Friends in need SACCO Limited v Lulume Nambi Norah (Civil Appeal No. 89 of 2019) [2021] UGHCCD 20 (28 January 2021)

THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (CIVIL DIVISION)

CIVIL APPEAL NO. 89 OF 2019

(ARISING FROM NABWERU CIVIL SUIT NO. 140 OF 2016)

FRIENDS IN NEED SACCO LTD ::::::::::::::::::::::::::::::::::::::::::::::::::::::APPELLANT

VERSUS

LULUME NAMBI NORAH:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT

BEFORE: HON. JUSTICE EMMANUEL BAGUMA JUDGMENT

Background

This is an appeal arising from the judgment and orders of Her Worship Mbabazi Edith Mary, Magistrate Grade 1 at Nabweru Chief Magistrates Court.

The appellant (formerly plaintiff) instituted a summary suit vide; Civil Suit No. 140 of 2016 against the respondent (formerly defendant) for recovery of 5,000,000/= (five million shillings) being money advanced through a loan. However, on the 7 th day of March 2017, the parties signed a partial consent judgment in the suit and decided to proceed with the counterclaim against the appellant of UGX 26,000,000/= (twenty six million shillings).

Judgment was entered in favor of the respondent that the appellant pays compensation of 15,000,000/= (fifteen million shillings) and damages of 15,000,000/= (fifteen million shillings) all totaling to UGX 30,000,000/= (Thirty million shillings).

The appellant being dissatisfied with the judgment and orders of the trial court, appealed to this honorable court.

The memorandum of appeal had the following grounds of appeal;

Grounds of appeal

- 1. That the learned trial Magistrate erred in law when she entertained a counterclaim that was beyond her jurisdiction and also made orders of compensation for lost earnings and general damages totaling UGX 30,000,000/= (Thirty million shillings) which was beyond her jurisdiction. - 2. That the learned trial Magistrate erred in law when she proceeded to determine a counterclaim that was a nullity and in violation of the law. - 3. The trial magistrate erred in law and fact when she failed to properly evaluate the evidence as a whole thereby coming to a wrong conclusion that the appellant's employees entered on the respondent's premises, closed the school and took away computers, furniture and books thereby arriving at a wrong conclusion. - 4. The trial magistrate erred in law and fact when she awarded excessive compensation and general damages of UGX 30,000,000/= to the respondent thereby occasioning a miscarriage of justice.

The duty of this court as a first Appellate Court was stated in the case of Kifamunte Henry V Uganda, S. C criminal Appeal No. 10 of 1997 where court held that;

*"The first appellate court has a duty to review the evidence of the case, to reconsider the materials before the trial judge and make up its own mind not disregarding the judgment appealed from but carefully weighing and considering it."*

I will therefore bear these principles in mind as I resolve the grounds of appeal in this case.

The appellant was represented by Mr. Mujurizi Jamiru while the respondent was represented by Mr. Mukasa Eric.

At the hearing, both counsel agreed to file written submissions which court has put into consideration while making this judgment.

Determination of ground1

Ground 1. That the learned trial Magistrate erred in law when she entertained a counterclaim that was beyond her jurisdiction and also made orders of compensation for lost earnings and general damages totaling UGX 30,000,000/= (Thirty million shillings) which was beyond her jurisdiction.

Counsel for the appellant in his submissions at page 2 paragraph 3 submitted that jurisdiction is a creature of statute and court cannot confer jurisdiction upon itself. He relied on the case of National Medical Stores V Penguins Ltd HCCA 29 of 2010. Where it was held that;

"Jurisdiction is a creature of statute… and where a court has no jurisdiction to entertain the matter, any proceedings arising thereof are a nullity."

