Reuman & Co Limited v Wandera and Others (Civil Appeal No. 51 of 2001) [2002] UGCA 17 (27 May 2002)

THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA HOLDEN AT KAMPALA

CORAM: HON. JUSTICE G. M. OKELLO, JA. HON. JUSTICE A. E MPAGI-BAHIGEINE, JA. HON. JUSTICE S. G. ENGWAU, JA.

CIVIL APPEAL NO. 51 OF 2001

BETWEEN

REUMAN & CO. LIMITED -------------- APPELLANT

AND

- 1. PHILEMON WANDERA - 2. HOIMA S. S. SCHOOL PARENTS ASSOCIATION

BOARD OF GOVERNORS HOIMA SECONDARY SCHOOL1--RESPONDENTS

4. HOIMA SECONDARY SCHOOL

(An appeal against the Ruling of the High Court at Kampala (Lugavizi J) dated 13.10. 2000 in Miscellaneous Application No. 1213 of 1999 arising from Execution Proceedings in HCCS No. 131 of 1989).

JUDGMENT OF S. G. ENGWAU, J. A.

This is an appeal against the Ruling of the High Court delivered on the 13^th October, 2000 in Miscellaneous Application No. 1213 of 1999 arising from the Execution Proceedings in HCCS No. 131 of 1989.

The brief background of this appeal is as follows. Mr. Yesero Mugenyi was the successful plaintiff in HCCS No. 131 of 1989 against the above named respondents. The High Court issued a decree for the payment of Shs. 4 million by the respondents to him. The Order directed a Court Bailiff and Auctioneer, one Bakesi Mahatane Cleophas, to attach and sell movable property belonging to the respondents. Consequently, the respondents' immovable property comprised of Plot M 11 Hoima Katakwi and Plot M12, Hoima Katakwi respectively were attached and sold.

After the attachment of the above mentioned properties, the respondents raised a complaint upon which the Registrar stopped execution and called upon parties to appear before him on 18.2.99 but the judgment creditor and the auctioneer did not attend. On 30.1.99 the properties were

advertised for sale and were sold to the appellant on 19.2.99. On 7.4.99 the Registrar issued an order for delivery of the land to the appellant.

In view of the above developments, the respondents filed Miscellaneous Application No. 1213 in the High Court to set aside the execution. It was brought under sections 35 and 101 of the Civil Procedure Act and Order 48 Rules 2 and 3 of the Civil Procedure Rules. In that application the appellant was joined as co-respondent together with Yesero Mugenyi, the plaintiff in the suit and Bakesi Mahatane Cleophas as the Court Bailiff and Auctioneer who carried out the execution.

The grounds for the application were that the attachment warrant issued by the Registrar was not applied for; there was excessive attachment; sale was to a company in which the judgment creditor had an interest; the immovable property was sold after 19 days instead of 30 days (see Order 19 Rule 64 Civil Procedure Rules); property was sold when there was the Registrar's order stopping the sale; the Registrar erroneously confirmed the sale he had previously stopped and that in the interest of Justice, therefore, the sale should be set aside and the property returned to the applicants now the respondents.

When the application came for hearing before Lugavizi J. on 23.8.2000, the appellant company and the co-respondents including. Yesero Mugenyi and Bakesi Mahatane Chophas raised several preliminary points of law. The objections include inter alia that:

- i. the action was barred by section 51 of the Civil Procedure Act which prohibits allegation of fronting. - ii. No action against the Auctioneer who is a public officer after expiry of 6 months. - iii. The appellant company was not a party to the suit and therefore section 35 of the Civil Procedure Act cannot apply to it. - Bailiff not a party to the suit nor was he an agent of the iv. parties - therefore section 35 of the Civil Procedure Act does not apply to him.

Notice of motion, a summon cannot be served outside 21 $V$ . days as provided by Order 5 Civil Procedure Rules as amended.

The learned judge delivered his ruling on 13.10.2000. He upheld the points of law in favour of the Auctioneer, Bakesi Mahatane Cleophas, and struck out the whole application against him with costs. He also partly upheld the points of law in favour of the appellant and struck out the action in respect of fronting against the appellant and dismissed the rest of the objections with costs.

It is upon the above background that the appellant has preferred 5 grounds of appeal as follows:-

- 1. The learned trial judge erred in law when having struck out as against the appellant that part of the application that alleged fronting of the appellant, he held that the application remains standing against the appellant in respect of other allegations or cause of action against the appellant existed - 2. The learned trial judge erred in law in failing to make a finding on those parts of the appellant's preliminary objection that: - If the application could not be maintained and would be $2.1$ struck out against the $2^nd$ respondent to the application who sold the suit property as Auctioneers, the same application could not be maintainable against the appellant who merely purchased the suit property at the auction. - 2.2 Having paid the full purchase price, the appellant's purchase of the suit property became absolute and protected by section 50 of the Civil Procedure Act. - $3.$ The learned trial judge erred in law when he failed to find that the application was not maintainable against the appellant as its purchase of the suit properly was protected by law.

