[2023] UGCA 347

# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT KAMPALA **CIVIL APPLICATION NO.560 OF 2022**

(Arising out of Civil Application No.562 Of 2022 & Consolidated Civil Appeal No.230 Of 2013 and Civil Appeal No.0010 of 2014)

MATOVU & MATOVU ADVOCATES ::::::::::::::::::::::::::::::::::::

# **VERSUS**

- 1. ATTORNEY GENERAL - 2. UGANDA POST LIMITED - 3. UGANDA TELECOM LIMITED (IN ADMINISTRATION) ::::::::::::::::::::::::::::::::::::

# RULING OF MUZAMIRU MUTANGULA KIBEEDI, JA

# **Introduction**

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- This is an application by Notice of Motion brought under Rules 2(2), 43 (1) and 44 (1) of $[1]$ Judicature (Court of Appeal) Rules, S. I No. 13—10, seeking orders that: - A temporary injunction doth issue restraining the Ministry of Finance, Planning and $1.$ Economic Development from making payments of a court award vide HCCS No. 135 of 2003 (Bernard Mweteise and others Vs UTL, UPL & Others) through the Ministry of Information, Communication and Technology and subsequently directly to the Applicants' clients/plaintiffs/beneficiaries pending the hearing and final disposal of the main suit (Civil Application No 562 of 2022) - Costs of the application be provided for. $2.$ - The application is supported by the Affidavit of Ms. Rosemary Birungi dated 15^th June 2022, the $[2]$ Affidavit of Mr. Justus Ampaire dated 24^th November 2022, and Rosemary Birungi's Affidavit in Rejoinder dated the 25^th November 2023.

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- $[3]$ The 1^st respondent opposed the application based on the grounds and evidence set out in the Affidavit of Ms. Emelda Adongo, a Senior State Attorney in the Attorney General's Chambers, dated the 24^th of November 2022 and that of the Under Secretary in the Ministry of ICT and National Guidance, Mr. Julius Victor Nkeramihingo, dated the 28^th November 2022. - The 2^nd and 3^rd respondents never filed Affidavits in reply. When the application was called up $[4]$ for hearing, the applicant, with leave of court, withdrew its claim against the 2^nd and 3^rd respondents. Accordingly, any reference to respondent hereinafter shall mean the Attorney General only.

#### **Background facts**

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- $[5]$ The background facts leading to this application appear not to be in contention. The applicant, a firm of advocates, successfully represented over 1600 former employees of Uganda Telecom Limited (UTL), Uganda Posts Limited (UPL), Uganda Communications Commission (UCC) and Post Bank Limited (PBL) (who, for ease of reference will collectively be referred to as "the applicant's clients") in the High Court in a representative suit for the recovery of pension, interest, general damages and costs, vide: HCCS No. 135 of 2003 Bernard Mweteise, Asaph Ndawula and others versus UTL, UPL, UCC, PBL and others. - The High Court entered judgment in favour of the applicant's clients for, inter alia, a declaration $[6]$ that they are entitled to pension calculated in accordance with their original contracts of service, general damages and interest thereon. The applicant's clients were also awarded the costs of the suit. - UTL appealed to the Court of Appeal under reference number Civil Appeal No. 230 of 2013 UTL $[7]$ Vs Bernard Mweteise, Asaph Ndawula and others; while UPL likewise appealed to the Court of Appeal under reference number No. Civil Appeal No. 10 of 2014 UPL Vs. Bernard Mweteise, Asaph Ndawula and others. The appeals were consolidated and judgment entered against the appellants by the Court of Appeal.


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UTL subsequently went into administration and the Government of Uganda took over the liability [8] of both UTL and UPL in respect of the decretal awards due from them. The government's commitment to pay the pension arrears as decreed by court was communicated to the applicant and the applicant's clients in the meeting held on 30^th November 2021 with the officials of the Ministry of Finance chaired by the Deputy Permanent Secretary/ Secretary to the Treasury. The office of the Auditor General was instructed to compute the entitlement due to each individual beneficiary. Thereafter, the budgeting process took over and by the time of hearing of this application, the government was ready to disburse some funds towards settlement of the decretal award in instalments.

