Wakilii

Pimer v Bakayana and 4 Others (Civil Suit 319 of 2019)

High Court · [2022] UGCOMMC 149 · 2022 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract and recovery of unpaid commission
Decision
Plaintiff's claim allowed; defendants ordered to pay USD 12,000 plus interest and costs; defendants' claim against third party dismissed.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that a partner who executed a commission agreement on behalf of a law firm bound the entire firm under partnership agency principles, notwithstanding that the agreement exceeded the firm's internal profit-sharing policy and was signed without other partners' express approval. The plaintiff, who procured and managed an IOM consultancy project, was entitled to a 40% commission on the project's net profits of USD 30,000. The defendants were jointly liable for the commission (USD 12,000 plus interest), but the third party who had resigned before the commission became due was not liable to indemnify the defendants.

Outcome

Plaintiff's claim allowed; defendants ordered to pay USD 12,000 plus interest and costs; defendants' claim against third party dismissed.

Facts

The plaintiff, a legal consultant specialising in international trade, was engaged by the defendant law firm (Arcadia Advocates) under two agreements: a Legal Consultancy Agreement dated 20 July 2016 and a Key Performance Indicator Agreement dated 26 January 2017. Under the KPI agreement, she was entitled to 40% of net profits on projects she brought in and executed. In February 2017, the plaintiff sourced an IOM consultancy project on immigration and employment laws for East African Partner States, originally advertised for individual consultants. She convinced IOM to accept a firm bid, prepared the proposal, and executed approximately 90% of the project's deliverables. The firm received USD 42,000, with expenses of USD 12,000, leaving a net profit of USD 30,000. The plaintiff claimed 40% of this profit (USD 12,000). The defendants argued the KPI agreement was unauthorised, exceeded the firm's internal profit-sharing policy, and was executed by the third party (then Managing Partner) without their knowledge or approval. The third party resigned from the firm on 31 December 2018 before the project concluded in May 2019.

Issues

  1. Whether the plaintiff has any cause of action against the defendants.
  2. Whether in view of the consent judgment between the plaintiff and the 3rd party, the plaintiff's suit is still maintainable in law against the defendants.
  3. Whether there is a valid and enforceable Key Performance Indicator Agreement to pay a commission to the plaintiff.
  4. If so, whether the contract is binding on the defendants.
  5. If so, whether the plaintiff performed the terms of the agreement to be entitled to a commission.
  6. If so, how much money is the plaintiff entitled to as commission.
  7. Whether the defendants are entitled to any contribution or indemnity from the 3rd party in the event that the plaintiff's claim is successful.

Orders

  • Judgment entered for the plaintiff against the defendants jointly.
  • The commission of USD 12,000 awarded to the plaintiff.
  • Interest thereon at the rate of 8% per annum from 1st June 2019 until payment in full.
  • Costs of the suit awarded to the plaintiff.
  • The defendants' claim against the 3rd party dismissed with costs to the 3rd party.

Rules and key headnotes

Partnership Law — Agency Authority — Authority of Partner to Bind Firm
A partner who executes a contract in the firm's ordinary course of business binds the firm and all other partners, even if the partner acts without the express authority or knowledge of fellow partners, provided the third party has no actual notice of the lack of authority.
Partnership Law — Agency Authority — Ordinary Course of Business
Whether an act is in the ordinary course of a partnership's business is determined by whether the activity is permitted under the partnership deed, is a regular and frequent activity rather than one-off, forms a sequence of similar past transactions, aligns with general industry standards, and is a source of income for the business. The execution of employment contracts and consultancy agreements with project managers constitutes the ordinary course of business for a law firm.
Partnership Law — Agency Authority — Restrictions on Partner Authority
Internal restrictions on a partner's authority contained in the partnership deed are not binding on third parties unless the partnership communicates the restriction to the third party before or at the time of contracting. A third party dealing with a partner in the ordinary course of business has no duty to inspect the partnership deed or inquire into the extent of the partner's actual authority.
Partnership Law — Joint Liability — Release and Settlement
Where partners are jointly liable for a partnership obligation, a consent judgment entered into between a creditor and one partner in that partner's individual capacity does not discharge the remaining partners from liability unless the consent judgment is made in the firm name and purports to be the act of the firm.
Employment Contracts — Commission Entitlement — Procuring Cause
An employee claiming entitlement to a commission based on bringing in a project must prove that she was the effective or procuring cause, meaning her activities set in motion a series of events which, without break in continuity, resulted in the firm securing the project. The employee need not be the sole reason but must be the leading cause.
Employment Contracts — Commission Payment — Termination of Employment
Termination of an employee's contract before full completion of a project does not necessarily preclude the employee's right to receive commission where no further action is required on the part of the employee to complete the work. Where an employee was the procuring cause of a project, she is entitled to her commission despite the fact that her employment contract expired before the project concluded and the profit was ascertained.
Partnership Law — Contribution and Indemnity — Retiring Partner Liability
A partner who retires from a firm remains liable for partnership debts or obligations incurred before retirement, but is not liable for obligations that only became debts after retirement. Where a commission became payable only after the firm ascertained a net profit at the conclusion of a project, and this occurred after the partner's retirement, that partner is not liable to indemnify or contribute to the settlement of the commission.

