Wakilii

Pimer v Bakayana and 4 Others (Civil Suit No. 319 of 2019)

High Court · [2022] UGCOMMC 91 · 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 commission
Decision
Plaintiff's claim for commission allowed; plaintiff awarded US $ 12,000 plus interest and costs against the 1st to 4th defendants jointly; defendants' third party claim against the 3rd party (Francis Gimara) dismissed with costs to the 3rd party

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that a partner acting within the ordinary course of partnership business binds the firm, even where such acts were unauthorised by co-partners or in contravention of internal partnership agreements, where the third party had no actual knowledge of restrictions on the partner's authority. The plaintiff, having procured and executed a consultancy project for the defendants' law firm, was entitled to a 40% commission on net profits under a Key Performance Indicator agreement signed by a managing partner, despite the agreement being unauthorised. The firm was liable for the full commission where the partner acted within apparent authority. However, a retired partner was not liable for contingent debts (the commission) that became due after retirement, as the commission only accrued upon project completion and profit calculation.

Outcome

Plaintiff's claim for commission allowed; plaintiff awarded US $ 12,000 plus interest and costs against the 1st to 4th defendants jointly; defendants' third party claim against the 3rd party (Francis Gimara) dismissed with costs to the 3rd party

Facts

The plaintiff, a lawyer specialising in international trade, was engaged by the defendant law firm (Arcadia Advocates) as a consultant and project manager in 2016. She signed a Legal Consultancy Agreement and a Key Performance Indicator (KPI) agreement with the 3rd party, who was then managing partner and head of the Legal Consultancy and Emerging Areas Department. The KPI agreement provided for a 40% commission on net profits from projects she brought in and executed. In early 2017, the plaintiff sourced a consultancy project from the International Organisation for Migration (IOM) worth US $ 42,000, which she helped the firm secure and substantially executed. The firm earned a net profit of US $ 30,000 on the project (after US $ 12,000 expenses). The plaintiff left the firm in June 2018, and the IOM project concluded in May 2019. The defendants refused to pay the plaintiff her claimed 40% commission (US $ 12,000), arguing the KPI agreement was unauthorised and in contravention of the Partnership Deed, that they only became aware of it in December 2018, and that the plaintiff had settled her claim via a consent judgment with the 3rd party. The plaintiff sued for US $ 12,000 commission, US $ 2,400 special damages, general damages, interest and costs.

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

Rules and key headnotes

Partnership Law — Partner's Apparent Authority — Binding the Firm
Where a partner executes an agreement in the firm's name or in a manner showing an intention to bind the firm, relating to the ordinary course of the firm's business, the firm and all partners are bound by such act even if the partner acted without the authority or knowledge of the other partners, unless the third party had actual knowledge that the partner lacked authority.
Commission Agreements — Ordinary Course of Business
The execution of employment contracts and commission agreements with consultants working for a law firm constitutes an activity in the ordinary course of the firm's business where such contracts relate to the provision of legal services and are executed with regular frequency as part of departmental operations authorised by firm policy.
Partnership Law — Third Party Rights — Notice of Restrictions
Third parties dealing with a partner in the ordinary course of partnership business have no duty to inspect the Partnership Deed or inquire otherwise to ascertain the extent of a partner's actual authority. To restrict a partner's apparent authority, the partnership has the burden of communicating such restrictions to third parties through actual or express notice.
Commission Entitlement — Procuring Cause
An employee or consultant is entitled to an agreed commission where she is the procuring cause of a project—that is, where her efforts set in motion a series of events which, without break in continuity, brought about the project in question—even if others intervened to complete the final negotiations or the employee left employment before project completion.
Partnership Law — Joint Liability — Effect of Consent Judgment with One Partner
A consent judgment signed by one partner in his individual capacity and not in the firm name does not discharge the liability of the other partners where the consent does not purport to settle the firm's debt and expressly records that it is made without admission to any claim in the suit. Partners remain jointly liable for firm debts incurred while they were partners.
Partnership Law — Retired Partner — Contingent Liabilities
A partner who retires from a firm is liable only for partnership debts or obligations incurred before retirement. Where a commission is contingent upon the firm earning a net profit ascertainable only at project completion, and the project concludes after the partner's retirement, the retired partner is not liable for such commission as it did not accrue as a debt before retirement.

Legislation cited (13)

Cases cited (58)

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  • Rice v. Reed [1900] 1 Q.B. 54
  • 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)
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  • 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
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  • Dodika Limited & Others v. United Luck Group Holdings Limited [2020] EWHC 2101 (Comm)
  • Mohanlal Kakubhai Radia v Warid Telecom Ltd (Civil Suit No. 234 of 2011)
  • Kinyera v The Management Committee of Laroo Boarding Primary School (Civil Suit No. 99 of 2013)
  • James Fredrick Nsubuga v Attorney General (Civil Suit No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and another (Civil Suit No. 177 of 2003)
  • Hadley v. Baxendale (1894) 9 Exch 341
  • Charles Acire v M Engola (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 (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
  • 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
  • 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
  • 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
  • Dering v. Earl of Winchelsea [1787] EngR 39, (1787) 1 Cox 319, (1787) 29 ER 1184
  • 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
  • Henry Denny Sons (Ireland) Ltd. v. Minister of Social Welfare [1998] 1 IR 34
  • Ready Mixed Concrete (South East) Ltd v. Minister of Pensions and National Insurance [1968] 2 QB 497
  • The Florida Bar v. Sperry, 140 So. 2d 587, 591 (Fla. 1962); 373 U.S. 379 (1963)
  • London, Chatham & Dover Ry. Co. v. South Eastern Ry. Co. (1892) I Ch. 120
  • Carmichael v. Caledonian Railway Co. (1870) 8 M (HL) 119

Full judgment

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Pimer v Bakayana and 4 Others (Civil Suit No. 319 of 2019) [2022] UGCommC 91 (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.