THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)
MISC. APPLICATION NO. 506 OF 2014
BEN SEKABIRA:::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANT
VERSUS
ROBERT BITWIRE::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT
BEFORE THE HON. MR. JUSTICE HENRY PETER ADONYO
RULING
1. Background:
The Applicant by a notice of motion under order 46Rules 1(b) and 8
of the civil procedure rules and Section 98 of the civil procedure Act
made this application to this Honourable Court for orders that the
this court review by setting aside its ruling making the applicant
liable for payment of Cooperative Bank’s debt in MA of 559 of 2013,
1: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
Robert Bitwire v Cooperative Bank and Another and that the costs
of this application be provided for.
The Application is made on the grounds which are further detailed I
n the application as follows;
1. The respondent filed Civil Suit No. 56 of 2004 against the
Cooperative bank Limited (In Liquidation) in which a consent
was recorded by the parties thereto pursuant to which the
bank would pay monies to him (Respondent),
2. The respondent subsequently filed Miscellaneous Application
No.559 of 2013 in which the court delivered its ruling on the
3rd of December, 2013 holding the applicant liable to pay the
debt of Cooperative bank Limited, on the basis that as
liquidator he is responsible for the affairs of the Cooperative
Bank Limited,
3. The finding that the Applicant is liable for payment of the
amounts due under the consent is an error on the face of the
record as it is trite under company law, that neither a
shareholder nor a director and or officer of a limited liability
company can be liable for the debts of a company and further
2: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
under the law of agency, an agent cannot be liable for the
debts of a disclosed principal,
4. The Applicant is aggrieved by the ruling of the court which in
effect changes the legal regime of the law of agency and
company law,
5. It is just and equitable and in the interests of justice that the
court reviews its ruling.
The grounds of this application are supported by an affidavit sworn
by the said Ben Sekabira dated 18th June, 2014 containing several
annextures and these are on record.
2. Applicant’s case:
The case of the Applicant is that he is an employee of Bank of
Uganda, which Bank of Uganda pursuant to Section 32 of the
Financial Institutions Statute 1993 (now Cap 54 of the Laws of
Uganda) took over the management and control of the Cooperative
Bank Ltd and thereafter placed it under liquidation. That by the
said law, Bank of Uganda is the statutory liquidator of the
Cooperative Bank Ltd and the applicant being merely an employee
of Bank of Uganda was engaged in the liquidation process of the
3: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
Cooperative Bank Ltd, not as liquidator, but as Bank of Uganda’s
employee engaged in the liquidation process.
That the respondent filed Civil Suit No. 56 of 2004 Robert
Bitwire v Cooperative Bank Ltd (in Liquidation), seeking for
various orders against the Cooperative Bank Ltd (in Liquidation).
The said suit arose out of a banker/customer relationship between
the plaintiff’s late father, one David Bitwire and the Cooperative
Bank Ltd. That in the said suit, the applicant was never a party to
the suit.
That a consent judgment was recorded therein pursuant to which
the Bank would pay the Respondent a sum of Ug Shs 27.745,
000/= (Uganda Shillings Twenty Seven Million only), interest and
costs. The said monies have to date not been paid by the
Cooperative Bank Ltd (In Liquidation) as its liquidation is still
ongoing.
The respondent then filed Misc. Application No. 559 of 2013
Robert Bitwire v Coop Bank Ltd (In Liquidation) & Ben Sekabira
seeking for several orders which included the following;
4: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
i)
The Cooperative Bank in liquidation and the liquidator
Benedicto Sekabira be summoned to court to answer
charges of contempt of court for defying the orders of Hon.
Lady Justice Arach Amoko in Misc. Application No. 304 of
2009 arising from Civil Appeal No. 4 of 2009 and the
consent decree dated the 3rd September 2007;
ii)
An order of a permanent injunction doth issue to restrain
the liquidator from stopping all payments of all monies
owed to the applicant;
iii)
An order that the delay to effect payment of UG shs.
