[2024] UGHC 737

**THE REPUBLIC OF UGANDA**

**IN THE HIGH COURT OF UGANDA AT JINJA**

**HCT-03-CV-MA-128-2023**

***(ARISING FROM HCCS NO. 027 OF 2011)***

1. **KIBEEDI HUSSEIN for and on**

**Behalf of 58 former employees of**

**Hotel Triangle Ltd & Brisk Recreation Ltd::::::::::::::::: APPLICANTS**

**VERSUS**

1. **HOTEL TRIANGLE LTD** 2. **BRISK RECREATION LTD:::::::::::::::::::::::::::::::::::::::::RESPONDENTS**

***Application for Contempt of Court*** *-*

*Held: Application GRANTED with Orders set forth in this Ruling*

**BEFORE: HON. JUSTICE DR. WINIFRED N NABISINDE**

**RULING**

This Ruling follows an Application brought under **Section 33 of the Judicature Act, Section 98 of the Civil Procedure Act Cap 71 (CPA)** **and** **Order 52 rule 1 & 2 of the Civil Procedure Rules SI 71-1** **(CPR)** seeking for Orders that:-

1. The 1st Respondent be cited for Contempt of Court for refusing to comply with this Honorable Court's Order Judgment delivered on 16/10/2019 ordering them to remit the Respondents NSSF contributions to their respective NSSF Accounts. 2. The 1st Respondent pays the costs of this application.

The grounds upon which this Application is premised are as follows:-

1. He filed ***Civil Suit No. 27 of 2011*** for and on behalf of 58 former employees of the Respondents and judgment was entered in favour of the Plaintiffs by Her Lordship Eva K Luswata and the Respondents did not appeal the same. 2. On page 34 & 35 of the Judgment, 1st Respondent was directed to remit to NSSF all unpaid remittances for each of the Plaintiffs/Applicants for the period December 1996 to September 2008. 3. They have since checked their NSSF Accounts and these remittances have never been made. 4. The Applicant's lawyers wrote to the 1st Respondent's Managing Director Mr. Mutaasa Kafeero informing him of their obligation under the Judgment but they have ignored and or failed to respond. 5. The acts of the Respondent have caused loss and anguish to the Applicants and it will be difficult and almost impossible to enforce the final judgment of the Court.

The above stated grounds are reiterated in the Affidavit in Support of the Application deponed by **Kibeedi Hussein,** the 1st Applicant on behalf of the others, the gist of which are that:-

1. He is a male adult Ugandan of Sound mind and the Applicant in the above matter for and on behalf of 58 former employees of Hotel Triangle Ltd. & Brisk Recreation Ltd. with authority to make this affidavit. 2. He filed **Civil Suit No. 27 of 2011** for and on behalf of 58 former employees of the Respondents and judgment was entered in favour of the Plaintiffs by Her Lordship Eva K Luswata and the Respondents did not appeal the same. (**See attached hereto a copy of the Judgment and decree marked “A" and "B" respectively)** 3. On page 34 & 35 of the Judgment, 1st Respondent was directed toremit to NSSF all unpaid remittances for each of the Plaintiffs for the periodDecember 1996 to September 2008. 4. They have checked their NSSF Accounts and these remittances have never been made; and have been advised by their lawyers of PRISM Advocates who also wrote to the 1st Respondent's Managing Director Mr. Mutaasa Kafeero informing him of their obligation under the Judgment, but they have ignored and or failed to respond. 5. The acts of the Respondent have caused loss and anguish to them and it will be difficult and almost impossible to enforce the final judgment of the Court. 6. He has been informed by his lawyers M/S. PRISM Advocates, which information he verily believes to be true that the 1st Respondent's should be cited for Contempt of Court; the 1st Respondents Managing Director Mr. Mutaasa Kafeero should be committed to civil prison until he complies with the judgment and the 1st Respondent was in contempt of this Honorable Court's Judgment by refusing to remit the Applicants NSSF contributions. 7. He swore this affidavit in support of the Applicant's application to have the 1st Respondent cited for Contempt of Court for refusing to comply with this Honorable Court's Judgment; and whatever he stated herein above is true and correct to the best of his knowledge and belief, save for paragraph 8 the source of which is therein disclosed and he believes the same to be true and correct.

