[2001] UGCA 54

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

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CORA]VI: HON. JUSTICE L. E. M. MUKASA KIKONYOGO, DCJ HON. JUSTICE C. IM. KATO, JA HON. LADY JUSTICE C. N. B. KITUMBA. JA

SUNSHILA GHUSALAI . . APPELLANT

# VERSUS

1. LATITA IVIANMILAL RAJA 2 PRADIP MANDLAL KARIA 3. NANDLAL HARJIVAN KARIA... 4. TRIBHOVANDAS IVIADHINJI BATTANI 5 PABCO PROPERTIES LTD RESPONDENTS

#### CIVIL APPEAL NO.52 OF 2OOO

(Appeal from the Judgement ofthe High Court of Uganda at Kampala, decision of the Hon. Principal Judge J. H. Ntabgoba delivered on '12-5-1999 in Civil Suit No 89 of 1995)

#### JUDGMENT OF MUKASA. KIKONYOGO, DCJ

This appeal is brought by Sunshila Ghusalal, hereinafter to be referred to as the appellant against the order for costs awarded to Lalita [Vlanilal Raja and 4 others hereinafter to be referred to as the respondents in High Court Civil Suit No. 89 of 1995.

The background of the appeal is that Sultan Ahamad was in 1912 granted a leasehold comprised in LR v36 Folio 2 for a period of 99 years. ln 1933 he entered into a sublease agreement with Jina Anand for the residue period of the head lease. ln 1955 Jina Anand's successors in title transferred and assigned a sub lease comprised in sub lease hold Reqister volume 1 Folio 24 known as Plot No. 6 and 64 Market street hereinafter to be known as suit property to Ghusalal Khimji, the appellant's husband. The appellant got registered as the executrix of the will of her deceased husband

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ln 1972 the appellant was together with other Asians expelled from Uganda. However, in 1993 she returned to Uganda and repossessed the suit property. She also sought to resume the relationship with the respondents as the sub lessee upon the original terms under the sublease agreement of 'l 933 which was still running. She tendered in her rent in the sum of Shs. 53/75 to the respondents but they refused it.

The respondents argued that she should pay a quarter that is 25o/o of the ground rent assessed from time to time by Kampala City Council as the controlling authority and lessor of the suit property. The respondents were also making claims for fees for management and repossession of the suit propefty in the sum of US dollars 500. The appellant was given 21 days in which to pay the ground rent failing which the respondents threatened to apply to the Registrar of Titles for re-entry.

The appellant without informing the respondents paid US dollars 300 to Kampala City Council as her contribution to the ground rent

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assessed by Kampala City Council. Subsequently she filed a suit in the High Court to stop the re entry by the respondents, and to seek the following declarations:

- (r) that the sub lease comprised in Sublease-hold Register Volume 1 Folio 24 known as plot No. 6 and 5A Market Street created out of leasehold Register Volume 36 Folio 2 subsists and is binding on the parties thereto: - (ii) that she was entitled to quiet enjoyment of the suit property. - (iii) that the respondents be ordered to receive and continue receiving the ground rent as stipulated in the sublease namely in the sum of Shs.53/75. - (iv) that the application for re-entry by the respondents over the sub lease be rejected - (v) costs of the suit.

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The respondents also filed a counterclaim for repossession costs and management fees incurred but subsequently withdrew it and conceded to costs as they had been settled.

During the course of the hearing of the appellant's suit the parties agreed that the appellant should pay 25o/o being a quarter of the ground rent assessed by Kampala City Council to the respondents and that the latter should abandon their appllcation for the re-entry. The parties, however, failed to agree on the costs which issue was submitted to the learned trial judge for determination.

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ln his ruling, the learned Principal Judge condemned the appellant to pay costs to the respondents because he found inter alia that:

" the suit was brought by the intransigence of the appellant in refusing to pay her due contribution and unreasonably seeking to pay the 1933 rent which defeats reason"

Aggrieved by the decision of the trial court the appellant appealed to this court on three grounds. They read as follows:

- 1. That the learned Principal Judge erred in law and fact when he held that the suit was by the intransigence of the appellant by refusing to pay 25% of the ground rent assessed on the head lease from time to time by the local authority thus wrongly awarding costs against the appellant. - 2. The learned Principal Judge erred in law and fact when he found that it was reasonable for the Respondents to demand a contribution ol 25o/o of the new Statutory ground rent and it was unreasonable for the appellant to insist on paying the sum set out in the sub lease agreement.

