Source: https://ulii.org/ug/judgment/commercial-court/2011/108
Timestamp: 2019-10-21 22:31:46
Document Index: 58023470

Matched Legal Cases: ['APPLICATION NO 406', 'application No. 176', 'Application No. 176', 'Application No. 176', 'Application No. 176', 'application No. 176']

Three Ways Shipping (Group) Ltd v Ken Group Of Companies Ltd (Misc. Appl. No 404 Of 2011) [2011] UGCOMMC 108 (27 October 2011); | Uganda Legal Information Institute
MISCELLANEOUS APPLICATION NO 406 OF 2011
(Arising from Civil Suit No 440 of 2010)
THREE WAYS SHIPPING (GROUP) LTD}................ APPLICANT/DEFENDANT
KEN GROUP OF COMPANIES LTD}....................... RESPONDENT/PLAINTIFF
The Applicants filed this application under order 9 rule 2, 3 (1), (a) (g) and (2) or 5 rule 1 (3) of the Civil Procedure Rules and section 98 Civil Procedure Act for; an order setting aside the summons in HCCS No. 440 of 2010; a declaration that in the circumstances of the case the court has no jurisdiction over the Applicant in respect of the subject matter of the claim or the relief or remedy sought in the action; for an order that the plaint be rejected for disclosing no cause of action against the Applicant/first defendant and costs of the suit.
The grounds of the application are that the summons served on the Applicant in HCCS No. 440 of 2010 were not valid for purposes of service; the High Court has no jurisdiction as jurisdiction lies in the court of Kenya and lastly that the plaint discloses no cause of action against the first Defendant/Applicant.
The application is supported by the affidavit of Edwin Karugire of Messrs Kiwanuka and Karugire Advocates. The affidavit gives the facts of the application. HCCS NO 440 of 2010 was filed on the 15th of December 2010 but summons were served on the Applicant/Defendant in July 2011. Prior to this summons were not served on the defendant within the time prescribed by law. On the 4th of April 2011 the plaintiff filed miscellaneous application No. 176 of 2011 seeking inter alia to extend the time within which to serve summons in HCCS 440 of 2010. The Applicant’s contention is that the application for extension of time to serve the summons was filed outside the prescribed time. Consequently the Applicant contends that service on the first Defendant was not valid on the grounds that the service was made after six months of issuance of the summons and secondly the application to extend the time to serve the summons was filed out of time. The affidavit further reproduces the other grounds of the application and refers to the documents evidencing the transaction in questions in annexure “A”, “B” and “C” to the plaint.
The Respondent’s affidavit in reply is sworn by Edward K. Kigongo the C.E.O of the Respondent/Plaintiff. In the affidavit in reply the Respondent’s agrees through its C.E.O that HCCS No. 440 of 2010 was filed on the 15th of December 2010 but summons could not be served on the same day as they were not signed that day. By the time summons were signed the time to serve them had lapsed and it was necessary to file High Court Miscellaneous Application No. 176 of 2011 to extend the time within which to serve the Defendant. The registrar was satisfied that the application was on order and granted leave for extension of time within which to serve the Respondents. The Respondent further contends that the law does not set a mandatory time within which to file an application for extension of time to serve the summons. As far as jurisdiction is concerned the agreement to transport the goods was executed on the 25th of August 2009 in Kampala giving the High Court of Uganda jurisdiction in the matter.
At the hearing the Respondent was represented by Learned Counsel Francis Bwengye while the Applicant was represented by Learned Counsel Peter Kauma.
