[2023] UGCommC 117

#### THE REPUBLIC OF UGANDA

## IN THE HIGH COURT OF UGANDA AT KAMPALA

# ICoMMERCIAL DMSIONI

## MISCELLANEOUS APPLICATION NO IO2O OF 2023

## ARISING FROM CIVIL SUIT NO. O523 OF 2023

ROKO CONSTRUCTION LTD : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :APPLICANT

#### VERSUS

1. TEN LOGTSTTCS LTD ^I 2. MARITIME FREIGHT CO. LTD I::::::::::::::::::::RESPONDENTS

# Before Hon. Lady Justice Patricia Kahigi Asiimwe

## Ruling

#### Introduction

- 1. This Application was brought under Section 33 of the Judicature Act Cap 13, Section 98 of the Civil Procedure Act Cap 71, Order 36 Rule 4, and Order 52 Rule 1 & 3 of the Civil Procedure Rules sI71-1. - 2. TL,e Applicant filed this Application seeking orders for grant of unconditional leave to appear and defend Civil Suit No. 523 of 2023 and the costs of the Application. - 3. The grounds of the Application are laid down in the Notice of Motion and in the Affidavit in Support deponed by Mark Koehler, the Director of the Applicant. He stated that: - a) The Applicant is not indebted to the Respondents. - b) The Applicant sha.ll raise a preliminary objection that the Affidavit in support of specially endorsed Plaint contains materia-l fa-lsehoods thus defective and is barred by law.

A-

Page 1 of 7

- The Applicant shall raise a preliminary objection that the $\mathcal{C}$ Respondents have no cause of action against the Applicant and have no locus standi to sue since they were not party to the alleged transaction. - The Applicant shall raise a preliminary objection that the $d$ ) suit is barred in law and ought to be struck off. - Applicant has never legally contracted the The $e)$ Respondents; they are strangers to the contract and hence have no locus standi. - The Applicant contracted with Welgrow Line (U) Ltd as its $f$ clearing agent for the importation of a grinder and fasteners; and paid all the sums as obligated but Welgrow Line (U) Ltd breached its obligations. - In the debt settlement agreement, the Respondents admit $g)$ that the only party indebted to them is Welgrow Line (U) Ltd. - 4. The Respondents opposed the Application by way of an Affidavit in Reply deponed by Dilpesh Rajnikant Patel, Director of the Plaintiff Company. He stated that: - The Applicant appointed the $2^{nd}$ Respondent as the $a)$ clearing agent and forwarding agent for the goods through correspondence to the imports department of MAERSK line, the shippers of the goods. - The said correspondence formed the basis of the $\mathbf{b}$ relationship between the Applicant and the Respondents since it set out the duties and obligations of the Respondent. - After the appointment of the $2^{nd}$ Respondent, the 1^st and $\mathcal{C}$ $2^nd$ Respondent worked together to clear the goods. - 5. The Applicant in rejoinder stated that:

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- a) The Applicant had a contract with Welgrow Line (U) Ltd to clear the goods. - b) Welgrow Line (U) Ltd informed him about their limited credentials to clear the goods and Welgrow Line (U) Ltd went ahead and subcontracted the 2"d Respondent since it had higher credentials. - c) Because the Uganda Revenue Authority required a letter from the consignee indicating that the clearing agent was appointed the said consignee, the Applicant then wrote the letter appointing the 2"d Respondent as the Clearing Agent. - d) The said letter is not a contract since it does not have clear terms as to payment, and scope of work to clearly state the acceptance and consideration; thus, it cannot be ^a case to be determined under summary procedure. - e) There is no evidence that the Respondent ever delivered the goods to the Applicants and paid demurrage of USD 56,139.

## Representation

The Applicant was represented by M/S Newmark Advocates, and the Respondents were represented by Zenilh Law Advocates. Both parties hled written submissions. 6

## Issues

7. Whether the Applicant should be granted unconditional leave to appear and defend Civil Suit No. 0523 of 2023.

## Resolution:

8. The principles for granting an application for leave to appear and defend were stated in the case of Maluku Interglobal Trade Agency V. Bank of Uganda [19851 HCB 65 where the Court held that:

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Before leaue to appear and defend is granted, the Defendant must shou bg affidauit or othenttise that there is a bonafide tiable issue of fact or lana. When there is ^a reasonable ground of defence to the claim, the Dekndant is not entitled to summary judgment. The Defendant is not bound to shout a good defence on the meits but should satisfg the Court that there was an issue or question in dispute which ought to be tied and the Court shall not enter upon the trial of issues disclosed at this stage.

