5 THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

[COMMERCIAL DIVISION]

MISCELLANEOUS APPLICATION NO. 0467 OF 2023

ARISING OUT OF CIVIL SUIT NO. 455 OF 2021 AND CIVIL SUIT NO. 739 OF 2021

10 1. JUBILEE INSURANCE CO. LTD

2. AC YAFENG CONSTRUCTION CO. LTD ::::::::::::::::::::::::::::: APPLICANTS

VERSUS
1. UNITED BANK OF AFRICA LTD
15 2. THE LIVING WORLD ASSEMBLY LTD
3. BENJAMIN NEBUCHUKU :::::::::::::::::::::::::::::::::::::::::::::: RESPONDENTS

BEFORE HON. LADY JUSTICE HARRIET GRACE MAGALA

RULING

Background

20 This application was brought by way of chamber summons under section 33 of

the Judicature Act Cap 16, sections 6 and 98 of the Civil Procedure Act Cap 282,
Order 11 Rules 1 & 2, Order 50 Rules 1,2 & 3 of the Civil Procedure Rules S.I No.
71-1, seeking for orders that:

a) High Court Civil Suit No. 445 of 2021 and High Court Civil Suit No. 739 of
25 2021 be consolidated;

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 5 b) In the alternative, High Court Civil Suit No. 445 of 2021 be stayed pending
the determination of High Court Civil Suit No. 739 of 2021; and
c) Costs of this application be provided for.

The Affidavit in support was sworn by Mr. Paul Ainembabazi, the Company
Secretary/Head of the Legal Department of the 1st Applicant while the
10 Supplementary Affidavit in support was sworn by Mr. Emeka Okoye, Chairperson
of the 2nd Applicant. Mr. Okoye deposed that:

a) On the 16th day of September 2019, the 2nd Applicant entered into a
construction contract with the 2nd Respondent to construct a 10,000 seater
prayer city project in Kajjansi -Wakiso District at a contract price of USD $
15 11,372,367;
b) On the 28th November 2019, the 2nd Applicant obtained a deed of
guarantee of the performance security from the 1st Applicant;
c) On the 29th November 2019, the 2nd Applicant obtained a performance
guarantee of up to UGX. 4,169,772,511.40 in favour of the 2nd Respondent
20 from the 1st Respondent, as security for compliance with its obligations
under the contract;
d) By a letter dated 23rd December 2020, the 2nd Respondent terminated the
building contract stating inter alia that the 2nd Applicant was allegedly in
breach of clauses 1(3), 2(1) and 25(1)(b) of the Building Contract and
25 guarantee;
e) On the 28th December 2020, the 2nd Applicant objected to the call on the
guarantee on several grounds but especially that the 2nd Respondent had
not terminated the contract validly;

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 5 f) Notwithstanding the objection, the 1st Respondent proceeded to call upon
the 1st Applicant to make payment to the 2nd Respondent under the Jubilee
Performance Security vide a letter dated 30th April 2021;
g) The 1st Applicant informed the 1st Respondent that the 2nd Respondent did
not legally terminate the building contract and therefore, the bank could
10 not call on the guarantee;
h) Subsequently, on the 7th July 2021 the 1st Respondent instituted Civil Suit
No. 445 of 2021 against the 1st Applicant for breach of contract and sought
to recover as a sum of UGX 4,167,972,511;
i) In order to determine whether the bank is entitled to the sum claimed in
15 the plaint, this honourable court would need to first investigate and
determine whether the construction contract between the contractor and
the client had been legally terminated and the guarantee rightly called vide
Civil Suit No. 445 of 2021. The said suit is before the Hon. Lady Justice
Patricia Kahigi;
20 j) On the 28th October 2021, the 2nd Applicant instituted Civil Suit No. 739 of
2021 vide Civil Suit No. 739 of 2021 before Hon. Justice Stephen Mubiru
against the 1st, 2nd and 3rd Respondents seeking a refund of the UGX
4,169,722,511 paid to the 2nd Respondent by the 1st Respondent
purportedly pursuant to the performance security and challenge the illegal
25 and irregular termination by the 2nd Respondent of the Contract;
k) It would be equitable if Civil Suit No. 445 of 2021 is stayed, pending the
outcome of Civil Suit No. 739 of 2021 since the same would greatly
determine whether the construction contract was indeed validly

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 5 terminated or not, which would then form the basis of resolving whether
the performance guarantee was rightly called.

