[2009] UGCA 64

## THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

## CORAM:

HON. JUSTICE A. TWINOMUJUNI, JA: HON. JUSTICE C. K. BYAMUGISHA, JA: HON. JUSTICE S. B. K KAVUMA, JA:

## CIVIL APPEAL NO.4 OF 2009

ATTORNEY GENERAL....................................

#### VERSUS

### 1. INIDRON & 25 OTHERS

## 2. MUGENYI & CO. ADVOCATES......... RESPONDENTS

An appeal from the ruling of the High court of Uganda at Kampala (Commercial Division, Kiryabwire J.) dated 21^st October 2008 in consolidated HCCS. NO.4 of 2007 and No. 616 2007

### JUDGEMENT OF THE COURT.

This is an appeal against the ruling of the High Court of Uganda on a preliminary objection in which it ruled that consolidated Civil suits No. 4 of 2004 and No. 616 of 2007

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s were not time barred and it ordered the trial of the consolidated suits to proceed.

10 The brief facts of the disputes are that the respondents are proved creditors of two public enterprises which were put under liquidation and receivership under the Public Enterprises Reform and Divestiture Act, 1993. The proceeds of the process were not sufficient to pay the creditors. They filed separate suits against the appellant and another, claiming for payment of the balances unpaid with interest. When the suit came up for hearing, the suits were consolidated as the claims were similar and against the same respondents. Before the hearing could proceecl, the appellant raised a preliminary objection that the suits were time barred.

The objection was overruled by the trial court, hence this appcal.

The Memorandum of appeal raised two grounds of appeal as follows:

1) That the learned trial judge erred in law and fact when he determined that compliance with the judgement or orders of S. C. C. A. No. 43 of 1995 is a matter that has to be ascertained and cannot just be washed away by a preliminary objection that the matter is time barred.

2) That the learned trial judge erred in law and fact when he failed to evaluate the evidence on record and ruled that the question of time was a matter to be determined by trial whereas not.

At the trial in the High Court, the parties made strong arguments in favour of their respective positions on the issue of time bar.

Before us in this court the parties filed detailed written arguments largely re-affirming their earlier submissions in the High Court. The learned trial judge, in a carefully considered judgement, determined the issues as follows:-

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$``T$ have read and considered $\quad\textbf{the}\quad$ submissions of both counsel for which

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I thank them. There is no doubt that the matter before me are evidence of ^a protracted dispute between the plaintiffs and the defendant following the privatization and divesture of state owned enterprise that took place under PERD Statute of 1993 (no Cap 98). Creditors of the divested companies looked to this Act to have their obligations setiled. ^A preliminary objection on a point of law and how it operates is now well settled in law.

I have rrtyself dealt with it in the case ^Y Sidpra & Another vs Sam Odaka, Milton Obote Foundation& Others HCCS 365 of 2OO7 in which I followed the decision of the East African Court of Appeal in Mukisa Biscuits Manufacturing \,zS V/est End Distributors Ltd [Le69] EA 6e6.

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In the Mukisa Biscuit case Sir Charles Newbold $(P)$ held that preliminary objection was demurrer. He observed "it raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or what is sought is the exercise of judicial discretion."

Justice Law in the same case gave an objection as to litigation (as is the here) as case an example of a preliminary objection. In the case of Y. Sidpra & Another vs Sam Odaka & Others $(Supra)$ I found that $\mathbf{a}$ preliminary objection on the above authorities should be raised if in so doing it will dispose of the whole and thus $_{\rm claim}$ save the parties expense and embarrassment in trying

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facts that will not determine the rights of the parties.

In this case, an objection as to limitation has been raised as to time. Counsel for the Attorney General submits that this is a tort which should have been brought within two years of 1994 when most of the company debtors were divested. $On$ the other hand the plaintiffs argue that this is a consolidated suit with several dates as to the cause $\mathbf{of}$ action. In particular I was referred to HCCS NO. 616 of 2007 that is founded on a SCCA No. 43 of 1995 that has not been complied with.

Whether the judgement or orders of SCCA No. 43 of 1995 have been compiled is a matter in the words of Sir Charles Newbold "that has to be ascertained" and cannot just be

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away by washed preliminary $\mathbf{a}$ objection that the matter is time barred.

Secondly clearly this is a dispute resulting from the PERD Statute of 1993. I think that it would take some time to operationalise this statute and the question of when time should run would be a question of fact depending on how the divesture was carried out. Indeed section 41 of the PERD Statute provides -

"1) Anything duly done under the authority of this Act for the purpose of giving effect to the Government's policy on reform and divesture of public enterprises shall have effect $not with standing$ other any enactment.

$2) \; Where$ $any$ $provision$ $of$ $an$ *enactment* conflicts with any

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provision of this Act, the latter shall prevail over the former."

It is my reading of this provision that Government policy on the reform and divesture of state owned enterprises prevails over all laws so as to give the policy a chance and time to be operationalised. It is my view that time can only run for purposes of limitation when the divesture process has been completed. When such a time can be said to begin is a question of fact that has to be ascertained by court for which a preliminary objection cannot be raised at this time simply that a cause of action arose in 1994 one year after the PERD Statute came into force.

This does $not$ mean that the objector waives the objection but

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that the question of time is question of fact that must a be determined bY trial see Stokes VS Grant [1878] 4 C. P. D. at Page 28' ^I accordinglY over rule the preliminary objection and order the trial commences. "(sic)

We have considered and evaluated all the evidence that was before the learned trial judge'

- 15 We have a,lso reconsidered thc arguments put to us by learned counsel for both parties together with the authorities they cited in support of their arguments' We have especially scrutinized the arguments made by learned counsel for the appellant. We have found nothing to justify us to interfere with the above holdings of the learned tria-l judge that: rt0 - (a) HCC'No. 616 of 2OO7 was founded on SCCA No' ⁴³ of 1995 and whether the orders of the Supreme Court in the case have been complied with or not was a matter that had to be ascertained and could

⁵ not just be objection. washed away by the preliminary

(b) Section 47 of the pERD statute interpreted properly within the context of the whole government policy on reform and divestiture of state owned enterprises prevails over all other raws [including the Limitation Act and the Civii proced.ure and Limitation (Miscellaneous provisions Act] so as to give the policy a chance and time to be operationalised.

completed and when it begins to run is a question of fact to be ascertained by court. (") Time could only limitation when th start to run e divestiture for purposes of process has been

we agree with the trial judge that the preriminary objection had no merit'and he was justified to dismiss it. This appeal therefore fails and is dismissed with costs to the respondents.

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Date at Kampala this.................................... $\mathsf{S}$

Twinomujuni Justice of Appeal

C. K. Byamugisha $15\\$

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**Justice of Appeal**