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- $[9]$ As the Ministry of ICT and National Guidance was processing payment of the pension arrears on behalf of the 2^nd and 3^rd respondents, controversy arose as to whom the payment should be paid. The debate appears to have been whether the payments of the ascertained unpaid decretal sums should be paid directly to the bank accounts of each one of the individual decree holders (the applicant's clients individually), or whether the payment should be paid by government to the applicant as counsel for the decree holders. - The applicant's position, as communicated by their various letters to the Ministry of Finance and $[10]$ Economic Planning and the Ministry of ICT and National Guidance, was that as Counsel of the decree holders they were entitled to receive the payment of all the ascertained decretal sums on behalf of their clients. That they had written instructions from the decree holders that upon receipt of the payment of the decretal sums from government, they should effect the payment thereof to the designated bank accounts of each individual beneficiary less 20% deduction to cater for what they termed to be "legal fees" and "administrative costs incurred during the procurement of [the] benefits". The fallback position of the applicants was that in case the government insisted on paying the decretal sums directly to the individual bank accounts of each one of the applicant's clients, then 20% be deducted before disbursing the 80% to the applicant's clients. But as for the payments forward, the applicants communicated to the Ministry

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of ICT and National Guidance that the monthly Pension payments should be made directly onto the bank accounts of each individual beneficiary.

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- It was in that context that the applicant commenced Civil Application No. 562 of 2022 by which it $[11]$ sought orders of the Court of Appeal to be issued against the Attorney General to the effect that "the court awards in terms of pension arrears, general damages and interest accrued thereon due to the [applicant's clients] under consolidated Civil Appeal No. 230 of 2013 and Civil Appeal No. 10 of 2014 be paid through the applicant for onward transmission to its clients". The applicant's alternative prayer was for the court to direct the responsible government ministries and officers to pay the applicant's clients directly after deducting the applicant's administrative costs and monies advanced to the said clients and consented to by them. The said application is yet to be heard and disposed of by this court. - The applicant also filed the instant application seeking a temporary injunction order pending the $[12]$ hearing and disposal of Civil Application No. 562 of 2022. - Faced with the payment instructions from the applicant already alluded to in this Ruling, the $[13]$ Ministry of ICT and National Guidance, through its Principal Human Resource Officer, Mr. Agaba, went ahead to verify the claim by the applicant to have got instructions to receive the payments as contended by it. Several of the applicant's concerned clients signed individual forms on the headed paper of the Ministry of ICT & National Guidance by which each one of the signatories stated that he/she "confirm[s] and consent[s] that 20% be deducted from [the] lumpsum pension and gratuity to pay [the applicant] for their legal fees incurred during the court case HCCS 135 of 2003 Benard Mweteise and Others Vs UTL, UPL & Others". Most of the confirmations submitted to the court were made in October 2022. - The Permanent Secretary of the Ministry of ICT and National Guidance also sought legal $[14]$ guidance from the Attorney General on whether the Ministry should retain and/or deduct 20% of the entitlements of the applicant's clients to pay the applicants for their legal services or not.

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- In response, the Attorney General by his letter dated the 16^th of November 2022, advised the $[15]$ Permanent Secretary of the Ministry of ICT and National Guidance that "payment should be made to the listed pensioners as verified by the Office of the Auditor General". - Upon receipt of the said legal advice, the Ministry of ICT and National Guidance went ahead $[16]$ with the processing of the payment to the applicant's clients in accordance with the advice. By the time of the hearing of this application, Counsel for the parties to this application informed court that some payments had indeed started being made by the Ministry of ICT and National Guidance to the applicant's clients directly.

#### **Representation**

- $[17]$ When this application came up before me for hearing, the applicant was represented by Mr. John Mary Kiwuuwa, assisted by Mr. Emmanuel Kakenga and Mr. Joel Kidandaire. The respondent was represented by Mr. Richard Adrole, a Principal State Attorney in the Attorney General's chambers. - $[18]$ The parties proceeded by way of written submissions as directed by Court. However, Counsel for the parties briefly addressed court in respect of some specific areas where court sought clarification. This Ruling has therefore been prepared largely on the basis of the Written Submissions. However, the oral submissions have also been considered.

## **Agreed Matters**

- I have closely examined the pleadings in this matter, the Affidavit Evidence of the respective $[19]$ parties, together with their respective submissions and supporting authorities for which I am grateful to all Counsel. Both sides are in agreement that the grant of the orders sought by the applicant is discretionary on the part of the court. Both sides are also in agreement as to the principles which guide the court in exercise of its discretion as set out in the different authorities relied upon by the parties namely: - $1.$ Pendency of the substantive application/suit.

