Lweza Clays Limited & Another v Tropical Bank Limited & Another (Civil Appeal 15 of 2018) [2021] UGSC 76 (20 December 2021)

7 Y THE REPUBLIC OF UGANDA TN THE SUPREME COURT OI' UGANDA AT KAMPALA coram: (Arach-Amoko, Mwondha' Mugamba' Muhanguzi' Tuhaise' JJSC) CIVIL APPEAL NO' 15 OF 2018 BETWEDN L.LWE;ZA CLAYS LTD 2. HJIZIT O LUTWAMA MOUSSA. AIiM RESPONDENTS (Arising from a Jud'gment of the Couft of Appeal delhtered -bg owing Dollo, DC^I, Kasul" oid Ko,kunt JJA alde Cluil Appeal No' el oi ZoOe on 3'd SePtember 2018) JUDG MENT OF MUGAM BA, J SC This is an appeal arising from a decision of the Court of Appeal which allowed the respondents'appeal and orclered that: (1) 1'he ruling of the trial Judge dated 07'09'2009 in lr4ir+i:ellaneous Application No'99 of 200gbesetasideaswellasallits<rrders.(2)ThatI{CCSNo.300of2008 be reinstated and Miscellaneous Application No'99 of 2009 be tried de nouo before another Judge (3) That each of the parties bear their own costs of the appeal and those in the High Court' Background The background facts as summarised by the Cor-rrt of Appeal are that in 2OO7 andthereafter, the l*t responGnt' a Commercial Bank extended financial facilities secured by mortgage and debenture to the 1"1 appellant, a company manufactttring clay building products' The 2"d appellant is the Chairman/Managing Director of the lst appellant' On 31/10/2008, the 1"t respondent asserting that the t*t appellant had 1 x I. TROPTCAL BANK LTD 2. FRED MTIWEMA..' 7 breached the repayment of loan rrbligations and acting under the terms of the mortgage and the debenture piaced the l"t appellant into receivership and appointed the 2",t respondent as receiver/manager to recover the monies owing to the 1*t respondent. The appellants through H.C.C.S No. 3OO of 2OO8 (Commercial Division) contended that their being placcd into receivership was wrong in law and fact since the mortgages and or debentures upon which the receivership was based, were null and void under the law. Messrs Askar Security Services Ltd, a security company employed by the respondents to keep the appellants off the factory premises, was added to the suit as a co-defendant. The respondents not admitting to the appellant's claims, filed written statements of Defence and a Counterclaim to the suit. Before the said suit was heard, the appellants lodged in Court Miscellaneous Appllcation No. 99 of 2OO9 seeking dismissal of the main suit for being founded on a debenture and mortgage tainted with fraud and thus null and void. The respondents filed a reply in opposition to this application. The parties, on the order of the trial Judge, filed written submissions in the application and on 07 / 09 / 2009, the Judge delivered a Ruling in the Application holding the mortgage and debenture upon which the respondents based their placement of the 1"t appellant into receivership as well as the Counterclaim to be null and void for non-payment of stamp duty upon them. The Judge also awarded substantial general damages and costs to the appellants. 2 3 7 :l \ Dissatisfied by the decision, the respondents appealed to the Court ol Appeal which resolved in their favour and set aside the ruling of the trial Judge dated 07/09 l2OO9 in Miscellaneous Application No. 99 of 2OO9 as well as all orders made in that Ruling. Court further ordered that H.C.C.S No. 3OO of 2OO8 be reinstated on the cause list and that the said sllit as well as Mlscellaneous Application No. 99 of 2OO9 be tried de novo by the High Court before another High Court Judge. The Court ordered that since the parties are still involved in litigation mainly due to the way the trial was handled in the High Court, each party should bear its costs of the appeal and those in the High Court. The appellants were dissatisfied with the decision of the Court of Appeal and appealed to this Court. Their Memorandum of Appeal contains the following grounds: 1. That the learned Justices of the Court of Appeal erred in law and fact in holding that the respondent had an automatic right of appeal. 2. That the learned Justices of the Court of Appeal erred in law and in fact ln holding that the trial Judge did not give the respondents a fair hearlng by denying the respondents' counsel right to cross-examlne witnesses 3. That the learned Justices of the Court of Appeal erred in law and fact in holding that failure to pay stamp duty did not make the documents invalid, when in the clrcumstances of this case the Respondent did not seek to pay it. 4. The learned Justices of the Court of Appeal erred in law and in fact in avoiding the ewidence of fraud and illegality in non- payment of Court filing fees, brought to the attention of Court. 5. The learned Justices of the Court of Appeal erred in law and in fact in not considering the appellants' cross appeal. 6. The learned Justices of the Court ofAppeal erred in law in not evaluating properly the glaring evidence before them, Submissions of counsel for the appeUants On ground 1, Counsel for the appellants submitted that the judgment of the Court of Appeal was premised on whether the respondents required leave of Court to appeal against the ruling of the trial Court in Miscellaneous Appllcatlon No.99 of 2OO9 which arose under Order 6 Rules 28 and 29 of the Civil Procedure Rules. Counsel emphasized that the High Court denied the respondents leave to appeal and it was incumbent on the respondent to seek such leave from the Court of Appeal under Rule 4O of the Court of Appeal Rules. He submitted that while the Court of Appeal considered that the matter had been heard to finality thus not necessitating leave to appeal, the Court did not consider that the trial Court had in its ruling ordered that the appellants' claim for damages be set dov,,rr for formai proof. Counsel contended that the right to appeal is created by statute and where a party does not have a right to appeal, that party may seek for I Representation Mr. Justine Semuyaba and Mr. Kenneth Engoru appeared for the appellants. Mr. Mukiibi Ssemakula and Mr. Kagoro Friday Robert, appeared for the respondents. 