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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(CIVIL DIVISION)
MISCELLEANOUS APPLICATION NO. 99 OF 2022
(ARISING FROM CIVIL SUIT NO. 275 OF 2019)
1. JOHN W. KATENDE
2. SIM KATENDE :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANTS
VERSUS
UGANDA COMMUNICATIONS COMMISSION ::::::::::::::::::::: RESPONDENT
BEFORE: HON. JUSTICE BONIFACE WAMALA
RULING
Introduction [1] The application was brought by Notice of Motion under Section 98 of the Civil Procedure Act (CPA), Section 33 of the Judicature Act, Order 13 rule 6 and Order 52 rule 1 of the Civil Procedure Rules (CPR) for orders that; a) Judgement on admission be entered against the Respondent/Plaintiff and the suit against the 4 th^ & 6 th^ Defendants (Applicants) be dismissed. b) Costs of the application be provided for.
[2] The application is supported by an affidavit sworn by Mr. Sim Katende , the 2 nd^ Applicant. Briefly, the grounds of the application are that between September 2008 and 2016, One Solutions Ltd, the 1st^ defendant in C.S No. 275 of 2019, was licensed by the Respondent (plaintiff in the said suit) to provide telecommunication services in Uganda. Under the license agreements and the Uganda Communications Act 2013, the said 1st^ defendant was required to continually pay its license and regulatory fees to the Plaintiff/Respondent. Sometime in 2016, the Respondent revoked the 1st^ defendant's license. The 1st
and 2 nd^ Applicants (who are 4th^ and 6th^ defendants in the suit) were directors of the 1st^ defendant from 1st^ March 201l to 6th December 2016. The Applicants never signed any post-dated cheques in favour of the Respondent nor signed any memorandum of understanding (MOU) nor any of the documents the Respondent is seeking to rely on in the suit. The Applicants also never personally made any oral representations or promises of any kind to the Respondent in respect of any matter involving the 1st^ defendant. The Applicants further averred that the Respondent never wrote or addressed any letter, invoice or communication of any kind in respect of the 1st^ defendant directly to either Applicant. The Applicants resigned as directors of the 1 st^ defendant in late 2016 prior to the filing of the suit and are no longer directors of the 1st defendant. The Applicants averred that by the Respondent’s own admission, the Respondent/Plaintiff has not adduced any evidence of misrepresentation or fraud as against the Applicants. The Applicants concluded that it is in the best interests of justice, equity and fairness that this application is granted.
[3] The application was opposed by the Respondent through an affidavit in reply deposed by Ms. Victoria Ssekandi, the Manager Legal Compliance and Enforcement of the Respondent, who stated that the application is misconceived, frivolous, vexatious and an abuse of court process and ought to be struck out and/or dismissed with costs on account of the fact that it seeks to pre-empt and dispose of the main suit against the Applicants, based on matters of fact that are pending full hearing of the suit and it is founded on a wrong interpretation of the facts as stated in the Respondent's witness statements, which do not, in law and fact amount to an admission that the Applicants are not liable for the orders sought against them in the main suit. The deponent stated that, from the outset, the Respondent denies the allegations that the statements which were made by the Respondent's witnesses in their witness statements are admissions of fact that the
Counsel. I have considered the submissions in the course of resolution of the matter before the Court.
Issue for Determination by the Court [7] One issue is up for determination by the Court, namely; Whether there are sufficient grounds to entitle the Applicants to judgement on admission and dismissal of Civil Suit No. 275 of 2019 as against the Applicants?
Applicants’ Submissions [8] Counsel for the Applicants relied on Section 20 of the Companies Act to the effect that the High Court may lift the corporate veil where a company or its directors are involved in acts of tax evasion or fraud. Counsel submitted that no ground for lifting the corporate veil has been pleaded and is capable of being established by the Respondent upon the evidence intended to be adduced by them. Counsel further cited the case of Future Stars Investments (U) Ltd v Nasuru Yusuf HCCS No. 0012 of 2017 to the effect that court is empowered to enter judgement on admission at any stage of the suit where an admission of facts has been made. Counsel submitted that the Respondent has effectively admitted in the agreed facts in the joint scheduling memorandum, witness statements and the documents relied on that the plaint does not disclose any evidence of misrepresentation or fraud against the Applicants in their individual capacities for any alleged breach of the license terms and conditions.
[9] Counsel submitted that the witness statement of Josephine Akong shows that all tax invoices, Annexures D, E and H were addressed to the 1 st defendant; that Annexure F was signed by the 2nd^ defendant; the MOU was signed by the 1 st^ defendant; and the cheques were issued by the 1st^ defendant. Counsel further submitted that paragraphs 16 and 17 of Kenneth Sseguya’s witness statement states that he is not providing any evidence against the Applicants. Counsel further submitted that according to the affidavit in
rejoinder, the representations relied upon in the main suit were never made or authored by the Applicants; the agreed facts confirm that there is no evidence of any fraud or misrepresentation on the part of the Applicants; that the resolution attached to the affidavit in reply shows that the 1st^ Applicant was a signatory to a Crane Bank account yet the postdated cheques relied on by the Respondent were drawn on Standard Chartered Bank and were not signed by the Applicants. Counsel prayed that judgement on admission be entered against the Respondent and the suit against the Applicants (4th^ and 6th defendants) be dismissed.