3. The learned trial judge erred in law and did not exercise his discretion judicially (sic) when he awarded costs of the suit against the appellant.

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ftlr Tayebwa, learned counsel for the appellant, prayed this court to allow the appeal with costs, set aside the trial court's order directing the appellant to pay costs to the respondents and substitute it with the following orders:-

- a) That the respondents pay the costs of Civil Suit No. 89 of 1995 or - b) Alternatively that each party bears its own costs in the said suit.

Counsel conceded that although there are three grounds of the appeal there is only one issue to determine namely;

# "whether the learned Principal Judge exercised his discretion judiciously when he condemned the appellant to pay costs of the suit"

He, therefore, proposed to argue them together for the purposes ot clarity and bravity. ln his submissions, Mr. Tayebwa pointed out that Section 27 of the Civil Procedure Act clearly sets out the principles governing the award of costs. lt was his contention that costs should follow the event although the court or judge has a discretion to order otherwise provided the discretion is exercised judiciously. Section 27 ol the Civil Procedure Act provides as follows:-

"Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incident to the suit shall be in the discretion of the court or judge and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purpose of the aforesaid. The fact that the court or judge had no jurisdiction to try the suit should be no bar to the exercise of such powers. Provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise order"

Relying on a number of authorities enunciating the same 20 principles, counsel argued that a party should not be unjustifiably deprived of costs unless it is shown that he or she was at fault. In the case of **Denram Danji Dattan vs Handas** Kalidas (1969) 16 EACA 35 it was held:

> " a successful defendant who after all is brought into court against his will, can only be deprived of his costs when it is shown that his conduct, either prior to or during the course of the action, has led to litigation which but for his own conduct might have been averted"

Similarly in the case of **Denberniotis and Others vs Central Africa** Company Ltd (1976) EA 31 it was held:

" Costs should follow the event where the plaintiff succeeds in the main purpose of his suit and a plaintiff should not be deprived of costs merely because he has raised another issue

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## which in itself cannot affect the result of the suit even if he loses on that issue"

According to Mr. Tayebwa, the appellant was the successful party and as such she should have been awarded costs. It was his argument that although the parties agreed that she should pay 25% of the ground rent assessed by the controlling Authority, Kampala City Council, she was entitled to costs.

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Alternatively, the learned trial judge should have ordered each party to pay its own costs. The appellant was entitled to enforce the terms of the sub lease which had not been revised. Although Mr. Tayebwa conceded that, economically Shs. 53/75 payable under 1933 agreement was nothing to-day, legally the appellant had a valid The parties had entered into the agreement freely argument. without any influence or duress. The agreement was, therefore, enforceable and should have been adhered to. The appellant was not unreasonable or wrong to insist on paying Shs.53/75 stipulated in the 1933 agreement. For all intents the agreement between the appellant and respondents had no fault and should have been enforced. To support his arguments counsel relied on the case of

## Campbell Discount Company Ltd vs Bridge (1961) ALL ER 97

where in his judgment Lord Holroyd expressed the following view:

"it would be a novel extension of the law to interfere on equitable grounds with ordinary contracts freely entered into by the parties, freely made without duress or mistake merely on the ground that on certain events it turned out parties who subsequently wished for the $or$ were compelled by circumstances to abandon their contracts"

It is, therefore, not correct to say that the appellant was wrong. Moreover she tried to talk to the respondents but they refused. Besides each party took a stand on the matter, In such circumstances each party should have paid its own costs.

Counsel further submitted that it was wrong for the judge to hold that the suit was due to the intransigence of the appellant. He was, biased when he awarded costs against the appellant. If the respondents were serious and co-operative the matter would not have ended in court.

In reply Mr. Lule, counsel for the respondents, supported the order of the learned trial judge condemning the appellant to pay costs of the suit to the respondents. To him the learned judge exercised his discretion judiciously. He, however, agreed with Mr. Tayebwa on the position of the law and the principles governing award of costs enunciated in the authorities counsel cited.

