[2025] UGHC 331

# THE REPUBLIC O}- UGANDA IN TIIE IIIGH COURT OF UGANDA AT KAMPALA LAND DIVISION

# CIVIL SUIT NO. 0557 OF 2023

STANBIC BANK (U) LIMITED :::::::::::::::::::::::::::::::::::::::: PLAINTIFF VERSUS

# I. KENETII MAMBO T/A REMEDY I}USINESS VENTURES 2. BAKAIMA INVESTMEN'I'S LIMI'I'ED : : : : : : : : : : : : : : : : : : : DEFENDANTS

#### Bcfore Lady Justice Christinc Kaahwa.

#### RUI,ING

#### Introduction.

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> This suit was brought by the plaintiff for breach of contract, recovery of Shs. 1,659,655,3281:, an order directing 2nd defendant to hand over the 1't defendant's certificates of title, permanent injunction, general damages, interest and costs of the suit.

> The plaintiff entered into a banking agency agreement wherein the first defendant would deliver designate financial services to the plaintiff s customers on the plaintiffs behalf. The 1" defendant credited the plaintiffs various customer accounts but the transactions were not properly fulfilled or debited against the 1" defendant's account.

> That a reconciliation exercise was canied out and it was established that the l't defendant owed the plaintiff a sum amounting to Shs. 2,938,523,563i: arising from uncredited transactions.

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It was established that the l't defendant applied the sums of money to purchase various properties from the 2nd defendant through its real estate business known as Baikama Real Estates Agents.

Pursuant to the reconciliation, the plaintiff and 1" defendant entered into an Acknowledgement of Debt and Settlement Agreement wherein the 1't defendant acknowledged the debt owed to the plaintiff. It was agreed that the properties purchased from the 2"d defendant by the l't defendant using the funds illegally obtained would be sold and the proceeds would meet the debt obligations.

That the 1't defendant handed over some certificates of title and those properties were sold to settle part of the debt and the rest were in custody of the 2nd defendant.

That the plaintiff wrote notices to both the 1" and 2nd defendants to hand over the other titles but it was in vain hence this suit.

#### Defences.

The l" Defendant did not file a defence in this matter. The 2nd defendant filed ^a defence on the 20th July 2023 and contended that the l't defendant purchased various properties from the 2nd defendant and paid valuable consideration; that the titles were transferred into the 1't defendants names; on lhe 23'd May 2022 the l"t defendant instructed the 2'd defendant not to release any document or titles to any person until due authorization from him; the sale of the properties to the l" defendant were on cash basis and never connected to the relationship between the 1't defendant and the Plaintiff.

Further, it was avcrred that the 2nd defcndant Company was not a party to the Debt and Settlement Agreemcnt between the Plaintiff and 1" defendant, is not privy to the contract and as such she had no duty to deliver titles registered in the


names ofthe 1't defendant to the Plaintiff. She pleaded that there was no cause of action against her.

### Rc resentation and hcarin

The Ptaintiff was represented by Mr. Andrew Munarura of S&L Advocates, the 1't defendant was self-represented while the 2'd defendant was represented by Mr. David Kassa from IWS Kasandha & Partners Co. Advocates.

### Consent Judscmcnt.

The plaintiff and the 1" defendant entered into a Consent Judgement on 6th May, 2025 wherein it was agreed that the 2nd defendant hands over the I't defendant's certificates of title to the plaintiff for disposal as full and final settlement of his debt obligations and that each party to bear its own costs.

Counsel for the 2nd defendant did not object to the consent but prayed for costs.

# Issue for determination.

Whether the 2"d defendant is entitled to cost.

# Submissions for the 2'd defendant.

Counsel for the 2nd defendant did not object to the consent judgement entered into by the Plaintiff and the l't defendant. I'Ie contended that the 2''d defendant is entitled to costs upon withdrawal of the suit against his client for the foliowing reasons.

Firstly, that the plaintiff had no cause of action against the 2nd defendant and the only reason the 2"d defendant was sued was because she had sold to the l't defendant land. He submitted that2"d defendant had custody of the 1" defendant titles and that it was totally unnecessary and unreasonable to sue the 2nd defendant.


Secondly, that this case being filed against the $2^nd$ defendant tainted the image of the $2^{nd}$ defendant in the eyes of its customers and led to the cancellation of the dealings with Stanbic Bank and other customers.

Thirdly, that upon entering the Consent Judgement the case is substantially disposed of but the plaint sought general damages and costs against the $2^{nd}$ defendant. The consent is restricted only to the 1^st defendant and does not dispose of the entire suit and neither has the plaintiff given any substantial reason why the $2^nd$ defendant should not be awarded costs.