Counsel submitted that jurisdiction goes beyond mere errors and it is an illegality that cannot be sanctioned by court for a Magistrate Grade 1 to entertain a matter that exceeds his/her pecuniary jurisdiction of 20,000,000/=(Twenty million shillings) provided for under Section 207 (1) (b) of the Magistrates Courts Act. Which provides that;

"*A Magistrate Grade 1 shall have jurisdiction where the value of the subject matter does not exceed twenty million shillings.*

Counsel also relied on the case of Seggululigamba V Kyobe Gerald & Anor H. C. C. A No 92 of 2017 where court held that;

*"Proceedings of a court without jurisdiction are a nullity because no court can confer jurisdiction on itself…"*

Counsel for the appellant submitted that this ground of appeal disposes off grounds; 2, 3 & 4 since the proceedings of the trial court without jurisdiction are a nullity *ab-nitio.* However, without prejudice, he submitted on grounds 2, 3 & 4.

On the other hand, counsel for the respondent submitted that the trial magistrate in the instant case awarded compensation of 15,000,000/= (fifteen million shillings) and general damages of 15,000,000/= (fifteen million shillings) which was within her jurisdiction as per Section 207 (1) (b) of the MCA. Cap 16.

Counsel also submitted that an objection to jurisdiction should be made at the beginning of the trial as per Section 16 of the Civil Procedure Act and failure or omission by the appellant's counsel to object to the jurisdiction at such time cannot be visited on the respondent.

Counsel further submitted that the general damages were not known at the commencement of the trial and couldn't form part of the value of the subject matter and that in the event where the damages are excessive, the court has powers to reduce the damages to the level that would adequately compensate the respondent and remain within the ambits of the jurisdiction of the Grade 1 Magistrate.

*Counsel for the respondent submitted that at scheduling, they conceded that the amounts awarded were over and above the jurisdiction of the Grade 1 magistrate but he invokes the discretion of court to reduce the amounts awarded and uphold the judgment of the trial court.* Further that the mistakes of the judicial officer should not be visited on the litigant as to be denied a remedy.

It should be noted that all through the written submissions of counsel for the respondent, he decided to keep quiet or avoided submitting on the issue of pecuniary jurisdiction of the 26,000,000/= (twenty six million shillings) in the counterclaim but only labored so hard to convince court on the issue of compensation of 15,000,000/= (fifteen million shillings) and general damages of 15,000,000/= (fifteen million shillings). He did not whatsoever address the issue of jurisdiction on the counterclaim of 26,000,000/= (twenty six million shillings).

Resolution of ground 1

Ground 1: whether the learned trial Magistrate erred in law when she entertained a counterclaim that was beyond her jurisdiction and also made orders of compensation for lost earnings and general damages totaling UGX 30,000,000/= (Thirty million shillings) which was beyond her jurisdiction.

The jurisdiction of the Magistrates Grade.1 is laid out in Section 207 (1) (b) of the Magistrate's Courts Act which provides as follows:

*(b) A Magistrate Grade 1 shall have jurisdiction where the value of the subject matter does not exceed twenty million shillings.*

In addition to this, Section 4 of the Civil Procedure Act Cap 71 provides that;

*"Except in so far as is otherwise provided, nothing in this Act, shall operate to give any Court jurisdiction over suits, the amount of value of the subject matter of which exceeds the pecuniary limits if any of its ordinary jurisdiction."*

The principle of law is that jurisdiction is a creature of statute. In the case of Baku Raphael Obudra & Anor v AG (S. C. C. A No. 1 of 2005), the Supreme Court held that;

*"Courts are established directly or indirectly by the constitution and that their respective jurisdictions are accordingly derived from the constitution or other laws made under the authority of the constitution."*

In the case of Peter Mugoya V James Gidudu & Anor [1991] HCB 63, *it* was held that:

*"A judgment of Court without jurisdiction is a nullity. The orders which follow such a judgment must be set aside ex debito justitiae (as of right).*

Further, in the case of David Segulani V Rosemary Natukunda & Anor Misc. Civil Application No.61 of 1991, Justice A. N Karokora (as he then was) held that *"it is now settled law that where a defendant makes a counter claim in his defense, a counter claim is to be treated for all purposes for which justice requires it to be so treated as an independent action.*

