Thursday, July 25News That Matters

Equity Bank, Meera Investments’ claims against Simbamanyo thrown out by the Commercial Court

Simbamanyo has won the second round in the cases he filed against Equity Bank, Sudhir Ruparelia’s Meera Investments Limited, and Ronald Luwangula’s Luwaluwa Investments Limited.

Simbamanyo Estates Limited through their lawyers M/S Kakuru & Co Advocates appealed against the decision of the Registrar, His Worship Kisawuzi who had awarded instruction fees of UGX 600,000,000/= to Equity Bank, UGX 400,000,000/= to Meera Investments Ltd, UGX 300,000,000/= to Luwaluwa Investments for its applications (No. 224, 3 and 718 all of 2021), which applications Simbamanyo had lost in a bizarre ruling by Lady Justice Susan Abinyo.

Simbamanyo appealed the taxation award and their major ground of the appeal was that it was not only unreasonable, inaccurate, manifestly excessive, and unfair but highly unconscionable and penal.

In a strange show of impunity and over entitlement, Meera Investments, Equity Bank Uganda Ltd, & Luwaluwa Investments Ltd through their lawyers had submitted a huge bill of costs in excess of over UGX 5b, cross-appealed the said decision claiming the costs were manifestly low and that they should be awarded the higher costs they had claimed.

However the Head of the Commercial Court, Justice Stephen Mubiru, after studying the taxation award by His Worship the Registrar, the submissions by  the various legal firms representing the litigants, gave  the following ruling and orders;

  • Equity Bank, Meera Investments and Luwaluwa were not entitled to costs in (Civil Suit No. 837 of 2020). Because in that suit that abated there was no order of court granting them such costs
  • The Registrar was wrong to base his award on the value of the properties of Simbamanyo House and Afrique Suites Hotel when it was not the issue before court. The issues were matters of law on abatement of proceedings. The Registrar should have therefore relied on item 1 (e) vii (b) of the 6th Schedule of The Advocates (Remuneration and Taxation of Costs) Rules, as amended which provides for a basic fee of UGX 300,000/= and only increased based on factors such as the importance to the litigants of the matters in dispute, the complexity or the extent to which the matter at hand required deployment of a considerable amount of industry on the part of counsel.
  • The appeal succeeded and the entire taxation award was set aside.
  • The taxation having been based on wrong principles of law was therefore to revert back to the Registrar to be taxed afresh
  • Each party was to bear its own costs.

The Judge gave another ruling on Simbamanyo’s application for a temporary prohibitive injunction which was denied. The respondents in characteristic braggadocio put out a statement through their apologists (the local tabloids) to the effect that was a big set back to the applicants. However anybody who read that ruling with unclouded mind will come to a different conclusion. In his ruling the Hon Judge stated inter alia

1.            Whether the applicants have a prima facie case

On this issue the Hon Judge stated that although the merits of the respective cases and their relative strengths are not to be considered at this stage the court should bear in mind what the applicants must plead in order to succeed.

The applicants seek declarations that the sale was in violation of their right of redemption as mortgagors, the sale was tainted by fraudulent and illegal acts the properties were wrongly sold and at gross under value the applicants businesses operated from the said properties were wrongly sold and so on.

These claims are premised on facts pleaded attributing fraud to the respondents the applicants further contend that the underlying credit arrangement that lead to the exposure of both properties as security was illegal.

In their written statements of defense the respondents contest the claims. The pleadings of both parties raise pertinent issues of law and fact. I am therefore satisfied that the applicants claims are not frivolous or vexatious there are serious questions of law and to be tried. Accordingly, a prima facie case has been established

2.            Whether the applicants will have an adequate remedy at law or will be irreparably harmed if the injunction is not issued.

On this issue His Lordship stated thus

If the harm could not be quantified by payment of money or if the harm is not readily calculated or estimated……or where the potential harm that could follow should a court order not be granted is difficult or impossible to calculate and quantify at later stage in the suit. The Hon Judge was of the view that if the injunction is not granted the applicants are not likely to suffer loss or injury that cannot be quantified by payment of money.

3.            Balance of convenience (whether the threatened injury to the applicants outweighs the threatened harm the injunction might inflict on the respondents)

On this issue the Hon Judge stated thus:

Since the court is in doubt considering the outcome of its consideration of the first two factors the third part of the test involves the court assessing which of the parties would suffer greater harm from the granting of or refusal of the injunction pending trial. Unless the material available to the court at hearing of the application for interlocutory injunction fails to disclose that the applicant has any real prospect of succeeding in his or her claim at the trail, the court should go on to consider whether the balance of convenience lies in favor of granting or refusing the interlocutory relief sought.

It is necessary to assess the harm to the applicant if there is no injunction and the prejudice to the respondents if an injunction is imposed

The Hon Judge went on to conclude thus:

Considered in the light of the effect of the delays inherent in the administration of justice a temporary injunction will have a disproportionate effect on the respondents in a manner that would have the undesirable effect of predetermining some of the issues due for trial, I, therefore, find that the balance of convenience in favors of the respondents, in light of the foregoing the order if granted would inflict greater  hardship than it would avoid hence the balance favors not granting the temporary injunction the order.

Finally, whereas this was an interim application whose substance does not touch on the merits of the case, the main suit of which is coming up for hearing on the 7th of June 22 before his lordship Steven Mubiru at the high court commercial division

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