Further, that Consent Judgement does not mention damages which imputes that general damages must be given. He submitted that denial of costs should be on sound reason that should be judiciously considered but a defendant who does the right thing cannot be denied costs in a matter of this nature.

He contended that the $2^{nd}$ defendant had no obligation to release titles unless Kenneth Mambo, the 1^st defendant had duly authorized the 2^nd defendant the release. He referred to several annexes to the pleadings and in the Trial Bundles.

He opined that the Plaintiff should have sued only the 1^st defendant and after securing a court order, then served the $2^{nd}$ defendant with the order. That the decision to sue the $2^nd$ defendant placed her in unnecessary litigation and she subsequently incurred costs.

# Submissions by the 1^st defendant.

The 1^st defendant stated that he had entered a consent judgement and his obligation to Stanbic Bank was resolved.

## Submissions by for the Plaintiff.

1/5/2025

$\overline{4}$

Counsel for the Plaintiff opposed the application for costs. He submitted that the issues were framed at page 5 of the Joint Scheduling Memorandum and 2 of these were raised by the 2"d defendant to wit; whether there was a cause of action against the 2'd defendant and whether the 2"d defendant is entitled to an order compelling the 2nd defendant to hand the certificates of title and signed transfer forms for the Properties comprised in Kyandondo Block 167 Plots 9654,96s5,96s6,9657,9658,9659,9660,9661,9662,9663, and 9664 all situate in Kiwale-Wakiso and Biock 3599 land at Sekiunga-Bwebajja to it, owing to the 1't defendants failure to settle his outstanding obligations.

That issue (c) in regard to handing ovcr the titles had been effectively deatt with by the consent agreement between the Plaintiff and the l't defendant. He proffered that the 2nd defendant was a necessary party to the suit, and because the l't dcfendant was unreachable, it was impossible to get the 1't defendant to give the authorization.

The justice of the case is that fraud was committed on the bank, the l't defendant confirmed that he had authorized the 2"d defendant to hand over the titles, the l't defendant could not be reached until recently.

He assailed the argument by 2'd defendant that the suit still subsisted since general damages had not been awarded, and contended that general damages would flow from the breach of contract which had been consented to. That the only residual issue would be whether there was a cause of action against the 2nd dcfendant.

Counsel opined that one should not benefit from Stanbic Bank as it was only recovering money that was taken through a fraudulent act. -I'hat even if the court found that the 2nd defendant was entitled to costs, it would have to determine


which party would be liable to pay the costs and not the plaintiff. He prayed that each party bears there own cost.

#### Rcsolution of the issuc.

Section 27 (1) Civil Procedure Act, Cap 282 (CPA) provides that subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incident to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent those costs are to be paid, and to give all necessary directions for the purposes aforesaid.

Section 27(2) of the CPA provides that costs ofany suit shall follow the event unless the court orjudge shall for good reason otherwise order.

Counsel for the 2nd defendant claimed there was no cause of action against the 2nd defendant and suing them was unreasonable. Counsel for the plaintiff stated that the 2'd defendant was a necessary party having had the custody of the titles.

Black's Law Dictionary, 2nd Edition, defines a "necessary party" as a party whose presence is essential to the court's ability to render a just, complete, and effective judgment in the case. This means that without their presence, the court cannot properly address the issues in dispute.

In Departed Asians Property Custodian Board vs Jaffer Brothcrs Ltd (Civil Appeal 9 of 1998) [999] UGSC 2 (27 May 1999), it was held that a party may be joined in a suit even though there is no cause of action against it but because that party's presences is necessary in order to enable court effectively and completely adjudicate and settle all the questions involved in the case.

Mulenga JSC, as he then was, in Jaffer Brothers Ltd (supra) held that for ^a person to be joined on the ground that his presence in the suit is necessary for effectual and complete settlement of all questions involved in the suit one of two things have to be shown. Either it has to be shown that the orders, which the plaintiff seeks in the suit would legally affect the interests of that person, and that it is desirable, for avoidance of multiplicity of suits, to have such person joined so that he is bound by the decision ofthe court in that suit.

In Dison Okumu and 7 othcrs versus Uganda Electricity Transmission Co. Ltd and 6 othcrs SCCA f 8 of 2020, the Supreme Court cited with approval Sujata Gandhi vs SB Gandhi Appeal No.l079 ol 2019, in discussing the meaning of a non- joindcr of parties, the court stated that a necessary party is ^a person who ought to have beenjoined as a party and in whose absence no effective decree could bc passed by the court. If such a party is not impleaded the suit is liable to be dismissed.

