Court setback exposes Bitature to prosecution

Protea Hotel in Naguru, Kampala, is one of Mr Bitature’s properties the creditor is putting up for sale, according to a public auction advert put in the media last week. PHOTOS/ISAAC KASAMANI

What you need to know:

  • The businessman had ran to court seeking a temporary injunction against Vantage and its agencies from commencing any private prosecution until the final disposal of a pending contempt of court case.

The Commercial Court’s decision yesterday not to halt plans by creditor Vantage Mezzanine Fund II partnership, a South African firm, to privately prosecute businessman Patrick Bitature and his wife Carol, means the duo is now liable to trial.
The entrepreneur was unavailable to comment on the ruling as was his lawyer, Mr Fred Muwema, whom Justice Stephen Mubiru ordered to personally pay costs of what he said was a case without “legal basis”.

READ: Lender, lawyers fight over Bitature property
Businessman Bitature ran to court, seeking a temporary injunction against Vantage and its agencies from commencing any private prosecution, or legal action, until the final disposal of a pending contempt of court case.

The ruling
But in his ruling delivered yesterday morning, Justice Mubiru dismissed the businessman’s bid for protection, deciding that it lacked a “legal basis”.
“The applicants’ (the Bitatures and their companies) need for such protection must be weighed against the corresponding need of the respondents (Vantage) to be protected against injury resulting from being prevented from exercising their own legal rights for which it may not be adequately compensated in damages if uncertainty were resolved in its favour at the trial,” ruled Justice Mubiru.
The case, which has been filed in different forms before different judges, resulting in varying decisions on the changing pleadings, arose from allegations by Vantage Mezzanine Fund II partnership that Bitature, his wife Carol and their companies defaulted on a $10m (Shs36b) taken in 2014.

Elizabeth Royal Apartments in Kololo, Kampala, is another of Mr Bitature’s properties that Vantage Mezzanine Fund II partnership is seeking to auction. 

Seeking loan recovery
Subsequently, the creditor last week placed a public auction advert in the media, putting up for sale some of Mr Bitature’s properties including Protea Hotel – Naguru (Skyz Hotel), Elizabeth Royal and Moyo Close apartments in Moyo.
The Bitatures in their filings for an interim injunction argued that the plan by Vantage to prosecute them privately would embarrass and damage their reputation and that of the businesses.

“… That prosecution is intended to embarrass and coerce the applicants (Bitatures) into accepting the 1st respondent’s demand as well as to circumvent legal proceedings pending in the High Court and the International Chamber of Commerce over the same subject matter,” the applicant submitted to the court.
In yesterday’s ruling, Justice Mubiru dismissed the application for an injunction, and condemned Bitature’s lawyer Muwema personally pay costs for not having professionally advised the businessman and his companies not to institute a case.

“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 (Mr Muwema) 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,” ruled Justice Mubiru.
He added: “The costs must be met by the applicants’ advocates in person. Consequently, the application is hereby dismissed. The costs of this application will be met personally by counsel on record for the applicants.”
We were unable to speak to Mr Muwema whose known cell phone number was switched off.

Mr Bitature who was unable to receive our calls had not responded by short text message (SMS), as he advised, to our request for his comment, and next steps, following the ruling.
Justice Mubiru noted that had Mr Muwema exercised his legal competence and professionally advised his clients, the legal costs and wastage of time would have been avoided.
Court documents show that on December 11, 2014, Simba Properties Ltd and Simba telecom, executed an agreement (the Mezzanine Term Facility) with Vantage Mezzanine in which they borrowed $10m (Shs36b).

The securities executed for the loan were in the names of Bitature and his wife Carol and included Linda Properties Limited, Elgon Terrace Limited, Simba Properties Investments Co. Limited and Simba Telecom Limited (Simba Companies), where the duo is shareholder (or ultimate shareholder).
Under the deal, Vantage would in lieu of recovery take shares in the mortgages in the event of a default.
Vantage moved to take the shares, paying in excess of Shs800m to government in stamp duty, but Uganda Registration Services Bureau (URSB) did not register the shares, leading to another case that Justice Musa Ssekaana dismissed on grounds that the creditor was not registered in Uganda as a partnership and, therefore, lacked the legal status or identity to sue.

Documents tendered in the case determined yesterday by Justice Mubiru show that the Bitatures being directors and the ultimate shareholders of the Simba Companies, allegedly with full knowledge and intent to defraud Vantage, and other creditors, altered the shareholding of the Simba Companies in contravention of, among others, sections 323 of The Penal Code Act, (CAP 120).
They were also accused of allegedly making false statements contrary to section 324 of The Penal Code Act and conspiring to defraud Vantage and the public, contrary to section 309 of The Penal Code.

Mr Patrick Bitature

Justice Mubiru held that essentially if the Bitatures had succeeded in a suit for malicious prosecution, the court would be required to make an award of damages to compensate for their rights for injury to reputation suffered through malicious prosecution, if proved.
“I, therefore, do not find this to be a case in which the applicants (Bitatures) are likely to suffer loss, or, injury that cannot be quantified by payment of money, or that is not readily calculated or estimated. The applicants, therefore, have not discharged the onus of proof in this respect,” he ruled.

The case
The case, which has been filed in different forms before different judges, resulting in varying decisions on the changing pleadings, arose from allegations by Vantage Mezzanine Fund II partnership that Mr Bitature, his wife and their companies defaulted on a $10m (Shs36b) taken in 2014.
The lenders in an advert published in this newspaper on Monday noted that net repayable loan now stands at $34m due to interest accumulated over the past eight years since the lending.

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