**BRIEF FACTS**

The Plaintiffs/ Applicants filed a representative suit **Civil Suit No.27 of 2011** in the name of Kibeedi Hussein on behalf of 58 others seeking for special and general damages for breach of their contracts of service by the Defendants/Respondents as well as unlawful termination. All plaintiffs /Applicants were former employees of the 1st Defendant/ Respondent, Hotel Triangle Ltd. (hereinafter referred to as the Hotel); and had a uniform claim against the Defendants/Respondents.

The plaintiff's case in brief is that prior to 2008, the plaintiff was an employee of the Hotel. In 2008, the Hotel divested herself of interest in the company, by selling her interest to Brisk Recreation Ltd (hereinafter referred to as Brisk), the latter who retained the plaintiffs on their existing terms and conditions of service. That shortly after taking over full responsibility of the hotel business, Brisk terminated the Plaintiffs / Applicants contract and that of 57 others.

The Plaintiff/ Applicants contended that the termination was without justification and thus, unlawful. In addition, upon termination, other breaches of their contracts manifested by non-payment of various terminal benefits and remission of National Security Fund (NSSF) entitlements on their behalf.

The Hotel admitted the claim only to the extent that they divested their entire business to Brisk, the latter who continued to employ the Plaintiff / Applicants under the name and style of the business name Hotel Triangle Limited. They denied ever terminating the Plaintiffs / Applicants contract, and accordingly deemed that there was no cause of action raised against them.

On their part, Brisk denied purchasing the hotel business in the manner claimed by the Hotel. That save for the physical infrastructure, there was never a change of ownership from the Hotel to Brisk and specifically, Brisk did not take over the Plaintiff Applicants as their employees and thus, they could not have been dismissed as alleged. That when Brisk took over the physical assets of the Hotel, save for some specific former employees of the Hotel, the plaintiff and others relocated to another branch of the Hotel on Buganda Road in Kampala.

That those employees taken over by Brisk continue in their employment and technically, would not be entitled to any terminal and other benefits. Brisk argued in the alternative that if the plaintiff and 57 others claim to have been employed by them, then, their contracts were summarily terminated for unjustifiably absconding from duty. They in addition challenged the decision of the Commissioner for Labour directing them to pay the plaintiff terminal benefits and any obligation to remit NSSF contributions for the plaintiff, or other benefits as there was no severance of their Contracts as claimed. Judgement was entered for the Plaintiffs/Applicants among other reliefs that:-

*“A declaration that there existed contracts of employment between the plaintiffs and Hotel Triangle Ltd the 1st Defendant/1st Respondent before the sale of part of the business on 18/10/2008;*

*A declaration that after the sale of the business to Brisk Recreation Ltd, the 2nd Defendant/2nd Respondent on 18/10/2008, the to the 2nd Defendant/ 2nd Respondent;*

*A declaration that both Defendants/ Respondents did not remit some of the plaintiffs' entitlements to the National Social Security Fund (NSSF); and*

*As a result, they were held in breach of their (the Defendants/ Respondents) statutory duty and the Plaintiffs / Applicants employment contracts.*

*The 1st defendant is directed to remit to the National Social Security Fund (NSSF) all unpaid statutory remittances for each of the Plaintiffs / Applicants for the period December 1996 to September 2008”.*

**REPRESENTATION**

When this Application was presented before me for hearing, the Applicants were represented by learned counsel Mr. Rubagaire of M/S. PRISM Advocates and the Respondents nor didn’t their representatives not appear in court for the hearing.

The court record shows that the Respondents were served with the current Application, but they rejected service. Court was satisfied that there was effective service upon the Respondents but they had failed and or neglected to file a reply within the prescribed period. The matter proceeded exparte against them under **Order 9 rules 10 and 20(1) of the Civil Procedure Rules.**

**THE LAW**

**Section 33 of the Judicature Act,**

*“****General provisions as to remedies***

*The High Court shall, in the exercise of the jurisdiction vested in it by the Constitution, this Act or any written law, grant absolutely or on such terms and conditions as it thinks just, all such remedies as any of the parties to a cause or matter is entitled to in respect of any legal or equitable claim properly brought before it, so that as far as possible all matters in controversy between the parties may be completely and finally determined and all multiplicities of legal proceedings concerning any of those matters avoided’*.

