[2025] UGIC 11


# **THE REPUBLIC OF UGANDA IN THE INDUSTRIAL COURT OF UGANDA AT KAMPALA LABOUR DISPUTE MISC. APPLN. No. 147 OF 2019**

*(Arising from Labour Dispute Reference No.165/2015)*

#### KAMUHANDA ROBERT & 27 OTHERS **•/APPLICANTS**

v

## M/S. KATENDE SSEMPEBWA & CO. ADVOCATES RESPONDENT

#### **Before:**

A, 5^4 '\*5%^ The Hon. Head Judge, Linda Lillian Tumusiime Mugisha.

#### **Panelists:**

- 1. Hon. Bwire John Abraham, - 2. Hon. Julian Nyachwo & - 3. Hon. Mwamula Juma.

## **Representations:**

- 1. Mr. Ayebare Robert of M/s. Barya, Byamugisha & Co. Advocates and M/s. Tumwebaze, Atugonza, Kobusingye Advocate and Legal Consultants for the Applicant. - 2. Mr. Edwin Wabwire of M/s. Katende, Ssempebwa & Co. Advocates for the Respondent.

#### **RULING**

#### **Introduction**

[1] This application is brought under Section 98 CPA, Sections 14 and 33 of the Judicature Act and Order 52 rules (1) and (3) of the Civil Procedure Rules, for orders that:


- a) The Respondent law firm is in contempt of court directives and/or orders issued on 14^th September 2017, 26^th September 2017, 6^th December 2017, 4^th April 2018, 6^th December 2017, 6^th March 2018, and 26^th February 2019 all compelling it to deposit in court USD 11.517.68, pending the determination of Labour Dispute Reference No. 165 of 2015. - b) The Managing partners, Counsel Edwin Wabwire and Counsel Kiiza Busingye, all of the Respondent firm are committed to civil prison for contempt of court directives/orders. - c) Costs of the application are provided. - $[2]$ The grounds of the application are contained in the affidavit deponed by Bossa Charles and are summarized as follows: - İ. That the Applicants filed Labour Dispute Reference No. 165 of 2015 that is pending determination in this Court. - That the Applicants filed in this Court Miscellaneous Application No. 94 of 2017 Ïİ. (Kamuhanda Robert and 27 others vs C and A Tours and Operators Limited (Hertz), seeking orders that USD 22,134.70 being monies held by Apollo Hotel Corporation t/a Sheraton Kampala Hotel (now the Sheraton Kampala Hotel) on behalf of C and A Tours and Operators Limited (Hertz), (now C and A Tours) are deposited in Court pending determination of Labour Dispute Reference No. 165 of 2015. - That unknown to the Applicants, the Respondent firm illegally requested and iii. obtained USD 11,517.68 from Apollo Hotel Corporation t/a Sheraton Kampala Hotel on behalf of C and A Tours and Operators Limited (Hertz) aware of the orders in Miscellaneous Application No. 94 of 2017. - The Applicants Advocates brought these underhand acts of the Respondent iv. 🤄 firm and the Sheraton Kampala Hotel to the attention of Court which directed and/or ordered the firm to deposit in Court the impugned USD 11,517.68, illegally received from Sheraton Kampala Hotel on behalf of C and A Tours but the Respondent law firm has not complied and is therefore in contempt of these orders and/or directives. - That it is in the interest of justice and equity that this application is granted with $V$ . costs to the Applicants.

#### **The Applicant's case**

- **[3]** It is the case that they were employees of C and A Tours, but they were unlawfully terminated and/or rendered redundant. As a result, they filed **Labour Dispute Reference No. 165 of 2015: Kamuhanda Robert and 27 others vs C and A Tours and Operators Limited (Hertz),** which is pending before this court, seeking orders for the payment of their terminal benefits. On 5/07/2017, they filed **Miscellaneous Application No. 94 of 2017: Kamuhanda Robert and 27 others vs C and A Tours and Operators Limited** (Hertz), before the Ag. Registrar Sylvia Nabbagala (as she then was), seeking inter alia an order of attachment of USD 22,134.70 held by the Sheraton Kampala Hotel in trust for/on behalf of C and A Tours and that the money is deposited in Court pending determination of **Labour Reference No. 165 of 2015** which orders were granted by Her Worship on 26/09/2017. ! - **[4]** On 27/08/2017, the Applicant's lawyers wrote to the General Manager of the Sheraton Kampala Hotel and copied in the Respondent reminding him to deposit the attached monies in Court, but this was not done. However, unknown to the Applicants and their Advocates, the Respondent's lawyer M/s. Katende Sempebwa and Co Advocates, aware of the ruling in **Miscellaneous Application** No. 94 of **2017,** in cahoots with the Sheraton Kampala Hotel and C and A Tours, illegally and fraudulently requested for and received from Sheraton Kampala Hotel USD 11,517.68 on 14/08/2017. The said money is part of the monies that were subject of attachment in **Miscellaneous Application No.** 94 **of 2017.** That upon realization of the unprofessional and illegal acts between the Respondent, C and A Tours, and the Sheraton Kampala Hotel, on 28/11/2017, the Applicant's lawyer wrote to the Respondent's lawyers, requesting them to deposit in Court the monies received from the Sheraton Kampala Hotel, which request was ignored.

