Uganda Telecom Limited v Ondoma (MISCELLANEOUS CIVIL APPLICATION No. 0012 OF 2018)

Observed later treatment

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Holding

Held that an advocate's professional fees constitute a contingent claim arising from the moment of instruction and acceptance, not a future claim. Where a company enters into an administration deed under the Insolvency Act after instructing an advocate, the advocate's claim for fees — even if not yet quantified or taxed — is caught by the deed and binds the creditor. The advocate may not proceed with execution by way of garnishee proceedings without first proving the debt to the administrator or obtaining leave of the court.

Outcome

Garnishee Order Nisi set aside; respondent bound by applicant's administration deed and may not proceed with execution without proving debt to administrator or obtaining court leave.

Facts

Uganda Telecom Limited instructed Ondoma Sammuel, an advocate, on 11 November 2015 to represent it in High Court revision and stay of execution proceedings. The advocate successfully represented the company, securing decisions in December 2015 and July 2017. On 20 November 2017, an advocate-client bill of costs was taxed at 10,000,000 Ugandan Shillings. Uganda Telecom failed to pay. On 19 February 2018, the advocate secured a Garnishee Order Nisi. In the meantime, Uganda Telecom had obtained a provisional administration protective order on 28 April 2017, an administrator was appointed on 10 May 2017, and an administration deed was executed on 22 May 2017 (later extended to 22 November 2017). Uganda Telecom applied to set aside the garnishee order on the ground that the advocate's claim was caught by the administration deed and execution was barred under the Insolvency Act.

Issues

1. Whether the respondent advocate is bound by the applicant company's administration deed executed under the Insolvency Act.
2. Whether a creditor bound by an administration deed may enforce a garnishee order without first obtaining leave of the court.

Orders

• Application allowed.
• Garnishee Order Nisi set aside.
• Each party to bear its own costs of this application and the proceedings leading to the Garnishee Order Nisi.

Rules and key headnotes

Legislation cited (12)

• Judicature Act s.33
• Civil Procedure Act s.98
• Insolvency Act 2011 s.140
• Insolvency Act 2011 s.143(1)(f)(ii)
• Insolvency Act 2011 s.148(3)(a)
• Insolvency Act 2011 s.164(1)(e)
• Insolvency Act 2011 s.164(2)(b)(ii)
• Civil Procedure Rules O.52 r.1
• Civil Procedure Rules O.52 r.3
• Insolvency Regulations 2013 reg.146(1)
• Insolvency Regulations 2013 reg.163(2)
• Insolvency Regulations 2013 reg.172(1)(2)

Cases cited (10)

• Roder Zelt-und Hallenkonstruktionen gmbh v. Rosedown Park Pty Ltd and another (1995) 13 ACLC 776
• J & B Records Ltd v. Brashs Pty Ltd (1995) 16 ACSR 285, 13 ACLC 458
• Brash Holdings Pty Ltd v. Katile Pty Ltd (1994) 12 ACLC 472; [1996] 1 VR 24
• Lam Soon Australia Pty Ltd (administrators appointed) v. Molit (No 55) Pty Ltd (1996) 22 ACSR 169
• Selim v. McGrath (2003) 177 FLR 85
• Larkden Pty Ltd v. Lloyd Energy Systems Pty Ltd [2011] NSWSC 1567
• BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v. Sutton [2011] NSWCA 414
• Lumweno and Co. Advocates v Transafrica Assurance Company Ltd (Civil Appeal No. 95 of 2004)
• Foxcroft v The Ink Group Pty Ltd (1994) 12 ACLC 1063
• J & B Records v Brashs Pty Ltd (1994) 12 ACLC 534

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

• Ezati v Maracha District Local Government (Civil Appeal 10 of 2021)

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