Crane Insurance Company v Shelter Uganda Limited (Civil Appeal 14 of 98) [1998] UGCA 34 (20 November 1998)

THE REPUBLIC OF UGANDA

IN THE COURT OF APPEAL OF UGANDA

AT KAMPALA

CIVIL APPEAL NO. I4l98

CORAM: HON. MR. JUSTICE C. M. KATO, J. A. HON. MR. JUSTICE J. P. BERKO, J. A. HON. LADY JUSTICE C. N. B. KITUMBA, J. A.

BETWEEN

CRANE INSURANCE COMPANY APPELLANT/DEFENDANT

AND

/

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SHELTER (U) LIMITED RESI'ON DLN'UPLAI N'I'I FI;

(Appeal arising from the Judgment and Decree of the High Court of Uganda at Kampala (Tinyinondi J.) dated 17th November 1997, in HCCS No. 748/95)

JUDGMENT OF JUSTICE C. N. B. KITUMBA. J. A.

This is an appeal against the Judgment of the High Coun allowing the respondent's claim against the appellant. The facts giving rise to the appeal are briefly as follows: The appellant who was the 1st defendant in the original suit executed a supply Guarantee Bond No. CrlSGB/95 128 on 19/411995 in favour of the plaintiff for the supply of goods to the hrne of Ug. Shs.20,975,000/ = to M/S Speedy Delivery Ltd. which was the second defendant in the original suit.

The appellant and the second defendant were to pay within thirty days of supplying the goods. On 19/511995 second defendant took delivery of comrgated iron sheets worth Ug. Shs.18,600,000/ =. The second defendant and the appellant failed to meet their

obligations. The respondent filed a suit against them in the High Court. The appellant denied liability and contended as follows:

- (a) That the plaintiff did not fulfil a condition precedent to the validity of the bond by writing a letter accepting the bond. - That the appellant had discovered that there was no delivery of the goods, and (b) - That the transaction was fraudulent between the 2nd defendant and the respondent and this fraud was concealed from the appellant. (c)

At the commencement of the hearing learned Counsel for the plaintiff indicated that since the 2nd defendant had neither entered an appearance nor filed a defence, the plaintiff/respondent was interested in pursuing the 1st defendant/appellant alone. The learned trial judge allowed the respondent to proceed against the appellant only and promised a ruling later. In his judgment, the learned trial Judge ruled that the plaintiff had the liberty to pursue the action against any of the defendants singly or jointly.

The trial Judge found that 2nd defendant took deliver of the goods and the appellant was liable as per its guarantee bond and ordered it to pay Ug. Shs. 18,600,000/= being the principal sum with interest of 14% p.a. from the date of filing the suit until payment in full and a general damages in the sum of shillings twenty million. Hence this appeal.

There are four grounds of the appeal, namely:-

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"1 - The leamed trial Judge's decision to reserve a ruling on the respondent's application allowing the Respondent to pursue the case against the Appellant alone in the lower suit amounted to, surprise in the context of the defence pleadings on record, in general, and violation of the principles of natural justice.

2. The learned trial Judge erred in law and in fact in admitting the respondent's exhibit P. IV and the defence evidence in respect of exhibit P. III

contrary to the law governing the admissibility of such evidence, and the decision caused a miscarriage of justice.

3. The learned trial Judge misdirected himself in improperly evaluating the evidence on record to the disadvantage of the appellant and without caring whether the burden of proof had been properly and fairly discharged, and

4. The learned trial Judge erred in law and in fact in passing judgement against the appellant alone when the suit against Messrs Speedy Delivery Limited, the second defendant in the lower suit had not been wholly discontinued and is a decision which caused a miscarriage of justice.

Mr. Nagemi, Counsel for the appellant, argued grounds I and 4 together and I shall deal with the two grounds in a similar manner.

Counsel for the appellant contended that the learned trial Judge erred in law and in fact when he allowed the respondent to proceed with the prosecution of the suit against the appellant alone when the suit had been instituted jointly against the appellant and the second defendant and this caused a miscarriage of justice. Counsel contended;

Firstly, that the learned trial judge's decision of allowing the respondent to proceed with the case against the appellant without first withdrawing the suit against the 2nd defendant in accordance with Order 22 of the Civil Procedure Rules was an error in law.

Secondly, that the learned trial judge's reservation of his ruling on tne above issue until the end of the trial prejudiced the appellant in its defence as there were ^a number of issues in the appellant's defence which would have been answered by the second defendant in a joint suit against the two.

Thirdly, that the appellant was denied the oppornmiry of aking out third party notice against the 2nd defendant.

Finally, that the learned trial judge did not allow counsel to frame issues before the trial started and did not give the appellant a fair hearing which was contrary to the rules of nanrral justice.

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Counsel submitted that the judge's failure in these regard has caused a miscarriage ofjustice. He cited FSSO (U) LTD. V. Semu Amanu Opio 1992-93 HCB 107. H. W. R. Wade. Administrative law 5th Ed. Ch.

