Wakilii

Kagoro v Samalien Properties Limited and 4 others (H.C.Miscellaneous Application No. 90 of 2020)

High Court · [2021] UGHCCD 5 · 2021 Application Partly Allowed — Transferred to Land Division AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to lift corporate veil and enforce judgment arising from Civil Suit No. 59 of 2010, opposed by preliminary objections
Decision
Application transferred to Land Division for hearing on merits

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that although a miscellaneous application arising from a judgment in the Land Division ought to have been filed in that Division, filing in the Civil Division does not render it incompetent but warrants transfer. The court rejected objections that the application improperly joined third parties or that fraud cannot be proved by affidavit, ruling these matters go to the merits. The application was ordered transferred to the Land Division for hearing on its merits.

Outcome

Application transferred to Land Division for hearing on merits

Facts

The applicant obtained judgment against the 1st respondent in Civil Suit No. 59 of 2010 in the High Court Land Division. The applicant subsequently filed this application in the Civil Division seeking to lift the corporate veil of the 1st to 4th respondents and hold them and the 5th respondent (a director) jointly liable for the judgment debt. The applicant alleged that after judgment, the 1st respondent transferred its properties to sister companies (the 2nd to 4th respondents) controlled by the 5th respondent and his family to evade execution. The respondents raised three preliminary objections: that the application was filed in the wrong division, that it improperly joined third parties not party to the original suit, and that it alleged fraud which cannot be proved by affidavit.

Issues

  1. Whether the application arises from a suit not pending before the Civil Division and thus constitutes an abuse of court process.
  2. Whether the application can proceed against third parties who were not parties to the main suit and are neither directors nor shareholders in the 1st Respondent company.
  3. Whether the application is premised on allegations of fraud which cannot be proved by affidavit evidence.

Orders

  • First preliminary objection partly succeeds.
  • Second and third preliminary objections dismissed.
  • Case file to be transferred to the Land Division.
  • File to be placed onto HCCS No. 59 of 2010.
  • Application to be handled on its merits in the Land Division.
  • Registrar of the Civil Division directed to effect the transfer.
  • Costs of this proceeding to abide the outcome of the application on its merits.

Rules and key headnotes

Civil Procedure — Miscellaneous Applications — Proper Division for Filing — Transfer Between Divisions
Where a miscellaneous application arising from a judgment in one division of the High Court is mistakenly filed in another division, the application is not incompetent but should be transferred to the proper division rather than dismissed, as the High Court is one unit with unlimited original jurisdiction and divisions exist for administrative expediency.
Civil Procedure — Execution of Decrees — Proper Court for Execution Applications
Although Section 30 of the Civil Procedure Act provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution, a miscellaneous application filed in the wrong division of the High Court should be transferred to the proper division rather than dismissed, as the High Court's divisions are administrative arrangements that do not affect the court's fundamental jurisdiction.
Civil Procedure — Preliminary Objections — Objections Going to Merits
A preliminary objection that challenges whether third parties can be joined to execution proceedings on grounds that they are not directors or shareholders of the judgment debtor company goes to the merits of the application and should not be determined as a preliminary point of law.
Company Law — Lifting the Corporate Veil — Proof of Fraud by Affidavit
Fraud alleged as a ground for lifting the corporate veil under Section 20 of the Companies Act can be proved by affidavit evidence, which may be tested through cross-examination and strict proof under Order 19 Rule 2 of the Civil Procedure Rules, and the mere fact that evidence is brought by affidavit is not a ground to defeat such an application.

Legislation cited (11)

Cases cited (10)

  • Bigirwa and Another v Kaguta Museveni (Miscellaneous Cause No. 63 of 2016)
  • Karuhanga and Another v Attorney General and 2 Others (Miscellaneous Cause No. 60 of 2015)
  • Basile Difasi and 3 Others v The National Unity Platform and 8 Others (Miscellaneous Cause No. 226 of 2020)
  • Former Employees of G4S Security Services v G4S Security Services Ltd (Supreme Court Civil Appeal No. 18 of 2010)
  • Alia v Amati (High Court Miscellaneous Application No. 0039 of 2015)
  • Gunning v Naguru Tirupati Ltd and 5 Others (High Court Miscellaneous Application No. 232 of 2017)
  • Bolton (HL) Engineering Co. Ltd v TJ Graham & Sons Ltd [1953] 3 WLR 804
  • Samuel Abbo v Cimeel Engineering Ltd (High Court Miscellaneous Application No. 29 of 2013)
  • Frederick Zaabwe v Orient Bank and Others (Supreme Court Civil Appeal No. 4 of 2006)
  • Yahaya Walusimbi v Justine Nakalanzi and 4 Others (Court of Appeal Miscellaneous Application No. 386 of 2018)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Kagoro v Samalien Properties Limited and 4 others (H.C.Miscellaneous Application No. 90 of 2020) [2021] UGHCCD 5 (9 March 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.