Wakilii

Dilipkumar Patel and 5 Others v Kashyapkumar Patel and 10 Others (Miscellaneous Application 840 of 2021)

High Court · [2021] UGCOMMC 183 · 2021 Preliminary Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for interlocutory injunction arising from civil suit for breach of contract; preliminary objection raised on ground of contempt of court
Decision
Preliminary objection dismissed; matter to proceed to hearing on the merits of the interlocutory injunction application

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the contempt order was criminal in nature, not civil, because it imposed punitive remedies (a fine and punitive damages payable to court) rather than coercive or compensatory remedies, and contained no purge provision. Since purging is neither permitted nor possible in criminal contempt, and insisting on payment before further proceedings would impede the court's ability to adjudicate the case, the preliminary objection was overruled and the application could proceed.

Outcome

Preliminary objection dismissed; matter to proceed to hearing on the merits of the interlocutory injunction application

Facts

The applicants sued the respondents for breach of a settlement agreement containing a non-compete clause. The parties had previously settled two suits concerning share transfers through a Confidential Release and Settlement Agreement dated 11 March 2020, under which the respondents undertook not to engage in steel or sugar manufacture in Uganda for five years. The applicants alleged the respondents breached this by acquiring shares in Bugiri Sugar Company Limited. The applicants filed an application for an interlocutory injunction. Before the application could be heard, the respondents raised a preliminary objection that the applicants had been found in contempt of court in earlier proceedings and ordered to pay a fine of UGX 50,000,000 and punitive damages of UGX 100,000,000, and that the contempt must be purged before any further hearing.

Issues

  1. Whether the applicants must purge themselves of contempt of court by paying a fine and punitive damages before their application for an interlocutory injunction can be heard.
  2. Whether the contempt order in question is civil or criminal in nature.
  3. Whether the court has power to vary or suspend a contempt order to allow proceedings to continue.

Orders

  • Preliminary objection overruled.
  • Application for interlocutory injunction may proceed to hearing.

Rules and key headnotes

Contempt of Court — Distinction Between Civil and Criminal Contempt
The test for determining whether contempt is civil or criminal is what the court primarily seeks to accomplish by imposing sentence. Criminal contempt is characterised by the imposition of an unconditional sentence for punishment or deterrence. Where the primary purpose is to preserve the court's authority and to punish for disobedience of its orders, the contempt is criminal. Where the primary purpose is to provide a remedy for an injured party and to coerce compliance with an order, the contempt is civil.
Contempt of Court — Purging Criminal Contempt
In criminal contempt, purging is neither permitted nor possible because the punishment imposed cannot undo or remedy what has been done. The concept of purging applies to civil contempt, where the contemnor can comply with the court order and be released. In criminal contempt, the contempt is considered purged when punishment for breach of the order is pronounced and imposed.
Contempt of Court — Indicators of Criminal Contempt
A contempt order is criminal in nature where: the fine and damages are payable to court rather than to the complainant; the award is not based on proved loss and is not intended to compensate; the court imposes punitive rather than coercive remedies; and the court does not specify any act the performance of which would purge the contempt.
Contempt of Court — Effect on Further Proceedings
Where a contempt order has the effect of impeding the court's ability to adjudicate a case further, and the contempt is criminal in nature such that purging is neither permitted nor possible, insisting on payment of punitive damages before further steps are taken in the suit serves only to inflame passions and does nothing to advance the case. In such circumstances, the court may allow proceedings to continue notwithstanding the contempt order.
Contempt of Court — Compensatory and Punitive Damages
Courts measure damages for compensatory contempt by evidence of the party's actual losses or reimbursable loss. Punitive damages are granted to create an incentive to pursue wrongdoers, to deter violations of legal standards, to punish wrongdoers, and to set an example to the public. If an ostensible compensatory award actually punishes, then it is really a criminal fine.

Legislation cited (2)

  • Contempt of Court Act 1981 s.14(1)
  • Criminal Justice Act 2003 s.258(2)

Cases cited (35)

  • Housing Finance Bank and another v Musisi (Civil Application No. 158 of 2010)
  • Munib Masri v. Consolidated Contractors International Company SAL, Consolidated Contractors (Oil and Gas) Company SAL [2011] EWHC 2579 (Comm)
  • United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901
  • Surgeoner v. Surgeoner (1991), 6 C.P.C. (3d) 318 (Ont. Gen. Div.)
  • Poje v. Attorney General for British Columbia [1953] 1 S.C.R. 516
  • Davy International Ltd v. Tazzyman [1997] 1 WLR 1256
  • Nicholls v. Nicholls [1997] 1 WLR 314
  • Bell v. Tuohy [2002] 1 WLR 2703
  • Shillitani v. United States, 384 US 364 (1966)
  • International Union, United Mine Workers of America v. Bagwell, 512 U.S. 821 (1994)
  • United States v. Mine Workers, 330 U. S. 258
  • Hicks v. Feiock, 485 U.S. 624
  • Gompers v. Bucks Stove & Range Co., 221 U.S. 418
  • Esso Standard (U) Ltd v. Semu Emanu Opio [1992-93] HCB 107
  • Wavamunno Eriab v. Teddy Sseezi Cheeye [1992-93] HCB 173
  • Harris v. Harris [2001] EWCA Civ 1645
  • Labour Relations Board v. The Queen, [1956] S.C.R. 82
  • Crystal Mews Ltd v. Metterick and others [2006] EWHC 3087 (Ch)
  • Enfield LBC v. Mahoney [1983] 2 All ER 90
  • Robinson v. Robinson [2001] EWCA Civ 2098
  • Hale v. Tanner [2000] 1WLR 2377
  • Lightfoot v. Lightfoot [1989] 1 FLR 414
  • Blue Jeans Corporation v. Amalgamated Clothing Workers of America, 169 S.E.2d 867 (1969)
  • Kabale University v Henry Rwaganika and another (Civil Appeal No. 7 of 2016)
  • In re Nevitt, 117 F. 448 (8th Cir. 1902)
  • Gompers v. Buck's Stove and Range Company, 221 U.S. 418
  • CJ v. Flintshire Borough Council [2010] EWCA Civ 393
  • Harris v. Harris; Harris v. Attorney General [2001] 3 WLR 765
  • Templeton v. Motorcare Warranties and others [2013] EWCA Civ 3
  • United States v. Harris, 582 F.3d 512 (3d Cir. 2009)
  • In re Lawrence, 279 F.3d 1294
  • Chuck v. Creemer (I Corp Jemp 342)
  • The People v. Sturtevant, 9 N.Y. 263
  • Feiock v. Feiock, 485 U.S. 624
  • US v. Perry 116 F.3d 952 (1997)

Full judgment

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Dilipkumar Patel and 5 Others v Kashyapkumar Patel and 10 Others (Miscellaneous Application 840 of 2021) [2021] UGCommC 183 (3 November 2021)
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.