15. Audi Alteram Partem Rule.

In response, Mr. Mayiga, learned counsel for the respondent, supported the learned trial judge's decision and submitted that the correct procedure was followed during the trial and that there was no miscarriage ofjustice occasioned. karned counsel contended;

Firstly, that the learned trial judge was right to allow the respondent to proceed with the suit against the appellant as the law permits a plaintiff to pursue defendants severally or jointly with another against whom he has a cause of action. He cited Betemuka v. Anvwar [1987] HCB 71. where Mukasa Kikonyogo J. (as she then was) held that the plaintiff is at liberty to sue anybody he thinks he has a claim against and cannot be forced to sue somebody and where he sues a wrong party he has to shoulder the blame. Counsel further submitted that the trial judge could not have entered an interlocutory judgment against the second defendant as there was no proof of service, which is a pre-requite according to Order 9 rule 5 of the Civil Procedure Rules. Counsel further contended that the procedure adopted by the learned trial judge did not occasion a miscarriage of justice. He cited FIDA BIRABWA VS. SOLOMON TIGAW NA t1993I V. KALR - 2 where it was stated;

"Substantial miscarriage of justice is said to occur where there has been ^a misdirection by the trial court on matters of fact relating to the evidence given or where there has been unfairness in the conduct of trial. "

Secondly, that the appellant knew where the second defendant was and should have brought him to the trial. Counsel further submitted rhat the appellant was at liberty to sue the second defendant to be indemnified.

Thirdly, that the learned trial Judge did not prevent counsel from framing issues, but it was the counsel for both appellant and respondent who failed to agree. According to Order 13 of the Civil Procedure Rules it is the duty of the trial judge and not of counsels to frame issues.

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I agree with the statement of the law by counsel for the respondent. A plaintiff is at liberry to sue any defendant or defendants jointly on severally against whom he has a cause of action. Order 1 rule 3 of the Civil Procedure Rules provides for joinder of defendants as follows:

> '' (a) All persons may be joined as defendants agairst whom any right or relief in respect of or arising out of the same act or transaction or series of acts or transactions is alleged to exist whether jointly or severally, or in the altemative, where, if separate suits were brought against such persons, any corrunon questions of law or fact would arise. "

Rule 4 of the same Order provides:

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"Judgment may be given without amendment,

(b) against one or more of the defendants as may be found to be liable according to their respective liabilities"

In the instant case the liability of the appellant to the respondent was joint and several. Joint and several is defined by Black's Law Dictionary Abridged Sixth Edn. p.583 as follows:

> "A liability is said to be joint and several whenthe creditor may demand payment or sue one or more of the parties to such liability separetely or all of them together at his option. "

In view of the above, I am unable to fault the learned trial Judge in proceeding with the trial against the appellant. However, I am of the view that once learned counsel for the respondent had indicated to court that he did not wish to proceed against the second defendant who had not been served and had not entered an appearance, the learned trial judge should have struck off its name from the record.

I agree with the submissions of learned counsel for the respondent on what amounts to substantial miscarriage of justice as stated in FIDA BIRABWA (Supra)

I find the argument of the appellant's counsel that failure by the trial judge to make a formal ruling to discontinue the proceedings against the second defendant before trial proceed caused a miscarriage of justice baseless. The appellant knew the second defendant and is at liberty even to-day to sue it so that the appellant can be indemnified.

Counsel for the appellant complained that the learned trial Judge prevented the counsel to frame issues. However, counsel for the respondent informed this court that both counsel failed to agree on issues at the trial and submitted that it was the duty of the trial Judge to frame issues and not of counsel.

I find that the learned trial Judge was alive to his duty to frame issues according to Order 13 of the Civil Procedure Rules. In his judgment at p.10 he discussed the issue and relied on Prince JDC Rukidi vs. Prince Salomon Isuru C. A. 18194. I reiterate that is the duty of the trial Judge to frame the issues. According to the provisions of Order 13 r. 5, Order ¹³ r. 4, issues are framed by the court after consultations with parties or their advocates at the beginning of trial. The trial judge is not bound by those issues. On the contrary, the judge may amend the issues, strike out some of them or add new ones any time before passing of the decree. See nBu re v. Attorne A ² J unre rted I find that the learned trial judge followed the correct procedure and that there was no miscarriage of justice. Accordingly grounds I and 4 must fail.

