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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT
KAMPALA
(COMMERCIAL COURT DIVISION)
HCT-00-CC-CS-0588 OF
2003
ROBERT MWESIGWA AND OTHERS :::::::::::::::::
PLAINTIFFS
VERSUS
BANK OF UGANDA :::::::::::::::::::::::::::::::::
DEFENDANT
BEFORE: THE HONOURABLE MR. JUSTICE YOROKAMU
BAMWINE
R U L I N G:
It is claimed by
the Plaintiffs in this suit that on 18/9/1998 the Defendant in exercise of its
statutory powers seized INTERNATIONAL
CREDIT BANK LTD thereby assuming the
employment contracts of the Plaintiffs. It is further claimed that the
Defendant subsequently
terminated the Plaintiffs’ employment contracts but
has refused to pay salary arrears and terminal benefits to the Plaintiffs.
Hence the suit.
When the case came up for a scheduling conference, Mr.
Masembe – Kanyerezi for the Defendant raised 2 preliminary points of
law.
These are:
1. That the suit against the Defendant is res judicata, the same having been tried and disposed of by this Court.
2. That the suit is barred by section 6 of the Civil Procedure Act in that there is another pending suit in this Court against International Credit Bank Ltd which raises precisely the same issues as herein.
As regards
the issue of res judicata, counsel produced a record of proceedings in respect
of HCCS No. 1 of 2000. It is contended
that the parties in that suit as well as
the claims are the same as herein. I was not able to verify the issue of
parties because
the list of names of the other Plaintiffs mentioned in annexture
‘A’ to the ill fated plaint has not been availed to
me. I have not
been able to tell, therefore, whether all the claimants herein were the same
claimants in HCCS No. 1/2000.
Coming now to the ruling in HCCS No.
1/2000, it is contended that an objection was raised that the Plaintiffs did not
have any cause
of action against Bank Of Uganda. That the Court held on that
issue that as a matter of law, Bank Of Uganda is not liable under
the employment
contracts sued upon.
Counsel argued that in the absence of an appeal
against that ruling, any matter relating to the same issue would be res
judicata.
Counsel did concede that in the present suit the scope has been
broadened. However, he argues that it is still an identical claim.
That they
may have a claim against ICB but as far as Bank Of Uganda is concerned, any such
matter ought to have been brought up
in the old suit. It is now deemed to have
been decided, he contended. He concluded on this point that it is not open to
the Plaintiffs
to come before another Judge of the same Court and advance the
same argument.
As regards the bar under S.6 of the Civil Procedure Act,
counsel argued that HCCS No. 1/2000 is till continuing. The matters in issue
are the same as herein. According to counsel, therefore, this suit would have
to be stayed so that Court gets to know the outcome
of that other pending suit
considering that it is the same matters in dispute. In counsel’s view,
the parties may not be the
same since Bank Of Uganda was dropped. However, it
is the same persons suing ICB. Counsel prayed in the alternative that in the
event of Court finding that the suit is not res judicata, I order that it be
stayed pending the outcome of that other matter.
LEARNED counsel for the
Plaintiff’s, Mr. Rutiba, does not share the above views. He argues that
the Defendant herein was struck
off the suit in HCCS No. 1/2000 as
2nd Defendant under 0.7 r 11 (a) of the Civil Procedure Rules (CPR)
for reasons which the learned Judge stated in the ruling. According
to him, it
was incumbent upon the Plaintiffs to study the ruling to see whether the plaint
could be remedied by filing another suit
under 0.7 r 13 CPR. Further, that the
plaint in HCCS No. 1/2000 did not allege bad faith on the part of the
2nd Defendant. Also the letters of termination by the 2nd
Defendant had not been attached. There was therefore no clear nexus between the
Plaintiffs and the 2nd Defendant, Bank Of Uganda, to the suit, a
tacit admission on the part of counsel that in the circumstances of that case,
especially
considering the plaint and its attachments, the learned Judge was
after all justified in ordering the plaint struck in as far as
Bank Of Uganda
was concerned. That as a result of these defects, the Plaintiffs filed a fresh
suit against the 2nd Defendant. He cited Nagokwo –Vs- Sir
Charles Rutahaba [1976] HCB 99 to support his argument that a plaint
dismissed for disclosing no cause of action under 0.7 r 11 (a) CPR can be
represented as a
fresh suit under 0.7 r 13 CPR.
