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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF
UGANDA AT KAMPALA
(COMMERCIAL COURT
DIVISION)
HCT-00-CC-MA-0789 OF 2005
(Arising from
HCT-00-CC-CS-0711-2005)
TINDYEBWA STEPHEN ::::::::::::::
APPLICANT/DEFENDANT
VERSUS
ALPHA INTERNATIONAL
INVESTMENTS LTD
::::::::::::::: RESPONDENT/PLAINTIFF
BEFORE: THE
HONOURABLE MR. JUSTICE YOROKAMU BAMWINE
R U L I N
G:
The facts of this case are rather simple and straight
forward.
The Applicant/Defendant obtained a loan of Shs.3,000,000- from
the Respondent/Plaintiff. The parties agreed that repayment would
be within a
period of three (3) months and that the principal sum would attract interest at
the rate of 20% per month. The Applicant
pledged his log book for M/V Reg. 385
UDQ as the security for the loan. Upon the Applicant’s failure to pay,
the Respondent
filed this suit against him under Summary Procedure, 0.33 of the
Civil Procedure Rules. The Applicant then filed this application
under 0.33 r 3
of the Civil Procedure Rules seeking leave to appear and defend the
suit.
When the application came up for hearing, the Applicant did admit that
he borrowed Shs.3,000,000- from a licensed money lender, the
Respondent.
Judgment was accordingly entered against him on the admitted claim. The parties
disagreement is over the payable interest.
The Applicant is of the view that
the 20% interest per month is unconscionable and illegal whereas the
Respondent’s opinion
is that it is reasonable and justified.
At the
time the Applicant made partial admission of the Respondent’s claim, his
lawyer was not around. It was agreed that parties
address Court in writing on
the issue of interest. In his submissions, Mr. David Innocent Nyote, counsel
for the Applicant has raised
a pertinent preliminary point of law. It is that
upon the Respondent’s failure to pay the principal sum and interest, his
client, the Applicant herein filed a suit against the Respondent in the Civil
Division of the High Court vide HCCS No. 840/2005.
He has attached a photocopy
of the plaint.
From the available evidence, the suit was filed on
2/11/2005. It was served on the Respondent on 4/11/2005, according to the
Applicant.
Counsel for the Respondent does not deny the fact of the existence
of the said suit in the Civil Division of the High Court. Her
argument is that
HCCS No. 840/2005 was never served upon the Defendant therein. That the
Respondent/Plaintiff (Defendant therein)
out of diligence acquired a copy of the
plaint from the Court file and then filed its Defence. She argues that failure
to serve
summons within the stipulated time of 21 days from the date of issuance
of summons contravenes 0.5 r 1 (1a) of the Civil Procedure
(Amendment) Rules,
1998 and that HCCS No. 840/2005 is therefore incompetent and the
Respondent/Plaintiff intends to apply to the
Court to have it struck off the
record with costs.
I have already observed that according to the
Applicant, his suit was filed on 2/11/2005 and served upon the Defendant therein
on
4/11/2005. By its own admission, regardless of how it came to learn of the
existence of a suit against it, the Defendant in that
case filed a defence.
After doing so, in a rather dishonest move, the same Defendant turned around and
filed the instant suit (HCCS
No. 711/2005) at the Commercial Court claiming
enforceability of the same loan agreement which is the subject matter in HCCS
No.
840/2005.
Looking at both suits, the issue in either of them is
whether or not interest of 20% per month is unconscionable and unlawful. Mr.
Nyote’s argument is that the subsequent suit was uncalled for. That all
issues would have been resolved in HCCS No. 840/2005.
He has therefore prayed
for an order under S.6 of the Civil Procedure Act pending action herein until
the earlier suit, HCCS No.
840/2005 is disposed of. Mrs Basaza Wasswa does not
agree.
I have very carefully addressed my mind to the point of law raised
by Mr. Nyote. I don’t hesitate to say that it carries the
day.
Section 6 of the Civil Procedure Act (Cap 71) is couched in
mandatory terms. It provides:
“6. Stay of Suit.
No Court shall proceed with the trial of any suit or proceeding in which the matter in issue is also directly and substantially in issue in a previously instituted suit or proceeding between the same parties, or between parties under whom they or any of them claim, litigating under the same title, where that suit or proceeding is pending in the same or any other Court having jurisdiction in Uganda to grant the relief claimed.”
I don’t
hesitate to say that HCCS No. 840/2005 was instituted before the instant one
(HCCS No. 711/2005). The matter in issue
herein, that is, interest, is directly
and substantially in issue in HCCS No. 840/2005. The two cases are between the
same parties,
litigating under the same titles.
The decision of Court in
HCCS No. 840/2005 would determine the outcome of the instant case. In
otherwords, it was absolutely unnecessary,
and to put it mildly, dishonest of
the Respondent herein, to file the instant suit after filing a defence in HCCS
No. 840/2005 and
expressly submitting to the jurisdiction of that Court. In
these circumstances, it is not necessary to consider the alternative
prayer of
consolidating the two suits.
In my view, whether or not HCCS No. 840/2005
is incompetent on account of failure to effect service in time or at all is not
a matter
I can competently investigate herein and adjudicate upon. That issue
can be raised before the Trial Court in HCCS No. 840/2005 for
an appropriate
remedy. Until that is done, this suit must be put on hold. It is immaterial
that the Applicant has already made
partial admission of liability
herein.
Mrs Wasswa has pointed out to Court that the Court’s
Direction on the submissions of both parties were restricted only to the
issue
of interest. That the new issues being raised now are uncalled for since
disposing of the issue of interest disposes of both
HCCS Nos. 711/2005 and
840/2005.
This argument cannot succeed. Much as the Court’s
direction was for the parties to address it on the issue of interest, Court
was
at that time unaware that there was yet another pending suit previously filed in
another Division of the same Court in respect
of the same subject matter. In
any case, a Court of law cannot sanction what is illegal and an illegality once
brought to the attention
of the Court overrides all questions of pleading,
including any admissions made thereon: Makula International Ltd –Vs-
His Eminence Cardinal Nsubuga & Anor [1982] HCB 11.
And if
disposing of the issue of interest herein would dispose of both suits, then it
was clearly unnecessary to file the subsequent
suit. A counter claim in HCCS
No. 840/2005 would have taken care of the Respondent’s desire in the
instant case.
In the result, I find merit in the point of law raised by Mr.
Nyote and I allow it. I direct that further proceedings in this suit
be stayed,
and they are accordingly stayed, pending hearing and determination of HCCS No.
840/2005 now pending in another Division
of High Court or until further orders
of this Court. The Applicant shall be entitled to the costs of this Ruling in
any event.
Yorokamu Bamwine
J U D G
E
13/03/2006
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.RTF of original document