4 Ieave. He submitted that where leave is required to appeal and such leave to appeal is not obtained, the appeal filed is incompetent and cannot even be withdrawn as an appeal. Counsel relied on the cases of Makhangu vs. Kibwana, (1995-1998)l EA 175, All Muss Propertles Uganda Ltd & 2 others vs. CTM (Ul Ltd & 2 others, (Court ofAppeal Civil Application No.379 of 2O17), Andrew Maviri vs. Jomayi Property Consultants, (Court of Appeal Civil Appeal No. 274 of 2Ol4) and Dr. Sheikh Mohammed Kasule vs. Green land Bank in liquidation, (S.C.C.A No. 1 1 of 2O 1O!, in support of his arguments. On grounds 2 and 6, counsel submitted that the learned Justices of the Court of Appeal erred in law and fact in holtiing that the trial Judge did not give the respondents a fair hearing by denying the respondents' counsel a right to cross examine witnesses. According to counsel, the trial Judge gave the respondents ample opportunity to address it on the payment or non-payment of stamp duties and that refusal to participate in Court's proceedings is one's prerogative, but cannot later be used as a denial of fair hearing. Counsel argued that the 1"t respondent filccl an affidavit in reply and it cannot be reasonably argued that in the circumstances, there was a denial of a right to a fair hearing. He submitted that the l"t respondent was at all material times represented by counsel and heard on its applications, but was not ready to proceed. Counsel submitted that had the Court of Appeal properly evaluated the evidence, it would not have concluded that there was a denial of the right to a fair hearing. Counsel further surbmitted that the right to a fair trial includes the right to a speedy trial. 5 b I On ground 3, counsel submitted that the Court of Appeal erred in law and fact in holding that the failure to pay stamp duty did not make the documents invalid. He further stated that the respondent bank did not seek leave to pay it. He contended that there was a distinction between insufficient payment of stamp duty and tiaudulent claims of payment of stamp duty. He argued that in the instant case, the respondent bank did not pay any stamp duty at all but rather it obtained general receipts belonging to a different person and endorsed them on its documentation. He argued that citing precedents on insufficient payment of stamp duty was misplaced. Counsel argued that the Companies Act mandated a limited time of 45 days within which a debenture must be registered. According to counsel if a debenture is not registered it is not a debcnture at all. He submitted that a defaulting party must apply to the High Court for an extension of time to properly register a debenture. Counsel argued that none of this was done. He submitted that where the debenture is not registered as required by Section 96 of the Cornpanies Act, it becomes void as against the receivers. Counsel relied on the case of Re; Summer Frutt (U) Ltd, Christlne Serunkuma, Christlne Okot, (Company cause No.S of 1995) in support of this argument. Counsel further relied on the case of lbts Aviation vs. Equatorial Commercial Bank Ltd & James Tullideph Bionise, CA No. NAl257 of 1999 wherc the Court of Appeal of Kenya cancelled a receivership that had beerr based on a debenture not properly registered. He also cited as persr.rasive the case of Kasozi 6 t .a Ddamba vs. Male Construction Servlces Ltd, (1981) HCB 26 where a debenture not registered within 45 da5,s was declared void. Counsel submitted that the crux of the appellants' appeal is based not on the fact of failure to pay but that the 1.1 respondent misrepresented to the High Court and the Court of Appeal that it had paid the relevant stamp duty and Court fees whereas it had not, issues which tantamount to deceit and perjury. Counsel was emphatic that the stamp duty in respect of this transaction and Court filing fees were paid on 17th October 2018 after an appeal had already been lodged in this Court. He submitted that these belated payments attested to r;he bank's wrongdoing. Counsel argued that these late payments were done unilaterally without first obtaining the leave of the High Court which the Court of Appeal had directed but also without first obtaining the extension of time of the High Court, required in registering debcntures outside of the 45 days'time as stated hereinabove. Counsel argued that this late payment validates the argument that the appointment of the 2ud respondent as receiver of the l"t appellant was null and voicl. He submitted that the said bclatcdly paid stamp duty was an underpayment considering that the debt being recovered is Uganda shillings nineteen billion (UGX. 19,000,000,000/=) for which the 1"t respondent bank cannot justify how interest arose to that extent as the matter is in courts of law and there is no bank statement to show how it accumulated. Counsel alluded that evidence of belated payments is new and they applied to this Court to bc allowed to rely on the same in this appeal. 7 t Counsel submitted that to allow the 1"1 respondent an opportunity to go back to the lower Court to rectify its rvrongdoing at the time when it had Iied to the Court about revenue collectior-r at the expense of an innocent party under illegal receivership '.vas not right. He submitted that this was an abdication of duty by the 1"t appellate Court to re-evaluate the evidence and arrive at its own indeoendent conclusion. Counsel concluded that having reached the conclusion that there was apparent fraud, the Court needed to make a finding as to whether the evidence produced was suflicient or not sufficient. Counsel cited the Mortgage Act, 2O1O and the Mortgage Regulatlons, 2OL2 ar.d averred that the responrients did not follow the procedure prescribed thereunder for sale by public auction. Counsel invited Court to consider whether there is in existence a lawful Court order of the suit property under a statutory sale under Sections 2 and 26 of the Mortgage Act. Counsel contended that no Court can enforce an illegal contract or allow itself to be made an instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal once illegality is duly brought to the attention of the Court. Cotinsel relied on the authorities of Flbrosa Spolka Akcyjna vs. Fair-bairn Lawson Combe Barbour, Ltd (1943) AC 32 and Co-operative Bank (tn ltquidationl vs. Shell Kasese Servlce Ltd, H.C.C.S No. 14O of 2OO5. Counsel submitted that the Mortgage Act and the Mortgage Regulations condemn the unregistered instruments to being equitable mortgages and the law forbids an equitablc mortgagee to take any action of foreclosure without first obtaining a Court order. Counsel cited the 8 ,| On ground 4, Counsel submitted that the learned Justices of the Court of Appeal erred in law and fact in avoiding the evidence of fraud and illegality in non-payment of Court filing fees brought to the attention of Court. He submitted that the Bank obtained a payment of duties by another person in a different matter and had it endorsed on its pleadings as its payment. Counsel further contended that no filing fees whatsoever had been paid on the Defence and Counterclaim. He added that the evidence of fraud appearing in the amended written statement of Defence and Counterclaim is a falsification of