[2024] UGHCLD 292

## **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (LAND DIVISION) MISC APPLICATION NO. 2709 OF 2024 (ARISING FROM CIVIL SUIT NO.636 OF 2024)**

## **1. RAJNIKANT UNADKAT (Administrator of the Estate of the Late Babulal Valji Ruparelia) 2. PARESH MEHTA ::::::::::::::::::::::::::::::::::::::::::: APPLICANTS**

#### **VERSUS**

**HAMLET MBABAZI KABUSHENGA ::::::::::::::::::::::: RESPONDENT**

### **BEFORE; HON. LADY JUSTICE NALUZZE AISHA BATALA RULING**

#### *Introduction;*

The Applicants brought this chamber summons under Section 98 of the Civil Procedure Act, order 1 rule 14 of the civil procedure rules for orders that;

- i) Leave be granted to the Applicants to issue a third-party notice to the respondent. - ii) Costs of the application be provided for.

### *Applicant's evidence;*

- 1. The application is supported by an affidavit deponed by Devesh Babulal Ruparelia holder of powers of attorney from the 1st applicant which briefly states as follows; - i) That I am fully conversant with the facts of this case and all matters that have arisen from the same. - ii) That the respondent is a director at summit management group ltd, the plaintiff in the main suit vide Civil Suit No. 636 of 2024 summit management group vs Rajnikant Unadkat (administrator of the estate of the late Babulal Valji) and Paresh Mehta. - iii) That the respondent approached the late Babulal Valji Ruparelia concerning the investment of funds for a project that involved the construction of houses on the land in dispute. - iv) That on the 4th of July 2014, the respondent signed an investment agreement on behalf of summit management group ltd which stipulated that the respondent was to build 20 houses and create 20 certificates of title in the names of Babulal Valji Ruparelia for the said houses.

- v) The respondent and summit management group ltd failed to deliver the said project and on the 1st of February 2016 the respondent signed a memorandum agreement where he was to pay Ughs 20,000,000 per month for ten years to the late Babulal Valji Ruparelia, construct 20 houses and transfer the titles into the names of the late Babulal Valji. - vi) That the respondent guaranteed that he would be personally liable in case summit management ltd breached the memorandum of agreement. - vii) That the respondent only transferred 16 certificates of title into the names of the late Babulal Valji Ruparelia instead of 20 certificates of title as agreed. - viii) That the respondent was part of the transfer of the suit lands and signatory of all documents concerning the transaction. - ix) That it's for logical resolution to the suit that third party notices be issued against the respondent to enable this court effectively resolve the matter.

#### *Respondent's evidence;*

2. The application is responded to by an affidavit in reply deponed by the respondent which briefly states as follows;

- i) That I am the director at summit management group limited, the plaintiff in the main suit. - ii) That I signed the investment agreement with the late Babulal Valji Ruparelia for purposes of constructing a number of houses which were built and the same was done in my capacity as the director of the company. - iii) That the applicant's intentions to have me explain my role in the company which is not the essence of a third party notice. - iv) That all the questions in controversy will be answered by me as I am the managing director of the plaintiff company.

#### *Representation;*

3. The applicant was represented by Counsel Dennis Kiwalabye of M/S R. Adam Advocates whereas the respondent was represented by Counsel Warren Byamukama of M/S Jingo, Ssempijja & Co. Advocates. Both parties proceeded by way of written submissions which I have considered in the determination of this application.

### *Issues for determination;*

Whether the applicants can be granted leave to issue a third-party notice to the respondent?

