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Priamit Enterprises Ltd v Attorney General (Civil Appeal No. 3 of 1999)

Court of Appeal · [2000] UGCA 45 · 2000 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court ruling dismissing a suit for failing to disclose a cause of action following a preliminary objection
Decision
Appeal dismissed; High Court dismissal of the suit for non-disclosure of a cause of action upheld

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Holding

The Court of Appeal dismissed the appeal, holding that the plaint disclosed no cause of action against the Attorney General. Government, as sole shareholder of an incorporated limited liability company (Uganda Transport Company), was not liable for the company's debts. Section 23(a) of the PERD Statute gives Government a discretion to pay creditors of a public enterprise only from the proceeds of sale once the enterprise has been sold and the proceeds placed on the Divestiture Account; absent an averment that UTC had been sold and proceeds were available, no cause of action arose. The trial judge correctly disposed of the decisive point of law at the outset. Preliminary objections to the appeal were overruled.

Facts

The appellant supplied tyres worth Shs.8,812,500/= to Uganda Transport Company (1975) Ltd, a company wholly owned by the Uganda Government as sole shareholder. The company defaulted on payment and, despite repeated demands, failed to pay. The Government caused General Notice No. 85 of 1994 and advertisements in the Uganda Gazette and New Vision to be published, appointing joint liquidators and announcing intention to sell the company's assets and terminate its existence. The appellant did not sue the company but instead sued the Attorney General, relying on section 23 of the PERD Statute as the basis for Government liability. At trial the respondent raised a preliminary objection that the plaint disclosed no cause of action against the Government. The plaint did not aver that the company had actually been sold or that proceeds of sale were on the Divestiture Account. The High Court upheld the objection and dismissed the suit with costs.

Issues

  1. Whether the trial judge was correct to hold that the plaint as amended disclosed no cause of action against the respondent.
  2. Whether pleading that section 23 of the Public Enterprises Reform and Divestiture Statute made the respondent liable created a cause of action.
  3. Whether the trial judge followed the correct procedure in dismissing the suit on a preliminary objection.
  4. Whether the appeal was incompetent for being filed without leave under Order 40 Rule 1 of the Civil Procedure Rules.

Orders

  • Appeal dismissed.
  • Costs of the appeal awarded to the respondent.

Key headnotes

Civil Procedure — Pleadings — Cause of Action — Essential Elements
For a plaint to disclose a cause of action, three essential elements must be shown: that the plaintiff enjoyed a right, that the right was violated, and that the defendant is liable; absent any of these the plaint is liable to be rejected under Order 7 Rule 11(a) of the Civil Procedure Rules.
Company Law — Separate Legal Personality — Liability of Shareholder for Company Debts
An incorporated limited liability company is liable to be sued in its own name and is liable for its own debts; the Government, even as sole shareholder of such a company, cannot be held liable for the company's debts so long as the company exists with that status.
Statutory Interpretation — PERD Statute s.23 — Discretionary Power to Settle Creditors from Divestiture Account
Section 23(a) of the PERD Statute authorises Government, through its agents, to pay creditors of a public enterprise only from the proceeds of sale of the debtor enterprise held on the Divestiture Account, and the power to pay is discretionary; a plaint relying on section 23(a) discloses no cause of action unless it avers that the enterprise has been sold and the proceeds are on the Divestiture Account.
Civil Procedure — Preliminary Points of Law — Disposal at Close of Pleadings
Where a point of law, if decided one way, would be decisive of the litigation, the court is entitled to take advantage of the rules of court to dispose of it at the close of, or shortly after, the pleadings, and may dismiss a suit on that basis without hearing evidence.
Civil Procedure — Appeals — Right of Appeal Against a Decree — Leave Requirement
An order dismissing a suit conclusively determines the rights of the parties and is a decree within section 2 of the Civil Procedure Act; an appeal against a decree of the High Court lies as of right and no leave under Order 40 Rule 1 is required, and a respondent cannot raise an objection to competence at the hearing without first obtaining leave under Rule 101(b) of the Court of Appeal Rules.

Legislation cited (10)

  • Civil Procedure Rules O.7 r.11(a)
  • Civil Procedure Rules O.40 r.1
  • Civil Procedure Act s.2
  • Civil Procedure Act s.58
  • Judicature Act 1996 s.14
  • Public Enterprises Reform and Divestiture Statute s.23
  • Court of Appeal Rules 1995 r.81
  • Court of Appeal Rules 1995 r.85(3)(d)
  • Court of Appeal Rules 1995 r.101(b)
  • Companies Act (Cap 85)

Cases cited (5)

  • Mugenyi & Co Advocates v Attorney General (Civil Appeal No. 43 of 1995)
  • Auto Garage and Others -vs- Motokov [1971] EA 514
  • Averett -vs- Ribbands and Another (1952) 2 Q.B. 198
  • Dr. James Rwanyarare & Another vs- Attorney General 1997 (C.A.)
  • Hajji Ntege Ssebaggala v Attorney General & 2 Others (Constitutional Petition No. 1 of 1999)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.