The 1st Respondent’s Affidavit of reply was sworn by Ms. Joanita Aber. It stated
that:

a) The application is fatally defective in as far as it does not identify or disclose

10 the particulars of the purported Respondents to the said application;
b) The 1st Applicant as an entity described in the Affidavit in support ceased to
legally exist under the same name;
c) The 2nd Applicant, 2nd Respondent and 3rd Respondent (Plaintiff, 1st and 2nd
Defendants in HCCS No. 739 of 2021) are not parties to HCCS No. 445 of 2021;
15 d) The 1st Respondent does not have any claim whatsoever against any of
them;
e) In the ruling of this honourable court dated 9th March 9 2021 vide Misc.
Cause No. 319 of 2021, this court found that the 1st Defendant in HCCS No.
739 of 2021 made a valid call for the payment by the 1st Respondent of the
20 sums guaranteed thereunder; and
f) The application was brought to further delay the hearing of HCCS No. 445
of 2021 and to unlawfully defeat the 1st Respondent’s claim against the 1st
Applicant.

The Affidavit in rejoinder sworn by Mr. Emeka Okoye stated that:

25 a) The application and affidavits in support clearly describe the 1st Respondent
as the Plaintiff in HCCS No. 445 of 2021 and the 3rd Defendant in HCCS No.
739 of 2021;

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 5 b) the 1st Applicant never ceased to legally exist as the change of names
happened in 2022 when one of the Applicants had already filed the suit and
when the transactions leading to the suits already came into force;
c) there is no injustice that has been caused to the Respondents due to failure
to use the new name of the company;
10 d) this application is not res judicata as Misc. Application No. 1463 of 2021
was not heard on its merits but court merely held that it could not
consolidate the suits where one of the suits had pending preliminary
objections to be determined by court;
e) the said preliminary objections raised by the Defendants in HCCS No. 739 of
15 2021 were dismissed and court ruled that the matter proceeds on its merits
on the 27th December 2022;
f) the two suits have similar facts and causes of action as they all originate
from the terms of contract, between the 1st Respondent and 1st Applicant,
and also from the performance guarantee between the 2nd Applicant and
20 the 1st Respondent;
g) the call of the guarantee by the 2nd Respondent prompted the claim by the
1st Respondent in HCCS No. 445 of 2021, and subsequently, the facts in the
suit originate from the facts in HCCS No. 739 of 2021;
h) the suits raise similar questions of law based on the breach of contract of
25 guarantee and this application does not delay the 1st Respondent in any
way as the success or failure of HCCS No. 739 of 2021 may affect HCCS No.
445 of 2021

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 5 Appearance and representation

The Applicants were jointly represented by M/s Katende, Ssempebwa & Co.
Advocates, Solicitors and Legal Consultants and M/s C.R. Amanya Advocates &
Solicitors while the 1st Respondent was represented by M/s H&G Advocates.The
parties filed written submissions.

10 Issues for determination

1. Whether Civil Suit No. 445 of 2021 and Civil Suit No. 739 of 2021 should be
consolidated
2. What remedies are available for the parties?