101,023,500/= (Uganda shillings One Hundred One Million
Twenty Three Thousand Three Hundred only) to the
applicant is an abuse of Court process and an infringement
of the applicant’s constitutional right to property in the
above mentioned judgment and rulings;
iv)
An order that matters relating to the consent judgment in
issue res judicata and all subordinate Courts are functus
officio to revisit it as a decision had already been taken in
the Constitution Petition No. 3 of 2008 arising from HCCS
No. 719 of 1997
5: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
v)
A declaration be made that the applicants fundamental
rights and freedoms were contravened and grossly violated
by the respondents;
The court held its ruling making the following orders;
1. Order the Respondents and or its agents or successors in title
to appear in court to answer charges of contempt of court for
defying the orders of Hon. Lady Justice Arach Amoko in Misc.
Application No. 304 of 2009 arising from Civil Appeal No. 4 of
2009 and the consent decree dated the 3rd September 2007;
2. Order that the applicant be forthwith paid the pending
decretal sum plus 15% interest from the time of judgment by
the respondents plus the taxed costs;
3. Order of a permanent injunction to restrain the liquidator from
stopping all or any payments of monies to the applicant
arising for 1 above;
4. Declare that the applicant’s fundamental right to property had
been contravened and grossly violated by the respondents for
having failed to comply with the court orders as in 1 above
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5. Declare that the applicant is entitled to compensation for the
violation and contravention of his fundamental rights to
property for the period in question and order compensation
equivalent of 2% of the decretal sum;
6. An order that the applicant be paid costs occasioned by this
application”
The applicant argues that this application falls within the scope of
Order 46 rule 1 based on the following;
(i)
The applicant is an aggrieved person as he is affected in his
personal capacity by the decision of the Court finding him
liable for payment of the debts of the Cooperative bank
Limited (In Liquidation);
(ii)
The finding that the applicant as agent of the Statutory
Liquidator, he is liable for the debts of Cooperative Bank Ltd
(In Liquidation) is an error on the face of record. As earlier
submitted this is an error of law.
Therefore, the applicant is aggrieved by the orders of this court
which he argues makes him an agent of the Cooperative Bank (In
7: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
Liquidation) and which required him to personally pay the
Cooperative Bank’s debt and sought for a review on the basis that it
was an error of law on the face of the record.
3. The Respondent’s case:
The Respondent opposes this application and submits that the
firstly the law relating to grant of review is where a person who is
aggrieved by a judgment or order of a court which he has not
appealed against is that such a person can apply to have such
order or judgment reviewed by the Court that passed it on proof or
discovery of new and material evidence which had not been
available earlier to court after due diligence of the party before the
judgment or Order was made and such a person ought to be legally
aggrieved as was held in the case of John Nagenda & 53 others v
Coffee Marketing Board HCC 80 of 1996 where Byamugisha J
held that;
“A party applying for review must feel aggrieved that the
decision pronounced against him by court has wrongfully
deprived him something or wrongfully affected his title to
something”.
8: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
Secondly, the respondent added that Order 46 rule 1 of the Civil
Procedure Rules gives the ground rule upon which a review may be
sought by an aggrieved person and they are;
(a) Discovery of new and important evidence which was not within
his knowledge and could, therefore, not be produced by him,
or
(b) Some mistake or error apparent on the face of the record, or
(c) Any other sufficient reasons.
From the provisions of this rule, it is clear that a party who is
aggrieved may apply for review of judgment only where decree or
order was made against him. Good examples of such situations are
found in the case of Mohamed Allibhai v W. E Bukenya Mukasa &
Departed Asians Property Custodian Board Supreme Court Civil
Appeal NO.56 of 1995 and Mbogoh v Muthoni & Another [2006]
1 E.A.172 where the general observation was that the applicant
must satisfy court that the decision is clearly wrong due to
misdirection or because the court acted on the matters on which it
should not have acted or it has failed to take into consideration
9: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
matters which it should have taken into consideration and in doing
so arrived at a wrong conclusion.