The Respondent had prior to this, failed and or refused to comply with several letters from the Applicant's lawyers and to the Manager, of the Sheraton Kampala Hotel, warning the hotel, not to remit the attached monies held in trust for C and A Tours to anybody, as directed by the KCCA Labour Officer, Ms. Ruth Namarwa Kulabako, until determination of the Labour dispute before her, but this was ignored by the Hotel and Respondent firm.

#### Page 4 of 17

[5] As a result, this Court during the various mentioned hearings of **Labour Dispute Reference No. 165 of 2015** and particularly on 6/12/2017 and 6/03/2018, Court ordered and/or directed the Respondent firm to deposit in Court USD 11,517.68 before the next hearing date although Counsel Wabwire Edwin of M/s. Katende Ssempebwa and Company Advocates, Solicitors, and Legal Consultants who appeared in court on the above dates as Counsel for C and A Tours and Operators undertook to comply, but this was not done. On 20/02/2019, the Justices and Panelists of the Industrial Court were notified about the contempt by the Respondent law firm which advised the lawyers to extract an order directing the Respondent law firm to deposit the monies received from the Sheraton Kampala Hotel, and the same was extracted and served on the Respondent on 4/04/2019 but to date, it has not complied.

According to him, by refusing to comply with the orders of Court to deposit the USD11. 517.88 in court, the Respondent law firm, Counsel Edwin Wabwire and Counsel Kiiza Busingye, were in contempt of court orders/directives and this court has powers to order the Respondent law firm to adhere to its direct!ves/orders to immediately deposit in court USD 11,517.68 and or order the arrest and detention in civil prison of the Managing Partners of the Respondent firm, together with Mr. Edwin Wabwire and Mr. Kiiza Busingye. That the Respondent is aware of this court's order/directive because *'/y,''* despite not being a party to the suit, Counsel Wabwire Edwin admitted that it was received. Therefore, even if the Respondent was not party to **M. A No. 94 of 2017,** by its admission in court when **Labour Dispute Reference No. 165 of 2015** was called for mention, it became part of it and its actions were intended to impede and prejudice the administration of justice, by contempt of the court directive/order. Therefore, in the interest of justice, this application should be granted and costs of the Application be provided for. *,3*

[6] In their Affidavits in reply, Fred Businge Kiiza and Edwin Buluma Wabwire, both Advocates of the High Court working with the Respondent firm swore that Captain Naem Choudry, the Managing Director of C & A Tours instructed the Law Respondent firm in March 2017, to demand the payment amounting to USD 22,134.70, duly owed to Cand A Tours by the Sheraton Kampala Hotel for unpaid fees for services provided. The Respondent firm accordingly followed instructions and issued a demand note dated 21/03/2017. As a result, on 3/04/2017, the Advocates of the Sheraton Kampala Hotel requested the KCCA Labour Officer for guidance regarding the demand for USD 22,134.70 from the Sheraton Hotel Kampala on behalf of C&A Tours and the Applicants following a directive from Mr. Mujuni Bernard (a labour officer), to withhold payment of the said USD 22,134.70 until the grievances of the Applicants had been resolved. The letter was attached as Annexure "B".

[7] The Commissioner for Labour, Industrial Relations, and Productivity, in a letter dated 15/05/2017, was requested by the lawyers of Apollo Corporation Limited t/a Sheraton Kampala Hotel, to provide clarity as to the basis of the directive from Muiuni. Bernard to withhold the making of any payment until the grievances of the Applicants had been resolved as evidenced by Annexure "C".