9. In the case Geoffrey Gatete & Anor V William Kyobe SCCA No 7 of 2OO5 Mulenga JSC explained that:

> In an applicationfor leaue to appear and defend a summary suit, the court is not required to determine the merits of the suit. The purpose of the application is not to proue the applicant's defence to the suit but to ask for opportunity to proue it through a tial. What the Court has to determine is whether the Defendant has shown good cause to be giuen leaue to defend. What courts haue consistently held to amount to good cause is euidence that the defendant has a triable defence to the suit.

- 10. One of the defences raised by the Applicant is that the Respondents have no cause of action against the Applicant and have no locus standi to sue the Applicant as it was not a pafty to the alleged transaction. - 11. Counsel for the Applicant submitted that they did not contract with the Respondents. Counsel submitted that Annexture A to the Specially Endorsed Plaint and Annexture A of the Affidavit in Support indicates the contract for the clearing of the goods was between Roko Construction Ltd and Welgrow Line (U) Ltd and none of the Respondents were party to it.

- 12. Counsel for the Applicant further submitted that Annexure B1 of the Specially Endorsed Plaint and Annexure D of the Affidavit in Support which is the debt settlement agreement also clearly shows that the contract which is subject to this suit is between the $2^nd$ Respondent and Welgrow Line (U) Ltd. There is nothing that connects the Applicant to the alleged contract and the sum claimed. - 13. Counsel for the Applicant argued that the Respondents rely on Annexture B2 a letter of appointment of a clearing agent as a contract, however, the said letter does not fulfill the ingredients of a valid contract. The Uganda Revenue Authority required a letter from the consignee appointing the $2^{nd}$ Respondent as a clearing agent. - Counsel for the Respondent contended that the letter 14. appointing the $2^{nd}$ Respondent as a clearing agent amounted to a contract. Counsel submitted that the key aspects which make up a contract include offer, acceptance, consideration, legal capacity, legal purpose, mutual assent, definite terms, performance or delivery, signatures, witness or notarization. The appointment letter was co-signed by the Managing Director and Operations Manager of Roko Construction Ltd and addressed to the Imports Department MAERSK Line, thus acknowledging the existence of an agreement to have them carry out the specific task of transporting the shipment. - 15. Counsel further submitted that a subcontract is a legally binding agreement between two parties. The Applicant breached the contract and they therefore have no defence and the Application should not be granted.

$\mathbb{R}$

In the case of Hon Justice Anup Singh Choundry v 16. Mohindern Singh Channa Civil Suit No. 335 of 2015 the Court cited the case of **Greenboat Entertainment Ltd v City** Council of Kampala HCCS NO.580 of 2003 Court held that:

> *In law when we talk of a contract, we mean an agreement* enforceable in law. For a contract to be valid and legally *enforceable there must be; capacity to contract; intention to contract; consensus ad idem; valuable consideration;* legality of purpose; and sufficient certainty of terms. If in a given transaction any of them is missing, it would as well *be called something other than a contract.*

- Court notes that the contract for handling transportation and 17. shipment of the goods was between the Applicant and Welgrow Line (U) Ltd, the $2^{nd}$ defendant in the main suit. The Respondents attached to their Plaint in the main suit a debt settlement agreement between the 2^nd Defendant (Welgrow Line (U) Ltd) and the $1^{st}$ Respondent. The claim against the Applicant in the main suit is for breach of contract. The Applicant raises issues that require the Court to determine whether there was a contract between the parties that is enforceable by law. This can only be determined through a trial. The Applicant therefore raises a triable issue. - 18. In the case of **Postal Corporation of Kenya Vs. Inamdar & 2 Others [2004] 1 KLR 359** court held as follows:

The law is now well settled that if the defence filed by a defendant raises even one bona fide triable issue, then the *defendant must be given leave to defend.*

19. In light of the above, court has not deemed it necessary to delve into the assessment of the other defences raised by the Applicant since as discussed court finds that there is already one triable issue.

- 20. In conclusion leave to appear and defend is granted on the following terms: - a) The Applicant shall file its written statement of defence within 15 days from the date of this Ruling; and - b) Costs shall follow the cause.

# Dated this 13th day of November 2O23

## Patricia Kahigi Asiimwe

Judge

Delivered on ECCMIS