Commercial Law Index

This was an application for an order that a writ of
mandamus doth issue ordering the Treasury
Officer of Accounts to pay the applicants.
When the application came up for hearing, learned
counsel for the respondent, raised an objection.
She argued that under rule 5 (1) of S. I. 11/2007,
an application for judicial review should be made in
a period of three months from the time when the
decision was made. According to her, the
impugned decision was made many years ago, so
the application is out of time.

The matter dealt with an application for foreclosure and sale of mortgaged property as a result of failure to make loan repayments by defendant.

The main issue was whether the plaintiff could exercise its right to foreclose the property. The court cited s 8(1) of the Mortgage Act that allows one to redeem the property at any time of breach and or to get a court order effecting the redemption. Reference to How v Vigures was also made regarding the triggers for foreclosure proceedings as being when due payment has not been made on date for redemption (default) or when there is a breach of any terms of the mortgage.

The court established that as the defendant had not complied with the terms of the credit facility agreement by not paying the agreed monthly instalments for a period of two years despite repeated demands, the exercise of the right to foreclosure was held to be fit and proper.

The court therefore concluded that the plaintiff could exercise the right to foreclose and accordingly allowed the application.

This was an appeal from decision of the Court of Appeal on grounds that;

The Justices of Appeal erred in law and fact when they granted orders for
cancellation of the fifth appellant’s title to the suit property which was neither
sought nor pleaded by the respondents, thereby occasioning miscarriage of
justice.

The plaintiff supplier sued the defendant – its Local Technical Representative (LTR) in accordance with the National Drug Authority Act for the distribution of pharmaceutical products – for breach of contract. The defendant failed to pay the plaintiff for the assorted products it supplied. The plaintiff consequently claimed for loss of income, damages, interest and costs of suit. The defendant lodged a counter-claim alleging that the plaintiff/first counter-defendant had breached the memorandum of understanding concluded between the parties and had, through various means, attempted to cripple the defendant’s/counter-claimant’s enterprise. It alleged further, as the basis of its challenge to the legality of the arrangement between the first and second counter-defendants, that the just-mentioned parties had colluded in this endeavour so as allow the latter to become the new LTR. 

The defendants/counter-claimants successfully raised the procedural bar of res judicata – which prohibits judicially-decided matters from being heard afresh a second time – concerning the plaintiff’s claim, given that the matter of their indebtedness thereto had been resolved in the settlement of antecedent winding-up proceedings. To what extent ought the defendant’s/counter-claimant’s challenge have been raised as part of the previous lawsuit? Suggesting that res judicata was applicable to both parties’ claims, the court nevertheless considered the counter-claimant’s’ case in respect of the first and second counter-defendants and found no measure of illegality or bad faith on the evidence. The counter-claimant was additionally time-barred from seeking review of the National Drug Authority’s decision over the LTR change. 

The plaintiff’s suit and defendants’ counter-claims were accordingly dismissed with costs.
 

The court made a ruling on a preliminary objection raised against a suit filed by the respondent to review a consent judgment executed between the applicants and the Uganda Revenue Authority. The applicants submitted that the respondent lacked locus standi to make the application according to Order 46 rule 1 of the Civil Procedure Rules.

The court went into some detail and examined who a ‘person aggrieved’ is. It was held that the expression referred to a person who suffered a legal grievance. However, the court in its interpretation followed English law and held that the expression cannot be restricted to definite categories with sharp definitive lines (restrictive interpretation). Consequently, the court held that the expression would also cover public interest litigation as embodied in the Ugandan Constitution, to include a member of the public who brings an action to ensure that the law is enforced or upheld.

The court noted that the objection was procedural and that the respondent’s application for review was procedurally incorrect since it was framed as a public interest litigation application. The court therefore determined that the main issue before it was whether a wrong procedure invalidates the proceedings. The court relied on article 126(2)(e) of the constitution in making a holding that the court had jurisdiction to determine the matter without undue regard to the technicalities.