In a letter dated 23/05/2017, the Commissioner for Labour, Industrial Relations, and Productivity, responded to the Advocates of the Sheraton Kampala Hotel, and stated therein that, the Labour officer's instructions to Sheraton Kampala Hotel regarding withholding payments to C&A Tours, were purely administrative and was not backed by any Employment law. The letter was attached as Annexure C1. Upon receiving a copy of this correspondence, the Respondent firm demanded payment of the impugned USD 22,134.70 from the Sheraton Kampala Hotel through demand letters dated 26th May and 12th June 2017, marked, annexures "D" and "E" respectively. Therefore, the Respondent did not illegally and fraudulently request **USD 11,517.68,** which was part of the USD 22,134.70, as alleged by the Applicants. In any case, there is no proof of the fraudulent and Illegal request for the same USD 11,517.68. He refuted the allegation that the Respondent firm was ever a recipient or addressee of the said written correspondences between the Applicants and the Sheraton Kampala Hotel, dated 25th January 2016 and 6th June 2017, and therefore has no knowledge of the contents therein.

[8] That the record of proceedings of this court on 6/12/2017, Marked "F", does not reveal any order or directive by the Industrial court issued against the Respondent law firm to deposit USD 11,517.68, as alleged by the Applicants. Therefore, the Applicants are erroneously misinterpreting the record of proceedings to further their ulterior motives. They further stated that they were not aware that the impugned USD 11,517.68 had already been paid out to C&A Tours and Travel Operators Limited, by 6/12/2017, following successful debt recovery prior to the order dated 26/09/2017. This is because both of them are junior lawyers in the Respondent firm and were not personally involved in the direct management of funds of the Respondent. Therefore, the statement made in court by Mr. Edwin Wabwire on 6/12/2017, regarding depositing


the money in the Industrial Court, was made in error and ignorance of the facts. In any case, the Acting Registrar's order dated 29/09/2017, indicates that it was made against the Sheraton Kampala Hotel, and it was in respect of depositing USD 22,134.70 in the Industrial Court and not USD 11,517.68 and her letter dated 4/04/ 2018, did not amount to an order of court.

Therefore, this Court's order dated 26/02/2019, directing the Respondent firm to deposit the impugned USD 11,517.68 was overtaken by events, since the monies were already paid out to C & A Tours and Travel Operators Limited. This is further evidenced by the Respondent firm's letter dated 21/06/2019, in which they informed the Applicants' lawyers that the subject of Miscellaneous Application No.94 of 2017 i.e. USD 11,517.68 was duly paid out to C&A Tours, following successful debt recovery less the firm's professional fees as evidenced in Annexure "G". In the circumstances, their actions to recover the monies owing to C and A Tours their client did not amount to contempt of court, because before 26/02/2017,there was no existing lawful order compelling the Respondent firm to deposit USD11,517.68 in the Industrial Court, therefore there was no failure by the Respondent to comply with an order which did not exist and in any case the Respondent firm was not a party to Miscellaneous Application No. 94 of 2017, therefore the Respondent cannot be held to be in contempt of the Court order dated 26/09/2017.1

[9] He concluded that the Respondent is therefore not in contempt of court orders/directives dated; 14/09/2017, 26/09/2017, 6/12/2017, 6/03/ 2018, 4/04/2018, and 26/02/2019, compelling it to deposit in court USD11,517.68, pending determination of Labour Dispute Reference No. 165 of 2015 for the following reasons:

**V**

- *a. «*There is no order dated 1/09/2017, compelling the Respondent to deposit in court USD 11,517.68 Pending Determination of Labour Dispute Reference No. 165 of 2015. - b. The order dated 26/09/2017 was issued ordering Apollo Construction Limited t/a Sheraton Kampala Hotel to deposit USD 22,134.77 on behalf of the Respondent (C&A Tours and Travel Operators Limited) in court within seven (7) days from the date of the order. This order was not 'issued against the Respondent. - c. There is no order/directive dated 6/12/2017 issued by this Honorable Court directing the Respondent to deposit in court US 11,517.68 pending determination of Labour Dispute Reference No. 165 of 2015. - d. There is no order/directive dated 6th March 2018 issued by this Honorable Court directing the Respondent to deposit USD 11,517.68. The record of proceedings does not disclose the

issuance of any order/directive by this Honorable Court directing the Respondent to deposit USD 11.517.68.