4. The learned trial judge erred in law when he failed to strike out the whole application as against the appellant with costs.

5. The learned trial judge erred and misdirected himself when he ordered that the appellant pays costs in respect of the objection raised against the application.

In accordance with the provisions of rule 97 of the Rules of this Court, counsel for both parties filed in their written submissions. Mr. Didus Nkurunziza, learned counsel for the appellant argued grounds 1, 2 and 5 separately but argued grounds 3 and 4 together. However, Mr. Richard Mwebembezi, learned counsel for the respondent, preferred to argue grounds 1,2,3 and 4 together and argued ground 5 alone. I shall follow the latter order in which counsel Mwebembezi has argued the grounds of appeal.

The complaint on the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ grounds of appeal may be summarised as follows. First, that the Notice of Motion and Affidavit in support thereof did not disclose a cause of action against the appellant in that the allegations made were only of fronting by the plaintiff in the suit (Yesero Mugenyi) to purchase the auctioned property, which allegations could not be maintained in view of section 51 of the Civil Procedure Act.

Secondly, that it was an error for the trial judge to maintain the application against the appellant on the other grounds when there were no other grounds shown in the pleadings.

Mr. Didus Nkurunziza pointed out that the only ground of application which had bearing on the appellant reads as follows:

" The sale was fraudulent as the property was sold to a company in which the respondent had an interest".

Learned counsel submitted that the only allegation of fact that was disclosed in the Notice of Motion and Affidavit in support thereof against the appellant was that of having been used as a front by the plaintiff in the suit ( Mr. Yesero Mugenyi, the 1^st respondent in the application) to purchase the auctioned property. He contended that section 51 of the Civil Procedure Act prohibits allegation of fronting.

Mr. Nkurunziza submitted, therefore, that the trial judge was in error when he held that the application remains standing against the appellant in

respect of the allegations. He paused a pertinent question to the effect that "which other allegations?" In counsel's opinion, there were no other allegations made against the appellant other than the one of fraudulently acquiring the auctioned property on behalf of or as a front for the plaintiff in the suit (Mr. Mugenyi). All the other allegations made as grounds of the application were, in counsel's view, against either the $1^{st}$ or $2^{nd}$ respondents to the application (Mr. Yesero Mugenyi and Mr. Bakesi Mahatane Cleophas respectively) and the appellant was not accused of those other allegations or grounds.

In conclusion, Mr. Nkurunziza submitted that once the allegation of "fronting" was struck out as against the appellant by operation of law as provided in section 51 of the Civil Procedure Act, then the appellant was not liable because there was no cause of action against it. Learned counsel relied on the authority of Auto Garage V. Motokov [1971] E. A. 519 where it was held inter alia that in order for a cause of action to exist it must be shown that:

> " the plaintiff enjoyed a right, that the right has been violated and that the defendant is liable ......... if on the other hand any of those essentials is missing no cause of action has been shown and no amendment is permissible".

He submitted, therefore, that it was an error of law for the learned trial judge to hold that the application remains standing against the appellant in respect of other allegations in the application, which allegations he did not point out, when no other allegations existed as against the appellant. In counsel's opinion, the trial judge ought to have instead struck out the whole application against the appellant with costs.

Mr. Richard Mwebembezi, learned counsel for the respondent, does not agree. He argued rightly, in my view, that section 35 of the Civil Procedure Act under which the application was based covers the appellant as a party to the application. Mr. Mwebembezi rightly submitted that though section 51 of the Civil Procedure Act prohibits suits alleging that the appellant bought the suit property merely as a front for Mr. Yesero Mugenyi, the 1^st respondent, its purchase, however, may be investigated under section 35 of the Civil Procedure Act which states:

$"$ 35 (1). All questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge, or satisfaction of the decree,

shall be determined by the court executing the decree and not by a separate suit".

Clearly, the above section covers " questions arising between the parties to the suit in which the decree was passed, or their representatives". In my view, although the appellant was not a party to HCCS No. 131 of 1989 or a representative of any of the parties to that suit. the learned trial judge was justified to hold that the appellant could be joined as a party to proceedings under section 35 (1) of the Civil Procedure Act. The trial judge was justified to hold so because it is now established that the wording of section 35 $(1)$ covering "the parties to the suit or their representatives" would include an auction purchaser, for the reason that title has passed to the purchaser from the judgment debtor. For that reason, the appellant is a very relevant party to include in such proceedings. See: Haningtone Wasswa & Another Vs. Maria Onyango Ochola & 3 Others, Supreme Court Civil Appeal No. 22 of 1993, (unreported) and Francis Nansio Micah Vs. Nuwa Walakira, SC Civil Appeal No. 24 of 1994 (unreported)

$\cdot$

The Miscellaneous Civil Application No. 1213 of 1999, in my view, is not limited only to the allegation of fronting by the respondent. It also covers other allegations such as illegality in the execution process, excess attachment and illegality of the sale in question, for example, those immovable properties were alleged to have been sold within 19 days after the advertisement in contravention of Order 19 Rule 64 of the Civil Procedure Rules (CPR) which provides that no sale of immovable properties shall take place until after the expiration of at least 30 days after advertisement. In my well considered view, these are other allegations which must be investigated by the trial judge before determining whether or not the sale would be set aside and the property returned to the owners. In any case, Court should not condorn to any illegality brought to its attention. See: Makula International Ltd Vs. His Eminence Cardinal Nsubuga (1982) HCB 11 where it was held inter alia that:

" A Court of Law cannot sanction what is illegal and illegality once brought to the attention of the court overrides all questions of pleading, including any admission made thereon".

