Wakilii

Threeways Shipping Services (Group) Ltd v Kabiito & Anor (Miscellaneous Application No. 121 of 2018)

High Court · [2018] UGCOMMC 24 · 2018 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for review of ruling in Miscellaneous Application No. 133 of 2017 directing 1st Respondent to continue acting as Receiver
Decision
Application for review dismissed for lack of merit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the application for review. The alleged conflict of interest arising from the Receiver also acting as advocate for the appointing creditor was not an error apparent on the face of the record because the law does not expressly prohibit such appointments and circumstances may exist where advocates can be appointed as Receivers. Further, the conflict of interest issue was not raised or considered in the original application and cannot form the basis for review.

Outcome

Application for review dismissed for lack of merit

Facts

The Applicant company received financing from the 2nd Respondent bank. Following alleged default, the 2nd Respondent appointed the 1st Respondent as Receiver under powers in a debenture over the Applicant's assets. The Applicant initially accepted the appointment but the directors subsequently resisted and refused to hand over management. The 1st Respondent applied to court in Miscellaneous Application No. 133 of 2017 seeking declarations as to the Receiver's duties and functions. The court granted that application and directed the 1st Respondent to continue acting as Receiver. The Applicant then brought this application for review on grounds that the 1st Respondent could not lawfully act as both Receiver of the Applicant and advocate for the 2nd Respondent, creating a conflict of interest that constituted an apparent error on the face of the record.

Issues

  1. Whether the court's ruling in Miscellaneous Application No. 133 of 2017 directing the 1st Respondent to continue acting as Receiver contained an apparent error on the face of the record.
  2. Whether the 1st Respondent's simultaneous role as Receiver of the Applicant and advocate for the 2nd Respondent constitutes a conflict of interest warranting review.
  3. Whether an application for review can properly be grounded on matters not considered in the original application being reviewed.

Orders

  • Application dismissed.
  • Costs to abide the final decision of the suit.

Rules and key headnotes

Review — Grounds — Error Apparent on Face of Record
An error apparent on the face of the record must be an error on a substantial point of law staring one in the face, leaving no option of two or more opinions; an error which has to be established by a long process of reasoning or on points where there may be conceivably two opinions cannot be said to be an error apparent on the face of the record.
Receivership — Appointment — Conflict of Interest
The law does not expressly prohibit the appointment of a Receiver from the same firm representing a creditor, and there are circumstances where advocates can be appointed as Receivers notwithstanding their relationship with the firm that has taken the company to court.
Receivership — Removal — Grounds
A Receiver may be removed at the instance of the shareholders or directors of a company under circumstances of misfeasance, gross negligence, fraud, fundamental breaches, transgressions and obvious bias exhibited by the Receiver.
Review — Scope — New Grounds
To base an application for review on a prayer which did not form part of the original application to be reviewed is improper and would occasion injustice in as much as it was not under consideration in the earlier proceedings.
Receivership — Duties and Powers
A Receiver's duties include making returns and accounts, owing fiduciary duties to the company, investigating the causes of the company's failure and conduct of the managers, taking charge of the business, having final say over all operational decisions taking over from the directors, and making use of every opportunity to restructure and if possible breathe fresh life into the company.

Cases cited (3)

  • Re Pantmaenog [2004] 1 AC 158
  • Re Advisory Opinion to the Governor (Depco) 593 A 2d 943 (1991)
  • National Labour Party and Another v Head of Civil Service and Director of Personnel Management (Civil Application No. 287 of 2000)

Full judgment

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

Threeways Shipping Services (Group) Ltd v Kabiito & Anor (Miscellaneous Application No. 121 of 2018) [2018] UGCommC 24 (20 June 2018)
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.