- e. There is no order/directive dated 4th April 2018 issued by this Honorable Court directing the Respondent to deposit USD 11,517.68. The letter from the Registrar to the Respondent incorrectly makes reference to an order dated 14th September 2017 wherein Court ordered the firm to deposit USD 22,134.77 within seven (7) days from the date of the court order. There is no order dated 14th September 2017 directing the Respondent to deposit USD 22,134.77 in this Honorable Court. - The order dated 26th February 2019 directing the Respondent to deposit USD 1.517.68 was $f$ overtaken by events since the aforesaid amount was already paid to C&A Tours and Travel Operators Limited. There is therefore no contempt of court since the subject matter of the order had already been handed over to C&A Tours and Travel Operators Limited.

Therefore, the Application has no merit as there was no contempt of court.

In rejoinder, Bossa Charles stated that the averments and contents contained in the $[10]$ affidavits of both Edwin Buluma Wabwire and Fred Businge Kiiza are false, contradictory, and lies. That the Applicants aver and contend that the orders by Assistant Commissioner Labour Inspectorate (Bernard Mujuni) and KCCA Labour Officer (Ruth Kulabako) were made to protect their benefits and they were the beneficiaries of the orders sought to be vacated, yet they were never summoned or made party of the proceedings before Mr. P. Okello for reasons best known to the Respondent firm and the Advocates of Sheraton Kampala Hotel. Both law firms knew the Applicants' advocates but chose to ignore them, which imputes fraud and unprofessional conduct all meant to stealthily obtain the monies. Various correspondences were exchanged with the Sheraton Kampala Hotel, marked Annexure "RH" in Kizza Fred's affidavit in reply and the Applicant's letter to Sheraton Kampala dated 6/06/2017.

That the directive of Labour Commissioner, Mr. P. Okello, (as per annexure "RD" to Kizza Fred Businge's affidavit in reply) dated 23/05/2017 was therefore illegal, null, and void. Therefore, all actions arising from it are illegal, null, and void and amount to fraud on the part of the Respondent firm.

$[11]$ That, the variation of the orders of the KCCA Labour Officer, Mrs. Ruth Kulabako, and Commissioner Bernard Mujuni were tainted with fraud by the Respondent firm and Kampala Associated Advocates Counsel for the Sheraton Kampala Hotel and this is the reason why the Applicants and their Advocate, Ayebare Robert, held several meetings with the Commissioner Patrick Okello on 12/02/2015, 27/02/2015 and


16/06/2015, in the absence of the Respondent as Advocates of C and A Tours, despite being summoned to these meetings by the Commissioner Labour, Industrial Relations and Productivity dated, 18/06/2015,25/05/2015.

He made reference to Annexure "B" of Sabiiti's affidavit in support of in Miscellaneous Application No. 94 of 2017 marked as Annexure "M" and contended that Mr. Bernard Mujuni referred the complaint to Mr. P. Okello who was aware of KCCA Labour Officer's directives and orders regarding withholding payment to C and A Tours until they resolved the Applicants complaint, therefore, these orders could not have vacated the orders without some underhand methods by the Respondent and Kampala Associated Advocates.

% 'W [12] He further contended that the Respondent firm went ahead to illegally and fraudulently request for and receive money, aware of that there was a pending ruling in respect of the said money in Misc. Application No. 94 of 2017 whose subject matter was attachment of monies before judgment. He contended further the Respondent's **<>.. Xv. Z:;** actions were intended to frustrate the outcome of the Application which was filed on 5/07/2017 and served on to the Respondent firm on 13/07/2015. Therefore, vacating the 2 orders by Commissioner, Mr. Okello P was illegal and void and could not confer any rights onto the Respondent to receive the said money on behalf of C and A Tours and Travel Operators Limited (Hertz).

Therefore, this Court cannot sanction an illegality and unlawful actions by a party/advocate(s). intended to frustrate the outcome of a suit which is what the Respondent and its 2 Advocates did when they demanded the release of the monies held by Sheraton Kampala Hotel based on a void and illegal order/directive yet they were aware of a pending suit/application touching the same subject matter.

#### **Decision of court**

## **% Background**

[13] On 10/03/2012, Sheraton Kampala Hotel entered into a 2-year Ground Transportation Service Agreement with C and A Tours, where C and A Tours was supposed to provide car rental services and rental of mobile handsets/modems for the execution of the ground transportation services for hotel guests at discounted rates, in return for consideration to be paid in dollars every month. In January 2015, this contract was terminated by the Sheraton Kampala Hotel, resulting in the termination of the

Applicants who claim to have been employed by C and A Tours during the subsistence of the service agreement. According to the Applicants, the Applicants were former employees, of C and A Tours but they were terminated unlawfully without paying them their terminal benefits.

