;</p> <p>“<em>To compel the client to show….. the actual confidential matters previously entrusted to the attorney and their possible value to the present client would tear aside the protective cloak drawn about the lawyer-client relationship. For the court to probe further and shift the confidences in fact revealed would require the disclosure of the very matters intended to be protected by the rule. It would defeat an important rule of secrecy- to encourage clients to fully and freely to make known to their attorneys all facts pertinent to their cause.”</em></p> <p>Because of the foregoing most courts are of the view that the presumption is irrebutable. Where the relationship has been substantial the presumption is stronger.</p> <p>In the instant case, the Applicant and the 1<sup>st</sup> and 2<sup>nd</sup> Respondents have had a relationship of legal and litigation interaction. In my view there exists a substantial relationship between them enough to have obtained confidential information from the Applicant to the 1<sup>st</sup> and 2<sup>nd</sup> Respondent. The advocates and their clients while chatting pass on information. Importantly too one cannot distinguish it between parties in the firm because of what is referred to as <strong>“Canteen factor.”</strong></p> <p>By <strong>canteen factor</strong> is meant ideal social chat between colleagues or with client that gives away vital information. So if the interaction is between one of the partners, it will be imputed to the others.</p> <p>The sum total is that in the several years that the Applicant and the 1<sup>st</sup> and 2<sup>nd</sup> Respondents have interacted, <strong><em>chat this</em> </strong>and<strong> <em>chat</em></strong> <strong><em>that</em></strong> about the 3<sup>rd</sup> Respondent and the Applicant certainly took place.</p> <p>In my view, a lot of information must have flowed from one to the other. A fiduciary relationship having existed as I have stated above, it would be unwise to allow the 1<sup>st</sup> and 2<sup>nd </sup>Respondent to represent any party against the Applicant in this case HCCS No. 493 of 2017.</p> <p>Conflict of interest may not exist between an Advocate and a party at the onset of the suit, but an amendment of the pleadings or filing of a Written Statement of Defence, or a Counterclaim or addition of a Third Party may create a conflict of interest that was not previously expected.</p> <p>This realignment of the parties seems to have arisen in the instant case when the Applicant filed a Counterclaim.</p> <p>Mr. Mpanga negotiated and drafted the implementation agreement that detailed a settlement of issues between the Applicant and the Plaintiff. The implementation agreement was to operationalise and ensure the smooth flow of the Confidential Settlement and Release Agreement (CSRA). The CSRA contained clauses intended to sort out the differences between the Applicant and the Plaintiffs.</p> <p>The CSRA however soon developed problems and the parties seem to have abandoned it. In his Defence and Counterclaim the Applicant alleged that the Respondents had breached the Implementation Agreement and he had as a result suffered damage. In the list of witnesses he included David Mpanga.</p> <p>The moment Mr. David Mpanga participated in the negotiations and even went as far as drafting the implementation agreement, he ought to have known that should the documents’ implementation and implications come into issue, he and his associates in making it would opt out of the realm of counsel into that of witness. Mr. Mpanga knew or ought to have known as early as 4<sup>th</sup> April 2017 that should questions concerning the agreement and its implementation arise, he would have a testimony concerning the disputed contents of the Implementation Agreement. </p> <p>The reason for that position is because he participated in its negotiations and drafting. His status as a potential witness has been known since the dispute arose.  This being the position, any continued appearance in a matter where it is now obvious that he and his firm’s staff are going to be required as witnesses for the Defendant would constitute a conflict of interest and deprive the Defendant of a chance to ably defend himself. </p> <p>Further more in acting as counsel, there was a high risk of the advocate leaving out what he considered was injurious to his client’s case or even his own firm;  <strong>In Commonwealth v Terry L. Palterson 432 MASS 767</strong>, the Supreme Court while considering Regulation 8. In <strong>Uganda Development Bank versus Ms Kasirye Byaruhanga and Company</strong> <strong>Advocates - Civil Appeal 35 of 1994</strong> had this to say:</p> <p><em>“It is meant to be an act and protection to counsel.  It is intended also as a safe guard for the court.  If an advocate is to give evidence, then as any other witness, he should stand cross examination. If during the process, there is any lapse of honesty, accuracy, or credibility, the court would have before it an advocate appearing in the case, who was shown to be unreliable.  He is an officer of the Court.  He would not only spoil his general character, but it would make it difficult for him to represent his client, since the Court might not be able to trust his advocacy.</em></p> <p><em>It is therefore much better that the two roles be separated. Yet, it is not that there is an offence under Regulation 8.  