It was further held that;*"a counter claim being treated as an independent action, it must, following the principle laid down in (*Paulo Lubega Kagenyi Musilama & Kato Misc. Cause No. 39/1967) *be filed in a court which has jurisdiction to try it. if the amount claimed in the counter claim exceeds the pecuniary jurisdiction of the court in which the main suit has been filed,then the defendant should have considered in which court he should file what he intended to claim in his counter claim. He could not file a counter claim in a court which had no pecuniary jurisdiction to entertain it.*

In the instant case, the respondent in her counterclaim dated 2 nd January 2017, paragraph 1 (b) sought for an order directing the appellant to pay compensation for lost earnings amounting to UGX 26,000,000/= (twenty six million shillings).

Further, in the witness statement of PW1 (Lulume Nambi Norah) dated 6 th April 2017 paragraph 6, she stated that she filed a counterclaim for recovery of 26,000,000/= (twenty six million shillings) as lost earnings.

In addition to the above, the trial magistrate went ahead and ordered the appellant to pay the respondent compensation of 15,000,000/= (fifteen million shillings) and general damages of 15,000,000/= (fifteen million shillings) totaling to UGX 30,000,000/= (Thirty million shillings) which was also above her jurisdiction.

The proceedings and pleadings before the trial Magistrate were enough for her to determine the question of jurisdiction before she could entertain the counterclaim.

Upon scrutiny of the judgment in paragraph 1, the trial magistrate indicated that the respondent prayed for compensation for loss of UGX 20,000,000/=in figures. However in words, the trial magistrate indicated twenty five million shillings. This shows that the trial magistrate knew that the counterclaim was above UGX 20,000,000/= (twenty million shillings) the fact that she wrote twenty five million shillings in words which is close to the twenty six million shillings in the counterclaim.

In the case of National Medical Stores Vs Penguins Ltd (H. C. C. A No. 29 of 2010) court held that;

*"With regard to damages…the law is that a magistrate cannot award damages over and above the pecuniary jurisdiction."*

Also in the case of *Mubiru & Ors V Kayiwa (1979) HCB 212 (CA),* the Court of Appeal of Uganda held that, *"an order made without jurisdiction is a nullity."*

In the instant case, since the trial court proceeded to entertain a counterclaim of UGX 26,000,000/= (twenty six million shillings) without jurisdiction and went ahead to make orders awarding compensation of UGX 15,000,000/= (fifteen million shillings) and general damages of UGX 15,000,000/= (fifteen million shillings) totaling to UGX 30,000,000/= (Thirty million shillings), It was a nullity *ab-initio."*

In the case of *Makula International V His Eminence Cardinal Wamala Nsubuga [1982] HCB 24,* Court held that;

*"Once an illegality is drawn to the attention of Court, it overrides all matters and such illegality cannot be allowed to stand."*

In the final result, basing on the provisions and authorities cited above, since the illegality of handling the matter above the jurisdiction is drawn to the attention of this court, it overrides all grounds and such illegality can't be allowed to stand.

Further, since the trial magistrate had no jurisdiction to try the counterclaim and went ahead to award compensation and general damages above her jurisdiction, this was erroneous in law and, is a nullity. Ground one of this appeal therefore succeeds.

Having resolved the first ground, I entirely agree with counsel for the appellant that this ground of appeal disposes off grounds 2, 3 and 4 hence this court will not waste time to consider the same.

In conclusion, this appeal succeeds with the following orders;

- 1. The proceedings and orders in C. S No. 140/2016 in respect of the counterclaim are hereby set aside since they were null and void *ab-nitio*. - 2. Costs of this appeal and in the lower court are awarded to the Appellant.

It is so ordered

…………………………………………….

Emmanuel Baguma

Judge

28/01/2021