the judicial record. Counsel relied on the authority of Betty Kizito vs. David Klzlto Kanonya & 7 others, S.C.C.A No.8 of 2O18 where it was held that misrepresentation of the true purchase price in order to evade payment of taxes defrauded government of revenues arrd constitutes fraud. He further relied on the cases of Samuel Kizito Mubiru vs. Byensiba & another (19851 HCB 106 and Namatornr Kaaya & another, Civil Suit No. 432 of 2OOS for the position that under-declaration to defraud the government by paying less stamp duty makes a transaction void by fraud. Counsel therefore supported the trial Judge's findings that the Counterclaim could not stand for non-payment of Court fees. Counsel contended that the Court of Appeal erroneously treated non -payment of Court fees the same way it did non-payment of sta-rnp duty and thus arrived at a wrong conclusion. Counsel further relied on the case of Ndaula Ronald vs. Ha$t Abdul Nadduli, (supra) wherein it was held t.hat non-compliance with the law case of Ndaula Ronald vs. Hajji Nadduli Abdul, Civil Appeal No.2O of 2OO6 where it was held that non-payment of stamp duty was fatal. 9 regarding payment of fees on affidavits and annextures affected those documents and they ought not to be used in any legal proceeding. On ground 5, counsel submitted that the learned Justices of the Court of Appeal erred in law and fact in not considering the appellants' cross- appeal. Counsel submitted that in the Ruling of the learned trial Judge, he ordered that "the Suit and Counterclaim are dismissed" when it should have read as "the Defence and Counterclaim are dismissed". Counsel argued that this was a typographical error which the Court of Appeal could correct exercising its wide discretion under Rule 2 (2) of the Court of Appeal Rules. Counsel prayed that this Court corrects the slip using its wide powers under Rule 2(2) of this Court's Rules. Counsel relied on the case of Musonga Moses Musah vs. Muwonge Peter, S.C.C.A No.11 of 2OO4 where it was held that a cross-appeal is a separate suit and should be determined on its merits. He concluded by praying that this Court allows the appeal with costs and a certificate of two counsel. Submlssions of counsel for the l't respondent The 1"t respondent's counsel startcd by submitting on grounds 1 and 2 separately, then grounds 3, 4 and 6 which were argued together and lastly ground 5. On Ground l, counsel supported the Court of Appeal's finding that the respondents had an automatic right of appeal against the trial Judge's decision. Counsel argued that the intention of the trial Judge was to bring the matter to finality, which he did, notwithstanding the fact that he purported to set the suit down for assessment of special damages. 10 Counsel submitted that the assessment did not and could not happen because there was no suit in which special damages could be assessed since the trial Judge had dismissed it. Counsel submitted that a final decision of the High Court is appealable as of right pursuant to section 66 of the Civll Procedure Act, read together with sectlon 10 of the Judlcature Act and Article L34 l2l of the Constitution. On ground 2, counsel submitted that the right to a fair hearing is provided for under Artlcle 28 of the Constitution and is non derogable as laid out under Article 44. Counsel submitted that when the Miscellaneous Appllcation No.99 of 2OO9 came up for hearing on Sth March 2009 before him, the trial ,Judge directed the parties to file their relevant affidavits and skeleton subrnissions. Counsel submitted that skeleton submissions are a summary of one's actual arguments and that such are only meant to guide the Judge while full oral submissions are being made. Counsel submitted that when the trial Judge delivered a ruling before having the said oral hearing, he denied both parties an opportunity to be heard and this prejudiced the respondents. Counsel further submitted that when the struck out Application came up for hearing, the respondents applied for and were granted leave to cross examine Mr. James Eboku of URA whereupon the matter was adjourned for cross examination. He submitted that, to the respondenr's surprise, a ruling in respect of Miscellaneous Application No.99 of 2OO9 was delivered before they were given an opportunity to cross examine the applicant's witness or make their full oral submissions. 11 tt Counsel submitted that the Court of Appeal was therefore right in finding that the respondents were deniecl the right to a fair hearing. On Grounds 3, 4 and 6, regarding allegations of fraud and illegality raised by the apperiants, counsel for the 1"r respondent submitted that under Order 6, Rules 2g and 29 of the Civil procedure Rules, pursuant to which the appe,ants purported to bring the struck out Application, permits a party to raise points of raw by preliminary objection, that the appellants in their application sought court to make Iindings of fact on various matters including fraud and illegarity. counsel relied on the case of Mukisa Biscuit Manufacturing co. Ltd vs' west End Distributors Ltd, 11969] EA6g6where court stated that a preiiminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings. Counsel further relied on the case of Kampala Bottlers Ltd vs. Damanico (U) Ltd, S.C.C.A No,22 of l992where it was held that fraud must be proved strictry, the burden being heavier than on a balance of probabilities generally applied in civil matters. He argued that evidence on fraud cannot therefore be reft to be proved on affidavit evidence as the appellants sought to do in the struck out Application. counsel further relied on the case of Busonya Jamada and 2 others vs. Daudi Giruli, s.c.c.A No.l1 of Z}LZ wherein court held that fraud could only be proved in an ordinary suit and not by way of affidavit evidence. He submitted that the court of Appeal was therefore right in ignoring allegations of fraud and illegality and rightly ordered a re-triar so that those matters can be determined through a fair hearing. 