Wakilii

Crane Bank Limited (In Liquidation) v Sudhir & Another (Civil Application 2 of 2021)

Supreme Court · [2021] UGSC 16 · 2021 Application Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Application in the Supreme Court for leave to amend the memorandum and record of appeal by substitution of parties, arising out of a pending civil appeal
Decision
Application for leave to amend by substitution of parties dismissed with costs; the appeal proceeds under the original parties

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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

The Supreme Court dismissed an application for leave to amend the memorandum and record of appeal by substituting Crane Bank Limited (In Receivership) with Crane Bank Limited (In Liquidation). Applying the principles in Gaso Transport, the Court held the substitution would work injustice to the respondents, introduce a new and inconsistent cause of action, and pre-empt the pending appeal — whose central issue was the receiver's capacity to sue under the Financial Institutions Act. The Court held that a company as a going concern, a company in receivership, and a company in liquidation are distinct entities with separate legal status, and found the application made mala fide to deprive the respondents of their statutory defence.

Facts

Bank of Uganda took over statutory management of Crane Bank Limited under the Financial Institutions Act on 20 October 2016 and placed it under receivership on 24 January 2017, selling its assets and liabilities to DFCU Bank. Crane Bank Limited (In Receivership) sued Sudhir Ruparelia and Meera Investments Limited in HCCS No. 493 of 2017. The High Court upheld preliminary objections that a bank in receivership had no locus to sue and dismissed the suit; the Court of Appeal affirmed. Crane Bank (In Receivership) appealed to the Supreme Court (Civil Appeal No. 7 of 2020), the central issue being the receiver's capacity to sue under the FIA. On 15 November 2020, Bank of Uganda placed Crane Bank under liquidation. The applicant then sought leave to amend the appeal record by substituting Crane Bank Limited (In Receivership) with Crane Bank Limited (In Liquidation), contending the entity remained the same and only its status of management had changed.

Issues

  1. Whether the applicant should be granted leave to amend the memorandum and record of appeal by substituting Crane Bank Limited (In Receivership) with Crane Bank Limited (In Liquidation).
  2. Whether the proposed substitution would work injustice to the respondents, introduce a new or inconsistent cause of action, or was made mala fide.
  3. Whether a company in receivership and the same company in liquidation are the same legal entity for the purposes of substitution of parties.

Orders

  • Application dismissed with costs to the Respondents.

Key headnotes

Civil Procedure — Amendment of Pleadings — Principles governing exercise of discretion
Leave to amend pleadings will not be granted where the amendment would work injustice to the other side that cannot be compensated by costs, where it is made mala fide, or where it is expressly or impliedly prohibited by law.
Civil Procedure — Amendment — Substitution of parties — Alteration of cause of action
An amendment by substitution of parties will not be allowed where it would fundamentally alter the cause of action or change the action into one of a substantially different character that could more conveniently be the subject of a fresh action.
Company Law — Receivership and Liquidation — Distinct legal status of corporate entities
A company that is a going concern, a company in receivership, and a company in liquidation are distinct entities, each enjoying a separate legal status with rights, powers and obligations that are not necessarily the same under the laws regulating companies and financial institutions.
Civil Procedure — Amendment at appellate stage — Pre-empting the substantive appeal
An amendment that would pre-empt or pre-determine the central issue of a pending appeal in favour of one party, and deprive the opposing party of a defence, will not be permitted as it defeats rather than assists the resolution of the issues in controversy.

Legislation cited (10)

  • Financial Institutions Act 2004 s.87(3)
  • Financial Institutions Act 2004 s.88(1)(a)
  • Financial Institutions Act 2004 s.99(1)
  • Financial Institutions Act 2004 s.99(2)
  • Judicature (Supreme Court Rules) Directions SI 13-11 r.2(2)
  • Judicature (Supreme Court Rules) Directions SI 13-11 r.42
  • Judicature (Supreme Court Rules) Directions SI 13-11 r.43
  • Judicature (Supreme Court Rules) Directions SI 13-11 r.44
  • Judicature (Supreme Court Rules) Directions SI 13-11 r.81
  • Companies Act

Cases cited (7)

  • Gaso Transport Services (Bus) Ltd v Martin Adala Obene (Civil Appeal No. 4 of 1994)
  • Central Kenya Limited v Trust Bank Limited [2000] 2 EA 365
  • Abdul Karim Khan v Mohamed Roshan [1965] EA 289
  • Joseph Ochieng & 2 Others v First National Bank of Chicago (Civil Appeal No. 149 of 1991)
  • Stapleford Finance Limited v Peter Lavelle and Irish Bank Resolution Corporation Limited (Civil Appeal No. 339 of 2015)
  • BUPA Ireland Ltd v Health Insurance Authority & Others [2005] IEHC 291
  • Coles v Ravenshear [1907] 1 KB 1
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.