**Section 98 of the Civil Procedure Act Cap 71 (CPA)**

*"Nothing in this Act shall be deemed to limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court".*

This section empowers the court to grant any orders in all cases in which it appears to the court to be just and convenient to do so to ensure that justice is not only done, but seen to be done.

And

**Order 52 rule 1 & 2 of the Civil Procedure Rules SI 71-1** **(CPR)** provide for the procedure that an Application of this nature must take.

**RESOLUTION OF THE APPLICATION**

Counsel for the Applicants raised issues to be determined in the Application to wit;-

1. Whether the 1st Respondent is in contempt of court? 2. What are the remedies available to the Applicants?

**ISSUE 1: Whether the 1st Respondent is in contempt of court?**

Learned counsel for the Applicants submitted that the 1st Respondent is in contempt of Court because Judgment in **Civil Suit No. 27 of 2011** was delivered on the 16th day of October 2019 in favor of the Applicants and the 1st Respondent has knowledge of it and has not complied. They cited the case of ***Barbra Nambi vs Raymond Lwanga H. C Miscellaneous Application No. 213 of 2017*** wherein it was stated that:

*“Before any action can be found to amount to contempt of Court, the following principles have to be established.*

*1. Existence of a lawful order*

*2. Potential contemnor's knowledge of the order*

*3. Potential contemnor's failure to comply, that is, disobedience of the order”.*

**Existence of a lawful order**

Learned Counsel for the Applicants submitted that in paragraph 3 of the Applicants' Affidavit in support of the application states on page 34 and 35 of the judgment that the 1st Respondent was directed to remit to NSSF all unpaid remittances for each of the applicants for the period December 1996 to September 2008 which proves the existence of a lawful order. They relied on the case of ***Nsagirano vs Col. Kaka Bagyenda and A’nor [2021] UGHC 23***, it was stated that a court order is not a mere suggestion or an opinion or a point of view. It is a directive that is issued after much thought and with circumspection. It must therefore be complied with and it is in the interest of every person that this remains the case. That it is an undisputed fact that there is in existence a lawful court order. Potential contemnor's knowledge of the order

Further, in paragraph 5 of the Applicants' Affidavit in support states that the Applicants' lawyers wrote to the 1st Respondent's Managing Director Mr. Mutaasa Kafeero informing him of their obligation under the judgment but they have ignored and or failed to respond which indicates that he has got knowledge of the orders in ***Civil Suit No. 27 of 2011.***

**Potential contemnor's failure to comply, that is, disobedience of the order.**

They submitted that in the instant facts, the judgment in **Civil Suit No. 27 of 2011** dated 16/10/2029 was delivered in favor of the Applicants with such orders and the Applicants filed **Miscellaneous Application No. 128 of 2023** for orders that the 1st Respondent be cited for contempt of Court because the 1st Respondent has not complied with such orders despite having knowledge about their existence.

In the case of ***Housing Finance Bank Ltd & Anor v Edward Musisi (supra)*** ***at page 11***, it was held that, the principle of law is that the whole purpose of litigation as a process of judicial administration is lost if orders issued by court through its set judicial process, in the normal functioning of the courts, are not complied with in full by those targeted and or called upon to give due compliance.

Paragraph 4 of the Applicants' affidavit in support of the application states that the Applicants' checked their NSSF Accounts and these remittances have never been made which means that the 1 Respondent has not complied with the Court Order.

I have carefully examined the record of **Civil Suit No. 27 of 2011** out of which the current Application arises as concluded by Hon. Justice Eva K Luswata in relation to the instant facts. It is an undisputed fact that there is in existence a lawful Court Order, whose details are capture by learned counsel for the Applicants in detail in this Ruling. The potential contemnor’s knowledge about its existence is therefore not in doubt since the matter heard interparty.

The record also reveals that the Respondents have not complied with any of the above Orders. It is therefore without a doubt that there is Contempt of Court of the said Orders.