The
instant
application
indicates
that
the
respondent
filed
Miscellaneous Application No. 559 of 2013 for Orders that;
a) The Cooperative Bank in Liquidation and the liquidator
Benedicto Sekabira be summoned to Court to answer
contempt of Court for defying Orders of Hon. Justice Arach in
Civil Appeal No. 04 of 2009 and the consent judgment dated
the 3rd day of September 2007,
b) An order for permanent injunction doth issue to restrain the
liquidator from stopping all payments of all the monies owed
to the applicant.
c) An
order
that
the
delay
to
effect
payment
of
Ugx.
101,023,500/= (One Hundred and One Million Twenty Three
Thousand Five Hundred shillings only) to the applicant is an
abuse of Court process and an infringement of the applicant’s
constitutional right to property in the above mentioned
judgment.
10: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
d) An order that the matters relating the matters relating to the
consent judgment in issue are res judicata and all subordinate
courts are functus officio to revisit it as a decision had already
been taken in the constitutional court petition NO.o3 of 2008
arising from HCCS No. 719 of 1997.
e) A declaration be made that the applicants fundamental rights
and freedoms were contravened and grossly violated by the
respondents.
f) A declaration that the applicant is entitled to compensation for
the violation and contravention of his fundamental rights and
freedoms under the fore mentioned provisions and that they
are entitled to own property and carry on a lawful occupation,
trade and or business.
g) An
order
that
the
applicant
be
forthwith
paid
Ugx.
101,023,500/= (One Hundred and One Million Twenty Three
Thousand Five Hundred Shillings only) the decretal sum plus
interest from the time of judgment by the respondent short of
which the liquidator Mr. Sekabira be committed to Civil
Prison.
11: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
h) An order that the applicant be paid exemplary/aggravated
damages for contempt of court
i) An order that the applicant be paid costs occasioned to this
application.
Subsequently, the court on the 2nd December, 2013 made the
following orders;
(a) The respondents and or its agents or successors in title to
appear in court to answer charges of contempt of court for
defying the orders of Hon. Lady Justice Arach Amoko in Misc.
Application No. 304 of 2009 arising Civil Appeal No. 4 of 2009
and the consent decree dated the 3rd of September 2007.
(b) An order that the applicant be forthwith paid the pending
decretal sum plus 15% interest from the time of judgment by
the respondents plus taxed costs.
(c) An order of a permanent injunction to restrain the liquidator
from stopping all or any payments of monies to the applicant
arising from 1 above.
(d) A declaration that the applicant’s fundamental rights to
property had been contravened and grossly violated by the
12: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
respondents for having failed to comply with the Court orders
as in 1 above.
(e) A declaration that the applicant is entitled to compensation for
the violation and contravention of his fundamental rights to
property for the period in question, and order compensation
equivalent of 2% of decretal sum.
(f) An order that the applicant be paid costs occasioned by this
application.
Arising from that ruling, execution process commenced which
eventually led to the filing of the instant application by Ben
Sekabira in his personal capacity which the respondent opposes.
4. Issues:
In arguing this application, the applicant framed the following
issues for the settlement of his grievances;
(i)
Whether an error of law can be a subject of a review
application;
(ii)
Whether a none party to a contract/suit can be liable to pay
the debts arising out of the contract/judgment debt
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(iii)
Whether the applicant is an agent of the Cooperative Bank
and in any event whether he is protected in the performance
of his duties
5. Whether an error of law can be a subject of a review
application:
The applicant submitted that there was an error on the face of
record in that the court made orders making him an agent of the
Cooperative Bank Ltd (In Liquidation) with orders that required him
to pay the judgment debt arising out of a suit to which he was not
party as the said suit arose out of a bank customer relationship to
which he was not a party. He relied on the decision in the case of
Kanyabwera v Tumwebaze [2005] 2 EA at page 86 where the
Supreme Court of Uganda while quoting AIR commentaries: The
Code of Civil Procedure by Manoher and Chitaley, Volume 5,
1998 stated that,
“…an error may be a ground for review; it must be one
apparent on the face of the record, i.e. an evident error which
does
not
require
any
extraneous
matter
to
show
its
14: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
incorrectness. It must be an error so manifest and clear, that
no court would permit such an error to remain on the record.