1,2 tJ Regarding non-payment of stamp duty and Court filing fees, counsel submitted that the receipts for payrnent o[ stamp duty and Court fees dated 17th October 2018 are irrelevant in these proceedings because they are matters that were not before the trial Court and the Court of Appeal. Counsel supported the Court of Appeal's Iinding that non-payment of stamp duty does not make the document, the subject of the payment of stamp duty, invalid. According to him it only bars the litigant from using the said document as evidence in a Court of law. Counsel submitted that it was on this basis that the l't respondent made a thorough consultation with URA and paid the requisite fees. Counsel further relied on section 97 of the Clvil Procedure Act and submitted that non-payment of Court lees does not render a Court document void and that a party who has nol paid the fee can be directed to do so at any stage of proceedings. He relied on the case of Lawrence Muwanga vs. Stephen Kyeyune, S.C.C.A No. 12 of 2OO1 to support his argument. Counsel argued that this same principle applies to non-payment of stamp duty-it does not render the document void. Counsel relied on the decision of Housing Finance Bank Ltd and another vs. Edward Musisi, S.C.C.A No. 22 of 2O1O to drive home his argument. He contended that it is immaterial that the respondents did not seek leave to pay stamp duty or Court Iiling fees at trial or any other stage. Counsel argued that the question is whether the Court of Appeal was right in finding that non-payment of stamp duty and or Court filing fees does not render a document void. 13 against such orders. Counsel argued that a party may as a matter of right appeal against an interlocutory order in circumstances where such a matter involves a controlling question of law, which on being resolved, the whole case is determined, or where an immediate appeal on the interlocutory matter will materially advance the ultimate determination of the litigation. He referred Court to the cases of Rene Dol vs. Offtctal Receiver of Uganda, (1954) 21 EACA 116 and Gurdlal Singh Dhillon vs. Sham Kaur & others, [1960] EA 795. He prayed that Court upholds the decision of the Court of Appeal on this ground. On ground 2 and 6, counsel submitted that the trial Judge did not give the respondents a fair hearing, by denying them the right to cross examine witnesses. Counsel submitted that the record of the High Court does not show any"where that there was a hearing in the matter nor does it show that non-parties to the matter who were condemned to damages were ever heard. Counsel averred that it is not anywhere mentioned on record that Mlscellaneous Appllcatton No. 99 of 2OO8 was heard and concluded. He submitted that in arriving at a decision, the Court of Appeal properly re-evaluated the evidence and as such grounds 2 and 6 should fail. On ground 3 and 4, counsel submitted that non-payment of stamp duty does not render the document invalid but that it cannot be used in evidence unless stamp duty is paid. Counsel submitted that section 40(11, 42 and 45 of the Stamps Act and the Stamps (Amendment) Act grant the options available under circumstances of such a nature which include impounding and ordering for payment of duty payable with a penalty and thereafter admitting the 15 ,b same document in evidence. In support of this proposition, counsel relied on the case of SlnderJi NanJi Ltd. vs. Mohamedall Kassam Bhaloo (1958) EA 76A and invited this Court to follow the persuasive authority of Sftcmsherall Zqver as. F.L Ko,dhlbhoi and others, Civll Appeal iVo. 8I of 2OO4. Counsel further submitted that fraud cannot be determined by any Court of law without being specifically proved. He prayed that grounds 3 and 4 should fail On Ground 5, counsel submitted that the Court of Appeal duly considered the issue of the cross appeal and made a decision which in fact is the subject of this appeal. Counsel submitted that it is wrong for the appellants to submit that it was a typographical error for the trial Judge to order for the suit and counterclaim to be dismissed. Counsel argued that if it was an error, they could have moved Court to correct it or Court on its own motion could have done so through the slip rule and not otherwise. Submissions in rejoinder On Ground 1 , counsel for the appellants reiterated their earlier submissions and argued that the Ruling ordered that the appellants' claim for damages be set down for formal proof and that that being the case the Ruling was not final. Counsel argued that since the Ruling was not final, the appellants should have sought leave before appealing. rl Counsel for the appellants rejoined to the l"t and 2".i respondents' submissions separately. However, in this case, they shall be considered together as they relate to the same issues. t6 Counsel further cited the Court of Appeal case of Llvingstone Kayaga Kizlto vs. Charles Wallgo, Mtsc Appllcation No.8O of 2012, where it was held that leave to appeal was mandatory for a Ruling emanating from an Application under Order 6 Rule 28 and 29 of the CPR. Counsel prayed that for that reason, the ground should succeed. On ground 2, counsel argued that the respondents were accorded a fair hearing. He averred that the 2"d respondent was acting as an advocate and a party to the suit and he voluntarily withdrew from conduct of the case. Counsel argued that the 2"d respondent cannot turn around and claim denial of the right to a fair hearing. Counsel further submitted that the respondents elected not to cross examine the witness and cannot claim that this was denial of the right to fair trial. He contended that the respondents are bound by the principle of approbation and reprobation On grounds 3, 4 & 6, counsel reiterated their earlier submissions and averred that there is a precedent in the case of Betty Kizito vs. David Kizlto Kanonya & 7 others, (supra) to the effect that evasion of palment of taxes to defraud government of revenues constitutes fraud. Counsel was emphatic that good reason should be given before Court departs from such proper precedent Counsel further submitted that payment of the stamp duty in 2018, 12 years after the execution of the security documents renders the arguments about cross examining URA officers moot and vindicating the trial Judge's findings. Counsel argued that the case of Busonya Jamada (supraf is distinguishable from the instant case because it did not involve arr 1,7 Application for striking out on a point of law or mixed law and fact. Counsel further submitted that Order 6, Rule 28 and 29 of the Civil Procedure Rules was never under consideration and the question was repayment of a loan as opposed to non-pa)'rnent of stamp duty and Court fees which are points of law. Counsel submitted that retrying questions o[ non-payment of stamp duty and Court filing fees is not appropriate. He further submitted that Courts should not act in vain and those who falsify revenue records and judicial files should be held to account. Consideration of the appeal This is a second appeal. In resolving the issues raised in this appeal, I am guided by what was stated by this court in Kifamunte Henry vs. Uganda, Supreme Court Criminal Appeal No. 1O of t997. Citing the holding in R vs Hassan bin Said, ll942l 9 EACA 62, the court stated: "On