Wakilii

Okoth & Another v Hamedali (Civil Appeal 24 of 1992)

Supreme Court · [1993] UGSC 41 · 1993 Appeal Partly Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Interlocutory appeal from a High Court ruling refusing to strike out two defendants from a civil suit alleging fraudulent deprivation of land.
Decision
Appeal allowed for the 1st appellant (Okoth-Ofumbi) and her name struck out; appeal dismissed for the 2nd appellant (Kulany), who remains a defendant in the suit.

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Cited — treatment unverified cited in 1 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

On an application to strike out two defendants, the Court considered joinder under Order 1 Rule 3. A company director is an agent of the company; the principal company, not the agent, should be sued, and any tort of interfering with the contract had not been pleaded, so the director's name was struck out. The advocate was properly joined: he had failed to carry out the plaintiff's specific instructions to complete the transfer and registration of title, founding a possible claim in damages, and his conduct formed part of the fraud relevant to cancellation of registration under s.184(c) of the Registration of Titles Act. The director's appeal was allowed; the advocate's appeal was dismissed.

Facts

In January 1975 the respondent purchased a plot on Nkambo Lane, Mbale, from the vendor company for shillings 100,000. He executed a sale agreement and was put in possession, with the sitting tenant paying him rent. The 3rd defendant advocate received the respondent's specific instructions, and transfer fees, to complete the conveyance and register the title in the respondent's name. The respondent fled into exile during the 1979 war. While he was away, the company and its director (the 1st appellant), who had succeeded her deceased husband as managing director, retook the property and procured a second sale of the same plot to a fourth person, who was registered before the respondent. The respondent sued the company, the director, the advocate and the second purchaser, alleging fraud, and sought a declaration of fraudulent deprivation, cancellation of the second purchaser's registration, substitution of his own name, damages and mesne profits.

Issues

  1. Whether the 2nd defendant, a director of the vendor company, was properly joined as a defendant in a suit alleging fraudulent deprivation of land where the company itself was a party.
  2. Whether the 3rd defendant advocate, who had acted on the plaintiff's instructions to complete the transfer, was properly joined where he failed to carry out those instructions and later acted for the adverse parties.
  3. Whether joinder of the appellants satisfied Order 1 Rule 3 of the Civil Procedure Rules.

Orders

  • Appeal of the 1st appellant, Theresa Okoth-Ofumbi, allowed.
  • Order of the High Court set aside in relation to Theresa Okoth-Ofumbi and her name struck out from the pleadings.
  • Appeal of the 2nd appellant, Jovan Kulany, dismissed.
  • 1st appellant to have her costs of the appeal and of the proceedings before the High Court.
  • 2nd appellant to pay the respondent's costs of the appeal in relation to him.

Key headnotes

Company Law — Directors — Liability as Agent of the Company
A director acts as agent of the company, and where the company is the ostensible and active principal in a transaction the principal, not the agent director, is the proper party to be sued.
Company Law — Directors — Fiduciary Duty Owed to the Company Alone
A director's fiduciary duty to act with the utmost good faith is owed to the company alone and does not, of itself, found an action by a third party such as a purchaser.
Tort Law — Inducing Breach of Contract — Servant or Agent as Alter Ego
A servant or agent who, acting bona fide within the scope of his authority, causes his principal to break a contract is not liable for interference with that contract, being the principal's alter ego; the position is a fortiori where the principal is a company.
Civil Procedure — Joinder of Defendants — Order 1 Rule 3 — Unpleaded Cause of Action
A defendant cannot be retained in proceedings on a cause of action, such as a director's liability in tort, that has not been pleaded; under Order 1 Rule 3 a party may be joined only where a right to relief arising out of the same transaction or series of transactions is alleged against them.
Contract Law — Advocate's Liability — Breach of Client's Instructions
An advocate who is specifically instructed and paid to complete a transfer and registration, and who fails to do so, may be sued for breach of those instructions, and that failure is a sufficient foundation for a claim in damages independent of any allegation of fraud.
Land & Property — Registration of Titles Act s.184(c) — Cancellation for Fraud — Necessary Parties
Where cancellation of a registered title is sought under s.184(c) of the Registration of Titles Act on the ground of fraud, parties whose conduct forms part of the combination of facts constituting that fraud may be properly joined, since not every party need be interested in every relief claimed.

Legislation cited (3)

  • Registration of Titles Act s.184(c)
  • Civil Procedure Rules Order 1 Rule 3
  • Civil Procedure Rules Order 1 Rule 5

Cases cited (2)

  • Percival v Wright [1902] 2 Ch 421
  • Evans & Sons Ltd v Spritebrand Ltd [1985] FSR 267 (CA)
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.