As regards the alleged
bar under S.6 CPA, counsel contends that it is not true that the two suits are
against the same parties. HCCS
No. 1/2000 is against ICB whereas this one is
against Bank Of Uganda. He concedes that it is undesirable to have 2 suits
which are
similar before Court but argues that the circumstances obtaining at
the time warranted so. Counsel invited me to reject the 2 points
of
law.
I have given my most anxious consideration to the arguments of both
counsel.
Res judicata is defined in Black’s Law Dictionary
[7th Edn, P.1312] as:
A matter adjudged .............. Rule that a
final Judgment tendered by a Court of competent jurisdiction on the merits is
conclusive
as to the rights of the parties and their privies, and as to them,
constitutes an absolute bar to a subsequent action involving the
same claim,
demand or cause of action (para phrasing mine).
Simply put, the Latin
maxim res judicata pro veritate accipitur means that a thing adjudicated is
received as the truth. In other
words, a judicial decision is conclusive until
reversed, and its verity cannot be contradicted. Res judicata presupposes 4
main
things:
1. that there are 2 opposing parties.
2. that there is a
definite issue between them.
3. that there is a tribunal competent to decide
the issue; and
4. that within its competence, the tribunal has done
so.
Once such matter or issue between the parties has been litigated and
decided, it cannot be raised again between the same parties,
but other parties
are not so bound. In the instant case, a dispute arose between the Plaintiffs
and the Defendant. The dispute
culminated into HCCS No. 1/2000. The Defendants
were ICB and Bank Of Uganda. The same Mr. Kanyerezi for Bank Of Uganda raised
the
issue of his client’s liability by way of a preliminary point of
law.
From the records, before this point of law was raised, Mr. Rutiba
for the Plaintiffs intimated to Court that his clients were of the
view that
they would not get justice from the Trial Judge. After listening to the
parties, my brother E.S. Lugayizi J. refused to
step down. He was legitimately
entitled to take the course he did. Mr. Kanyerezi then raised the issue of
liability. Mr. Rutiba
was unable to respond. He had sought an adjournment to
seek fresh instructions on the matter but the Court disallowed it. The Judge
proceeded to make a ruling on the matter. Again it is not my duty herein to
question the procedure he adopted. However, he did
find that the Plaintiffs
enjoyed a right, and that the same had been violated. As to whether the
2nd Defendant (the only Defendant herein) was liable for that
violation, he considered the fact that Bank Of Uganda was not a party to
the
contracts of employment, which gave rise to the obligation the 1st
Defendant had, to pay the Plaintiffs their respective salaries and benefits
during employment and on termination thereof. He said:
“For that reason it is difficult to hold the 2nd Defendant liable for any default in payment of those dues.”
It should be remembered that according to
counsel for the Plaintiffs, his clients had not attached to their pleadings
copies of termination
letters purportedly issued by officials of Bank Of Uganda.
The omission is said to have been cured herein to thereby establish the
nexus
between Bank Of Uganda and the terminations. The Judge went further:
“Secondly, S. 49 of the Financial Institutions Statute also protects the 2nd Defendant against all suits arising from the discharge of its statutory obligations under sections 30 and 31 of the Financial Institutions Statute unless the Plaintiffs show bad faith on the part of the Defendant” (emphasis mine).
“The rationale behind that protection is obvious. It is in the public interest that the 2nd Defendant, which is the watchdog of financial institutions in Uganda charged with the responsibility of ensuring that such institutions are properly managed, must not be unnecessarily opened up to all sorts of legal actions as it carries out its statutory duties. Be that as it may, in the instant case, the plaint does not allege bad faith on the part of the 2nd Defendant. That means that S. 49 of the Financial Institutions Statute fully protects the 2nd Defendant against the Plaintiffs’ suit” (again emphasis mine).