a second appeal, a second appellate court ia precluded from questioning the frndings of fact of the trial court, provided that there was evidence to support those findings, though it may think it possible, or even probable, that it would not have ltself come to the same concluslon, it can only interfere where it considers that there was no evidence to support the finding of fact, this being a question of law." t1 18 Counsel also relied on the case of Actlue Automoblle Spcrres Ltd as, Crane Bo,nk Ltd & enor, Ctttll Appeal No. 27 of 2OOl where Justice Oder held that the issue of legality of a transaction can be questioned and when a transaction between banks was illegal, no recovery can be made. I have perused the records of proceedings of the High Court and the Court of Appeal as well as the judgments of both Courts. I have also studied the submissions of both counsel for the appellants and respondents and the relevant available authorities. To resolve this appeal, I shall apply the relevant legal principles. I proceed to do so. This appeal is against the final orders of the Court of Appeal which were that High Court Civil Suit No. 3OO of 2OO8 and Misc. Application No. 99 of 2OO9 be tried de nouo. The Court further ordered that each party bears its costs of the appeal and in the High Court. I will resolve grounds 1 and 2 separately, then grounds 3 and 4 together and lastly grounds 5 and 6 separately. Ground 1 In their first ground of appeal, the appellants contended that the respondents had no automatic right of appeal from the High Court decision since it arose under Order 6, rule 2A & 29 of the Civil Procedure Rules, SI 71-1, In coming to its decision the Court of Appeal addressed itself on these provisions of the law and concluded as follows: "Our appreciation of the Ruling of O7.O9.2OO9 in Miscellaneous Application No.99 of 2OO9 is that the learned trial Judge resolved to flnality HCCS No. 99 of 2OO9. He gave Judgment ln favour of the respondents as plaintiffs that included declaring the suit mortgages, debentures, and other securitles null and vold, the placing of the l"t respondent under receivership to have been unlawful, awarded substantial damages to the respondents against 19 h the appellants and their counsel as well as costs ofthe suit and the counterclaim..,. Thus, the above decision ofthe trial Judge is covered by section 66 of the Civil Procedure Act. We also obsenre as a matter of law that a party may as a matter of right, appeal an interlocutory order, if that order involves a controlling questlon of law, whlch tn being resolved, the whole case ls determlnedl or where an immediate appeal on interlocutory matter will materially advance the ultimate determlnatlon of the lltigatlon." I am unable to fault the above decision of the Court of Appeai. While the Ruling arose out of an interlocutory application, the learned trial Judge made orders that clothed the respondents with a right to appeal to the Court ofAppeal under s€ction 66 ofthe Civil Procedure Act. ln llwqn Sang Llmlted vs. M and D Tlmber Merchqnts qnd Transporters Llmlted, Citrll Appeal No.O2 of 2O7a, this Court held that where the resolution of an interlocutory matter wholly disposes of the controversy in issue between the parties the decision is then a decree and the aggrieved party has a right of appeal. This ground accordingly fails. Ground 2 Under this ground, the appellants contended that the Court of Appeal erred in holding that the learned trial Judge did not give the respondents a fair hearing when he denied the respondents'counsel the right to cross examine Mr. James Eboku, the manager, Non-tax Revenue, Domestic Taxes Department, URA. 20 Lt The Court of Appeal Justices in re-evaluation of the evidence on record laid down the events that led to the disposal of the suit in the trial Court as follows: "At the closure of pleading in the suit, an issue arose as to whether or not stamp duty had been paid sufficiently or at all upon the mortgages, debentures and other security documents upon which the appellants were basing their defence. Through Miscellaneous Application No.625 of 2OO8 Court ordered, on 19.O2.2OO9, the Uganda Revenue Authority (URAf to supply within 7 days the requisite documents evidencing stamp duty paid. URA obliged and through, Mr. Eboku James, manager, Non-tax Revenue, Domestic Taxes Department, URA, in compliance with the said Court Order urrote to Court and also deponed to an affidavit to the effect that, though the requisite documents had purportedly been executed and registered in 2OO7, the appropriate stamp duty had been paid in respect of other documents. On the basis of the URA evidence, the respondents filed in Court Miscellaneous Application No.99 of 2OO9 under 06 r 28 and 29 of the CPR to dismiss the appellants defence and counter-claim to HCCS No.SOO of 2OO8. The parties were directed by the trial Judge to file written submissions in the application on O5.O3.2OO9 and these had been filed by the 15.O4.2OO9, the date to which the application had been adjourned, On this date counsel for the appellants, on the basis of what was on Court record, successfully applied to the trial Judge, to cross examine Mr. James Eboku of URA. The application was adjourned to 21.O5.2OO9 for this purpose. On 21.O5.2OO9 cross 21- examination was not done because counsel for the appellants prayed the trial Judge to :recuse himself from the applicatlon pursuant to a resolution of the Uganda Law Society, the professional body oflawyers in Uganda, about the status ofthe trial Judge as a Judicial Officer in the Uganda Judiciary. The Judge refused to recuse himself, the appellants' lawyers stated they were withdrawing from representing the appellants in the suit and prayed that the appellants bre given time to engage other lawyers in the cause. The trial Jrrdge adjourned the Application to 29.O5.2OO9 for this purpose. On 29.O5.2OO9 the Court Deputy Registrar adjourned the application sine die because the trial Judge was indisposed. On O3.O9.O9 the parties and thelr counsel were summoned to Court and the Deputy Registrar Communicated to them that she had been directed by the trial Judge to deliver the ruling in the application. The appellants' lawyers opposed this and insisted to get instructions from the head of the Court, the then Lady Justice Stella-Arach Amoko, who directed that the delivery of the ruling be on O7.O9.O9 at 12.OO noon. 