In his address to the court learned counsel for the Applicant first sought to attack the affidavit in reply and contended that it does not comply with the Commissioners for Oaths Act cap 5 laws of Uganda in that annexure to the affidavit were not identified as required by the Oaths Act which requires exhibits to be identified in terms of rule 8 and 9 of the schedule to the Act. The requisite format is found in the third schedule to the Oaths Act and rule 8 requires all exhibits to be sealed by the Commissioner, while rule 9 provides the format of the Jurat. Learned counsel contended that failure to identify an exhibit attached to an affidavit is fatal and the affidavit ought to be struck off the record. He relied on the case of Solomon Software EA Ltd and Another vs. Microsoft Corp [2003] 1 EA 300, at page 301 and 302 and Odungas digest of Civil Law and procedure at page 24, pages 47 – 48 and page 58 as highlighted. He prayed that I strike out the Respondent’s affidavit in reply.
As far as the grounds of the application are concerned learned counsel for the Applicant submitted that order 5 rule 1 (3) of the Civil Procedure Rules prescribes that summons which is not extended for purposes of service within the prescribed time and application for extension of time to serve has not been made within the time limited for service of summons shall be dismissed without notice. He submitted that the Plaintiff’s application for extension of time was filed out of time. Under order 9 rule 2 and order 9 rule 3 (1) (a) and (g) a defendant can apply to strike out the summons as had been done in this case. In addition learned counsel submitted that in the absence of service of summons in a regular manner the court has no jurisdiction to hear the suit under order 9 rule 3 (1) (g) of the Civil Procedure Rules.
Learned counsel for the Applicant further contended that jurisdiction as far as the subject matter of the suit is concerned, lies with the courts in Kenya. The plaint shows that the cause of action arose in Mombasa Kenya. Secondly he contended that under section 15 (a) of the Civil Procedure Act, a suit may be instituted in the court with territorial jurisdiction where the defendant resides but in the Respondents case the plaint shows that the Respondent dealt with Three Ways Services (K) Ltd a company carrying out business in Kenya Mombasa and in which case jurisdiction lies with the courts of Kenya.
Lastly counsel contended that the plaint discloses no cause of action under Order 7 rule 11 (a) of the Civil Procedure Rules. This is because the annexure to the plaint do not disclose a cause of action against the Applicant but against Three Ways Shipping Company Kenya Ltd. Counsel relied on Auto Garage vs. Motokov 1971 EA 514 and Micro Finance centre Limited vs. Uganda Micro entrepreneurs association HCCS 1007 of 2004. In Micro Finance (Supra) the court held that where a document showing cause of action relied on are not attached, the plaint will be rejected for disclosing no cause of action.
In reply learned counsel Francis Bwengye contended that the Applicant’s application challenges the order of court to extend time in which to serve summons and pleadings. He submitted that no summons had been issued by court and his learned friend has not shown a copy of the summons by the time the suit was filed. He submitted that only the plaint was returned for service as averred in the affidavit of Kigongo. As a result of the lapse by the court to issue the summons there was a lapse of time and the Plaintiff applied for extension of time to serve the summons. It was stated that summons had been issued when they had never been issued. Learned counsel for the Respondent submitted that the application for extension of time was done as a prudent measure because the registrar alleged that summons had been signed. There was no evidence on court record about the signing of summons. In case the court misplaced the summons the plaintiff applied for extension of time.
Learned counsel submitted that the application made by his learned friend was an omnibus one which seeks to set aside the court order extending time and at the same time strike out the main suit. The proper procedure would have been for the defendant to file a written statement of defence and have the plaint struck out or raise objection at the time of pre trial conferencing or scheduling of the suit. Counsel contended that a point of law should be set out in the written statement of defence and the plaintiff would have sufficient time to reply thereto. It was not proper to apply in an application objecting to jurisdiction. Consequently learned counsel submitted that the applicant’s application is frivolous and vexatious. He prayed that the application is struck out and the Defendant applies for extension of time to file a defence or the suit proceeds ex parte against the Applicant. It was noted at this stage of the proceedings that there was a written statement of defence on the court record as a matter of fact.
Learned counsel for the Respondent submitted that extension of time is at the discretion of the court under section 96 of the Civil Procedure Act. Section 96 ought to be read together with order 5 rules 1 (2) of the Civil Procedure Rules. He contended that paragraph 8 of Karugire’s affidavit argues that the summons served on the first Defendant were not valid because they were served out of time. That was after the original summons had expired. He contended that the expired summons could not be traced and they do not know on which date they were issued.