For the reason above, the Court found that the
plaint (and I would add its attachments”) did not reveal a cause of action
against
the 2nd Defendant and ordered it struck out. The issue now
is whether this is an entirely new cause of action that warrants a hearing by
this Court. I believe it is. I will give the basis for that belief. The
Plaintiffs emphasize that they don’t dispute the
findings on the factual
and legal issues they faced in HCCS No. 1/2000. Rather, they raise what they
say is now a completely fresh
issue after remedying the faults in the ill-fated
plaint.
I have had occasion to read both plaints. Material alterations
were made to the original plaint to come up with the instant one.
The instant
one is, so say, an improvement on the one in HCCS No. 1/2000. Areas improved
upon were mentioned by Mr. Rutiba. It
is not necessary to enumerate all of them
here but they include an allegation of bad faith on the part of the Defendant in
terminating
their services. In my view, after purportedly bringing the matter
out of the protection afforded to the 2nd Defendant by S.49 of the
Financial Institutions Statute (as it then was) what is before me now is
something which still has to be
tested as a matter of law. It is significant to
note that the Court in HCCS No. 1/2000 did not dismiss the Plaintiffs’
cause
of action. It rejected the plaint in respect of Bank Of Uganda. With
this rejection, the Plaintiffs were at liberty to present
a fresh plaint in
respect of the same cause of action under 0.7 r 13 CPR. This Rule provides:
“The rejection of the plaint on any of the grounds herein above mentioned shall not of its own preclude the Plaintiff from presenting a fresh plaint in respect of the same cause of action.”
Clearly, the law under which the plaint
was rejected allows the sort of thing the Plaintiffs have done herein. The
position would
have been different if no surgery had been done on the ill-fated
plaint to cure the defect pointed out by the Judge as denying them
a possible
cause of action against Bank Of Uganda or if the Court had dismissed the suit
and not merely struck it out. It would
appear to me that inspite of that
surgery, the issue of cause of action against Bank Of Uganda is something yet to
be tested as a
matter of law, the same way it was tested in HCCS No. 1/2000, if
the Defendant herein so desires.
Once again, I consider it settled law
that for res judicata to apply, the matter ought to have been heard and
determined on merits.
Where the merits of the matter were not heard and
determined, the doctrine does not apply. See: Nakiride –Vs- Hotel
International Ltd [1987] HCB 85. See also Busulwa –Vs-
Kakinda [1979] HCB 179 where this Court observed that where a suit has been
dismissed on a preliminary point, the Plaintiff has not had an
opportunity of
being heard on the merits and the matter is not res judicata.
Relating
the above law to the facts of the instant case, it is clear to me that when the
point of law came up for determination, it
was not decided finally. The plaint
was merely struck out. In these circumstances, I would agree with Mr. Rutiba
that the doctrine
of res judicata strongly argued by Mr. Kanyerezi does not
apply to the Plaintiffs’ suit. The Rules of procedure under which
the
plaint was struck out do not preclude the Plaintiffs from instituting a further
suit in respect of the same cause of action.
If anything 0.7 r 13 CPR allows
it. Given that it is not arguable that new issues have been raised in the
present suit and the
uncertainty of the question as to whether the plaint herein
raises a cause of action against the Defendant, I’m unable to find
that
the current suit is barred on the basis of res judicata. I would disallow the
first point of law and I do so.
As regards the existence of two suits on
the same point of law, I notice that HCCS No. 1/2000 is against ICB. This suit
is against
Bank Of Uganda. The two are independent institutions, each with its
own corporate image. ICB is in the process of liquidation.
The
circumstances under which the 2 suits came into existence have been
satisfactorily explained to Court. The two Defendants had
been sued together.
Fate separated them. The precipitating factors for the separation have now
purportedly been taken care of.
In my view, a consolidation under 0.10 r 1 CPR,
after the issue of whether the plaint raises a cause of action against the
Defendant
has been determined, if any is raised, would remedy any unsatisfactory
state of affairs. It is not the sort of matter that would
necessitate a stay of
one of them. This point also lacks merit. I disallow it.
In the
result, both points of law are rejected. The Court shall entertain the issue of
whether or not the plaint herein raises a
cause of action against the Defendant
or else proceed with the scheduling conference.
The Plaintiffs shall
have the attendant costs herein in any event. I so order.
Yorokamu
Bamwine
J U D G E
06/04/2005
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