In disagreement with counsel for the appellant Mr. Lule submitted that it was the respondents who were the successful party at the trial. The respondents were forced into court by the appellant.

It was the submission of Mr. Lule that the requirement for the appellant to pay 25o/o of the ground rent was not only a matter of economic realities but a question of law. Kampala City Council, the local authority charges rent and rates according to the law. lt was. hence, a statutory obligation for the appellant to pay her contribution. The appellant refused to pay to the respondents but paid directly to Kampala City Council only to be informed that it was a mistake as shown by their letter dated 14 December, 1994. The appellant also refused to heed to the advice in the respondents' letter to pay so as to avoid re-entry.

I agree with counsel for the appellant that the only issue to determine is whether the learned trial judge exercised his discretion judiciously when he ordered the appellant to pay costs to the respondents. He was right to argue the three grounds of appeal together. I propose to adopt the same approach.

The general rule governing appeals against award of costs is well settled. Where the trial court has exercised its discretion on costs an appellate court should not interfere with it unless the discretion has been exercised unjudiciously or on wrong principles. The appellate Court will also interfere where the reasons given do not constitute good reasons within the meaning of the law. See Kiska Ltd vs De Anqelis (1959) E. A. 6: and National Pharmacv v Kampala Citv Council (1979) HCB 256.

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ln agreement with Mr. Lule, counsel for the respondents, Mr. Tayebwa stated the correct position of the law on award of costs by the trial Court. The general rule as stated in section 27 of the Civil Procedure Act and enunciated in the authorities cited by counsel, is that costs follow the event. The successful party should not be deprived of costs except for good reasons.

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ln the instant appeal each side claims to have been the successful party in the High Court and hence entitled to costs. Each party complains that it was dragged into court by the other. lt is important to note that during the course of the trial the parties reached a partial settlement. The appellant agreed to pay 25o/o of the assessed ground rent whilst the respondents abandoned the threat to make reentry on the suit property.

ln the premises I am unable to say that the appellant was the successful party. She filed the suit but settled with the respondents. ln the alternative I would have been persuaded to order each party to bear its own costs but for the conduct of the appellant prior to the filing of her suit on 6 February, 1995.

That leads me to the first ground of the appeal whether the suit was brought due to the intransigence of the appellant. Clearly on the record before court the appellant filed the suit when the respondents wrote to her to demand for payment of her contribution and threatened her with re-entry. Without informing the respondents she

directly paid US dollars 300 to Kampala City Council only to be told it was a mistake. In the Kampala City Council's letter dated 14 December, 1994 GR 2/F N 12 MRd the appellant was advised to regularize payment of the ground rent with the respondents. The letter reads as follows:

# "ATTN V Thakkar

### **Re Ground Rent for plot 6A market street**

We have come to find out that the ground rent you paid to us in respect of the above plot was done in error contrary to section 1(1) of the sub lease agreement.

The sublease indemnifies you against any claim in respect of ground rent. Therefore you will need to regularize with your sub lessor who has always paid the said rent to us"

Clause 1 of the sublease reads:-

# "The sub lessor will duly and punctually pay the rent reserved by the head lease under which he holds the premises and will indemnify the sub lessee against any claim in respect there of"

Again the appellant refused to pay her contribution as indicated in the demand note from Kampala City Council produced as Exhbit P1 shown as Shs.394.000/ $=$ to the respondent but insisted on paying Shs. 53/75.

I agree with Mr. Lule that the appellant was at fault. ln the circumstances of this case she did not have to go to court if she had taken the advice of both the respondents and Kampala City Council. She would have averted the costs of this suit. The respondents' letter demanding paymenl of 25o/o and threatening re-entry was written in January 1994. lnstead of paying the ground rent the appellant opted on 6 February, 1995 to file this suit in the High Court almost a year later. A close examination of the facts of this case reveals that there was no good reason for filing this suit. The learned trial judge was justified to hold that the suit was brought on the intransigence of the appellant.