As far as jurisdiction is concerned which objection is founded on paragraph 9 of Karugire’s affidavit, learned counsel for the Respondent contended that it is this court which has jurisdiction and not the Mombasa court under section 15 of the Civil Procedure Act. In the first place the Plaintiff Company is based in Uganda and the first Defendant Company is also based in Uganda. The agreement was also signed in Uganda by the Three Way Group of companies based in Kampala. The law is clear where the party sues both in contract and in civil law generally. The plaintiff was right to sue in Kampala and this court has jurisdiction. It is in the interest of justice that the court elects to deal with the application of the order extending time and extends that time.
As far as the authorities cited by the Applicant’s counsel are concerned, counsel contended that the cases were decided by the Kenyan High Court and were interpreting the Oaths Act which is not in pari materia with the Oaths Act of Uganda. The affidavit of the Respondent’s CEO in opposition to the application fully complied with the Oaths Act because the annexure has the signature of the Commissioner for oath and it refers to the place, signature and signature of deponent. The annexure to Kigongo’s affidavit are clearly marked “A”, “B” C” and “D” and form part of the affidavit. Counsel contended that any alleged irregularities were a matter of form and not substance. Procedural forms or rules are meant to serve the ends of justice and not intended to defeat it. Counsel relied on James Kabaterana vs. John Ntimba [1991] ULSLR page 130, [1991] HCB 82. Learned counsel further submitted that the court has inherent jurisdiction under 98 of CPA to administer justice in the circumstances of the case. He referred to Adonia vs. Mutekanga (1970) EA 429 and particularly at page 432; Raual vs. Mombasa Hardwares Ltd (1968) EA 392 at page 394 where it was decided that the section of the Civil Procedure Act giving power to make rules shall not be inconsistent with the provisions with the Act. The provisions of section 101 would apply where injustice would be caused by the rules.
Learned counsel submitted that section 14 (1) of the Judicature Act and article 139 (1) of the Constitution of the Republic of Uganda give unlimited original jurisdiction to the High Court which in this case has the requisite jurisdiction to hear the suit. Referring to Larco Construction Ltd vs. Transair [1987] HCB 39 at page 40 it has been held that the High Court jealously guards its jurisdiction and therefore any instrument purporting to oust its jurisdiction must be clear and not in uncertain terms. The court had jurisdiction even where parties have excluded its authority to deal with that matter. In the case of Standard Chartered Bank vs. Club Cloud 1000 [1988 – 90] HCB at page 84 even a specific rule excluding jurisdiction cannot restrict courts inherent jurisdiction under the statute.
Learned counsel further repeated his submission that her worship the Registrar used her discretion as empowered by section 98 of the Civil Procedure Act to extend the time. And that it is in the interest of justice that parties to a dispute should be heard so that each side can put its case. Minor technicalities were cured by article 126 (2) (e) of the Constitution.
As far as cause of action is concerned, he contended that the Case of Auto Garage vs. Motokov is a student’s law in that it gives the elementary ingredients of what a cause of action is. A cause of action is disclosed where the plaint shows that there is a right enjoyed by the plaintiff, that the right has been violated and the defendant is liable for the violation of the right. Counsel for the Applicant has not demonstrated these three ingredients. Moreover the plaintiff has not had time to reply to the written statement of defence. Counsel cited HMB Kayondo vs. AG [1988 – 90] HCB 107 holding NO. 5 which provide that before striking out a pleadings court must be satisfied that the case presented to court cannot be maintained or argued. Court should not whimsically strike out an action unless it has heard both sides.
