Wakilii

Priamt Enterprises Limited v Attorney General (Civil Appeal 3 of 1999)

Court of Appeal · [1994] UGCA 1 · 1994 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court ruling dismissing the suit for failing to disclose a cause of action
Decision
Appeal dismissed with costs; High Court dismissal of the suit for lack of cause of action upheld

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal dismissed an appeal against a High Court ruling that struck out the appellant's suit for disclosing no cause of action against the Attorney General. The debt was owed by Uganda Transport Company (1975) Ltd, an independent limited liability company suable in its own name, so the Government was not liable merely as sole shareholder. Section 23 of the PERD Statute could ground liability only where the debtor public enterprise had been sold and proceeds lay in the Divestiture Account; the plaint averred only an intention to sell. The suit was premature. The Court also confirmed the established procedure of disposing of a decisive point of law at the pleadings stage.

Outcome

Appeal dismissed with costs; High Court dismissal of the suit for lack of cause of action upheld

Facts

The appellant, Priamit Enterprises Ltd, supplied tyres to Uganda Transport Company (1975) Ltd (UTC), a company of which the Government of Uganda was the sole shareholder. UTC owed the appellant Shs.8,812,500 and defaulted in payment despite demands. The Government, through General Notice No.85 of 1994 and newspaper advertisements, announced its intention to liquidate UTC, appointing joint liquidators and inviting creditors to lodge claims. The appellant sued the Attorney General, contending that under s.23 of the PERD Statute the Government was liable to pay the debt from the divestiture account. At trial the respondent raised a preliminary objection that the plaint disclosed no cause of action, arguing that UTC was a limited liability company suable in its own name and that the Government could not be liable for its debts. The High Court upheld the objection and dismissed the suit. The plaint averred only an intention to sell UTC, not that it had been sold with proceeds standing in the Divestiture Account.

Issues

  1. Whether the trial judge was correct to hold that the plaint as amended disclosed no cause of action against the respondent.
  2. Whether pleading that s.23 of the Public Enterprises Reform and Divestiture Statute made the respondent liable made any difference.
  3. Whether the learned trial judge followed the correct procedure in dismissing the appellant's suit.

Orders

  • Appeal dismissed.
  • Costs of the appeal awarded to the respondent.

Rules and key headnotes

Civil Procedure — Pleadings — Cause of Action — Essential Elements
For a plaint to disclose a cause of action it must show that the plaintiff enjoyed a right, that the right has been violated, and that the defendant is liable; failing which the plaint is liable to be rejected under Order 7 rule 11(a) of the Civil Procedure Rules.
Company Law — Separate Legal Personality — Liability of Sole Shareholder
A company incorporated with limited liability is liable to be sued in its own name and for its own debts, and its sole shareholder, including Government, cannot be held liable for the company's debts while the company continues to exist with that status.
Commercial Law — Public Enterprises — PERD Statute s.23 — Government Liability for Public Enterprise Debts
Under section 23(a) of the PERD Statute, Government's power to pay creditors of a public enterprise from the Divestiture Account arises only where the debtor public enterprise has been sold and the proceeds are in that account, and payment is discretionary; a plaint that avers only an intention to sell the enterprise discloses no cause of action.
Civil Procedure — Preliminary Objections — Disposal of Decisive Points of Law at Pleadings Stage
Where a point of law, if decided one way, would be decisive of the litigation, the court may take advantage of the rules to have it disposed of at the close of pleadings or shortly afterwards without waiting for evidence.
Civil Procedure — Appeals — Right of Appeal Against a Decree of the High Court
An order of the High Court dismissing a suit conclusively determines the rights of the parties and is a decree under section 2 of the Civil Procedure Act, against which an appeal to the Court of Appeal lies as of right without leave.

Legislation cited (10)

Cases cited (7)

  • Mugenyi & Co. Advocates v Attorney General (Civil Appeal No. 4 of 1995)
  • Auto Garage and others v Motokov [1971] EA 514
  • Averett -vs- Ribbands and Another [1952] 2 Q.B.
  • Dr. James Rwanyarare & Another v Attorney General (Constitutional Petition No. 11 of 1997)
  • Ismail Serugo v Kampala City Council & Another (Constitutional Petition No. 14 of 1997)
  • Haji Ntege Sebaggala v Attorney General & 2 Others (Constitutional Petition No. 1 of 1999)
  • Wycliff Kigundu v Attorney General (Civil Appeal No. 27 of 1992)

Full judgment

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

Priamt Enterprises Limited v Attorney General (Civil Appeal 3 of 1999) [1994] UGCA 1 (23 June 1994)
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.