Wakilii

Colonial Printing Works v Mrs. R.A. Main (Civil Appeal No. 3 of 1953)

East African Court of Appeal · [1955] EACA 299 · 1955 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from judgment of H.M. Supreme Court of Kenya concerning liability of business transferee under Fraudulent Transfer of Businesses Ordinance
Decision
Judgment entered against both the transferor and transferee jointly for the full amount claimed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where a business transferee admitted acquiring part of the transferor's business, the trial judge could not find it was a separate business. Under the Fraudulent Transfer of Businesses Ordinance, the transferee becomes liable for all debts incurred in the transferor's business where notice is incomplete. The liabilities of transferor and transferee are several, not joint or alternative, so a creditor may sue both concurrently, but judgment should be entered against both defendants jointly for the total sum claimed, not separately against each.

Outcome

Judgment entered against both the transferor and transferee jointly for the full amount claimed

Facts

Fitchen operated a business called Kingsway Free Publications. In May 1951, he engaged the appellant printing firm to print several publications including one titled Jayne, incurring charges of Sh. 5,178. In September 1951, Fitchen sold the Jayne publication portion of his business to the respondent Mrs. Main. Notice of transfer was published under the Fraudulent Transfer of Businesses Ordinance but before the two-month notice period expired, the appellants sued both Fitchen and Mrs. Main for the printing charges. The trial judge entered judgment against Fitchen for the full amount but against Mrs. Main for only Sh. 2,141, being the portion relating to Jayne, finding that Jayne was a separate business. The respondent's defence had expressly admitted that Jayne was a portion of Fitchen's business.

Issues

  1. Whether the trial judge was entitled to find that the Jayne publication was a separate business when the defence admitted it was part of the transferor's business.
  2. Whether the transferee was liable for all debts incurred in the transferor's business or only those relating to the transferred portion.
  3. Whether a creditor can sue both the transferor and transferee of a business concurrently under the Fraudulent Transfer of Businesses Ordinance, or must elect between them.
  4. What is the proper form of judgment when a claim is made against two defendants with several liabilities.

Orders

  • Appeal allowed with costs.
  • Judgment of the lower court varied.
  • Judgment entered for the appellant firm in the sum of Sh. 5,178 against both defendants.
  • Plaintiff shall not recover more than Sh. 5,178 excluding costs.

Rules and key headnotes

Business Transfers — Transferee Liability — Scope Under Fraudulent Transfer of Businesses Ordinance
Where a transferee acquires a portion of a business and notice under the Fraudulent Transfer of Businesses Ordinance is incomplete at the date of transfer, the transferee becomes liable for all liabilities incurred in the transferor's business, not merely those relating to the transferred portion.
Pleadings — Admissions — Effect on Findings of Fact
Where a defendant expressly admits a material fact in the defence, it is not open to the trial judge to make a finding contrary to that admission. The admitted fact is not in issue and requires no proof.
Business Transfers — Concurrent Liability of Transferor and Transferee — No Doctrine of Election
Under the Fraudulent Transfer of Businesses Ordinance, the liabilities of the transferor and transferee are several, not joint or alternative. A creditor may sue the transferor, the transferee, or both concurrently without being required to elect between them. The doctrine of election applicable to alternative remedies does not apply.
Judgments — Form Where Multiple Defendants with Several Liabilities
Where a claim is made against two defendants whose liabilities are several, judgment should be entered against both defendants jointly for the total sum claimed, not as separate judgments against each defendant for the same amount. The plaintiff may not recover more in total than the amount claimed excluding costs.
Fraudulent Transfer of Businesses Ordinance — Preservation of Transferor's Liability
Section 3(5) of the Fraudulent Transfer of Businesses Ordinance expressly provides that imposing liability on the transferee does not relieve the transferor from any liability to which he would otherwise be subject. Both remain liable to the creditor.

Legislation cited (3)

  • Fraudulent Transfer of Businesses Ordinance s.3(1)
  • Fraudulent Transfer of Businesses Ordinance s.3(2)
  • Fraudulent Transfer of Businesses Ordinance s.3(5)

Cases cited (5)

  • Scarf v Jardine (1882) 7 AC 345
  • Morel Brothers & Co Ltd v Earl of Westmoreland (1904) AC 11
  • Rulia Ram v Mohan Singh (17 EACA 3)
  • Dalip Chand and Sharma v Feroz Din and Hansraj (1935) 16 KLR 106
  • Morris Ltd v Perrott & Bolton (1945) 1 All ER 567

Full judgment

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Colonial Printing Works v Mrs. R.A. Main (Civil Appeal No. 3 of 1953) [1955] EACA 299 (1 January 1955)
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.