The “error” may be one fact, but it is not limited to matters of
fact and includes error of law”
The applicant contends therefore that since he was not a party nor
agent of the Cooperative Bank (In Liquidation) and where the bank
was sued by its customer, then that clearly was an error on the
face of the record which this Honourable Court should vacate on
the basis of the Kanyabwera case (cited above) .
The respondent on the other hand had submitted otherwise. He
stated that this court should find that the instant applicant was an
agent of the bank liquidation since he was acting on behalf of the
official liquidator, that is Bank of Uganda and hence cannot deny
the liabilities in his personal capacity as he is not the aggrieved
party with no interests of the applicant affected by the orders of
court. In his submission, the respondent argued that Order 46 rule
1 of the Civil Procedure Rules and the cases of Mohammed Allibhai
v W.E Bukenya Mukasa & Departed Asian Property Custodian
Board SCCA No. 56 of 1995 and Mboga v Muthoni & Another
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[2006] 1 EA 172 do not apply in the instant case of the applicant
since he was not personally a party in the suit. That what is of note
is that amount money totaling to Ug. Shs.
101,023,500/= (One
Hundred One Million Twenty Three Thousand Five Hundred
Shillings only) as the decretal sum plus interest which was to be
paid to the respondent was to be paid by the applicant for and on
behalf of the official liquidator for the Cooperative Bank (U) Ltd (In
Liquidation) with no reason being advanced as to why the applicant
was holding onto those payments yet he ought to have done so with
his duty only being to comply with the court orders and pay the
monies due and payable which are not from his personal account
but on the account of the bank in liquidation.
I agree with this submission entirely. It is evident to me that the
applicant is an agent of the liquidator which is in control of the 1st
respondent since the 1st respondent was put into liquidation. This
relationship makes it incumbent on the applicant as agent of the
principal to comply with court orders. The applicant is therefore
well aware of the position of the Cooperative Bank (U) Ltd (In
Liquidation) and since he is handling matters concerning the said
16: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
bank on behalf of the official liquidator, he is clearly liable in that it
is his duty to ensure that the court orders are implemented. In this
regards, I find that there is no error of law that occurred to warrant
a review since there is a clear court order directing the liquidator to
pay to the respondent a sum of money amounting to Ugx.
101,023,500/=
(One
Hundred
One
Million
Twenty
Three
Thousand Five Hundred Shillings only) as the decretal sum plus
interest and costs and this said money is from the account of the
bank which is in liquidation and not from the applicant’s personal
account.
It is clear to me from the applicant’s affidavit in reply in Misc.
Application No. 559 of 2013 that he was a liquidator’s agent, for the
Cooperative Bank (U) Ltd (In Liquidation) and hence assumed
managerial roles in that capacity. Further,
the applicant even
admits to have deducted and paid Ug. Shs. 55,444,860 (Fifty Five
Million Four Hundred and Forty Thousand Eight Hundred and
Sixty Shillings only) to offset the indebtedness of the respondent,
this action in itself shows that the applicant assumed the duties
and obligations as a liquidator and he cannot be seen to perform
17: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
some of the duties and ignore the rest. By his very conduct he
estopped to state the contrary.
In making this finding, while I agree that with the fact that an agent
only carries out the functions of his principle who should be held
liable for any acts or omission, it is evident that where an agent is
empowered y its principal to carry out certain functions then an
agent is obliged to act accordingly unless evidence is shown to the
contrary. In the instant matter, the finding of the court was against
the actions of the principal through its agent who failed to
implement the court order and this was not an error of law since it
was the duty of the agent to implement the court order. He cannot
hide on the back of the principal yet he is the face of the principal.