'I'he Ruling was ao delivered on that day.t' The Court of Appeal Justices held: "From the narrative above, it c:omes out clearly that Miscellaneous Application No.99 of 2OO9 was never heard to completion. The trial Court never received all the c,vidence and denied the appellants' lawyers their right to cross-examine Mr. James Eboku, the URA Officer. It was essential for the Court to establish, not only that the due stamp duty was not paid, but also as to who was r€sponsible for 22 'I am satlsfied thqt thls C:ourt, sitting ln appeal, ls competent to leag the requlslte stamp dutg and prescrlbed penaltg and I accordlnglg lmpound exhtblt 70 and order that the appellants do utlthln seaen dags' pag to the Reglstra 23 \4 the non-payment, given the assertion of the l"t appellant that the requisite documents, the sulrject of the stamp duty payments had the impressed stamps of URI\ and the same had been registered at lands and companies registrir:s. The Court ought to have availed all the parties affected the opportunity to adduce evidence, through cross-examination or otherwjise as to who was responsible for this apparent fraud. Was it the ap,pellants or was it URA or some other party, or a combination of all. of them? Depending on the findings to the above, the Court would. be guided as the decision to make in the circumstances, including the options available under sections 40 (1) 42(af and 45 of the Stamps Act, Cap.342 and. the Stamps (Amendment) Act, 2OO2t of irnpounding, ordering the payment of duty payable to be paid, witlr a penalty, if the circumstances so demanded and then admitting; the same in evidence after payment of the due duty with which the instruments wer€ chargeable. Our appreciation of the law on the pointr is that failure to pay stamp duty does not make the document the subject of the payment of stamp duty, to be invalid. It orrly bars a litigant from using the said document as ewidence in a Court of law. The litigant may thus go and pay the stamp duty due and once this has been done, then the document can be used as valid evidence. We are guided by the case of Sunderji Nanji Ltd vs Mohanredali Kassam Bhaloo [1958] EA 763 where the Court held: We find that in acting as he did, the trial Judge denied the appellants the right to a fair hearing enshrined ln Article 44 (cl of the Constitution. Consequently, the trial Judge waa rot entitled to hold as he did that there was a point of law that substantially disposed of the whole defence of the appellants. The matters relating to payment of stamp duty on the requisite documents were matters of law and fact and required full trial with all necessary evidence being availed to Court....,.. The ruling in Miscellaneous Application No.99 of 2OO9, in the considered view of this Court, is at variance with the proceedings on the Court record in that the ruling is as if all the parties and respective counsel had concluded their evidence and submissions and then Court retired to prepare and deliver a ruling. This is not a true reflectlon ofthe Court record." From the above portion of the Court of Appeal judgment, it is clear that the respondents in the instant application were denied the right to a fair hearing by the trial Court. Article 28(1) of the Constitution of Ugandarelates to the right to a fair hearing and provides: "28. Right to a fair hearing. (1) In the determination of civil rights and obligations or any criminal charge, a person shall be entitled to a fair, speedy and public hearing before an independent and impartial Court or tribunal established by law." 24 2t This right is non-derogable under Artlcle 44(cl of the Constltutlon. A Judgment/Ruling arrived at in breach of the right to a fair hearing is null and void and cannot be enforced. Needless to say, while a person is entitled to a speedy trial, the trial should not be rushed as was the case in the matter at hand. The parties have to be given a hearing before the Court takes a decision. I reject the appellants' argument that the respondents' right to a fair hearing was moot because of later developments that are not available on the Court record. I find no fault in the Court of Appeal findings on this ground. In the result, this ground fails. Grounds 3 and 4 In these grounds, counsel for the appellants raise issues on non- payment of stamp duty and Court filing fees by the 1"t respondent. At the hearing of Ctvil Application No.33 of 2O18, the full bench of this court dismissed the application for additional evidence and promised to give reasons later in the judgment of the instant appeal. The Court's reasons for dismissing the application for additional evidence were the following: - The applicants/appellants brought Civil Applicatlon No.33 of 2O18, under Rule 2(2) of the (Supreme Court) Rules Dlrecttons S.I 13-11 (hereinafter referred to as the Rules of this Court), seeking leave to adduce additional evidence of receipts of payment of Stamp duty and Court filing fees made by the 1"t respondent on 17th October 2018. t6 25 It is a general rule that this Court has no discretion to take additional evidence under Rule 3O (1f of the Rules of this Court. But this Court has in exceptional circumstances proceeded to consider admission of additional evidence under Rule 2 (2f of the Rules of this Court. Rute 2(2) of this Court's Rules vests this Court with inherent powers to make such orders as may be necessary for achieving the ends of justice. Rule 2(2) provides as follows: "Nothing in these Rules shall be taken to ltmit or othenrise affect the inherent powers ofthe court, and the Court ofAppeal, to make such orders as may be necessary for achleving the ends ofJustlce or to prevent abuse ofthe process ofany such court, and that power shall extend to setting aside judgments which have been proved null and void after they have been passed, and shall be exercised to prevent an abuse of any court caused by delay." While it is true that this Rule preserves the inherent jurisdiction of this Court to make such orders as may be necessary for achieving the ends of justice, the applicants/appellants must demonstrate how they fal within the ambit of the Rule. This Court has had occasion to consider the issue of admission of additional evidence in numerous cases including the recent decision of Micheal Mabikke vs. Law Development Centre, Miscellaneous Application No. 16 of 2O15, where the Court held as follows: "As such, for an appellate Court to admlt additional or fresh evidence, thls Court in Attorney General VS Paul Kawanga Ssemogerere, Supreme Court Constitutlonal Application No. 2 of 2OO4, relying on Ladd v Marchal [1954] 3 All ER 745, L48 Skone Vs 26 U I Discovery of new and important matters of evidence which, after the exercise of due diligence, was not within the knowledge of, or could not have been produced at the time of the suit or petition by, the party seeking to adduce the additional evidencel It must be evidence relevant to the issuesl It must be evidence which is credible in the sense that it is capable ofbelief; The evidence must be such that, if given, it would probably have influence on the result ofthe case, although it need not be decisive; The affidavit in support of an application to admit additional evidence should have attached to it, proof of the evidence sought to be given; The application to admit additional evidence must be brought without undue delay." 