They filed a Labour complaint before Ms. Ruth Kulabako Labour Officer at KCCA, who handled the matter by way of mediation. On 12/01/2015, Ms. Kulabako wrote to the Management of the Sheraton Kampala Hotel, directing it to withhold payment of any monies owing to C and A Tours in respect of the service agreement, pending the resolution of the Labour Complaint before her. According to C and A Tours as of 31/12/2014, the Sheraton Kampala Hotel still owed it USD 12.134.70 for the services she rendered to it before the termination of the service agreement. It engaged the Respondent firm to enable it to recover these monies from the Sheraton Kampala. In its computation of the monies owed, the Respondent included USD 10,000 which it considered as damages for delayed payment, resulting in a total claim of USD 22.134.70. When Ms. Kulabako failed to resolve the matter, she referred it to another Labour officer, a one Mr. Mujuni, Assistant Commissioner Labour Inspection at the Ministry of Gender Labour and Social Development, who also handled it by mediation. He was not able to settle the Dispute and as a result, he referred it to Mr. Patrick Okello, the Commissioner Labour Relations and Productivity, who also handled it by mediation. When he failed to resolve the matter, he referred it to the Industrial Court for adjudication and it was registered as Labour Dispute Reference No.165 of 2017.

[14] In July 2017, before the matter commenced before this Court, the Applicants filed vide Misc. Applin No. 94 of 2017 before the Acting Registrar of the Court (as she then was), seeking attachment of the monies owing to C and A Tours by the Sheraton Kampala Hotel, pending Judgement in LDR No.165 of 2017. The Acting Registrar heard the Application and issued her ruling on 14/09/2017. She ordered the Sheraton Kampala Hotel, to deposit USD 22,134.70 in this court. A decree was extracted on 29/09/2017.

It is the Applicants' case that the Respondent firm, acting on behalf of its client C and A Tours with the knowledge that an application for the attachment of the USD 22.134.70, that the Sheraton Hotel Kampala, was holding on behalf of C and A Tours, was heard by the Acting Registrar and was pending ruling, fraudulently demanded and received USD11,517.68, as part of the USD 22,134.77 which was pending attachment. They contend that the actions of the Respondent firm amounted to contempt of the Labour officer's orders prohibiting the Sheraton Hotel from paying any money owed to C and A, under the service contract, pending the resolution of the labour complaint before them. They were also in contempt of the Acting Registrar's order issued on 14/09/2017 and this court's order dated 26/02/2019 directing the Respondent firm to deposit the USD11,517.68 it received from the Sheraton Kampala Hotel on behalf of C and A on 14/08/2017, hence this application.

% [15] According to Black's Law Dictionary 11th edition, an Order is "a command direction or instruction, a written direction or command delivered by a government official, especially a court or judge, the word generally embraces final decrees as well as interlocutory directions or commands. Also termed court order".

According to Halsbury's Laws of England 4th edition page 57, states that: "it is civil contempt of court to refuse or neglect to do an act required by a judgement or order of the court within the specified time in the judgement or order or to disobey a judgement or order requiring a person to abstain from doing a specified act..." ,

It is settled law that a party who knows of an order regardless of whether in view of that party the order is null or valid, regular or irregular, cannot be permitted to disobey it by reason of what the party regards the order to be. The Order must be complied with in totality, in all circumstances by the party concerned, subject to the party's right to challenge the order in issue, the law permits

Therefore, for an Applicant in contempt proceedings to succeed, he or she must prove that there was a clear and unambiguous court order, which must clearly state when, where, and to whom it applies. The Applicant must prove that the alleged contemnor was aware.of the existence of the order and he or she willfully disobeyed it or he or she may have intentionally disobeyed the order.

[16] In the case before us, both Parties filed submissions for which the court is grateful and ^S^k althougfcthe Applicants filed their submissions late, in the interest of completeness % and the justice of the application Court considered the submissions in determining this application. We also considered the record of proceedings in Miscellaneous Application. No 94 of 2017 and the order arising therefrom, the evidence on the record of LDR 165 of 2017, which we have carefully analyzed and resolved as follows:

The record of the instant Application indicates that Ms. Kubabako Namarwa Labour Officer KCCA, handled the Applicants labour complaint, by way of mediation, and during the mediation proceedings, on 12/01/205, she wrote to the Sheraton Kampala

Hotel and directed it to withhold payment to C and A Tours, until she resolved the labour complaint. When she failed to resolve it, she referred it to a more Senior Labour Officer at the Ministry of Gender Labour and Social Development, Mr. Bernard Mujuni, the Assistant Commissioner Labour Inspection, who summoned the parties for mediation hearings on 12/02/2015, 27/02/2015, and 16/06/2015 and like his predecessor, also directed the Sheraton Kampala Hotel to withhold any payments to C and A Tours, until the complaint before him was resolved. Upon failing to determine the matter he referred it to his superior, Mr. Patrick Okello, the Ag. Commissioner Labour, Industrial Relations, and Productivity at the same Ministry,;K:. Who also summoned the parties for mediation on 14/07/2015 and eventually referred it to this court for Adjudication.

