Wakilii

Kakeeto Muhamood v Idd Saupe Sekaddu (Civil Appeal No. 356 of 2022)

Court of Appeal · [2025] UGCA 354 · 2025 Appeal Partly Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
First civil appeal from a High Court (Commercial Division) judgment dismissing a suit seeking a declaration of partnership and distribution of partnership assets
Decision
Appeal partly allowed; a partnership declared to exist from 2009; specified shops, motor vehicles and land declared partnership property and ordered sold and distributed equally through the Official Receiver

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Holding

The Court of Appeal held that an informal partnership existed between the parties from 2009, later registered in 2018, and that the trial court erred in finding the appellant a mere employee or broker — characterisations the respondent never pleaded. Applying the rule that parties are bound by their pleadings, the court found the trial judge wrongly relied on unpleaded facts of brokerage, mistake and illiteracy. The four shops, two motor vehicles and developed Bukasa land bought during the partnership were declared partnership property under section 23 of the Partnership Act, save the fourth shop registered in a different name. The appeal was partly allowed; the partnership assets were ordered sold and shared equally; costs were awarded to the appellant.

Facts

From 2009 the appellant, the respondent and Abdul Nsereko pooled resources to trade in building hardware within Mr Kibirige's shop. In 2013 the appellant and Nsereko paid goodwill and the initial rent for a larger shop, trading as Idd Stockist Hardware; receipts bore both parties' names and contacts. Nsereko later left the business. Over time the enterprise acquired three further shops, two motor vehicles and land at Bukasa, on which a storeyed building housing a branch was built, all registered in the respondent's name. On 13 July 2018 the respondent registered the business as a partnership listing himself, the appellant and his wife. The respondent denied any partnership, contending the appellant was a mere employee, and later asserting he was a broker paid commissions. The appellant sued for a declaration of partnership, an account, and equal distribution of the assets and profits. The High Court (Commercial Division) dismissed the suit, found no partnership, and made declarations in the respondent's favour, prompting this appeal.

Issues

  1. Whether the trial judge erred in finding that no informal partnership existed between the appellant and the respondent from 2009 to 12 July 2018.
  2. Whether the trial judge erred in finding that no formal partnership existed between the parties from 13 July 2018.
  3. Whether the four hardware shops, the two motor vehicles and the developed land at Bukasa are partnership property.
  4. Whether the trial judge erred in granting the respondent reliefs that were never claimed.
  5. Whether the trial judge erred in failing to assess the general damages payable had she found for the appellant.

Orders

  • Appeal partially allowed and the judgment and orders of the lower court set aside.
  • Declared that a partnership business between the appellant and the respondent has existed from 2009 to date.
  • Declared that the 1st, 2nd and 3rd shops in the name of Idd Stockist Hardware, motor vehicles Registration Nos. UAT 776K and UBE 473C, and the land at Bukasa, Wakiso District (50ft x 100ft) with the storeyed building thereon are partnership properties.
  • The partnership assets and profits to be shared equally between the parties, with the Official Receiver at the Uganda Registration Services Bureau appointed for this purpose.
  • The respondent to disclose all books of accounts of the partnership to the appellant from 2009 to date.
  • The Official Receiver to determine the value of the partnership assets and profits for distribution and to report to the Registrar of the Court within three months.
  • Expenses of distribution and dissolution to be borne equally by both parties.
  • Costs of the appeal and of the court below awarded to the appellant.

Key headnotes

Partnership — Formation — Informal partnership implied from conduct
A partnership is the relationship subsisting between persons carrying on a business in common with a view to profit, and may be formed informally and implied from the express or implied conduct of the parties; it need not arise from a written agreement or partnership deed.
Pleadings — Parties bound by pleadings — Departure from pleaded case
Parties are bound by their pleadings and a party cannot succeed on a case not set up in, or inconsistent with, those pleadings; a court errs where it bases its decision on material facts introduced only in evidence and never pleaded.
Burden of proof — Party alleging employment relationship must prove it
A party who alleges an employer-employee relationship bears the evidential burden of proving it; failure to adduce any evidence of employment, coupled with sustained involvement in the business, supports a finding of partnership rather than employment.
Partnership property — Property bought with partnership money — Section 23 Partnership Act
Unless a contrary intention appears, property bought with money belonging to the firm is deemed to have been bought on account of the firm; assets acquired by a managing partner during the subsistence of the partnership, from business funds, are partnership property notwithstanding registration in that partner's personal name.
Reliefs — Court cannot grant relief not claimed in the pleadings
A court cannot grant a party relief which it has not claimed in its plaint, claim or counterclaim; a trial court errs in making declarations and orders in favour of a defendant who pleaded only for dismissal of the suit with costs.

Legislation cited (6)

  • Partnership Act Cap 110 s.2(1)
  • Partnership Act Cap 110 s.2
  • Partnership Act Cap 110 s.23
  • Employment Act Cap 226 s.2
  • Illiterates Protection Act Cap 74
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 Rule 30(1)(a)

Cases cited (18)

  • Uganda v George Wilson Simbwa (Criminal Appeal No. 37 of 2005)
  • Banco Arabe v Bank of Uganda (Civil Appeal No. 8 of 1998)
  • Father Narsensio Begumisa & Others v Eric Tibekinga (Civil Appeal No. 17 of 2002)
  • Interfreight Forwarders (U) Ltd v East African Development Bank (Civil Appeal No. 33 of 1992)
  • Uganda Revenue Authority v Stephen Mabosi (Civil Appeal No. 26 of 1995)
  • Bubare Company v. Meble Kente [1982] HCB 143
  • Sadler v. Whiteman [1910] 1 K.B. 868 at page 889
  • Ready Mixed Concrete (South East) Ltd v. Minister of Pensions and National lnsurance [1958] 2 OB 497 at page 515
  • Othieno Okoth v Pius Ogolla (Civil Appeal No. 9 of 2005)
  • Kitaka Peter & 12 Others v Muhamood Thobani (Civil Appeal No. 20 of 2021)
  • Bachhaj Nahar v. Nilima Mandal & Anor, SCCA No. 5798-5799 of 2008
  • Ms Fang Min v Belex Tours and Travel Ltd (Civil Appeal No. 6 of 2013)
  • Attorney General v Paul Ssemogerere and Zachary Olum (Constitutional Appeal No. 3 of 2004)
  • Julius Rwabinumi v Hope Bahimbisimwe (Civil Appeal No. 10 of 2009)
  • Hotel International Ltd v Administrator of the Estate of Robert Kavuma (Civil Appeal No. 37 of 1995)
  • Standard Chaiered Bank (U) Ltd vs Grand lmperial Hotel Ltd
  • Construction Engineers & Builders (U) Ltd v Attorney General (Civil Appeal No. 24 of 1994)
  • Mbogo v. Shah [1968] E.A. 93 at 96
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.