In rejoinder learned counsel Kauma, counsel for the Applicant prayed that the court should read the record to establish the question of irregularity of service of summons. He invited the court to read the record to determine what transpired. He noted that the record would show that it was not the courts fault. Summonses are supposed to be accompanied by a plaint. In their application for extension they state that the document was locked. If summons were not issued it cannot be blamed on the court. Order 9 rule 2 allows a challenge on irregular summons. The order of the registrar can be challenged. The order states that acknowledgement by the defendant is not a waiver to objection to the order extending validity of service.
As far as omnibus summons are concerned the WSD indicates that we would apply to have the plaint struck out. The application is meant to save the time of the court.
Lastly counsel has extensively relied on authorities. That the points raised are technicalities. Service of summons is an issue of substance and not of form. The issue of a faulty affidavit is substance and not form. See page 58 of Odungas digest of Civil Procedure.
Lastly on section 101 before revision and 98 of the Civil Procedure Act after revision, learned counsel for the Applicant submitted that various authorities have held that the section should not be waived as a magic wand by defaulting litigants.
I have carefully considered the pleadings and submissions of the parties. I have also gone through the court record which discloses further facts relevant to the application. The Applicant’s application is brought under order 9 rule 2, 3 (1) (a) (g) and 2 order 5 rule 1 (3) of the Civil Procedure Rules and section 98 of the Civil Procedure Act. It is for an order to set aside the summons in HCCS No. 440 of 2010 and a declaration that the court has no jurisdiction over the Applicant as far as the subject matter is concerned. In the alternative, that the plaint discloses no cause of action against the Applicant.
The grounds of the application are that the summons served on the Applicant who is the first Defendant to the suit are not valid for purposes of service; that the jurisdiction with respect to the subject matter is vested in the Kenyan courts of Mombasa and that the plaint discloses no cause of action against the first Defendant.
For purposes of my ruling I have deferred the question of whether the annexure to the affidavit of the Respondent’s C.E.O Mr. Kigongo should be rejected and will first consider the issue of alleged irregularity of summons which if decided in the applicant’s favour would dispose of the application without having to consider other points submitted on. It is the Applicant’s contention that the application to serve the summons out of the time prescribed for service was made out of time prescribed for making that application rendering the summons invalid. The question is whether the court can consider the Applicant’s prayer for setting aside the summons and dismissing the suit in view of the Registrars order to serve the summons out of time. The Respondent’s counsel submitted that court order extending time was an exercise of courts discretion under section 98 of the Civil Procedure Rules as supported by article 126 of the Constitution of the Republic of Uganda 1995. He was of the view that the application seeks to set aside the order of the Registrar extending time and should not be granted.
The record shows that the Plaintiff’s suit was filed on the court record on the 13th of December 2010. Summons to the Defendant to file a defence within 15 days were signed by Hon. Registrar Gladys Kisekka on the 15th of December 2010. On a question of fact the affidavit of the Respondent’s C.E.O Mr. Edward Kigongo sworn to according to his information from counsel for the plaintiff on the 23rd of September 2011 paragraph 4 thereof is not true. He avers in paragraph 4 as follows:
“That I am reliably informed by our Counsel,Mr. Francis A.W. Bwengye, whom I verily believe, that by the time the summons were signed, the time within which to serve the Defendant in the said suit had elapsed, hence the necessity to file Misc. Application No. 176 of 2011 in which the Respondent company sought from Court an extension of the time within which to serve the Defendants.”
The said deponent further avers in paragraph 5 that the honourable Deputy Registrar of the Commercial Court Division granted the Respondent leave and extended time within which to serve summons to file a defence on the Applicant/first Defendant to the suit. In paragraph 6 of his affidavit Edward Kigongo further avers that the application for leave to serve the summons to Defendant out of time was proper because the law does not set a mandatory time limit within which such an application ought to be made.