In the instant case the Plaintiff sought for orders that the 2'd defendant hands over titles that were held in hcr custody on behalf of the 1't defendant. Whereas it was an agreed fact that indeed some land titles were held in her custody, an issue was framed on whether the 2'd defendant should hand over the said titles to the Plaintiff bank. The orders sought thercfore made the 2nd defendant a necessary party to the suit without whom the order sought would have, in my view been difficult to enforce.

Counsel for the 2nd defendant argucd that the case had not been completed as there were issues regarding the general damages and costs that had not been dealt with in the consent judgement. Respectfully, I belicve that the reasoning is not well premised as damages could only arise from the breach of contract between the

Plaintiff and the 1't defendant; the 2nd defendant argued correctly in my view that he was not privy to the contract between the 1't defendant and the Plaintiff.

It is my considered opinion that the Consent Judgement wholly disposed of the case between the Plaintiff and 2^d defendant.

The question that begs an answer is whether the 2nd defendant is entitled to costs and against which party?

Counsel for the Plaintiff submitted that this court should in case it finds that the 2nd Defendant is entitled to costs, determine who is liable to pay the costs.

Section 27(2) of the CPA as cited above is to the effect that the costs follow the event unless the judge has good reason orders otherwise. It is also trite that the award of costs is within the discretion of the judge or court.

As a general principle, a party who engages in conduct which tends to defeat justice in the very cause in which they are engaged must compensate the opposite party in the action for costs. The general principle is that the person liable for the loss or costs should bear the burden of payment. See Wilkinson v Wilkinson U95812 All E. Rl79 at page 192.

In Kiska Limited v Vittorio Angels [968]EACA, it was heid that a successful defendant can only be deprived of his costs when it is shown that his conduct, either prior to or during the course of the suit has led to litigation which but for his own conduct might have been averted.

In this case the 2'd defendant is not a successful litigant as I found that he was ^a necessary party; therefore the question as to whether there was a cause of action would not arise in this case. It seems to me that the singular reason that the Plaintiff added the 2"d defendant to the suit was to recover the certificates titles and


transfer forms that were in custody for the 1" defendant, in a bid to recover the money that had been not properly credited arising from the banking agency agreement.

In this case it is true that the 2"d defendant did incur some costs to defend the suit against him. He filed a defence and Trial bundles and was also a party in Misc. Application 1259 of 2023 for a temporary injunction. It is also true that the 2'd defendant received a whatsup message from the 1't defendant on the May23,2022 was instructed not to release any of the titles to the Plaintiff. The message reads "Hi, I still have unfinished business with Stanbic, DO NOT release any of those documents without any clear and proper authorization from me. Otherwise I still remain the legal owner of those properties. And they have no legal right to tell you not to release them to me. And in any case, you will have to handover those titles to me and I sign to confirm that I have taken them like the previous ones at the right time. This is between me and Stanbic. Kindly stay out of it. Not that any parpoted(read as purported) authorization is not from me."

This court observes that the communication was made after the Plaintiff and I't defendant had entered into an Acknowledgement of Debt Settlement Agreement, dated 15th September 2021. That agreement was binding on the parties and is the subject of this suit. Counsel for the 2nd defendant submitted that the 1't defendant could not be reached for some time. Ilad the 1't defendant been committed to executing the that agreement this suit would have been un necessary. I find that the l't defendant caused the delay in executing its part of the agreement and caused the 2'd defendant to defend himself due lack of commitment to the Acknowledgement of Debt Settlement Agreement. I exercise my discretion in ordering that the legal costs ofthis suit borne the 2nd defendant should be paid by 1't defendant.

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As earlier opined an error apparent on the face of the record, is an error that is apparent and does not require any extraneous matter to show its incorrectness. An exercise of discretion in my view does not fali under mistake or error apparent on the face of the record.

Be that as it may I draw analogous from Order 43 rule 4 and 5 of the CPR which allows a court to order security for costs where it deems fit. Whereas this order is in relation to appeals to the High Court, I take cognizance of the fact that there is no prohibition in law in granting a conditional stay ofexecution.

I find that the court in ordering a conditional stay of execution is not an error apparent on the face of the record. This application therefore fails.

Accordingly, the application is dismissed with costs to the 1't respondent Datcd at Kampata ,hir/i7.ldfr ,f May 2025.

Ic-

Christinc Kaahwa

JUDGE.