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- $2.$ Likelihood of success of the pending application, or it raises a prima facie case. - The applicant will suffer irreparable damage, or the application will be rendered nugatory if $3.$ injunction order is not granted. - Balance of convenience. $4.$ - The application should have been instituted without delay. $5.$

See: Shiv Construction Vs. Endesha Enterprises Ltd S. C. Civil Appeal No. 34 of 1992; Robert Kavuma Vs M/s Hotel International SCCA No.8 of 1990; and Kiyimba Kaggwa Versus Haji Abdu Nasser Katende [1985] HCB 43

$[20]$ What is in contest is whether the current application satisfies those principles.

# **Analysis**

- By this application, the applicant is seeking a temporary injunction to be issued against the $[21]$ Ministry of Finance Planning and Economic Development restraining it from making payments in respect of the court award in High Court Civil Suit Number 135 of 2003 through the Ministry of ICT and then subsequently to the applicant's clients directly, pending the disposal of the substantive application filed by the applicant in this court namely, Civil Application No. 562 of 2022. - $[22]$ There is no doubt that the primary purpose of granting an application of this nature is to preserve the right of the applicant to be heard in the substantive application. This position has been settled by this court and the Supreme Court in the decisions some of which have been cited by the parties in the instant matter in support of their respective submissions. The authorities include Shiv Construction Vs. Endesha Enterprises Ltd S. C. Civil Appeal No. 34 of 1992 cited by the parties. - As such, resolution of this application revolves around establishment of the bona fides of the $[23]$ right(s) claimed by the applicant in the substantive application and whether the rights claimed right(s) claimed by the approach. ... are worthy of protection through the orders sought in the instant matter.

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- $[24]$ I have had a look at the substantive application, Civil Application No. 562 of 2022 pending before this court. In the said application, the applicant seeks, inter alia, directions as to payment of the decretal sums and interest due to the applicant's clients as the beneficiaries in Consolidated Civil Appeal No. 230 of 2013 and Civil Appeal No. 10 of 2014 which arose out of High Court Civil Suit No. 135 of 2003. The said application was filed in this court in June 2022. The application raises several questions of law and fact which need to be settled by this court. - $[25]$ The first question relates to the scope of authority of an advocate to bind his/her clients and recover payment from government on their behalf. In the matter in issue, the applicant represented over 1600 litigants in the High Court and in the Court of Appeal and obtained judgments in their favour. The client/advocate relationship between the applicant and its clients is now over 20 years old. There is no evidence that the clients have terminated that relationship or otherwise withdrawn their instructions from the applicant. It is in those circumstances that the applicant went ahead to demand for payment of all the decretal moneys and instructed the relevant government bodies to pay the same onto the applicant's bank account, presumably a clients' trustee account which the applicant is required by law to maintain. For reasons not disclosed in the evidence before the court, the payment instructions were not honoured by government. - As a fallback, the applicant instructed government to pay 20% of the decretal sums onto its bank [26] account and the 80% onto the individual bank accounts of the applicant's clients. The respondent insisted on getting a confirmation from the applicant's clients as to whether the applicant had the mandate to give such modified payment instructions to the respondent. The applicant's clients indeed signed before the ICT Ministry staff documents which confirmed that the applicant's modified payment instructions to the respondents' officials did not deviate from the instructions given to it by its clients. - After that, the respondent was still not satisfied. He sought to fault the payment instructions $[27]$ using Section 16 of the Pensions Act which shields a pension, gratuity or other allowance granted under the Pensions Act against attachment, assignment and transfer.~ Nich

Page 7 of 13 $[28]$ The court while resolving the substantive application will therefore determine the scope of application of the Pensions Act in general, and Section 16 in particular, to the settlement of the decretal sums due to the applicant's clients: Does the Pension's Act exclude the right of the applicant, as an advocate, to act on behalf of his clients and receive payments on their behalf and thereby discharge the respondent in accordance with the well-known Latin maxim, *qui facit* per alium facit per se" (which means: "He who acts through another does the act himself")? Or whether the Pensions Act vests the legal competence to receive payment of the decretal sums exclusively in the applicant's clients in person and that that right can never be discharged by their advocates, the applicants in the instant matter.