It is a question of fact that the application to serve the summons out of time was made in Miscellaneous Application No. 176 of 2011. The order extending time which is annexure “A” to the Respondents affidavit in reply shows that the order extending time was issued on the 28th of June 2011 though the application itself was heard by the Deputy Registrar on the 15th of June 2011. Miscellaneous application No. 176 of 2011 was filed on court record on the 4th of April 2011. It sought orders that time to serve the summons and pleadings on the Defendants be extended. The record shows that the grounds of the chamber summons were that the legal assistant one Mr. Gerald Nuwagira got the pleadings from court and instead of giving them to the law clerk for service, locked them in his drawer and a few days later quit his job without notice. Secondly the chambers of the plaintiff’s lawyers closed on the 22nd of December 2010 for two weeks. After the staff came back they searched for the pleadings in vain and then broke into the desk of the said Legal Assistant where they found the pleadings but there were no summons attached to the pleadings for purposes of service. The affidavit in support of that application for leave to extend summons was sworn by learned Counsel; Francis Bwengye and it more or less confirms the grounds in the chamber summons. However what is crucial is paragraph 6 of the affidavit which avers that on the 7th of January 2011 Mr. Nuwagira Gerald did not show up and after sensing that he had left the firm, they decided to break into his desk that is when they retrieved the pleadings in HCCS No. 440 of 2010 and they found that the time of service had lapsed. The lapse of time was attributed to the legal assistant’s conduct which amounted to negligence. Specifically the affidavit does not give an exact date as to when the desk of the legal assistant was broken into. It must be assumed that this happened after the 7th of January 2011.
The first matter for me to consider is whether it is proper to revisit the order of the registrar extending time. This is because the thrust of the Applicants case is that the application to serve the summons on the defendant out of time was filed outside the time prescribed by order 5 rule 1 (3) of the Civil Procedure Rules within which to make such an application. I will firstly consider whether such an application may be made after an order extending time to serve has been made. I must firstly emphasise that an application to serve summons out of time is made ex parte and therefore cannot be challenged by the Defendant at that stage if the application is made irregularly or where there are any valid grounds for challenging the extension of time. The Defendant’s remedy in such a case is to challenge the irregularity in the issuance of the summons under the procedure provided for under order 9 rules 2 and 3 of the Civil Procedure Rules. For this purposes it is sufficient to consider order 9 rule 2. Order 9 rule 2 provides that that:
The filing of a defence by the defendant shall not be treated as a waiver by him or her of any irregularity of the summons or service of the summons or in any order giving leave to serve the summons out of the jurisdiction or extending the validity of the summons for purposes of service.
Order 9 rule two explicitly provides that the filing of a defence is not a waiver of any irregularity in the summons or service of the summons or any order giving leave to serve the summons out of the jurisdiction or extending the validity of the summons for purposes of service. In this case there was an order extending the validity of the summons for purposes of service. I agree with the Applicant’s counsel that this rule is read in conjunction with order 5 rules 1 (2) of the Civil Procedure Rules which provides that summons shall be served within 21 days from the date of issue. As we noted above as a question of fact summons were issued on the 15th of December 2010. By the 24th of December 9 days had at least passed by without service leaving 12 days unexpired. Order 51 rule 4 of the Civil Procedure Rules provides that the time between the 24th of December of any year and the 15th of January of the year following shall not be reckoned in computing the time prescribed by the rules for amending, delivering or filing any pleading. Consequently by the 7th of January 2011 and up to the 15th of January 2011 the applicant was still within time as the period between 24th of December 2010 and 15th of January 2011 was excluded. By the end of January 2011 the remaining two weeks had lapsed. The filing of the Applicants application to extend time to serve the summons acknowledges the fact that summons were not served within 21 days as prescribed by order 5 rule 1 (2) of the Civil Procedure Rules. The problem is with order 5 rule 1 (3) which provides that where summons have not been served within 21 days after it has been issued and there is no application for extension of time as prescribed in order 5 rule 1 (2) the suit shall be dismissed without notice. Order 5 rule 1 (2) provides that time may be extended on application to court where service of summons was not made within the prescribed 21 days provided that the application to court to extend time is made within 15 days of the expiry of the time prescribed by the summons. As I noted the time must have lapsed by the end of January 2011. The application ought to have been filed within 15 days after the 30th of January 2011. This application was filed on the 4th of April more than two months after the expiration of the time of 21 days limited for service of summons under the rules.