**Issue 2: What are the remedies available to the Applicants?**

It was submitted by learned Counsel for the Applicants that the High Court is enjoined to exercise its jurisdiction in conformity withthe common law and doctrines of equity whereby it's obliged to exercise itsdiscretion in conformity with principles of justice, equity and good consciencerespectively**.** They cited the case of ***Stanbic Bank (U) Ltd vs Commission General Uganda Revenue Authority***.

Court reiterated that disregard of an order of the Court is a matter of sufficient gravity whatever the order maybe and that court of Law never acts in vain and as such, issues touching on contempt takes precedence over any other case of invocation of the jurisdiction of Court.

Further, that the court awarded the Applicants exemplary/ punitive damages of UGX 300,000,000/=; and also prayed that the 1st Respondent is fined with UGX 100,000,000/= for disobeying orders of Court.

They added that in the case of ***Stanbic Bank (U) Ltd v Commission General Uganda Revenue Authority MA 42 of 2010***, Court imposed a fine of UGX 100,000,000/= as sufficient punishment to purge the contempt in that matter. Accordingly, they prayed that this application be granted and the 1st Respondent is compelled to pay exemplary/ punitive damages and fined.

**I have carefully analyzed this Application and taken into account the submissions of counsel for the Applicant. Black’s Law Dictionary 7th Edition page 313** defines Contempt of Court as *“a disregard of or disobedience to, the rules or orders of a legislative or Judicial body, or an interruption of its proceedings by disorderly behavior or insolent language, in its presence or so near thereto as to disturb the proceedings or to impair respect due to such a body”.*

Contempt of court has also been well described in the case of ***Megha Industries Ltd vs Conform Uganda Ltd HCMC No.21 of 2014*** where the Judge held that contempt of court exists where there is a lawful court order and the potential contemnor must have been aware of the court order and failed to comply with the Order.

It was further elaborated in the case of ***Hon. Sitenda Sebalu vs Secretary General of the East African Community Ref. No. 8 of 2012*** that the conditions which must be proved by the applicant in contempt of court are that;

1. Existence of a lawful order. 2. The potential contemnor’s knowledge of the order. 3. The potential contemnor’s ability to comply. 4. The potential contemnor’s failure to comply with/ disobedience of the order.

It is clear from the record that on 16th October 2019 the 1st Respondent was ordered to remit to the National Social Security Fund (NSSF) all unpaid statutory remittances for each of the Applicants for the period December 1996 to September 2008; the 2nd Respondent was directed to remit to the NSSF all unpaid statutory remittances of each of the Plaintiffs for the period October 2008 to March 2010. The 2nd Respondent shall continue remitting NSSF contributions for all the Applicants that they retained until the formal end of their contracts.

Pursuant to the order, the Respondents have never made the remittances as seen in paragraph 4 of the Application.

Further in paragraph 5 of the affidavit in support of the Application, the Applicant contended that their lawyers have written to the 1st Respondents managing director Mr. Mutaasa Kafeero reminding him about his obligations under the Judgment but have rather ignored and never responded to them.

It is important to first state that the Judgment was delivered in the presence of counsel for the Respondents who ought to have notified their clients. This is an indication that the Respondents are fully aware of their obligations in the aforementioned Judgment.

I therefore find that the Respondents are in outright disobedience of part of the court order which amounts to contempt of court. In the case of ***Housing Finance Bank Ltd & Another vs Edward Musisi Misc. Application No.158 of 2010, the court of appeal held at page 11*** that;

*“the principle of law is that the whole purpose of litigation as a process of Judicial administration is lost if orders by court through the set Judicial process, in the normal functioning of the courts are not complied with in full by those targeted and /or called upon to give due compliance. Further, it is not for that party to choose whether or not to comply with such order.*

*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 in such a lawful way as the law permits. It was also stated that otherwise to disobey an order of court or offer no explanation for non -compliance to the issuing court, at any party’s choice or whims, on the basis that such an order is null or irregular, or is not acceptable or is not pleasant to the party concerned is to commit contempt of court.”*

The above decision is the correct position of the law and therefore the Respondents are in contempt of court when they refused to remit the Applicants NSSF contributions to their respective NSSF Accounts.

**On remedies,** the court having found the Respondents to be in contempt of court, there is no justifiable excuse for the Respondents to have disobeyed the court order. The primary purpose of contempt is to preserve the effectiveness and sustenance of the power of courts ***see: People vs Krz 35 Mich App. 643, 656 (1971).*** For the reasons I have given above, I will find merit in this application and it is accordingly allowed.