Legislation cited (13)

Cases cited (58)

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  • Cooke v. Gull, LR 8E.P 116
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  • Bailey v. Haines [1850] 15 Q.B. 533
  • Folly v. Forbes [1820] 4 Moore (C.P.) 448
  • Rice v. Reed [1900] 1 Q.B. 54
  • Western National Bank of City of New York v. Perez, Trisanna and Co. (1891) 1 QB 304
  • In re, Frances Handford and Co. Ex parte, Frances Handford. (1899) 1 QB 566
  • Brooke Bond Liebeg (T) Ltd v. Mallya [1975] E.A 266
  • Long v. Lopez 115 S.W.3d 221 (Texas App. 2003)
  • Cox v. Hickman (1860) 8 HLC 268
  • Dinesh Kotak v. Jagdish Kotak Royal Bank of Scotland Plc (Third Party) Bowbridge Ltd [2017] EWHC 1821 (Ch)
  • Lal Chand Sharma trading as Regal Provision Stores v. Bush Mills [1957] 1 EA 404
  • Vijay Kumar Saidha & another v. Tribhuvan Gordhan Barkrania & 2 others [2015] eKLR
  • Lloyd v. Grace, Smith & Co [1912] AC 716
  • Hamlyn v. John Houston & Co [1903] 1 KB 8
  • Mercantile Credit Company Limited v. Garrod [1962] 3 All ER 1103
  • Downs Distributing Co. v. Associated Blue Star (1948) 76 C.L.R. 463
  • Henry Denny Sons (Ireland) Ltd. v. Minister for Social Welfare [1998] 1 IR 34
  • Ready Mixed Concrete (South East) Ltd v. Minister of Pensions and National Insurance [1968] 2 QB 497
  • Willson v. Turner Resilient Floors, (1949) 89 Cal.App.2d 589; 201 P.2d 406
  • Sessions v. Pacific Improvement Co., 57 Cal. App. 1
  • Chamberlain v. Abeles, 88 Cal. App. 2d 291
  • Watson v. Wood Dimension (1989) 209 Cal.App.3d 1359
  • Zinn v. Ex-Cell-O Corp. (1944) 24 Cal.2d 290
  • Ellis v. McKinnon Broadcasting Co. (1993) 18 Cal.App.4th 1796
  • Borham-Carter v. Hyde Park Hotel [1948] 64 TLR
  • Masaka Municipal Council v. Semogerere [1998-2000] HCB 23
  • Musoke David v. Departed Asians Property Custodian Board [1990-1994] E.A. 219
  • Kyambadde v. Mpigi District Administration, [1983] HCB 44
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Gapco (U) Ltd v AS Transporters (U) Ltd (Court of Appeal Civil Appeal No. 18 of 2004)
  • The Eastern Shipping Company Limited (Appeal No. 37 of 1923) v. Quah Beng Kee (Penang) [1924] AC 177
  • Birmingham and District Land Co v. London and North Western Railway (1886) 40 Ch D 268
  • Hurst v. Bryk and others [2000] 2 All ER 193
  • London, Chatham & Dover Ry. Co. v. South Eastern Ry. Co. (1892) I Ch. 120
  • Carmichael v. Caledonian Railway Co. (1870) 8 M (HL) 119
  • Riches v. Westminster Bank Ltd [1947] 1 All ER 469
  • Dodika Limited & Others v. United Luck Group Holdings Limited [2020] EWHC 2101 (Comm)
  • Mohanlal Kakubhai Radia v Warid Telecom Ltd (High Court Civil Suit No. 234 of 2011)
  • Kinyera v The Management Committee of Laroo Boarding Primary School (High Court Civil Suit No. 99 of 2013)
  • James Fredrick Nsubuga v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and another (High Court Civil Suit No. 177 of 2003)
  • Hadley v. Baxendale (1894) 9 Exch 341
  • Charles Acire v M Engola (High Court Civil Suit No. 143 of 1993)
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Storms v. Hutchinson [1905] AC 515
  • Kabona Brothers Agencies v. Uganda Metal Products & Enamelling Co Ltd [1981-1982] HCB 74
  • Kiwanuka Godfrey T/a Tasumi Auto Spares and Class mart v Arua District Local Government (High Court Civil Suit No. 186 of 2006)
  • Hungerfords v. Walker (1989) 171 CLR 125
  • President of India v. La Pintada Compagnia Navigacia SA ('La Pintada') [1985] AC 104
  • Jennifer Rwanyindo Aurelia and another v School Outfitters (U) Ltd (Court of Appeal Civil Appeal No. 53 of 1999)
  • National Pharmacy Ltd. v. Kampala City Council [1979] HCB 25
  • Uganda Development Bank v. Muganga Constructions [1981] HCB 35
  • The Florida Bar v. Sperry, 140 So. 2d 587, 591 (Fla. 1962); 373 U.S. 379 (1963)
  • Dering v. Earl of Winchelsea [1787] EngR 39, (1787) 1 Cox 319, (1787) 29 ER 1184

Full judgment

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Pimer v Bakayana and 4 Others (Civil Suit 319 of 2019) [2022] UGCommC 149 (16 August 2022)
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.