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I accept the argument by Mr. Lule that the question of the counterclaim by the respondents did not arise. lt had been filed in respect of the repossession costs and was concluded in the High Court. ln any case the respondents cannot be said to have dragged the appellant to court on a counter- claim. The respondents were not guilty of any dilatory conduct to justify awarding costs against them. See Kiska vs De Anselis (supra) and National Pharmacy Ltd vs Kampala Qily&urdl (supra)

With regard to the complaint on ground number two that the trial judge erred in law and fact when he found that it was reasonable for the respondents to demand 25o/o cf the new statutory ground rent, it is true the rent in the original agreernent of 1933 had not been revised. [t/r. Tayebwa, may have some valid point to make when he submits that the appellant was right to enforce that agreement. Be that as it may, the appellant should have paid heed to the advice given to her due to the change in the economic realities and statutory obligations. I agree with Mr. Lule that the justification for the appellant to pay 25o/o was not only a matter of economic realittes but also a matter of law. Kampala City Council as the local controlling authority charges rent and rates according to the law.

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Further by eventually agreeing to pay the 25% ground rent the appellant conceded, as the learned trial judge held, that adhering to static uneconomic rates in disregard to the importance and value of the suit property was unrealistic in the circumstances of the case. Obviously it would be unreasonable to insist on the supremacy of the original contract where the stipulated rent was only Shs. 53/75 as it was argued by Mr. Tayebwa in complete disregard of the economic realities. The learned trial judge rightly found that the respondents were justified to demand 25o/o as the appellant's contribution to the assessed ground rent.

Lastly in view of the aforesaid I am unable to say that the learned trial judge unjustifiably deprived the appellant of costs. He did not exercise his discretion unjudiciously nor on wrong principles. He gave good reasons in law to justify his decision to award costs to the respondents against the appellant. I find no merit in the appeal. lt must fail.

Since Kato JA and Kitumba JA hold a similar view this appeal is dismissed with costs to the respondents in this Court and the High Court.

Dated this? Day of Nev. 2001


# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGNADA AT KAMPA

# CORAM: HON. JUSTICE L. E. M. MUKASA-KIKONYOGO, DCJ. HON. JUSTICE C. M. KATO, JA. HON. JUSTICE C. N. B. KITUMBA, JA.

SUNSHILA GHUSALAI ...................................

**VERSUS**

# 1. LATITA MANMILAL RAJA 2. PRADIP MAMDLAL KARIA 3. NANDLAL HARJIVAN KARIA 4. TRIBHOVANDAS MADHINJI BATTANI |... RESPONDENTS 5. PABCO PROPERTIES LTD.

### CIVIL APPEAL NO.52 OF 2000

(Appeal from the judgment of the High Court of Uganda at Kampala decision of the Hon. Principal Judge J. H. Ntabgoba delivered on 12-5-1999 in Civil Suit No. 89 of 1995)

### JUDGMENT OF C. M. KATO, JA.

I have had the advantage of reading the judgment of my Lord Mukasa-Kikonyogo, DCJ. in draft. I agree with the conclusions reached by her. I have nothing to add.

Dated at Kampala this 20^th day of Nivember $2001.$

> C. M. KATO JUSTICE OF APPEAL

### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

HON. LADY JUST CE L. E. M. MUKASA - KIKONYOGO, DCJ. CORAM: HON. MR. JUSTICE N. M. KATO, JA.<br>HON. LADY JUSTICE N. B. KITUMBA, JA.

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SUNSHILA GHUSALAI APPELLANT

#### **VERSUS**

1. LALITA MANMILAL RAJA 2. TRADIP MANDLAL KARIA 3. NANDLAL HARJIVAN KARIA 4. TRIBHOVANDAS MADHINJI BATTANI **1....................................** 5. PABCO PROPERTIES LTD.

#### CIVIL APPEAL NO. 52 OF 2000

(*Appeal from the Judgment of the High Court of Uganda at Kampala,* decision of the Hon. Principal Judge J. H. Ntabgoba delivered on 12-5-1999 in Civil Suit No. 89 of 1995)

#### JUDGMENT OF C. N. B. KITUMBA, JA.

I have had the benefit of reading in draft the judgment of my Lord Mukasa-Kikonyogo, DCJ and I entirely agree with it. I have nothing useful to add.

Dated at Kampala this. 20lt day of November 2001.

CHS Culumber! C. N. B. KITUMBA, **JUSTICE OF APPEAL**