As I have observed order 9 rules 2 gives the Defendant for the first time the opportunity to be heard in objection to the application to extend time of service after 21 days had elapsed. That application had been heard ex parte. Order 51 rules 6 gives the registrar discretionary power to enlarge time prescribed under the rules where time has expired as the justice of the occasion demands. More so the explicit order 5 rule 1 (2) is the particular and specific rule which gives the Registrar the requisite discretionary powers. Notwithstanding the above rules, order 9 rule 2 ensures that the Defendant who did not have had any opportunity to contest anything has opportunity to raise an objection to the summons even after an order extending time has been granted under the discretionary powers of the Registrar. For purposes of clarity we need to examine order 9 rule 3 which provides that a defendant who wishes to dispute the jurisdiction of the court in the proceedings by reason of any such irregularity as mentioned in rule 2 of order 9 or on any other ground give notice of intention to defend the proceedings and file an application to set aside the summons. Order 9 rule 3 (1) (d) allows an application to discharge the order extending the validity of the summons for purposes of service as in this case. It is therefore no defence in such an application that the extension of time was made under the discretionary powers of the Registrar.
Be the above as it may, I have examined the record of the Deputy Registrar. The record shows that the legal Assistant Nuwagira Gerald had not come back when the Respondent’s counsel reopened office in January 2011 and time for serving summons and pleadings had expired. It was not drawn to the Registrars attention that the application for extension of time has been filed outside the 15 days limited by order 5 rule 1 (2) within which to apply for extension of time after expiry of the 21 days. In other words the Registrar never exercised any discretionary powers to permit the filing of the application outside the time prescribed by order 5 rules 1 (2) of the Civil Procedure Rules. She had these powers of extension of time under order 51 rules 6 of the Civil Procedure Rules. In any case even if she had exercised such discretionary powers, which she clearly did not, this would not have taken away a Defendant’s right to object to it after appearing in court.
For the above reasons I am satisfied that the application to serve the first Defendant with summons was made irregularly because there was no order giving leave to file the application outside the 15 days after expiry of the time prescribed by order 5 rule 1 (21 days) within which to serve the summons. The Registrar was not advised that the application was time barred and she never considered this question and could therefore not be deemed to have exercised any discretionary powers allowing the application on that ground.
There is in the premises no need for me to consider the rest of the grounds including the alleged infirmity of the Respondent’s affidavit, whether this court has jurisdiction over the Defendant and whether the plaint discloses a cause of action. The correct course of action is to comply with order 5 rule 1 (3) of the Civil Procedure Rules which makes it mandatory and without notice for the court to dismiss the plaint for failure to serve summons within 21 days and after no application for service of summons has been made within 15 days after the expiry of the time limited for service of summons. This is the situation here exactly. The suit should have been dismissed before the Respondent filed an application to extend the 21 days which had expired. This is a routine matter and the Respondent would have filed a fresh suit. The court cannot exercise discretion to extend the time in an application using order 9 rule 2 and 3 to strike out the summons and thereby nullify the Applicant’s application after the event complained about. In any case the Respondent did apply for extension of time and to consider the prayer for extension of time to argue an application made outside the prescribed time would have been an admission of the Applicant’s application. This would show the court in poor light. The suit against the first Defendant is accordingly dismissed with costs to the first Defendant under order 5 rule 1 (3) of the Civil Procedure Rules because no application was filed for extension of time to serve summons on the Defendants within 15 days after expiry of the 21 days limited by order 5 rule 1 (2) of the Civil Procedure Rules within which to serve the summons issued by court on the 15th of December 2010.
Ruling delivered in court this 28th day of October 2011
Peter Kauma for the applicant,
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