Wakilii

National Drug Authority v Bakiza (Civil Suit No. 34 of 2008)

High Court · [2013] UGCOMMC 129 · 2013 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money collected by defendant's firm but not remitted to plaintiff
Decision
Judgment entered for plaintiff for UGX 20,000,000 (UGX 15,000,000 special damages plus UGX 5,000,000 general damages) plus interest at 15% per annum from judgment until payment in full; counterclaim dismissed

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Holding

The High Court held that the defendant, who signed a management service agreement as a Senior Partner of Kabyesiza and Company Advocates after the death of the sole proprietor Francis Kabyesiza, was personally liable for non-remittance of collected rent. The court applied the doctrine of estoppel and inferred a partnership from conduct under the Partnership Act Cap 114 s.3. Advocates are personally liable for professional work and for the acts of their clerks. The plaintiff was awarded UGX 15,000,000 in special damages and UGX 5,000,000 in general damages. The counterclaim was dismissed as it should have been pursued through execution proceedings. Interest at 15% per annum was awarded from judgment.

Outcome

Judgment entered for plaintiff for UGX 20,000,000 (UGX 15,000,000 special damages plus UGX 5,000,000 general damages) plus interest at 15% per annum from judgment until payment in full; counterclaim dismissed

Facts

On 30 January 2001, the plaintiff National Drug Authority entered into a management service agreement with Kabyesiza and Company Advocates, a law firm, for collection of rent from tenants at plot 59 Nkrumah Road. The agreement was signed by the defendant John Chris Bakiza as Senior Partner. Francis Kabyesiza, the sole proprietor of the firm, had died in 1999, before the agreement was executed. The plaintiff terminated the agreement effective 31 December 2003 and appointed auditors Lawrie Prophet and Company to verify tenant balances. The audit revealed that UGX 40,060,000 had been collected by the firm but not remitted to the plaintiff. The defendant claimed he was merely an employee, that Francis Kabyesiza had negotiated the contract before his death, and that the plaintiff's employees accepted cash payments in breach of the agreement's requirement for cheque payments. The plaintiff had previously filed HCCS 613 of 2006 against the defendant and two other associates but withdrew it with costs to the defendants.

Issues

  1. Whether the suit raises any cause of action against the defendant personally?
  2. Whether the defendant was liable under the service agreement and if so, to what extent?
  3. Whether the defendant received the rent payments from the tenants but did not remit them to the plaintiff?
  4. Whether any of the parties breached any terms of the service agreement?
  5. Whether the counterclaim is tenable in law?
  6. What remedies are available to the parties?

Orders

  • Judgment for the plaintiff.
  • Defendant to pay the plaintiff Uganda shillings 15,000,000/= as special damages.
  • Defendant to pay the plaintiff Uganda shillings 5,000,000/= as general damages.
  • Interest at 15% per annum awarded from the date of judgment until payment in full.
  • Counterclaim dismissed.
  • Costs to the plaintiff.

Rules and key headnotes

Agency — Personal Liability of Agent — Business Names Registration Act — Sole Proprietorship
Where a sole proprietor dies and persons continue trading under the business name without notifying the registrar of business names or obtaining letters of administration, those persons holding themselves out as having authority to contract under that business name are personally liable on contracts they execute, notwithstanding their claim to be mere employees.
Partnership — Implied Partnership — Carrying On Business in Common
A partnership may be inferred from conduct under the Partnership Act Cap 114 s.3 where persons who are not formal partners undertake contractual obligations jointly, carry on business under a common name, and share in the business receipts, even in the absence of a partnership deed.
Estoppel by Representation — Senior Partner Designation
Under the doctrine of estoppel by conduct and Evidence Act s.114, where a person represents himself as a Senior Partner in a firm when contracting with a third party and the third party relies on that representation, the person is estopped from later denying his capacity as a partner and the personal liability that flows from it.
Advocates — Professional Responsibility — Vicarious Liability for Clerks
An advocate is personally responsible for client work under the Advocates (Professional Conduct) Regulations and is liable for the acts of clerks and non-professional employees in the performance of professional duties, including the misappropriation of client funds by clerks acting in the course of their service.
Business Names Registration Act — Third Party Rights Against Defaulters
Under the Business Names Registration Act s.9(1)(b), a third party's rights to sue a person trading under a business name are not prejudiced by that person's failure to notify the registrar of changes in proprietorship. A defaulter cannot avoid liability to third parties on the ground that he failed to comply with registration requirements.
Counterclaim — Res Judicata — Execution of Decree
A counterclaim for costs awarded by decree in a previous suit is not maintainable where the decree expressly awards costs against the plaintiff's advocates (not the plaintiff) and the proper remedy is execution proceedings under the decree, not a fresh suit or counterclaim. Civil Procedure Act s.34(1) bars suits on matters that should be pursued by execution.
Special Damages — Apportionment Where Multiple Defendants
Where a plaintiff proves that multiple associates jointly operated a business and jointly failed to remit client funds, but then withdraws the suit against some associates and proceeds only against one, the court may reduce the quantum of special damages awarded against the remaining defendant to reflect the fact that he was not solely responsible and that the plaintiff chose not to pursue joint and several liability.

Legislation cited (19)

Cases cited (6)

  • Auto Garage and Another v Motokov [1971] EA 514
  • Chamute Agencies Co Ltd v Mbale District Administration (HCCS No. 34 of 1996)
  • National Social Security Fund and Another v Alcon International Ltd (Civil Appeal No. 15 of 2009)
  • Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd and others [1994] AC 85
  • Lloyd v Grace, Smith and Company [1912] AC 716
  • Raymond Katabakya v Attorney General (HCCS No. 318 of 1985)

Full judgment

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

National Drug Authority v Bakiza (Civil Suit No. 34 of 2008) [2013] UGCommC 129 (5 July 2013)
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.