Centenary Rural Development Bank Limited v The Management Committee of St. Peters Educational Hill Mixed Primary School (Civil Appeal 23 of 2024) [2024] UGHC 1016 (25 October 2024)

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA HOLDEN AT KIBOGA

CIVIL APPEAL NO.0023 OF 2024

(FORMERLY MUBENDE CIVIL APPEAL NO. 046 OF 2023)

(ARISING FROM CIVIL SUIT NO.030 OF 2018 AT KIBOGA MAGISTRATES COURT)

CENTENARY RURAL DEVELOPMENT BANK LTD::::::::::::::::::::::::::::::::::::

VERSUS

THE MANAGEMENT COMMITTEE OF ST. PETER'S

EDUCATIONAL HILL MIXED PRIMARY SCHOOL ::::::::::::::::::RESPONDENT

BEFORE: HON. MR JUSTICE KAREMANI JAMSON. K

JUDGMENT

Introduction

Centenary Rural Development Bank Ltd (hereinafter referred to as the appellant) was the 1^st defendant in the Chief Magistrate's Court of Kiboga while the management committee of St. Peter's Education Hill Mixed Primary School (hereinafter referred to as the respondent) was the plaintiff.

Respondent's case at trial.

The respondent's cause of action against the appellant in the lower court was for, a declaration that the attachment and closure of the respondent's school was illegal and unlawful, a declaration that the respondent is not indebted to the appellant, a declaration that the respondent never secured any loan facility with the appellant and has never secured a loan there from, general damages, mesne profits, interest and costs of the suit.

Wan

Appellant's case at trial.

The appellant denied the allegations of the respondent and contended that it has never sent anyone to close the respondent school at all and that the respondent is unknown to her neither her client.

The appellant raised a counterclaim against Dicks Patrick Kabagambe –a director of the respondent school for outstanding loan arrears of shs. $5,065,731/=$ , interest and costs of the counterclaim.

Decision of the trial court.

The trial court found that the respondent school was not party to the loan given by the appellant to the respondent school's director, that the closure of the respondent school by agents of the appellant was illegal and that appellant was vicariously liable for the acts of the 2^nd, 3^rd and 4^th defendants who were her agents/employees. The court awarded the respondent shs. $49,124,500/$ = in special damaged, shs. $20,000,000/$ = in general damages, 6% interest on the sums above and costs of the suit.

The appellant being dissatisfied with the findings of the trial court appealed to this court on the following grounds:

- 1. The learned trial magistrate erred in law and fact when she proceeded ex parte after 6^th October, 2022; - 2. The learned trial magistrate erred in law and fact when she entered judgment for the respondent without proof of registration as a school; - 3. The learned trial magistrate erred in law and fact when she held that the appellant closed the respondent's school; - 4. The learned trial magistrate erred in law and fact when she awarded the plaintiff unproved excessive special and general damages;

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5. The learned trial magistrate erred in law when she awarded damages in excess of her jurisdiction.

The appellant prayed that the appeal be allowed, judgment and the orders of the trial magistrate be set aside, the respondent be ordered to pay costs of the appeal and in the court below. That civil suit no. 30 of 2018 be dismissed or in the alternative heard and determined interparty.

Representation.

The appellant was represented by Mr. Ceasar Mateeka of M/S Nambale, Nerima & Co. Advocates. The respondent was represented by Mr. Sebuta Joseph whose firm was not disclosed.

First Appellate court's duty.

This is a first appellate court in this matter. The duty of the first appellate court was clearly elucidated in the case of Kifamunte Henry V Uganda SCCA No.1 of 1997 and the case of Father Narsensio Begumisa & 3 Ors V Eric Tiberaga SCCA No.170 of 2000 [2004] KALR 236 where it was held that:

"This being a first appeal, this court is under an obligation to re-hear the case by subjecting the evidence presented to the trial court to a fresh and exhaustive *scrutiny and re-appraisal before coming to its own conclusion"*

The appellate court always bears in mind the fact that it does not have the opportunity of hearing and seeing the witnesses testifying so as to test their demeanour.

Consideration of the grounds of appeal.

Ground 1

The learned trial magistrate erred in law when she proceeded ex parte after 6^th October, 2022;

The learned counsel for the appellant submitted that when the matter came up on $6/10/2022$ , counsel for the respondent applied to proceed ex parte in the absence of counsel for the appellant which was granted. However, counsel was not ready to proceed on that day and the case was adjourned to $20/11/2022$ where counsel for the respondent proceeded ex parte. That when the hearing was adjourned to $20/11/2022$ , counsel for the appellant ought to have been served with a hearing notice. Counsel cited the case Onek and Anor V Omona HCCA No. 32 Of 2016.

Further that the appellant had a counter claim which is a suit in its right but the trial magistrate never gave the appellant a chance to present the counter-claim.

The learned counsel for the respondent submitted that the trial magistrate was right in ordering the matter to proceed ex parts on $6/10/2022$ because despite the appellant's counsel being served several times with hearing notices, he made it a habit to receive the hearing notices in protest giving excuses without reasonable justification. On the counterclaim counsel submitted that the suit of the appellant in counterclaim had automatically abated having not taken any step to have it prosecuted within 6 months after filing it.

