[2003] UGHC 71

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)}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1 \widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid947789 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 THE REPUBLIC OF UGANDA \line }{ \b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 IN THE HIGH COURT OF UGANDA AT KAMPALA \line }{\b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 HIGH COURT CIVIL SUIT NO. }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid1649761 255}{\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 }{ \b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 OF 2002 \line }{\b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }\pard \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid6910314 {\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 PIUS}{ \b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 OGOOLA}{\b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \'85\'85\'85\'85\'85\'85\'85\'85\'85}{ \b\lang1033\langfe2057\langnp1033\insrsid6910314 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85.}{\b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \'85\'85..}{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 PLAINTIFF \line }{ \b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 VERSUS \line }{\b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4087631 {\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 OTHIENO OKOTH}{ \b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \'85\'85\'85\'85\'85\'85\'85\'85}{\b\lang1033\langfe2057\langnp1033\insrsid6910314 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85}{ \b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \'85}{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 DEFENDANT \line Before: The Hon. Mr. Justice E. S. Lugayizi \line }{ \b\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }\pard \s15\qc \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid6910314 {\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 RULING \line }{ \lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }\pard \s15\ql \li0\ri0\sb100\sa240\sbauto1\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\ipgp1\pararsid4087631 {\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 This ruling is about a preliminary objection that the defendant raised when Court was about to hear the head suit on 11/7/2003. Briefly, the background to the preliminary objection is as follows: \line }{\lang1033\langfe2057\langnp1033\insrsid6910314

\par }{\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 In the late 1}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 990s the plaintiff and the defendant ran a school as partners with equal shares. The school was called }{ \b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 \'93Premier Secondary School.\'94 }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 It was located at Kira in Wakiso District, near Kampala. Eventually, the plaint iff and the defendant had serious misunderstandings, which led the Ministry of Education to close and de-register the school in the year 2002. After the closure of the school the plaintiff and the defendant failed to agree on the sharing of the partnershi p assets and liabilities. For that reason, the plaintiff filed a suit against the defendant,}{\lang1033\langfe2057\langnp1033\insrsid6910314 by way of originating summons, }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 seeking Court \rquote s orders, among other things, as to how the parties herein should share the assets and liabilities of the partnership. The respondent denied the plaintiffs claim. Among other things, he alleged that the partnership was dissolved, in law, in December 2001 when the plaintiff retired from it. On 11/7/2003 when the matter came before for hearing the defendant\rquote s advocate indicated that he wished to raise a preliminary objection. Court adjourned the matter to 3/9/2003 with a view to hearing the preliminary objection. Roughly, that is th}{\lang1033\langfe2057\langnp1033\insrsid6910314 e background to the preliminary }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 objection. \line }{\lang1033\langfe2057\langnp1033\insrsid6910314 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 On the day Court heard the preliminary objection ( i.e. 3/9/2003) Mr. Kwizera represented the plaintiff and Mr. Othieno represented the defendant. In essence, Mr. Othieno submitted that the originating summons offends Order 34 rule 4 of the }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid6910314 CPR}{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 in that it reveals that there is a dispute as to the existence of the partnership. He pointed out that while the plaintiff alleges that the partnership subsists, the defendant denies its existence and maintains that the partnership was dissolved when the plaintiff retired from it. Mr. Othieno referred to de-registra tion of the school in 2002 as further confirmation that the partnership does not exist. He cited }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid6910314 section 23 of the}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 }{ \b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Education Act (Act 10 of 1970) }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 and }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid6910314 sections 36 (c) and 38 of the}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Partnership Act (Cap. 86) }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 to back up his position. For those reasons, Mr. Othieno called upon Court to strike out the originating summons with costs. \line }{\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 On his part, Mr. Kwizera opposed the preliminary objection. He submitted that the originating summons does not offend Order 34 rule 4 of the CPR because it does not reveal that ther e is a dispute as to the existence of the partnership. Mr. Kwizera then pointed out that although the partnership is, in law, technically dissolved, it still exists because its assets and liabilities have not yet been settled between the partners. In his view the partnership assets and liabilities could now only be settled on a complete winding up of the partnership. He cited }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Lindley and Banks on Partnership page }{ \b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid6910314 695}{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 , }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 which shows that there is a clear distinction between a }{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 \'93technical dissolution\'94 }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 and }{ \b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 \'93a general dissolution\'94 }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 of a partnership. He finally urged Court to over-rule the preliminary objection with costs. \line }{\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 In reply to the above submission }{\lang1033\langfe2057\langnp1033\insrsid6910314\charrsid4087631 Mr.}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Othieno maintained that }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Lindley and Banks on Partnership (supra) }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 only states the common law position which d oes not apply in Uganda where there is a clear law of partnership governing the matters under consideration. \line }{\lang1033\langfe2057\langnp1033\insrsid14890633\charrsid4087631 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 The relevant parts of Order 34 rule 4 of the CPR read as follows. \line \par \'934. }{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 When the existence of}{\b\i\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 }{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 a}{ \b\i\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 }{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 partnershi}{\b\i\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 p}{ \b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 ... is not in dispute, any partner in a}{\b\i\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 }{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 firm.... may take out an originating summons returnable before a judge sitting in chambers against }{\b\i\lang1033\langfe2057\langnp1033\insrsid6910314 his partner or former partner }{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 for the purpose of having the partner}{\b\i\lang1033\langfe2057\langnp1033\insrsid6910314 ship dissolved (if it be still }{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 subsisting) and}{ \b\i\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 }{\b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 for the purpose of.}{\b\i\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 .}{ \b\i\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 . winding up such partnership.\'94 \line }{\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 The above provision suggests that a }{\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 partner,}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 who wishes to have a subsisting partnership dissolved, may only take out originating summons against his partner or former partner where the existence of the partnership is not disputed. The ques tions to answer, therefore, are two. Firstly, whether the partnership still subsists? Secondly, whether the originating summons does not reveal that there is a dispute between the parties herein as to the existence of the partnership? Court will deal with the above two questions in the order in }{\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 which }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 they occur. \line }{ \lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 With regard to the first question }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 (i.e. whether the partnership still }{ \b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid6910314 subsists)}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Court has this to say. It agrees with Mr. Kwizera that the principle in }{ \b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Lindley and }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Banks}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 }{ \b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 on Partnership (supra) }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 is of wide application. It applies in Uganda in the same way as it does in Britain and other common law jurisdictions. Therefore, it means that although technically the partnership in question may be dissolved by operation of the law, in practical terms it c ontinues to subsist because the partners have not yet settled the question of assets and liabilities. It would require a complete dissolution of the partnership to settle that question. \line }{ \lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 All in all, Court is of the opinion that the partnership still subsists for the purpose of winding up its affairs. \line }{\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631