Before it commenced, however, the Applicants filed an application before the Acting Registrar of the Industrial Court, for attachment before judgement. In her ruling of 14/09/2017, her worship stated that a labour officer has the mandate to make orders and such orders can only be vacated on appeal to the Industrial Court. Although we agree that this is the correct position of the law, such orders can only be issued by a Labour officer sitting as an adjudicator. It is clear in the instant case that all the Labour officers involved in the applicants' Labour complaint sat as mediators and not as adjudicators. In the circumstances- their directives did not have an injunctive effect, as an administrative order would-have. According to Black's Law Dictionary 11th edition at page... An administrative order is defined as "An order issued by a government agency after an adjudication hearing...". Mediation hearings are not adjudication hearings because they are intended to reconcile the parties outside the Court procedures. In the circumstances, any order arising out of a mediation procedure would not be binding on the parties.

On 3/04/2017, the Sheraton Kampala Hotel through their lawyers, KAA Advocates Ms. Kulabako's sought advice from Ms. Kulabako Labour Officer KCCA, on how to deal her directive to the Sheraton Kampala Hotel not to pay the monies owed to C and A Tours, pending the resolution of the Applicants Labour complaint before her, and in the alternative, requested her to serve them with a Court order restraining the hotel from making any payment, as a means of preventing them from being dragged into unnecessary litigation and costs.

#### Page 12 of 17

On 23/05/2017, the Ag. Commissioner Labour, Industrial Relations, and Productivity responded to the lawyer's query and clarified that the "orders" that Ms. Kulabako Labour Officer KCCA had issued were purely administrative in nature and were not backed by any provision under the Employment law. As already discussed, an order arising out of mediation proceedings has no injunctive effect, therefore in our considered opinion, the Commissioner's response did not amount to a review of any order but rather an interpretation of the directive issued by Ms. Kulabako, as the respondents would like this court to believe. It must be emphasized that Section 13 of the Employment Act empowers a Labour Officer to handle matters as an adjudicator, or conciliator or Arbitrator, and where he or she chooses to handie a matter as an adjudicator, the labour officer is empowered to issue an order in respect of any matter adjudicated upon. Such an order would have therefore have an injunctive effect and it can only be varied or vacated by the Industrial Court on Appeal?-

We reiterate that where the labour officer handles a matter as a mediator, however, any orders arising out of mediation proceedings are not enforceable orders. In the circumstances, the Commissioner Labour was correct to state that the KCCA Labour Officer's order to prevent the Sheraton Kampala Hotel from paying money pending the resolution of the Dispute when she Was sitting as a mediator had no legal basis, although at the time the directive was sufficient to preserve the status quo, during the pendency of the mediation proceedings, to avoid the dissipation of the money by C and A Tours.

#### **Was there an existing order when the process of recovery commenced?**

[17] The record further shows that the process of recovery of the monies owed to C and A Tours by the Respondent firm commenced in March 2017 and the money was paid to them on 14/08/2017. This is not denied by the Claimant. However, by this date, the Acting Registrar had not yet issued her ruling in Misc. Appln. No. 94, Of 2017, which -. Was in respect of application for attachment before judgement. Therefore, the Labour officers having handled the Labour complaint as mediators, their directives had no injunctive force beyond the mediation proceedings.

Save for the labour officer's directives, there was nothing on the record to indicate that, the Applicants, applied for an interim injunction pending the Acting Registrar's ruling in MA No. 94 of 2017. It is therefore presumptuous for them to assume that, merely being aware of the pending proceedings in MA No. 94 of 2017 was sufficient to prevent

the Respondent from pursuing the recovery of money owed to its client by the Sheraton Kampala Hotel in the absence of an order, or that the outcome would be automatically in their favour. We are fortified by the fact that the Respondent firm started the process of recovery of the impugned money from the Sheraton Kampala Hotel as early as 21/03/2017, (see annexure "RB") and the Lawyers of Sheraton Kampala Hotel, sought directions from Ms. Kulabako on regarding her directive not to pay the money on 3/04/2017 and received clarification from the Ag. Commissioner on 23/05/2017. It is also not in dispute that the Sheraton Kampala Hotel paid the money to the Respondent firm on 14/08/2017,1 month before the Ag. Registrar delivered her ruling before the MA No. 94 of 2017, on 14/09/2017. We also established that the Application in MA No. 94 of 2017 was filed in July 2017, just a monthjjefore the money was paid out to the Respondent firm.