Again in the case of ***Mega Industries (U) Ltd vs Comfoam Uganda Ltd MC 21 of 2014*** relied upon by learned counsel for the Applicants, Court awarded Exemplary damages of UGX. 300,000,000/= to the applicant Company with payment of interest at court rate from the date of the ruling till payment in full. The court handed down a penalty of UGX. 100,000, 000/= for Contempt of Court orders in **Civil Suit 269 of 2011** which was to be deposited in court.

Exemplary damages are punitive or exemplary in nature. They represent a sum of money of a penal nature in addition to the compensatory damages given for the pecuniary or physical and mental suffering. **(see *Butterworth’s v Butterworths & Englefield [1920]P 126*** *per Lord McCardie J.*

The rationale behind the award of exemplary damage is to punish the defendant and deter him from repeating the wrongful act. These damages should not be used as a means to enrich the Plaintiff.

Lord Devln in ***Rookes vs Bernard [1946] ALL ER 367*** state three categories of cases in which exemplary categories of cases in which exemplary damages are awarded which were re-echoed in ***Ntabgoba vs. Editor in Chief of the New Vision [2004]2 EA 234***, These are:-

1. where there has been oppressive, arbitrary or unconstitutional action by the servants of government and 2. where the defendant's conduct has been calculated by him to make a profit which may well exceed the compensation payable to the plaintiff and 3. that some law for the time being in force authorizes the award of exemplary damages.

Lord Devlin further ststed that when making an award of exemplary damages the following must be borne in mind;

1. Plaintiff cannot recover exemplary damages unless he or she is the victim of punishable behaviour, 2. The power to award exemplary damages should be used with restraint,

and

1. The means of the parties are material in the assessment of exemplary

damages.

In practice, there is a tendency to confuse exemplary damages and aggravated damages, but these two kinds of damages are distinct t as noted from the passage of Lord Devlin in ***Rookes vs Bernard(supra)***

"*English law recognized the awarding of exemplary damages, that is, damages whose object was to punish or deter and which were distinct from aggravating damages(whereby the motives and conduct of the defendant aggravating the injury to the plaintiff would be taken into account in assessing compensatory damages)... The fact that the injury to the plaintiff has been aggravated by the malice or by the manner of doing the that is, the insolence or arrogance by which it is accompanied is not justification for an award of exemplary damages; aggravated damages can do in this type of case what otherwise could be*

*done by exemplary damages.’*

In the case of ***Obongo v Kisumu Council, [1971] EA 91***court noted that exemplary damages are awarded,

*"first, where there is oppressive, arbitrary or unconstitutional action by the servants of the government and, secondly, where the defendant’s conduct was calculated to procure him some benefit, not necessarily financial, at the expense of the plaintiff. As regards the actual award, the plaintiff must have suffered as a result of the punishable behaviour; the punishment imposed must not exceed what would be likely to have been imposed in criminal proceedings if the conduct were criminal; and the means of the parties and everything which aggravates or mitigates the defendant's conduct is to be taken into account. It will be seen that the House took the firm view that exemplary damages are penal, not consolatory as had sometimes been suggested. "*

In the circumstances of this case, I will award the Applicants exemplary damages of UGX. 200,000,000/= (Two Hundred million) for the delay the Applicants have suffered because of the impunity of the Respondents and this Court will not condone the unfairness and injustice the Applicants have suffered yet they were in employment of the Respondents

The exemplary damages will carry interest of 23% from the date of this ruling till payment in full.

The respondent will also deposit a fine of 5,000,000 (Five million shillings) into this court.

The costs of this Application are awarded to the Applicants.

I SO ORDER.

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ JUSTICE DR. WINIFRED N NABISINDE JUDGE 26/06/2024**

This Ruling shall be delivered by the Honorable Magistrate Grade 1 attached to the Chambers of the Senior Resident Judge Jinja who shall also explain the right to seek leave of appeal against this Ruling to the Court of Appeal of Uganda.

**\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

**JUSTICE DR. WINIFRED N NABISINDE JUDGE 26/06/2024**