11. lll, lV. v vl This Court went further and clarified that the evidence sought to be adduced should not be newly created evidence that was not in existence at the time of the hearing in the High Court and the Court of Appeal. It should be evidence that was already in existence but not within the knowledge of, and could not have been discovered after the exercise of due diligence. Court stated: 21 u Skone (1971),2 All ER 582 at 586; Langdale Vs Danby (19821 3 ALL ER. 129 at 137; American Express International Vs Atulkimar S. Patel, Application No.8B, of 1986, stated that an appellate court may exercise its discretion to admit additional evidence only in exceptional circumstnces which include; "...it is clear from the record that what the applicant intends to adduce as additional evidence was actually not in place at both the time of the proceeding in the High Court and the Court of Appeal. It is clear from the record that the investigation by Dr. Pamela committee and its ensuring report and the management committee's 98th meeting and its minutes were future events that had not occurred at the time of the hearing before the two lower courts. We accordlngly agree with the respondents submissions that the applicant's interest is to pursue new issues or causes of action that did not feature at the trlal or in the Court of Appeal. Although this court possessea power to take additional evidence, in the present case, no such exceptlonal clrcumstances do exist to warrant the taking of such evldence. In the circumatances, this applicatlon must fail." In the instant case, the appellants/applicants had to prove to Court that the evidence discovered and which they seek to adduce is new and important and that it is evidence which, after the exercise of due diligence, was not within the knowledge of, or could not have been The intended evidence at the time of filing and hearing of the applicants case in the said two courts, was not available, could not be obtained by the applicant at the material time. Thus it could not be said to be crucial, necessary, credible material or relevant for the purpose ofthis appeal before this Court. 28 produced at the time of the suit or petition by the party seeking to adduce the additional evidence. For the record, the applicants/appellants in the instant case liled the main suit on 17th November 2008 and the High Court Miscellaneous Applicatlon No.99 of 2OO9 on 3.d March 2009. The appeal before the Court of Appeal was filed on l"t December 2009 and the Judgment was delivered on 3.d September 2018. The instant appeal was filed on 8th November 2018 and the application for additional Evidence was filed on 27th November 2018. The 2"d applicant/appellant, Mr. Kizito Lutwama Moussa, in his affidavit averred that the new evidence is in form of receipts of paSrment of stamps duty of Shs. 7,295,000/= and Shs. 2,060,000/= both dated 17th October 2O 18, receipt of Court filing fees of Shs. 2,475,147 /= daled 17th October 2018 and Notices of default dated l"tNovember 2018. The 2"d applicant contended that the additional evidence is intended to introduce crucial parts of evidence which was not available during the proceedings in the High Court and the Court of Appeal. It is apparent from the chronolory above that the evidence in issue came into existence in 2018 following payments made by the l"t respondent. It is clear that the applicants/appellants were seeking to adduce newly created evidence that was not in existence when the High Court and the Court of Appeal heard and determined the applicants/appellants case. Given that it is evidence of future events that had not occurred at the time of the hearing before the High Court and the Court of Appeal such evidence goes against the lirst principle stated in Mabtkke (supra). In the result, Court found that the applicants failed to satisfy the principle that the evidence was already in existence but not within the 29 JO knowledge of, and could not have been discovered after the exercise of due diligence. The applicants/appellants also needed to prove to Court that the evidence to be adduced is relevant to the issues to be determined by the Court. The 2",rapplicant averred that the evidence sought to be adduced is crucial and very necessary for the applicant's case as they are the appellants in Civil Appeal No.15 of 2O18 (the instant appeal). According to the 2"d applicant, this newly discovered evidence is meant to elucidate on the fact that the respondents had not paid stamp duty for the registration of the mortgage and debenture and that the respondents had also not paid Court filing fees, contrary to the respondents'evidence at the trial Court and the Court ofAppeal. The main issue to be determined by this Court in the instant appeal is whether the Court of Appeal Justices erred when they ordered that High Court Civil Suit No. 3OO of 2OO8 and Misc. Application No. 99 of 2OO9 be tried de nouo. ln the event, Court did not find the said additional evidence to be relevant in the resolution of the main issue in the appeal before this Court. It is for the above reasons that the application for additional evidence in CtvilAppltcatlon No.33 of 2O18 was dismissed by the full Court at the hearing. I shall now proceed to resolve grounds 3 and 4 of the appeal. Under ground 3, counsel for the appellants faulted the Court of Appeal Justices on holding that failure to pay stamp duty does not make a document invalid. In ground 4 counsel for the appellants contended also that the learned Justices of the Court of Appeal erred in law and in fact 30 t,./ in avoiding the evidence of fraud and illegality in non-payment of stamp duty and Court filing fees, brought to the attention of Court. I would not go into the merits of grounds 3 and 4 as I earlier found in ground 2 t}:.at, in the instant case, the Ruling of the trial Court was arrived at in breach of the Constitutional right to a fair hearing and is therefore null and void and cannot be enforced. "A Retrial is ordered in the interest of justice. In the present matter, allegations of fraud by the appellants were raised. The appellants averred in their alfidavits that because the respondent