In the instant case, it is not disputed that Mr. Sekabira is an
employee of Bank of Uganda the Statutory Liquidator of Cooperative
Bank Ltd. It is also not disputed that his involvement in the affairs
of Cooperative Bank Ltd was by virtue of his employment liability
imposed on him are to ensure that the debts of Cooperative Bank
Ltd (In Liquidation) and when he fails to do so then he becomes
personally liable for disobeying court orders.
18: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
I therefore find no error on the face of the record since the applicant
was clearly the agent of the liquidator and he was ordered to carry
out and comply with court orders which he, as the agent of the
principal failed to personally comply with.
6. Whether a none party to a contract/suit can be liable for
payment of a debt and or judgment debt:
In its ruling, the Court ordered that;
“I order that the Applicant be paid the decretal sums plus 15%
interest from the time of judgment by the Respondents plus the
taxed costs”
The effect of this Order was that the Cooperative Bank Ltd (In
Liquidation) through its liquidator was to pay the debt in question. I
have looked at the financial institutions Statute, 1993 while the
said Act appears to be silent on issues of employment rights from
the employer to the Central Bank that may take possession of a
financial institution, the said Act must be read in consonance with
and not in isolation of employment statutes. The Applicant’s
appears to only narrow his role of managing finances only without
19: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
the obligation of ensuring that all liabilities of the bank that the
central bank has taken over are concluded. However, my reading
even of Section 32 of the Financial Institutions Act seems to me to
vest upon the Central Bank powers of management and control of
the affairs of the financial Institution it has taken over which in my
opinion includes matters concerning employment with subsection 2
of the said section clearly providing that the central bank may take
over operation of a financial institution and conduct matters of that
financial institution in its name to which the financial institution
may be a party making it clearly liable for the acts or omissions of
the financial institution it has taken over. The court’s decision in
Greenland Bank Ltd V Westmont Lan (Asia) Ltd HCCS NO. 309
of
1999
(unreported)
is
therefore
applicable,
the
plaintiff’s
argument is unsustainable.
A liquidator is therefore liable to meet the debts of the company in
liquidation from the assets of the liquidated company and for the
case of the central bank , it is required as the controller of and
licensor of banks in the country to ensure that the banks have
minimal deposits to protect not only depositors but even their
20: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
employees and once such banks do not do so then, as the regulator,
it assumes all liabilities.
There was therefore no error by the court in its holding that the
applicant liable for payment of the debt of the Cooperative Bank Ltd
(in Liquidation).
From the above it is very clear that the liquidator assumed the role
of management and control of Cooperative Bank (U) Ltd (In
Liquidation)
and
101,023,500/=
that
(One
role
include
Hundred
One
payment
million
of
Ug.
Twenty
Shs.
Three
Thousand Five Hundred shillings only) as the decretal sum plus
interest to be paid to the respondent as the applicant is running the
affairs of Cooperative Bank (U) Ltd (In Liquidation) for and on behalf
of the statutory liquidator. The applicant’s role is not to pay the
debts of Cooperative bank (U) Ltd (in Liquidation) but to enforce
orders that the respondent obtained from this Honorable Court
which the applicant has failed to enforce as an agent of the
liquidator for and on behalf of Cooperative bank (U) Ltd (in
Liquidation). The issue was in the ruling of this court in Misc.
Application No. 559 of 2013
21: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014
Having found so above ,the other issues collapse as it is evident
from the court record that specific orders were made by court which
ought to be complied with which the applicant has not honored . It
should be recalled that Court Order are not made in vain and must
be complied with I find that this application for for review is only
calculated to continue frustrate the very clear orders of this court
which I find not to be in the interests of justice.
7. Orders:
I find no merits in this application as I find the same to be an abuse
of court process. I accordingly dismiss it with costs.
Henry Peter Adonyo
Judge
22nd December, 2014
22: Ruling to errors stated to be on the face of record: By Hon. Henry peter Adonyo: December, 2014