Regulation 8 does not provide that an affidavit becomes defective or that a proceeding must be struck out.  The remedy is anodyne - simply cease to appear and impliedly, offer other evidence if necessary.  The fundamental principle in Regulation 8 is that a way should be sought of presenting the case or application without overlapping roles of Counsel.”</em></p> <p>In the counter claim, the Applicant alleges breach of contract in which he contends that Clause 12 which required a return of US $ 8 million on account of breach of contract by the Respondents has not been fulfilled. He also contends that he is entitled to release of securities namely: LFR 130 Folio 18 Plot M418 Nakawa Industrial Area and LRV 1239 Folio 2 Plot 7 Parliament Avenue Kampala as provided for in Clause 4.1 of the Confidential Settlement and Release Agreement (CSRA) and Clause 2 of the Assignment and Assumption Deed.</p> <p>Evidence is abundant that Mr. Mpanga and his firm negotiated and drafted the resultant agreement. Where provisions of the Agreement come into question, it is good thinking that the author and subsequently those who undertook to implement it would be or are likely witnesses.</p> <p>Mr. Kanyerezi of the 1<sup>st</sup> Respondent submitted that the 1<sup>st</sup> and 2<sup>nd</sup> Respondents’ lawyers cannot be called as witnesses. While that is normally the position, there are exceptions.  The exception lies in section 125(b) wherein the advocate would disclose any fact observed by any advocate in the course of his or her employment as such, showing that any crime or fraud has been committed since the commencement of his or her employment.</p> <p>In this suit, a big portion of it talks of nothing but fraud and illegal extraction of money and transfer of property. In my view, these allegations place the matter in the arena of exceptions.</p> <p>The sum total is that the 1<sup>st</sup> and 2<sup>nd</sup> Respondents have found themselves in an adverse position to a former client. They are rightly presumed to possess confidential information learnt in earlier representation of the Applicant which would be advantageous to their present client. In this situation the Applicant does not have to show much as the rule laid down in P.C<strong>. Theatre Corporation vs Warner Brothers SDNY 195 clearly </strong>states;</p> <p>“<em>The former client need show no more than the matters embraced within the pending suit wherein his former attorney appears on behalf of his adversary are substantially related to matters or cause of action wherein the attorney previously represented him- only in this manner can the lawyers duty of absolute fidelity be enforced in the spirit relating to political communication maintained.”</em></p> <p>The understanding here is that where the matter in contention touches those that the advocate used to handle on behalf of the Applicant then the irrefutability of the presumption of imputed knowledge of confidences is enhanced and the Advocate must be disqualified.</p> <p>I find that to be the position in this case and on those grounds the 1<sup>st</sup> and 2<sup>nd</sup> Respondents are disqualified from participating in the suit HCCS No.493 as advocates and or Counsel.</p> <p>The Application is thus allowed, costs shall abide the final decision of the suit. </p> <p><strong>Dated at Kampala this 21 day of December 2017.</strong></p> <p> </p> <p> </p> <p><strong>HON. JUSTICE DAVID WANGUTUSI</strong></p> <p><strong>JUDGE</strong></p> <p> </p> <p><strong><u>21/12/2017:</u></strong></p> <p><strong><u>PRESENT:</u></strong></p> <ul> <li>Peter Kabatsi}</li> <li>Joseph Matsiko}</li> <li>Elly Karuhanga}</li> <li>John Jet Tumwebaze} for the Applicants</li> <li>Moses Adriko}</li> <li>Bwogi Kalibala}for 1<sup>st </sup>Respondent</li> <li>Timothy Lugayizi }</li> <li>Mercy Odu} for 2<sup>nd</sup> Respondent</li> </ul> <p>In Court          -     Dr. Sudhir Ruparellia representing both Applicants</p> <ul> <li>Titus Mulindwa}</li> <li>Ms Lorna Gariyo}representing Bank of Uganda</li> <li>Rose Emeru Court Clerk</li> </ul> <p><strong>Kabatsi:          </strong>Your Worship this is for ruling.</p> <p><strong>Court:             </strong>Ruling delivered in open court.</p> <p><strong>Adriko:           </strong>Your Worship we have instructions to appeal the ruling and request that court expedites the extraction and certification of records.</p> <p><strong>Court:             </strong>The certified record shall be prepared and parties notified accordingly.</p> <p> </p> <p><strong>…………………..</strong></p> <p><strong>LILLIAN BUCYANA</strong></p> <p><strong>A/REGISTRAR</strong></p> <p><strong>21/12/2017</strong></p> </div></div></div><div class="view view-download-button view-id-download_button view-display-id-entity_view_1 view-dom-id-6625d4702b07bd92552b9424b5d8181d"> <div class="view-content"> <div class="views-row views-row-1 views-row-odd views-row-first views-row-last"> <div class="views-field views-field-field-download"> <div class="field-content"><a href="https://old.ulii.org/system/files/judgment/commercial-court-uganda/2017/153/commercial-court-uganda-2017-153.doc" target="_blank"><img src="https://africanlii.org/sites/default/files/Download-Button-red.png" width="180"> </a></div> </div> <div class="views-field views-field-field-download-1"> <div class="field-content"></div> </div> </div> </div> </div> Thu, 21 Dec 2017 10:08:01 +0000 jane mugala 28179 at https://old.ulii.org