Determination

15 Issue 1: Whether Civil Suit No. 445 of 2021 and Civil Suit No. 739 of 2021 should
be consolidated?

I have duly considered the parties’ submissions and authorities relied on in

determining this issue. The law relating to consolidation of suits is provided for
under Order 11 Rule 1 of the Civil Procedure Rules S.I No. 71-1 which states that:

20 “Where two or more suits are pending in the same court in which the same
or similar questions of law or fact are involved, the court may, either upon
the application of one of the parties or of its own motion, at its discretion,
and upon such terms as may seem fit-

a) order a consolidation of those suits; and

25 b) direct that further proceedings in any of the suits be stayed until
further order.”

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 5 The Black’s Law Dictionary 9th Edition at page 351 defines consolidation to mean:

“3. The court-ordered unification of two or more actions, involving the same
parties and issues, into a single action resulting in a single judgment or,
sometimes, in separate judgments.”

In Mulla The Code of Civil Procedure Act V of 1908 16th Edition Vol. 2, the author
10 explained the meaning of consolidation of suits and proceedings as follows:

“When two or more suits or proceedings are pending in the same court, and
the court is of the opinion that it is expedient in the interest of justice, it may
by order direct their joint trial, whereupon all such suits and proceedings may
be decided upon the evidence in all or any such or proceedings.”

15 In addition to the above cited texts, the case of Willy Jagwe v Wilfred Bugingo
CACA No. 114 of 2016 at page 14, Hon. Justice Elizabeth Musoke relied on the
decisions in Daws v Daily Sketch & Sunday Graphic Ltd and Another and Darke
and Others v Same [1960] 1 ALL ER 397; Payne v British Time Recorder Co. Ltd &
Curtis Ltd [1921] 2 K.B 1 at page 16 to state that:

20 “Broadly speaking, where claims by or against different parties involve or

may involve a common question of law or fact, bearing sufficient importance
in proportion to the rest of each action to render it desirable that the whole
of the matters should be disposed of at the same time, the court will allow
the joinder of plaintiffs or defendants, subject to its discretion as to how the
25 action should be tried.”

On a careful perusal of both suits, I am persuaded that they arise from the same
contract agreement of construction, performance security and advance payment

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 5 guarantee. My understanding is that the issue in contention in Civil Suit No. 445 of
2021 filed by the 1st Respondent is that the 2nd Respondent informed the 1st
Respondent that the 2nd Applicant had breached the terms of the building contract.
Subsequently, it demanded for the payment of the guarantee from the 1st
Respondent and or made a call on the guarantee. The 1st Respondent then
10 informed the 1st Applicant of the predicament and requested it to pay the said sum.
This led the 1st Respondent to claim a breach by the 1st Applicant of the deed of
guarantee of performance security and demanded recovery of that sum.

After HCCS 0045 of 2021 was filed, the 2nd Applicant filed Civil Suit No. 739 of
2021, seeking recovery of UGX 5,106,444,649/= arising out of its claims of fraud,
15 conspiracy to commit fraud, breach of fiduciary duty and duty of care to act in
good faith against the 1st, 2nd and 3rd Respondents. Relating to the same
construction agreement, performance security and advance payment guarantee,
the 2nd Applicant claims that it indeed secured the performance security and
advance payment guarantee from the 1st and 3rd Respondents at UGX
20 4,169,772,511/= and UGX 6,251,958,758.25/= respectively; and it commenced
construction works, up to about 30% completion. The 2nd Applicant, however,
claims that the 2nd and 3rd Respondents wrongfully terminated the construction
agreement, the same amounted to fraud and was done in bad faith; wherein they
intended to fraudulently benefit from the Advance Payment guarantee and
25 performance guarantee in breach of Clause 25 (1)(d) of the agreement. To this
end, the 2nd Applicant informed 1st Respondent of the wrongful termination and
requested it to halt any payments on the call on the guarantee. But the 1st
Respondent refused to honour the same, which was done irregularly, fraudulently
and in conspiracy with the 2nd and 3rd Respondents.