Respondent’s Submissions [10] In reply, Counsel for the Respondent relied on the case of Central Electricals International v Eastern Builders and Engineers HCMA No. 0176 of 2008 to the effect that a judgement on admission is not a matter of right but at the discretion of court and that court may refuse the motion if a case involves questions that cannot be conveniently disposed of on motion; and the cases of Connie Watuwa v AG HCMA No. 544 of 2020 and Dembe Trading Enterprises Limited v Global Electricals HCMA No. 202 of 2021 to the effect that an admission should be unambiguous, clear, unequivocal and positive. Counsel submitted that the Respondent has not made any admission on any fact to necessitate entering of a judgement on admission and dismissal of Civil Suit No. 275 of 2019. Counsel argued that the removal of the Applicants from the main suit will prejudice the matter and affect their ability to achieve the remedies sought.
[11] Counsel submitted that the pleadings contain several pieces of evidence and averments that point to the fact that the Applicants should be part of the suit and the prayers in the plaint were sought against all the defendants jointly and severally, and that particular paragraphs in the witness statements show that the Respondent directed her case against all the defendants including the
has also been stated that the purpose of a judgment on admission is to enable a plaintiff to obtain a quick judgement where there is plainly no defence to the claims. To justify such a judgment, the matter must be plain and obvious and where it is not plain and obvious, a party to a civil litigation is not to be deprived of his right to have his case tried by a proper trial where, if necessary, there will be discovery and production of oral evidence subject to cross- examination. Therefore, unless the admission is clear, unambiguous and unconditional, the discretion of the court should not be exercised to deny the valuable right of a defendant to contest the claim. See: Industrial and Commercial Development Corporation v Daber Enterprises Ltd, [2000] 1 EA 75 and Continental Butchery Ltd v Ndhiwa [1989] KLR 573 (from the Court of Appeal of Kenya).
[14] On the matter before me, the facts identified by the Applicants as entitling them to a judgment on admission are allegedly contained in the joint scheduling memorandum, namely; that the Applicants never signed any post- dated cheques in favour of the Plaintiff, any Memorandum of Understanding (MOU) nor any of the documents sought to be relied upon by the Respondent; that the Applicants never personally made any oral representations or promises of any kind to the Respondent in respect of any matter involving the 1 st defendant; and that the Respondent never wrote or addressed any letter, invoice or communication of any kind in respect of the 1st^ defendant directly to the Applicants. The Applicants also rely on the averments in the witness statements of two witnesses, namely, Josephine Akong and Kenneth Lennox Sseguya. According to the Applicants, Josephine Akong showed that all tax invoices to the Respondent were addressed to the 1st^ defendant, the document Annexure F was signed by the 2 nd^ defendant, the Memorandum of Understanding (PE ID1) was signed by the 7th^ defendant, and the cheques were issued by the 1 st^ defendant. It is further stated that in his statement, Kenneth
Lennox Sseguya stated that the evidence he was giving would not apply to the Applicants.
[15] It ought to be noted that in paragraph 5(j) of the plaint, the Respondent/Plaintiff pleaded that during the period relevant to the dispute, the 1st^ defendant generated sufficient revenues from its operations in Uganda but the 2nd^ to 7th^ defendants (who include the present Applicants) decided to unjustly enrich themselves using the said revenues and it is only just and equitable that the veil of incorporation be lifted to hold the 2nd^ to 7th^ defendants jointly and severally liable with the 1st^ defendant for the outstanding liability. In paragraph 6 of the plaint, it is pleaded that the 2nd^ to 7th^ defendants materially misrepresented and/or concealed the financial status of the 1 st defendant and were fraudulent in the manner in which they dealt with the plaintiff. The plaintiff went ahead to set out the particulars of fraud and misrepresentation.
[16] In view of the above pleading, I find it quite incorrect for the Applicants to argue that the admission of the facts pointed out first above could amount to an unambiguous, clear, unequivocal and positive admission of absence of liability on the part of the Applicants as 4th^ and 6th^ defendants in the suit. I do not believe that the Applicants’ genuine view is that by this application and proceeding, the Respondent is expected to prove whether fraud or misrepresentation has been established against the 4th^ and 6th^ defendants and that the Court should determine that question at this stage. Clearly, to my mind, once fraud is specifically pleaded, as it was in the main suit, the burden upon the plaintiff to prove the same lies within the domain of trial of the suit and not that of pre-trial filing. In other words, it must be only after evidence has been produced and tested during cross-examination that the Court can reach a finding as to whether fraud as alleged in the pleadings has been proved or not. I am therefore in total agreement with the Respondent’s Counsel that