Accordingly, the court dismissed the application with costs.

The court considered an application where the applicant argued that the Court of Appeal, in an earlier judgment in the same case, erroneously misconstrued s 272 of the Succession Act. The court held that an appeal could be re-heard if the matter is of great public importance. The court confirmed that great public importance and general importance depends on the facts and circumstances and may vary from case-to-case. 

The guidelines for what would constitute public or general importance in certain cases are statements of law which affect 

(1) a considerable number of people in their commercial practice; 
(2) enjoyment of fundamental rights; 
(3) the proper functioning of public institutions; 
(4) the court’s scope to dispense redress; or (4) the discharge of duties of public officers. 

If an appeal meets one of the criteria constituting public or general importance, the court will be permitted to re-hear an appeal on its merits. The court in this case held that this case raised a question of law of general importance and could be reheard.
 

The appellant sought a declaration that it was the lawful owner of a piece of land in dispute, and that the respondent has been a trespasser. The respondent filed seeking to strike out the appellant’s suit for being time-barred. The trial judge allowed the application. The appellant appealed to the Court of Appeal against the dismissal. The Court of Appeal found no merit in the appeal and dismissed the same, hence this appeal.

The issue for determination for the appeal was whether the appellant could appeal to the Court of Appeal against the order of the trial court without the leave of court.

The court applied the principle that if the decision conclusively determines the rights of the parties, then it would be a decree; otherwise it would be an order. If for instance portions of a plaint are struck out as being frivolous, or if a suit is stayed, such a decision would be an order, whereas if a suit is dismissed with costs, that would be a decree. A decree is appealable as of right, whereas under the Civil Procedure Rules most orders are only appealable with leave of the court.

In applying the principle, the court found that the High Court decision disposed of the suit conclusively and the decision was therefore a decree within the meaning of s 2(c) of the Civil Procedure Act, even though it was worded as an order. It held that the appellant therefore had a right of appeal as against the decision and did not need to apply for leave to appeal to the court of appeal.

The appeal succeeded.

The court considered a review application arising from an application surrounding a facilitation agreement between the parties. 

A receiver was appointed and it was alleged that there was a conflict of interest. The first respondent was appointed, but the directors refused to hand over the management of the company. An order was sought, to declare the duties and functions of the receiver. 

The court held that it was the receiver’s duty to make returns and accounts, to uphold his fiduciary duty to the company and investigate the causes of the company’s failure.  Therefore, the receiver was expected to take charge of the business. 

It was found that there was nothing prohibiting the appointment of a receiver from the same firm representing the creditor. The applicant argued that it was an error on the face of it to appoint the advocate of the second respondent as the Receiver as it was a conflict of interest.  

The court found that an error on the face of it must be an error on a substantial point of law staring one in the face, leaving one with no other options. Whereas, an error which has to be established by a process of reasoning, cannot be said to be an error on the face of the record. 

The court found that the applicant was asking the court to review something that was never an issue in the original application. 

The court held that to bring an application for review on a prayer which did not form part of the original application is improper and would cause an injustice. 

Application dismissed. 
 

The appellant appealed against a taxing officer’s order awarding the second respondent costs of 1, 900, 739/= contending that the instruction fee awarded was based on an incorrect value of the suit. The respondents’ counsel raised preliminary objections inter alia that couldn’t be permitted to raise a new point of law that was not argued in the lower court. 

The underlying dispute between the parties related to an entitlement of the appellants to a proper statement of account by the respondents. The question at issue was whether the order of the high court was appealable and if so, whether the appellants had made out a case for a two-state judicially controlled procedure, dealing first with the adequacy and second with the accuracy of the accounts.

In making a decision the court was guided by the principle that a judgment or order has three attributes, first, the decision made must be final in effect and not susceptible of alteration by the court of first instance; second, it must be definite of the rights of the parties; and third, it must have the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings. The principles however are neither exhaustive nor cast in stone. An order may not possess all three attributes, but will nonetheless be appealable if it has final jurisdictional effect.