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 5 On the face of it, it would be expedient to have the suits consolidated and avoid
having different decisions rendered by different judicial officers. However, I find
that both suits have different parties and issues. Both suits have also already
commenced hearing in this honourable court before different judges. To be
precise, Civil Suit No. 445 of 2021 is before Hon. Lady Justice Patricia Kahigi
10 Asiimwe which was adjourned at the stage of scheduling conference; and its now
currently under mediation. Civil Suit No. 739 of 2021 is being heard before Hon.
Justice Stephen Mubiru, who already heard the Plaintiff’s case on the 28th
September 2023, and the next hearing is scheduled for 16th September 2024. In
the case of Visare Uganda Limited v Muwema & Co. Advocates and Solicitors
15 Misc. Application Nos. 0826 and 0827 of 2023 (Consolidated) at page 6, Hon.
Justice Stephen Mubiru observed that:

“Where multiple cases have common parties, facts, issues, witnesses,

transactions or occurrences and/or claims for relief, the court may join the
proceedings. A court must balance the interests of expediency and
20 convenience with possible prejudice (unfairness) to the parties. In weighing
efficiencies and fairness of an order, court has to consider variety of facts
including:

a) the extent of the difference or commonality of the facts or issues in the

proceedings;
25 b) the status of the progress of the several proceedings; and
c) the convenience or inconvenience, in terms of time, money, due
process and administration, of bringing the proceedings together.

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 5 An order for consolidation will generally be appropriate only where the
proceedings are at an early stage in the litigation process.

In addition, the Hon. Justice Stephen Mubiru in the case of Visare Uganda Limited
v Muwema and Company Advocates & Solicitors (supra), also stated that:

“On the other hand consolidation compresses two suits into one. It allows for
10 one set of pleadings, one set of discoveries, a common pre-trial, and a single
trial, with no prospect of inconsistent findings…One of the downsides to a
consolidation order is that it requires the redrafting of pleadings, as one set
of fresh, consolidated pleadings is required.”

I am also guided by the Learned Judge’s book, Civil Procedure and Practice in
15 Uganda by Ssekaana Musa & Salima Namusobya Ssekaana at page 93 paragraph
6 2-2, where it stated circumstances in which court will refuse consolidation of
suits, among which included:

“2. Impossible to save expense:

Where it is impossible to save expense or avoid multiplicity of pleadings and

20 proceedings consolidation is refused especially where different advocates are
involved.

9. Where actions set down for trial:

Where the actions are set down for trial, consolidation should be refused
because of multiplicity of pleadings cannot be avoided nor can the expenses
25 be saved.”

As earlier submitted, the 2nd Applicant, 2nd Respondent and 3rd Respondent in HCCS
No. 0739 OF 2021 are not parties to HCCS No. 0455 of 2021. Consolidating the suits
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 5 would mean that 1st Respondent would proceed against the said against its will.
This would also mean that pleadings would have to drafted afresh, wait for the
pleadings to close in accordance with the law and embark on the journey of going
through the pre-trail processes of summons for directions and scheduling. This
would be a total waste of resources (time and money) given that both suit have
10 significantly progressed before the different judicial officers. It would have been
prudent of the Applicants to file this application at an early stage of litigation and
not at the time they did which comes off as an afterthought or knee jerk reaction.

For the reasons given above, this application is disallowed and is hereby dismissed.

The suits shall proceed independently before the different judicial officers.

15 Issue 2: What remedies are available for the parties?

Section 27 of the Civil Procedure Act Cap 282 provides that;

“(1) 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
20 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.

(2) The fact that the court or judge has no jurisdiction to try the suit shall be
no bar to the exercise of the powers in subsection (1); but the costs of any
25 action, cause or other matter or issue shall follow the event unless the
court or judge shall for good reason otherwise order.”

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 5 Having found for the Respondents and the Applicants shall pay the costs of this
Application.

I so order.

Signed and dated at Kampala this 5th day of August 2024

10

Harriet Grace MAGALA

Judge

Delivered online (ECCMIS) this 8th day of August 2024.

15

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