We reiterate that it is the principle of the law that, the essence of litigation as a process ofjudicial administration is lost if orders issued by court are not complied with in full by those required to give effect to the orders. Therefore, the purpose of contempt of court proceedings is to punish a party who is aware of a court order against it, but willfully chooses to disobey the order, whether in its view the order is null or void because an order of court must be obeyed. Therefore, an applicant in contempt of court proceedings must adduce cogent evidence to prove contempt. He or she must prove that an order did exist, the order was clear, and it was disobeyed by the Respondent. (Also see *Angelina Lamunu Langoya Vs Olweny George William,* Misc. Appln. No. 30 of 2019). CF

Based on the analysis of the trajectory of the Applicants complaint before the labour J-f • ^a officer and in this court, it is glaringly clear that by the time the Acting Registrar issued her ruling on 14/09/2017, the Sheraton Kampala Hotel had already paid out the USD 11,517.68 to the Respondent firm, having paid it on 14/08/2017. In the absence of the existence of any injunctive order, preventing the Sheraton Kampala Hotel from paying the impugned money to C and A Tours, the money was paid out, given that the Labour Officers' directives had no injunctive effect, there was no order that could have been disobeyed on the 14/08/2017.

We reiterate that, the purpose of contempt of court proceedings is to punish a party who is aware of a court order against it, but willfully chooses to disobey the order, whether in its view the order is null or void. We have established that, by 14/08/2017,

there was no order in existence and no injunction in place to prevent the Respondent firm from recovering what the Sheraton Kampala Hotel owed its Clients C and A Tours, before the disposal of the Application for attachment before judgment, in MA No. 94 of 2017.

We respectfully do not agree with Counsel for the Applicants that mere knowledge of the pendency of a ruling was an order for which the Respondent firm should be held in contempt. There must be an order whether final or injunctive, that must be disobeyed for one to be held in contempt, and as already established there was none in existence by the time the USD 11, 517.68 was paid to the Respondent firm. In the circumstances, in the absence of any order preserving the status quo before the issuance of an order arising out of MA. No. 94 of 2017, we have no basis to find that the Respondent firm acted fraudulently when it processed the recovery of the monies owed to its clients ^C and ^A Tours. X#

We had an opportunity to consider Her Worship's ruling in MA No.94 of 2017 which she issued on 14/9/2017 and established that she ordered the withholding of USD 22,134.68 being held by the Sheraton on behalf of C and A Tours. As already discussed, this amount included USD 10,000, which the Respondent firm considered as damages to their clients for delayed payment of monies owed by the Sheraton Kampala Hotel. It seems to us that the Sheraton Kampala Hotel only reckoned what it owed C and A Tours, for the services rendered and that is why it paid USD 11,517.68. As already discussed, the money was paid before the issuance of the Registrar's order of 14/09/2017, which.was clearly overtaken by events, (see *Nkamushaba versus Makerere University and Ors* Misc. Appn. No. 540 and 709 of 2018).

# **Was the Order by this Court dated 26/12/2017 valid?**

[18] This Applicants' contention as already discussed is that this court on 26/02/2019 % issued an order directing the Respondent firm to deposit the USD 11,517.68 in this court until the resolution of LDR No. 165/2015 and by failing to do so, the Respondent firm was in contempt of Court.

We have carefully analyzed the evidence filed in LDR No. 165 of 2015 pending resolution before this court and established that, when the file was called for mention on various occasions, the Applicants raised complaints about the fact that the Respondent firm had recovered USD11,517.68 in breach of the Acting Registrar's order that was issued on 14/09/2017. The record further indicates that on each of

these occasions the court directed the Applicants to extract an order for enforcement. Indeed, the Applicants extracted an order based on the record of 6/12/2018, which the entire panel signed on 26/02/2019, directing the Respondent firm to deposit USD 11,517.68, received from the Sheraton Kampala Hotel, on behalf of C and A Tours in this court.

