Mastermind Tobacco Uganda (PTY) Limited v Rugujiro & Anor (Miscellaneous Application 713 of 2005) [2002] UGCommC 29 (6 December 2002)

THE REPUBLIC OF UGANDA IN THE HIGH CURT OF UGANDA AT KAMPALA (COMMERCIAL COURT)

MISC. APPLICATION NO. 713 OF 2002 ARISING FROM MISC. APPLICATION NO. 712 OF 2002 (ARISING FROM CIVIL SUIT NO. 497 OF 2002)

| MASTERMIND<br>TOBACCO | | | |----------------------------|--------|-------------| | UGANDA<br>(PTY)<br>LIMITED | | APPLICANT | | | VERSUS | | | RUJUGIRO<br>AYABATWA<br>1. | ] | | | &<br>LEAF<br>TOBACCO<br>2. | | RESPONDENTS | | COMMODITIES<br>(U)<br>LTD | ] | |

BEFORE: THE HONOURABLE MR. JUSTICE JAMES OGOOLA

RULING

MASTERMIND TOBACCO applied to this Court for an injunction against both Respondents to bar them from using the Applicant's machinery and equipment pending disposal of the underlying suit (HCCS No. 497/2002) - which suit requests substantially the same relief.

The brief background to the underlying dispute appears to be that Applicant/Plaintiff leased and later purchased certain tobacco processing machinery and packing equipment from the British Virgin Islands. It is contended that the machinery/equipment was then shipped to the First Defendant/Respondent who, at that time was a Director of the Plaintiff Company, but who has since acquiring that machinery, left the Plaintiff company and formed his own (the Second Respondent in this application). Plaintiff avers that subsequently, the First Respondent converted the machines to his own use at the premises of his own company (the Second Respondent). Now comes Plaintiff with this instant application seeking an order to restrain both Respondents from using the suit

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machinery and equipment, on the grounds that Respondents have neither the authority nor the experience/expertise to operate the machines; and are therefore likely to damage them; and, as the machines are unique, it would be difficult to replace them if damaged.

Applicant argued that it has a *prima facie* case, with a probability of success; that it might otherwise suffer irreparable damage that cannot be adequately compensated in damages; and that if Court is in doubt on the first two grounds, it should decide this application on ^a balance of convenience - as between the Applicant and the Respondents. Respondents, for their part, opposed the application on the grounds that to grant the injunction sought, would be to prejudge the outcome of the underlying suit (since the suit and the application are identical in substance). Secondly, the injunction sought would fundamentally change the *status quo,* and would create untold inconvenience both to the Respondents, and to all others concerned.

Having considered the submissions of both counsel and perused the pleadings in this application, ^I have formed the following conclusions:

- (1) Prima facie case: ^I find that each one of the parties on the evidence adduced in their respective affidavits has proved a *prima facie* case with probable success as regards the question of ownership of the suit machinery and equipment. In other words, each party raises a formidable case which then throws a reasonable doubt on the claim of the other. ^I am fully mindful that at this stage of the proceedings proof of facts is not required. - (2) irreparable damage not compensable in damages: The Applicant has utterly failed to convince me that if Court does not grant the injunction prayed, the Applicant would suffer irreparable damage that cannot be atoned by compensation in damages. The suit machinery, and much less the packing equipment, are not rare works of art or any such asset. They are pieces of machinery whose monetary value can be ascertained - ^I dare say quite easily.

(3) On the basis of my findings in (1) and (2) above, which cast a doubt on those respective principles, ^I am constrained by our law to decide the application on a balance of convenience. Naturally each party to this application claimed to have the balance of convenience. ^I find that given all the circumstances of this case, it is the Respondents who should have the benefit of the balance of convenience in the instant application. First, and foremost, it is a cardinal principle of our law that an injunction should preserve the *status quo.* In the present application, the *status quo* is that the Respondents have been using the suit machinery and equipment for ^a very long time - ever since the incorporation of the second Respondent as a limited liability company. I To stop the machines now would create a fundamental and drastic change in the *status quo.* It would have far reaching repercussions not only on the fortunes of the second Respondent company (namely cessation of all manufacturing activities), but would also have wider economic ramifications (including possible unemployment of about 200 workers, as well as negative fiscal, economic and financial out fall on the economy of this country). Such dire consequences cannot by any stretch of the imagination be said to be a preservation of the *status quo.* No; to grant the injunction now

prayed by the Applicant would be to court unmitigated disaster - ^a function for which this Court'^s discretion in granting injunctions was never intended. To grant an injunction in such dire circumstances would be a complete abuse of the Court's discretion. Court must reserve the reaching of such a drastic decision only after it has been presented with full argumentation of all the evidence in the underlying suit by live witnesses who are subjected to examination and cross-examination, and by production of all the relevant documentation in the matter. Only then would the Court feel confident and justified to decide on the fundamental issues in this litigation.

In the premises, Court is not inclined to grant the Applicant's prayer. Accordingly, the application is hereby declined.

The costs of the application are to abide the outcome of the underlying suit.

Ordered accordingly.

James Ogoola JUDGE 06/12/02

DELIVERED IN OPEN COURT, BEFORE:

Kandeebe Esq – for Applicant Ms Ruth Mubiru – for Respondents J. M. Egetu – Court Clerk.

> James Ogoola JUDGE 06/12/02