#### *Resolution and determination;*

- 4. Order 1 rule 14 Civil Procedure Rules provides that; "Where a defendant claims to be entitled to contribution or indemnity against any person not a party to the suit, he or she may, by leave of the court, issue a notice (hereafter called a "third party notice") to that effect." - 5. The decision in **NBS Television Ltd Vs. Uganda Broadcasting Corporation**, M. A No. 421 of 2012 court interpreted the provisions of order 1 rule 14(1) and held that *"Quite clearly, Order 1 rule 14(1) and (2) CPR is confined to cases where a defendant claims indemnity or contribution from a third party that would otherwise be a stranger to the suit. It is trite law that for a third party to be legally joined to a suit, the subject matter as between the defendant and the third party must be the same as that between the defendant and the plaintiff, and similarly the cause of action between the defendant and the third party must be the same as the original cause of action."*

- 6. The following principles derived from these authorities have to be satisfied by the applicant if the application (for leave to issue a third-party notice) is to be granted: - (i) the applicant has sufficient grounds to join the respondent as a third party, - (ii) the subject matter between the applicant and respondent is the same as the subject matter between the plaintiff and the defendant and the original cause of action. - (iii) the applicant claims indemnity or contribution from the respondent. - (iv) the plaintiff will not suffer any prejudice if the application is granted. - (v) it is in the interest of justice that the suit be heard on its merits. - 7. I will proceed to ascertain the conditions to be met in an application for leave to issue a third-party notice basing on different decisions of court as earlier discussed.

*As to whether the applicant has sufficient grounds to join the respondent as a third party?*

- 8. It is the submission of counsel for the applicants that the respondent personally guaranteed under clause 7 of the addendum, to the investment agreement promising to indemnify Babulal Valji Ruparelia and the respondent played a pivotal role in the auction, sale and transfer of the suit property and executed various documents pertinent to the transactions. - 9. Counsel for the respondent submitted that there is no nexus between the respondent and the applicants in the main suit and the instant application is brought in error and contrary to the law. - 10. From the submissions of both parties, it is evidenced that the applicants' claim against the respondent related to the same transaction between the applicant and the defendant in the main suit. Further from the investment agreement adduced in court under clause 7 the respondent clearly states that he shall be personally liable in cases of breach of the agreement, it is the respondent who signed on behalf on the defendant on all the agreements. - 11. I am of the view that the presence of the respondent in the suit is to ensure that a party with potential liability in the main suit is well represented before court. I therefore find that the applicant

has demonstrated sufficient grounds to join the respondent as a third party to the suit.

*Whether the subject matter between the applicant and the respondent is the same as the subject matter between the plaintiff and the defendant in the main suit?*

- 12. Counsel for the applicants submits that it is not disputed that the subject matter in dispute between the applicant and the respondent is identical to the subject matter at issue between the plaintiff and the defendant stemming from the original cause of action. - 13. The subject matter in dispute between the applicants and respondent revolves around the investment agreement executed on the 4th of July 2014 and the addendum, the perusal of the pleadings in the main suit state that the subject matter in the main suit is based on the same facts. I find that the subject matter between the applicant and the respondent is the same as the subject matter between the plaintiff and the defendant in the original cause of action.

*Whether the applicant claims indemnity or contribution from the*

# *respondent and whether the plaintiff shall suffer any prejudice if the application is granted.*

- 14. It can be inferred from the evidence of the applicants that they hold a claim from the respondent in relation to the dispute at hand and this is because of the respondent's involvement in the transactions, the fact that he undertook himself to be personally liable in cases of breach of the agreements and the fact that he participated in the transfer of the certificates of title to the suit land. I find that the applicants claim indemnity or contribution from the respondent. - 15. A perusal of the pleadings clearly indicates that the application was brought with the knowledge of the plaintiff and the intention of which is to bring all concerned parties involved in the transactions before court and have the question regarding liability determined at once. I believe that is done in the interest of justice and will not prejudice the plaintiff or any other party. - 16. In the result, I am convinced that this is a proper case where a third-party notice should be issued. Accordingly, the instant application succeeds with the following order;

- i) leave to issue third party notice together with a copy of the pleadings upon the respondent is hereby granted and the same should be effected within 21 days from the date hereof - ii) There is no order as to costs.

#### **I SO ORDER.**


#### **NALUZZE AISHA BATALA**

#### **Ag. JUDGE**

#### **09 th/12/2024**

#### **Delivered electronically via ECCMIS on the 09 th day of**

**December 2024.**