What is peculiar about this order however, is that it directed the Respondent firm to deposit the USD 11,517.68 which it recovered on behalf of its client based on an order issued by the Registrar on 14/08/2017, arising from MA 94 of 2017. The order directed the Sheraton Hotel to deposit USD 22,134.77 in this court pending the resolution of LDR. No. 165 of 2015. The Order reads in part as follows:

"IT'S HEREBY ORDERED THAT:

% M/s. Katende, Ssempebwa and Company Advocates, Solicitors and Legal Consultants does deposit with this honourable court USD 11. 517.68, being security for costs received by it from Sheraton Hotel on 14th August 2017 on behalf of C and A tours and Travel Operators Limited (hertz), the respondent, as had been ordered in Miscellaneous Application No. 94 of 2017: Kamuhanda Robert and Others -vs- C and A Tours and Travel operators Limited (hertz)..."

Firstly, the order refers to monies received on 14/08/2017 based on an order arising from MA 94 of 2107 that was issued on 14/09/2017. %

Secondly the Order in M. A No.94 of 2017, Kampala Hotel did not involve the Respondent firm because it was not a party in the case.

Thirdly the Order in MA. No. 94 of 2017, was issued by the Acting Registrar and not by the Panel of the Court. Ordinarily, a court should enforce its own orders, (see *Ayebazibwe Raymond V Barclays Bank Uganda Ltd* HOMA No. 283 of 2012). In any case, we have already established that by the time the Order in MA No. 94 of 2017 was issued On 14/09/2017, the impugned USD 11,517.68 had already been paid to . the Respondent firm on behalf of their clients C and A Tours. Even if it is on record that Mr. Wabwire counsel for the Respondent admitted that the money was received by the Respondent firm and it was in the process of depositing it in court, it still remains that it was received on 14/08/2017 before the issuance of the Acting Registrar's order of 14/09/2017, on which this court's order of 26/02/2019 is based.

[19] In the circumstances, it is our finding that it was not proper for this Court to issue an order based on the breach of the Registrar's order in MA 94 of 2017, first because this

court did not issue the order and in any case, the order was not in existence by the time the Ag. Registrar issued her order on 14/09/2017 and the firm received the impugned money on 14/08/2017. And thirdly because the order was against the Sheraton Kampala Hotel and not the Respondent firm and it was in respect of USD 22,134,78. If any, Contempt proceedings ought to have commenced, they should have been filed before the Acting Registrar who issued the order in MA No. 94 of 2017 and not before the Judges and Panelists of the Industrial Court.

It must be emphasized that a party cannot be held in contempt of a nonexistent Order let alone one they are not aware of the issuance of the order by the Panel of this court on 26/02/2019, based on the Registrar's Order issued on 14/9/2017, was therefore made in error, which error must be corrected.

This Court has the responsibility of preventing the abuse of the process of court by ensuring it makes orders that are orderly, are in accordance with the law and that ensure justice is done. Therefore, the order of this court dated 26/02/2019, directing the Respondent firm to deposit in this court the USD 11,517.68, it received from the Sheraton Kampala Hotel on 14/08/2017, based on the Registrars' order in MA No. 94 of 2017, which was issued on 14/09/2017 against the Sheraton Kampala hotel, was done per in curium and is therefore incompetent. It is accordingly, hereby vacated.

$[20]$ In conclusion, it is the finding of this court that in the absence of any Order of Court or of the Labour officer, preventing the Sheraton Hotel from paying what it owed to C and A Tours during the pendency of the proceedings in MA No. 94/2017, and having received the USD 11 517.68 from the Sheraton Kampala Hotel on behalf of C and A tours on 14/08/2017, 1 month before the Acting Registrar issued her order in MA No.94/2017, against the Sheraton Kampala Hotel on USD 11,517.68 on 14/08/2017. There was no breach of any order by the Respondent firm for which they can be held in contempt.

We, therefore, find no merit in this application. It is dismissed, with no order as to costs.

### Final Orders:

- 1. That the order that was issued on 26/02/2019 by this Court Per curiam is hereby vacated. - 2. The application is dismissed. - 3. No orders as cost is made.

Signed in Chambers at Kampala this **20^th** day of **January** 2025.


Hon. Justice Linda Lillian Tumusiime Mugisha, **Head Judge**

## **The Panelists Agree:**

- 1. Hon. Bwire John Abraham, - 2. Hon. Julian Nyachwo & - 3. Hon. Mwamula Juma.

20^th January 2025 2:30 pm

**All Market WARRANTING MAN**

$\mathcal{R}_{\mathcal{P}_{\mathcal{P}_{\mathcal{P}_{\mathcal{P}}}}}$