By Uganda Online Media
Kampala: The war between city businessman Patrick Butature and South African based money lender, Vantage Mezzanine Fund is far from ending as Justice Stephen Mubiru just delivered another ruling ordering City Lawyer Fred Muwema to personally pay legal costs for misleading his client Bitature.
“This application catastrophically lacks a legal basis. The legal costs and time wasted in this litigation could have been avoided entirely if the applicants’ advocates had discharged their duties to the expected minimum standards of professional competence. It qualifies as a “rare and exceptional” case where it would not be fair for the applicants to bear the costs. The costs must be met by the applicants’ advocates in person” Justice Mubiru said in his ruling delivered today May 24 2022.
According to Justice Mubiru, ”an advocate should not be held to have acted unreasonably simply because he or she acted for a client who has a bad case, but it would be quite different if the advocate gives his or her assistance to proceedings which are an abuse of process.
Mubiru further noted ”I find that in 10 filings of this application, the advocates’ default rises to a “rare and exceptional” level. Basic professional competence demands that an advocate seeking interlocutory relief should first establish that there is a substantive matter pending before the court, which they did not. Basic professional competence further demands that an advocate seeking the intervention of this court in proceedings pending before a magistrate’s court should do so by invoking its prerogative or
15 supervisory powers, and not otherwise.
”In the same proceeding, they join as respondent advocates whose only role was to facilitate their client’s cause, thereby seeking to restrain professional
colleagues from carrying out their duties as officers of the court. It is an advocate’s professional responsibility to ensure that all suits and applications filed possess a proper legal basis, yet this application is entirely misconceived and devoid of legal foundation.
“This application catastrophically lacks a legal basis. The legal costs and time wasted in this litigation could have been avoided entirely if the applicants’ advocates had discharged their duties to the expected minimum standards of professional competence. It qualifies as a “rare and exceptional” case where it would not be fair for the applicants to bear the costs. The costs must be met by the applicants’ advocates in person,” concluded the ruling.
This whole Saga began in 2014 when Simba Properties Investment Company Limited (SPIC) (as borrower) and Patrick Bitature (as guarantor and promotor) borrowed US$10,000,000 (Loan) from Vantage to refinance a portion of the Simba Groups’ existing debt and to fund the completion of Simba’s Skyz Hotel in 2014 but since then, Bitature has never paid any single coin arguing that the company isn’t legally registered in Uganda and therefore can’t make mistake to carry out any business with ‘an illegal company.
According to Vantage, the 2014 loan matured and fell due for repayment in December 2019. but instead of making efforts to repay the Loan, the Simba Group and Bitature resorted to litigation, claiming that Vantage’s Loan was invalid and signed under duress and therefore Simba, having used the money, did not have to repay it.
Bitature, through his lawyers, doesn’t deny that he received the money but has since then never paid a penny, why?, he argues that the company isn’t legally registered in Uganda and therefore can’t carry out any business, let alone borrowing billions of money to him! Bitature’s debt, according to sources had swollen close to thirty million US dollars (Ush100 billion), of which, instead of paying back, he changed gears and asked for legal paperwork for the company that borrowed him.
Bitature’s opinion was indeed cemented by Hon. Justice Musa Ssekaana of the High Court when he declared in Misc. Cause No. 205 of 2021 Vantage Mezzanine Fund II Partnership vs Simba Properties Investment Co. Ltd, that Vantage Mezzanine Fund II Partnership is a non-existent legal entity which had no locus standi to file the suit.
”In the present case, the applicant contends that it is a partnership, which means that it must comply with the law which requires registration in order to have the capacity to sue or to be sued in Uganda. The applicant’s status as a recognized entity in South Africa has not been proved to the satisfaction of this court since there is no single registered document that has been produced before this court apart from a few pages of the unregistered partnership agreement,” ruled Ssekaana.
He added, ”In the same vein, this Court rejects the submission of counsel for the applicant, that foreign partnerships are free to operate in Uganda outside the regulatory registration requirements contained in the Partnerships Act, 2010 and the Business Names Registration Act (Cap 109). Therefore, the international partnerships or foreign partnerships just like the Ugandan partnership cannot be recognized once they are not registered since their identities are unknown and it may open the door wide for fraud in their transactions and dealings.”
However, in Vantage’s public notice, it contends that despite the above ruling, it is not ready to give up on squeezing Bitature in all angels to cough their money amounting to US$34,000,000 (loan and interests).
”Vantage will not be deterred by the Simba Group’s and Bitature’s ‘continued abuse of court processes and public institutions, nor by their recent “PR campaign”, in their ongoing efforts to avoid their creditors and lawful obligations. Vantage will persist in the recovery of its long-overdue Loan, exercising its rights against the Security if need be.” Vantage retaliated.