In ground No. 2 learned counsel for the appellant complained that the learned trial Judge erred in law in admitting exhibit P. IV in evidence and oral evidence in respect of exhibit P3 contrary to the taw and thereby caused a miscarriage ofjustice. He contended that exhibit P.lV did not bear the name of the addressee. It was admitted by Court in evidence for identification but the learned trial Judge in his judgment found that it confirmed that delivery of the goods was made to the second defendant. Counsel for the appellant fu(her submitted that the learned trial judge erred in law to admit oral evidence to explain the exhibit. He further argued that the trial judge ened by relying on statements from the bar to explain the contents of exhibit P. III He cited Choitram v. l,azar t19591 EA ¹⁵⁷

In response, Mr. Mayiga, counsel for the respondent, said that counsel for the appellant did not object to the admissibility of the exhibits P. III and P.lV at the trial. He further contended that PW1's evidence did not subtract or add anything to exhibit P. III. PWI's

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evidence simply explained the respondent company's procedure. He submitted that the appellant was by section 113 of the Evidence Act estopped from denying the contents of exhibit P. IV. He argued that what was stated by counsel from the bar was not in evidence. He further explained that counsel as an officer of court has a duty to explain to court if ^a need arises.

I am unable to fault the learned trial judge for his admission in evidence of Exhibits P. IV especially when learned Counsel for the appellant did not object to the admissibility of the same exhibit at the trial. I agree with the learned trial judge's finding that tlte contents of exhibit PIV corroborated PI's evidence especially when it was issued three days after the issue of exhibit P3. I agree with the trial judge's admission of the evidence in respect of exhibit PIII. The evidence merely clarified respondent company procedure. The learned trial judge found that PWI was a credible witness and knew very well the difference between delivery notes and invoices. I hold that the evidence did not add to or subtract anything from the primary evidence. Choitram v I:zar (supra) relied on by counsel for the appellant is not applicable in the instant case.

In ground No. 3 counsel for the appellant submitted that the learned trial judge erred in finding for the Respondent when it had not discharged its required standard of the burden of proof and failed to evaluate evidence and based his judgment on extraneous matters. The extraneous matter which learned counsel complained of in this ground were statements by counsel from the bar and admission of oral evidence on exhibit P. III.

In reply learned counsel for the respondent contended that the leamed trial Judge had properly evaluated the evidence on record. The trial judge had correctly directed herself on the standard of proof which is on the balance of probability. The appellant should have produced evidence to show that the goods were not delivered. He submitted that the evidential burden does not shift to the defendant unless there is cogent and credible evidence produced by the plaintiff on the issue.

He submitted that plaintiff had produced such evidence and the burden was on the appellant to produce evidence to show that the goods had not been delivered. He cited Musisi Dirisa & Others V. Sietico (U) Ltd. (S ) (C. A.) No. 24/93 (unrenorted)

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I find that the learned trial Judge properly evaluated the evidence. The standard of proof required. which is on balance of probability, was discharged. (See Miller v. Minister of Pensio ¹¹⁹⁴⁷¹2 All ER.

372) In view of my finding in ground 2, the complaint by counsel for the appellant, that the trial Judge in his Judgment considered extraleous matters, is groundless.

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Ground No. 3 must also fail

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In the result, I would dismiss this appeal with costs to the respondent..

Dated at Kampala tti. .}{hrv or. NW: l;sa

O{-':' c-C,--.5-- , C. N. B. KITUMBA JUSTICE OF APPEAL.

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

CIVIL APPEAL 14/98

THE HON. MR. JUSTICE C. M. KATO, J. A. CORAM: THE HON. MR. JUSTICE J. P. BERKO, J. A. AND THE HON. LADY JUSTICE C. N. B. KITUMBA, J. A.

CRANE INSURANCE CO. LTD. & ANOTHER ........ ... APPELLANT

- VERSUS -

RESPONDENT $\cdots$ SHELTER LIMITED ...........................

(Appeal arising from the judgment and Decree of the High Court of Uganda at Kampala (Tinyinondi J.) dated 17-11-97 in HCCS No.748/95)

JUDGMENT OF C. M. KATO, J. A.

I have had the benefit of reading the judgment of Kitumba, J. A. in draft. I entirely agree with it. Since Berko, J. A. also agrees, this appeal is dismissed with costs to the respondent in this court and in the High Court.

Dated at Kampala this ... $\mathcal{Q}$ day of ... $\mathcal{N}$ $\mathcal{P}$ ....................................

$C. M$ JUSTICE OF APPEAL

THE REPUBLIC OF UGANA

IN THE COURT OF APPEAL OF UGANDA

AT KAMPALA

CIVIL APPEAL NO. 14/98

CORAM: HON. MR. JUSTICE C. M. KATO, J. A., HON. MR. JUSTICE J. B. BERKO, J. A. & HON. LADY JUSTICE C. N. B. KITUMBA, J. A.

CRANE INSURANCE COMPANY....................................

VERSUS

SHELTER (U) LIMITED....................................

(Appeal arising from the Judgment and Decree of the High Court of Uganda at Kampala by Hon. Justice Tinyinondi, J. dated 17^th November 1997, in HCCS No. 748/95)

My Lords, I have had the advantage of reading in advance the Judgment written by my Honourable and learned friend Justice Kitumba, J. A. I am in agreement with it and accordingly I would dismiss the appeal.

Dated at Kampala this $\frac{20^{th}}{100^{th}}$ ......day of November, 1998.

$20$

J. P. Berko Justice of Appeal.

$10$