Analysis by Court

Order 9 rule 20(1)(a) of the Civil Procedure Rules stipulates that;

1. Where the plaintiff appears and the defendant does not appear when the suit is called on for hearing—

(a) if the court is satisfied that the summons or notice of hearing was duly served, it may proceed ex parte;

According to page 364 of the record of appeal, when the matter came up for hearing on $6/10/2022$ , neither the appellant representative nor its counsel was in court. Counsel for the respondent applied to have the matter proceed ex parte noting that the conduct of the appellant's counsel severally not appearing despite evidence of being served with hearing notices was only meant to frustrate hearing. Court allowed the respondent to

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proceed ex parte with the hearing. The matter was stood over and when it later was called the learned counsel for the respondent/plaintiff sought an adjournment on the ground that he needed to prepare his witnesses. The matter was adjourned to 20^th October 2022. On 20^th October 2022 the matter proceeded ex parte. On 15^th November 2022 the learned counsel for the appellant/1^st defendant appeared in court but the respondent/plaintiff was not present. The learned counsel applied orally to set aside the ex parte proceedings but was advised to make a formal application. The same application was file but the same was dismissed by the trial magistrate on the ground that the appellant did not show good or sufficient cause to warrant setting aside the ex parte proceedings.

From the record of proceedings of the lower court, it is clear that whereas the appellant/1^st defendant was served with the hearing notice for $6/10/2022$ on that day the, matter was adjourned after the respondent/plaintiff's counsel had been granted leave to proceed ex parte but was not ready. The matter was adjourned to 20^th October 2022. It is my considered view like it was found in the case of Onek Manancy & Another vs Omona Micheal High Court Civil Appeal No.032 of 20216 at Gulu (unreported) that upon adjournment of the case the appellant/defendant deserved to be served with fresh hearing notice.

I the case cited above it was found that failure to serve a hearing notice of the subsequent hearing date was irregular.

Order 9 Rule 20 (1) (c) of CPR when the court postpones the hearing of the suit to a future day, the court has to direct that a notice of that future day to be given to the defendant.

There is need to distinguish a defendant who files no defence at all where the plaintiff is granted leave to proceed ex parte against him/her for failure to file a defence from the defendant who files a defence but fails to attend court on a particular day when the matter is called on for hearing. Such a defendant with a defence on record deserves service with a hearing notice whenever the matter comes up for hearing unless court makes it clear

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that there is no need to serve hearing notices for further proceedings again. This was not the case in this matter.

Failure to attend one session by a party does not disqualify that party permanently from being alerted of the subsequent proceedings whenever they occur.

However much the party fails to turn up upon service of hearing notices, if the party has a defence on record and has an address of service, such a party ought to be served whenever the matter comes up.

I accordingly find that non service of the appellant/ $1$ ^st defendant with the hearing notice for the proceedings of the 20^th October 2022 when the matter was called and heard ex parte was irregular.

The second complaint on the proceedings was about failure by the trial court to address the counterclaim in the amended defence even though this was not raised in the grounds of appeal. I find it pertinent to address the same issue since both counsel addressed it in their submissions.

The learned counsel for the appellant/defendant/counterclaimant submitted that the trial magistrate did not address the counterclaim at all.

The respondent's learned counsel submitted that the counterclaim abated having lasted for over six months without action.

Analysis by Court

Counterclaims are provided for under Order 8 Rule 2 of CPR.

A counterclaim is a suit in its own way and has to be treated so including being defended.

According to Order 11A Rule 6 of CPR (as amended by Civil Procedure (Amendment Rules 2019) where the plaintiff does not take out summons for direction in accordance with Sub rule $(2)$ or $(6)$ , the suit shall abate.

Jame Wani

I have looked at the proceedings in this case and I don't find any order of court pronouncing that abatement. There is no automatic order of court that doesn't involve a judicial officer. There must be pronouncement by court for every order of court. It is not over until court has declared it so.

I therefore find that it was irregular for the trial court to pronounce a judgment and ignore the appellant/defendant/counter defendant's counterclaim/suit.

The first ground of the appeal succeeds.

The rest of the grounds of the appeal touch the merits of the case and if resolved at this stage may prejudice the fresh proceedings in the matter. It is my finding the best remedy in this matter is to order fresh hearing of this matter inter party.

All in all, the appeal succeeds. The ex parte proceedings, the ex parte judgment and decree earlier entered are set aside. I order the matter to be heard de novo interparty. Costs of this appeal are awarded to the applicant. Costs in the lower court will abide the outcome of the hearing de novo.

I so order.

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KAREMANI JAMSON. K

JUDGE

25.10.2024

Court: This order to be sent to the trial court for hearing de novo of the matter before a different Chief magistrate to be assigned by the Chief Registrar.

Maur

KAREMANI JAMSON. K

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JUDGE

25.10.2024