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- $[29]$ The court will also determine whether by instructing the respondent's officials to pay 20% to the applicant's bank account and 80% to the personal accounts of the applicant's clients, the applicant's action amounted to a deduction from the pension moneys in contravention of section 16 of the Pensions Act, or whether the applicant, as an advocate, could lawfully give instructions to the respondents as to where the payments should be made and in what proportions. - Further, the court will determine whether the payments in the instant matter which are due to the $[30]$ applicant's clients by virtue of a court decree (otherwise termed "decretal sums") and which included the awards of general damages and interest still come within the scope of definition of "pension" covered by Section 16 of the Pension's Act. - Lastly, the court will also determine whether the payment instructions given by the applicant to $[31]$ the respondent's officials are barred by Section 26 of the Advocates Act, Cap. 267 and Rule 55(1)(b) of the Advocates (Professional Conduct) Regulations S. I No. 267-1. The court will consider whether in the post 1995 constitutional order which lays emphasis on "substance" as opposed to "form", the distinction between advocate/client agreements for remuneration of an advocate based on percentage terms and agreements based on agreed sums is still relevant - As such, I am satisfied that the substantive application raises bona fide questions of law and fact $[32]$ which need to be answered by this court in Civil Application No. 562 of 2022. $\mathcal{S}$

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- $[33]$ In the meantime, the substantive application has not yet been set for hearing by this court owing to reasons which are wholly outside the control of the applicants. On the other hand, the respondent has continued to settle the decretal sums due to the applicant's clients in accordance with the mode being objected to by the applicant in the said application. And if this goes on unabated, then the risk of rendering Civil Application No. 562 of 2022 moot increasingly becomes real with each payment. As such, it is important that this court does intervene for purposes of preserving the right of the applicant to be heard over the issues raised in Civil Application No. 562 of 2022. - $[34]$ However, after a very careful consideration of the application as filed, I cannot grant the orders sought in the terms set out in the Notice of Motion. And the reason is very simple: By the time a claim gets to the stage of payment, there is a whole budgeting cycle through which the claim will have been subjected before eventually getting to the current stage where payments have started being effected by the respondent's officials. It is a definitely very involved and cumbersome process, takes a lot of time and comprises very many stakeholders. As such, if I were to make an order the effect of which is to restrain the respondent's officials from paying the applicant's clients their hard earned and long-awaited money when the budgeting and payment process has been brought to the tail end, that will be grossly unjust. - Needless to mention, the applicant's clients have been in court for over 20 years. They $[35]$ commenced the High court case in 2003. But that is not the time when their complaint first arose. Any postponement of the fruits of a 20 years' struggle would not be anywhere near fair. So, I cannot grant the application in the terms sought by the applicant. - Instead, I am modifying the order to make the ends of justice meet in the unique circumstances [36] of this case. In so doing, I have taken into account the fact that the dispute which is the subject matter of Civil Application number 562 of 2020, revolves around mode of payment: Should government pay the applicant's clients directly or it should pay counsel and counsel, in turn, pays his clients? Or, should government pay 80% to the clients directly and 20% to counsel? That's what the dispute is all about - payment.

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- I have also considered the stakeholders in the whole subject. Ordinarily once counsel is $[37]$ instructed by a client, then he is the one who is legally mandated to represent the clients at all phases, including at the payment stage. Further, that once payment is made to one's advocates, it is in law as good as payment to the client himself with the consequence that the judgment debtor becomes discharged upon effecting the payment to the advocate. However, in the instant matter, court is also alive to the history which has characterised such representative suits when payments have been made directly to counsel. The case which involved the criminal prosecution and conviction of an advocate, Bob Kasango (now deceased) is still fresh in the public memory and part of our jurisprudence, vide: Lwamafa Jimmy and 3 Others Vs. Uganda, Court of Appeal Consolidated Criminal Appeals No.183 of 2018 and No. 005 of 2019 2021 UGCA 40 (19 July 2021). Consequently, in the process of making my decision, I have had to be alive to certain realities which are part of the history of legal practice in this country. - [38] I have also considered the number of litigants who were represented by the applicant for over 20 years. 1600 clients spread all over the country is not a small number. The intricacies of managing that relationship up to the time of getting a judgment in their favour are best known only by the applicant and not us who were not part of their struggle. But what is for certain is that it is definitely not any easy experience managing such a number of clients. - And from the record, several of the applicant's clients were indigent clients; they could not afford [39] to pay upfront for the legal services which led to the victory they are proud of. Nonetheless, their economic situation should never, and did not, make them any less entitled to be represented because they had a genuine legal claim. So how does court ensure that legal representation for such people is not compromised from the type of decisions we make as judicial officers. To me, this has been one of the critical balances I have had to make. - I have also had to balance with the reality of human behaviour characteristic of most ordinary $[40]$ clients after they have already won their case: There is a Luganda saying which states that "alivamu, yaliyita ekyato" (Meaning: After an individual has been facilitated by a canoe to cross a river or water stream, the value of the canoe diminishes and, in the mind of the individual, the

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formerly valuable canoe ("elyato") starts being described in derogatory terms as "ekyato" to reflect its diminished value.) That saying is an apt summary of ordinary human behavior.