The learned trial judge was also justified in holding that in the case of Court Bailiffs the better practice is to sue them separately. The fact that the application was struck out against the Auctioneer who sold the property does

not automatically exonerate the appellant, a purclraser of the suit property. It is the appellant cornpany which obtained title to the suit property after a sale in execution. The appellant, in rny vrew. was a party to the sale and if the sale can be shown to have been illegal, then the purchaser's title to the propeny shall be afflecled.

o

In conclusion, I find that the l't ground alone disposes ofthis appeal I do not intend, therefore, to labour on the rernaining grounds ofappeal.

In the result, this appeal has no merit and I would dismiss it with costs to the respondents.

Dated this r# day or !l)sj 2oo2

t ,-..... HON. JUSTICE S. G. ENGWAU JT]STICE OF APPEAL.

THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

CORAM: HON. MR. JUSTICE G. M. OKELLO, JA $\overline{5}$ HON. LADY JUSTICE A. E. N. MPAGI-BAHIGEINE, JA HON. MR. JUSTICE S. G. ENGWAU, JA

CIVIL APPEAL NO. 51 OF 2001

BETWEEN

REUMAN & CO. LIMITED ::::::::::::::::::::::::::::::::::::

AND $15$

$10$

$20$

$25$

$\pm^{-l}$

1. PHILEMON WANDERA ) 2. HOIMA S. S. SCHOOL PARENTS ASSOCIATION )::::: RESPONDENTS 3. BOARD OF GOVERNORS HOIMA S. S. SCHOOL) )

4. HOIMA SECONDARY SCHOOL

(Appeal against the Ruling of the High Court (Lugavizi, J) at Kampala dated $13 - 10 - 2000$ In Misc. Appl. No. 1213 of 1999 arising from Execution Proceedings in HCCS No. 131 of 1989)

JUDGMENT OF G. M. OKELLO, JA

I have read in draft the Judgment of Engwau, JA just delivered. I agree that the application was untenable under section 51 of the Civil Procedure Act in as far as it $30$ alleges that the appellant bought the property as a mere front for Mr. Yoseru Mugenvi. The section clearly prohibits such an action.

However, that was not the only issue in the application. The respondents are perfectly justified to want the propriety of the sale of the property to the appellant $35$ in the execution of the decree investigated under Section 35 (1) of the Civil

$\mathbf{1}$

Procedure Act. The Supreme Court has held in Francis Nansio Micah vs Nuwa Walakira, Civil Appeal No. 24 of 1994 (SCU) that Parties to a suit or their representatives have a statutory right under section $35(1)$ to have their legitimate complaint investigated by the executing court. That interpretation is still good law.

I. therefore, agree with Engwau, JA, that the appeal has no merit. As Bahigeine. JA also agrees, the appeal shall and is hereby dismissed with costs in favour of the respondents.

Java of May<br>Gnylwoo Dated at Kampala this .... $10$ 2002. G. M. Okello JUSTICE OF APPEAL.

$\overline{5}$

THE REPUBLIC OF UGANDA

IN THE COURT OFAPPEAL OF UGANDA

AT KAMPALA

CORAM: HON. JUSTICE G. M. OKELLO, JA. HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, J. A. HON. JUSTICE S. G. ENGWAU, JA.

CIVIL APPEAL NO.51 OF 2001

BETWEEN

REUMAN & CO. LIMITED :::::::::::::::::::::::::::::::::::: APPELLANT

AND

1. PHILEMON WANDERA $2.$ HOIMA S. S. SCHOOL PARENTES ASSOCIATION0):: RESPONDENTS $3.$ BOARD OF GOVERNORS HOIMA S. S. SCHOOL $\mathbf{I}$ $4.$ HOIMA SECONDARY SCHOL 1

> (Appeal against the Ruling of the High Court (Lugayizi, J) at Kampala dated 13.10.2000 in Misc. Appl. No.1213 of 1999 arising from Execution Proceedings in HCCS No.131 of 1998)

JUDGMENT OF A. E. N. MPAGI-BAHIGEINE, JA.

I have read the judgment of Engwau, J. A. in draft. I agree the appeal should be dismissed.

Dated at Kampala this $\ldots$ 2.7.... day of $\dots$ ..2002

> A. E. N. MPAGI-BAHIGEINE JUSTICE OF APPEA