The court held that the order of the court a quo had effectively precluded the appellants from contesting the adequacy of the accounts, an issue that had been a bone of contention between the parties thus making the decision of the court a quo appealable. In the result, the appeal succeeded. 

South African Airways (SAA) received government funding on four occasions (since 2007). The applicant contended that SAA’s operation was non-commercial, anti-competitive and prejudicial to other air transport services. The decisions to issue a R5.6 billion guarantee to SAA on 26 September 2012, and to extend the guarantee’s period, were the subject of the review. Applicant argued that the decision was unlawful and ultra vires of the Public Finance Management Act; violated the separation of powers; violated sections 7(2), 9, and 22 of the Constitution; irrational; procedurally unfair; and in violation of Comair’s legitimate expectations.

The court held that pronouncing on the legality of the first decision was moot as there would be no utility in the order or in pronouncing on the issues related to it. It was separate from the extended guarantee. Furthermore, the court found that it did not have jurisdiction to decide issues based on Competition Law. The court also held that it was not in its jurisdiction to decide on matters of policy, to which the decision to issue the guarantee amounted.

Due to the dynamic nature of the market, need for flexibility, and to intervene in the dire circumstances of SAA as a strategic asset, the court held that there was no basis for forming a legitimate expectation by the applicant. The court also held that the decision was rational as it considered all relevant factors and involved multi-level input from different governmental departments.

The application was dismissed with no order as to costs.

In this case, monies held by the appellant belonging to the Nigeria Customs Service were traced. An order nisi was served on the appellant as the fifth garnishee. This case illustrates how the garnishee proceedings do not avail the garnishee to attack a judgment that the judgment creditor and debtor have accepted.

The court considered whether the appellant should be granted leave to raise fresh issues in additional grounds of appeal. The court explained that garnishee proceedings were not a process employed by the garnishee to fight a proxy war against the judgment creditor on behalf of the judgment debtor. The court held that a decision of a court of law not appealed against is to be accepted by the parties and it remains binding on them other parties, including garnishees.

The court held that the appellant had prayed for leave to raise issues that this court did not have the benefit of the views of the court below. The court considered order 2 rule 12 of the Rules of the Court which provide that the court may exercise its discretion to accept fresh evidence. The court held that there was a mischievous purpose attached to the appellant’s application and no power in law inheres in the garnishee to fight the cause of a judgment debtor.

The court concluded that the cause of action available to the garnishee was quite limited and therefore the application in this case was an abuse of the court process. 

The court dismissed the application with costs. 
 

The respondents/plaintiffs had successfully approached a court seeking a declaration of rights asserting their bona fide title in respect of certain immoveable property. They further sought a permanent injunction against the appellant/defendant, who alleged a stronger claim to the property, barring its interference therewith. 

The appellant appealed the factual findings of the trial court, which the Court of Appeal found were substantiated by the evidence on record. Absent any evidence of perversity in its factual conclusions, its findings were deemed reliable on appeal.

The respondents adduced evidence which met the criteria – from the instructive methodology of the Supreme Court – for the proof of declaration of title to land. They showed that the property had been lawfully conveyed to their grandfather and fallen unto them by succession, after which time they consistently exercised possession and ownership rights thereover. The appellant adduced insufficient evidence to establish his contestations of historical ownership to the property having accrued to his family via crown grant, as well as his own roots of title.

The appellant/defendant unsuccessfully tried to raise estoppel on the grounds of res judicata, alleging that the matter had already been heard by the Lands Registry Court. The appellate court made an adverse finding on the basis that the parties’ dispute had been incomprehensively ventilated before that authority and so res judicata could not apply. 

The appeal was dismissed.
 

Administrative law – judicial review- determining whether and administrative body acted ultra vires