- In our context, after a lawyer has assisted a client score legal success through a judgment, the $[41]$ value of the lawyer in the perception of the client diminishes. At that stage, the readiness of the client to pay the lawyer likewise goes down. The consequence is that it becomes extremely difficult for a lawyer to start billing and recovering from his or her client at the stage when the lawyer's perceived value to the client has diminished. - The aforesaid observations are backed by the research findings and experience summarised by $[42]$ Jay G. Foonberg in what he termed "the client's gratitude curve". See: Jay G. Foonberg, "How to Start and Build a Law Practice" & https://validatum.com/articles/the-foonberg-gratitudecurve. - According to Foonberg, clients readily pay for what they badly need and don't have; clients $[43]$ rarely pay for what they badly needed and already have. - $[44]$ In practical terms, what Foonberg's theory of "the client's gratitude curve" implies is that the best time for an advocate to bill and collect his/her fees without much difficulty is during the early or formative stages of their case upto the time immediately before judgment. At that stage, the client's satisfaction levels are high and, correspondingly the value of their advocate is perceived to be high. After judgment, the client's perception of the value of the advocate starts going down. When the client's perception of the advocate's value is on the downward trend, as in the instant matter, it becomes extremely difficult for the advocate to be paid by each one of the 1,600 or so clients spread all over the country. If I am not alive to the behaviour of clients when it comes to settlement of their advocates fees and refunding the disbursements incurred in the litigation journey, I would be unwittingly frustrating legal practice in general and, in particular frustrating the commendable work done by the advocates who go out of their way to assist such needy litigants. So, I have had to strike that balance.

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- $[45]$ I have also had to strike the balance to ensure that the Attorney General is not exposed to unintended danger as a result of paying to any single person or group of persons. The Attorney General's obligation should cease the moment he settles the decretal sums and he should never have any worries should a dispute arise between the advocate and his clients upon failing to account to his clients after receipt of money from government. - In summary, the compromise I have considered caters for the diverse stakes and interests in the $[46]$ litigation and its resolution. This is in line with the current constitutional dictates of article 126 by which the exercise of judicial power is not restricted only to the consideration of the law but extends to consideration of, among other things, the aspirations of the people of Uganda. In my view, such a constitutional duty on the part of this court, as it currently stands, is a much bigger challenge than the situation prior to the 1995 Constitution and dictates that court is not oblivious to the Political, Economic, Social, Technological and Environmental (PESTE) realities and aspirations of the people of Uganda.

## **Disposition**

In the final result, I hereby order that:

- 1) An injunction is hereby issued against the Attorney General and the Agencies of Government from paying the decretal sums awarded in High Court Civil Suit Number 135 of 2003 and the interest thereon directly to the applicant's clients. - 2) Instead, the Attorney General shall pay 80% directly to the bank accounts of the beneficiaries under the decretal award in accordance with the assessment made by the Auditor General, and 20% shall be paid to the applicant's bank account. - 3) Upon payment as foresaid, the Attorney General shall stand discharged from all claim and liability arising from or associated with the satisfaction of the decretal sum in High Court Civil Suit Number 135 of 2003.

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- 4) This order shall stay in place until the end of the next financial year (2024/2025) or until this court has resolved Civil Application number 562 of 2022 which is pending before this court, whichever of the two happens first. - 5) For avoidance of doubt, the payment terms above cover only the pension arrears, general damages and accrued interest due to the applicant's clients under HCCS No. 135 of 2003 Bernard Mweteise, Asaph Ndawula and others versus UTL, UPL, UCC, PBL and others, as computed by the Auditor General. The subsequent monthly pension payments which the applicant's clients are entitled to receive are not subject to this order and are, accordingly, payable directly to the applicant's clients. - 6) Costs of this application shall abide the outcome of Civil Application number 562 of 2022. - $[47]$ I so order.

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Signed, delivered and dated at Kampala this 15^th day of November, 2023

$c$ bee Muzamiru Mutangula Kibeedi

**JUSTICE OF APPEAL**