had failed to pay the loan sum, he convinced the office of lands to issue him with a special certificate of title and yet he had given the original certificate of title to the appellants as a mortgage for the loan. In such circumstances, the Court could not simply gloss over the allegation of fraud without hearing a defence from the other party. This would lead to a miscarriage of justice, Therefore, in the interest of justice the Court of Appeal ordered for a retrial. Therefore, I cannot fault the Court of appeal for making such an order.t' Similarly in the instant case, I would agree with the reasoning in Busonya Jamada (supra) that it would be in the interest of justice that There are serious allegations of fraud raised in grounds 3 and 4 which needed to be strictly proved. Fraud is a serious allegation that this Court cannot simply gloss over. In the case of Busonya Jamada & 2 others vs. Daudi Girull, Civil Appeal No. 11 of 2O\7 , the position of this court could not have been put clearer when it observed: 31 this matter be tried de nouo as held by the Court of Appeal. I would, uphold the Court of Appeal's order for a re-trial. Grounds3and4fail. Ground 5 This ground is to the effect that the learned Justices of the Court of Appeal erred in law and in fact in not considering the appellants'cross appeal. The appellant's counsel argued that in the Ruling of the learned trial Judge, he ordered that the "suit and counterclaim are dismissed" when it should have read as the "defence and counterclaim are dismissed". Counsel argued that this was a tJ4pographical error which the Court of Appeal could correct exercising its wide discretion under Rule 2 (2f of the Court ofAppeal Rules. This ground has been overtaken by my findings in the earlier grounds and it would be moot to inquire into it. I have already found that there was denial of the right to a fair hearing and therefore the resultant Ruling by the trial Court was void. No purpose will be served by inquiring into a void Ruling. Ground 6 Ground 6 was to the effect that the leamed Justices of the Court of Appeal erred in law in not evaluating the glaring evidence before them. With respect, this ground offends the Rules of this Court on drafting of the Memorandum of Appeal. Rule 82(1) of this Court's Rules provides as follows: 32 3J/ 7 "A memorandum of appeal shall set forth concisely and under distinct heads without argument or narrative, the grounds of objection to the decision appealed against, specifying the points which are alleged to have been wrongly decided, and the nature of the order which is proposed to ask the court to make.,' This ground is too broad and not concise as required by Rule 82(l) of the Rules of this Court. I reject it and it accordingly fails. Conclusion Since all the grounds of the appeal have been unsuccessful, I would dismiss the appeal and order each party to bear its own costs in this appeal and in the Courts below as it was the fault of the trial Court which did not conduct the trial appropriately. In the result, I would uphold the judgment of the Court of Appeal. Dated tnis .....2-sY..day of . 2021 Paul Kahaibale Mugamba Justice of the Supreme Court a.- 1:' e, t"/ tu Cl/4-- ,_/,,t I.TROPICAL BANK LTD 2.FRED MUWEMA ANI) ::::::::::::::::::::::: :RESPONDENTS ) lAppeal from the decision of the Court of Appeal at Kmpola (Owiny Dollo, DCJ, Kasule tnd Kakuru; JJA). Duted 3"t Seplember, 2018 in Civil Appeal No.9l of 2009.I JUDGMENT OF M.S.ARACH-AMOKO JSC I have had the benelit of reading in draft the Judgment of my learned brother Hon. Justice Paul Mugamba, JSC. I agree with his decision that this Appeal should be dismissed for the reasons he has given in his Judgment. I also agree with the Orders he has proposed. As the majority of the members on the Coram agree, this Appeal is hereby dismissed on the terms as proposed by the learned Justice. Dated at Kampala this 2 V^ ...day of 2021 3J @ IN THE SUPREME COURT OF UGANDA AT KAMPALA (CORAM : Arach-Amoko, Mnondha, Mugamba, Muhonguzi, Tuhoise; JJSO CIVIL APPEAL NO. 15 OF 2OI8 BETWEEN I.LWEZA CLAYS z.KIZIT O LUTWAMA MOUSSA ),,,,,,,,,,,,,,,:: :: :: :: ::APPELLANTS M.S. ARACH-AMOKO JUSTICE OF THE SUPREME COURT 7 THR RI'PUIILTC OF UGANDA IN THtr SI.]PREME COURT OF UGANDA AT KAMPAI,A Coram: Arach Anroko, Mrvondha, Mugamba, Muhanguzi, Tuhaise, JJSC Civil Appeal N0. l5 of20l8 BETWTiDN I. LWEZA CI,AY'S LTD 2. KIZI"| O I,U'I'WAMA MOUSSA APPI,)I,I,AN'I'S ANI) l l l. 'l.trot,tcAL rlANt( LTI) R I,rSt'( )N | )t,tN',l s 2. Iftt tit) Nttrwl,tMA (Arising lronr lhejudgrnent of the Court ofAppeal dclivered by Owiny Dollo, l)CJ, Kasule and KakurLr JJA in Civ il Appcal N0. 9l ol'2009 on 3'd Septcrnbcr 201 8) Judsnr cn t of Mrvorrdha .IS(l I have had the benefit of reading in drafl the judgmcnt of my learned brother Hon. Justice Paul Kehaibale Mugamba, JSC. I concur rvith thc decision that this appeal bc dismissed and thc order that each party bcars its own costs in this cour-t and the courts bclow. Vr'- Dttcd at l(anrpala this .........day of .. Mwondha Justice ofthc Suprcme Court I 3lt t THE REPUBTIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA CORAM: Aroch-Amoko, Mwondho, Mugomba, Muhanguzi, Tuhoise, JJ.5C crvrr APPEAT No. 15 0F 2018 1. LWEZA CLAYS LTD 2. K]ZITO I.UTWAMA MOUSA APPELIANTS VERSUS . TROPICAL BANK LTD . FRED MUWEMA RESPONDENTS (Appeal from the judgment of the Court of Appeol in Civil Appeol No. 91 of 2009 before Owiny-Dollo, DCJ, Kasule & Kokuru, JJ. A dated 3'd September, 2018) JUDGMENT OF JUSTICE MUHANGUZI JSC I have had the benefit of reading in draft the judgment of my learned brother Hon. Justice Paul Mugamba, JSC. I agree with his analysis, findings and final decision. Dated at Kampala this Vr--. day of... 2021. Ezekiel Muhanguzi JUSTICE OF THE SUPREME COURT. 1 2 tl v IN THE SUPREME COURT OF UGANDA AI KAMPATA CIVIL APPEAL NO.I5 OF 2OI8 I. TWEZA CTAYS tID 2. KtZlTO tUruAMA I OUSSA APPETTANIS AND . TROPICAT BANK TTD . TRED MUWEMA tuocmerur or luHals I hove hod the benefit of reoding the leod judgment of Hon Juslice Mugombo, JSC. I ogree with the onolysis of evidence, discussion of the opplicoble lows ond principles, decision ond conclusion thot lhe oppeolbe dismissed ond eoch porty to beor its own cosls in this oppeol ond in the courls below, Doled ol Kompolo, this - doy of --- 21 Percy Night Tuhoise JUSTICE OF THE SUPREME COURT 1 2 C, [, e'/ Z, t ,,/ (CORAM: Arach - Amoko, Mw ondho, Mugambo, Muhonguzi, fuhoise. JJ.SC.) BETWEEN ::::::::::::::::::::::::::::::::::::::RESPONDENTS [Arbing from a judgment of the Court of Appeal deliuered by Owing DoIIo DCJ, Kasule, Kalatru, JJA uide Ciuil Appeal No.91 of 20O9 on ?d September 20181 rrtq,q-