\par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 With regard to the second question }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 (i.e. whether the originating summons does not reveal that there }{ \b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 is }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 a dispute between the parties herein as to the existence of the partnership) }{ \lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Court thinks that it does no t. A perusal of the pleadings clearly shows that the parties are agreed that they have not yet shared the partnership assets and liabilities. Once that fact is established it becomes difficult to deny the existence of the partnership, at least for the pur pose of complete winding up. (}{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 See}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Lindley and Banks on Partnership (supra). }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 \par In the circumstances, Court is of the opinion that the originating summons does not offend Order 34 rule 4 of the CPR. For that reason, Court has no choice but to over-rule the preliminary objection; and Court hereby orders so. \line }{ \lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 \par \par }{\b\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 E. S. Lugayizi (J) \line }{ \b\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 2/10/ 2003}{ \lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 \line }{\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 Read before: At 9.38 a.m. \line }{\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 \par }{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 P1. }{\lang1033\langfe2057\langnp1033\insrsid6122979\charrsid4087631 In}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 court \line Mr. Kwizera for the plaintiff \line Mr. Othieno for the defendant \line Mr. Sewanyana c/clerk \line }{\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 E. S . Lugayizi (J) \line }{\b\lang1033\langfe2057\langnp1033\insrsid535243\charrsid4087631 }{\b\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 2/10/2003}{ \lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 }{\lang1033\langfe2057\langnp1033\insrsid6122979 \par }{\i\lang1033\langfe2057\langnp1033\insrsid6122979 Uploaded by kivumbi Sheila.}{\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 \line \par }\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid4087631 \fs24\lang2057\langfe2057\cgrid\langnp2057\langfenp2057 {\lang1033\langfe2057\langnp1033\insrsid5852725\charrsid4087631 \par }}