THIRD PARTY

PROCEEDINGS/CLAIMS
Third party proceedings
A third party claim is a claim made by a defendant within existing legal proceedings seeking to enjoin a
person not party to the original action, to enforce a related duty.

Under order 1 rule 14 CPR, it is provided that:

“Where a defendant claims to be entitled to contribution or indemnity over against any person not a
party to the suit, he or she may, by leave of the court, issue a notice (hereafter called a “third party
notice”) to that effect”.

In the same spirit, Order 1 rule 21 of the CPR states that:

“Where a defendant claims to be entitled to contribution or indemnity against any other defendant in
the suit, a notice may be issued and the same procedure adopted for the determination of such questions
between the defendants as would be issued and taken against the other defendant, if the last-mentioned
defendant were a third party; but nothing in this rule shall prejudice the plaintiff against any defendant
in the suit.”
Third Party…
A third party notice serves to enforce duties which the third party owes to the defendant issuing the third
party notice.
In Lasto Bosco Mayanja vs Lugya Ronald, HCMA 1236 of 2014 (Land Division), Justice Monica Mugenyi
observed that:
“Quite clearly, Order 1 rule 14(1) and (2) of the CPR is confined to cases where a defendant claims
indemnity or contribution from a third party that would otherwise be a stranger to the suit. It is trite law
that for a third party to be legally joined to a suit, the subject matter as between the defendant and the
third party must be the same as that between the defendant and the plaintiff, and similarly the cause of
action between the defendant and third party must be the same as the original cause of action. See NBS
Television Ltd. Vs. Uganda Broadcasting Corporation (supra) and Yafesi Walusimbi vs. Attorney General
of Uganda (1959) 1 EA 223 at 225. In Yafesi Walusimbi vs. Attorney General of Uganda (supra), where the
plaintiff’s cause of action was found to have been premised in negligence while the defendant’s cause of
action against the third party was rooted in fraud, the third party notices were cancelled.”
The learned judge went on to observe that:
“In the instant case, the plaintiffs’ case is rooted in trespass by the defendant onto the suit land pursuant
to an allegedly unauthorised and illegal sale transaction he executed with a beneficiary of an Estate that
includes the disputed land. On the other hand, the defendant’s claim for indemnification by the third
party appears to be premised on misrepresentation in the sale transaction in respect of the suit
land. Although they pertain to the same subject matter, I find these to be two distinct causes of actions.
Lasto Bosco Mayanja case…
 Furthermore, it seems to me that an applicant for third party notice would be required to establish his/ her right
to indemnity or contribution. In the instant case, the applicant’s application is premised on a claim in indemnity
and not contribution. Nonetheless, for completion, I shall briefly address the concept of contribution in third
party proceedings. When two or more people are jointly liable for the same tort and a plaintiff claiming
thereunder seeks to make good his injury from one of them as defendant, the said defendant may seek
contribution from other tortfeaser(s). See Oxford Dictionary of Law, Oxford University Press, Seventh Edition,
p.132. I find a claim for contribution inapplicable to the present circumstances as the defendant and third party
are not jointly liable in trespass herein.
 On the other hand, the right to indemnity is well articulated in the following authorities. In Eastern Shipping Co.
Vs. Quah Beng Kee (1924) AC 177 at 182 it was held:
 “A right to indemnity generally arises from contract express or implied, but is not confined to cases of
contract. A right to indemnity exists where the relationship between the parties is such that either in law or in
equity there is an obligation upon the one party to indemnify the other. ... These considerations were all dealt
with by the Lords Justices in Birmingham and District Land Co. Vs. London and North Western Ry Co.”
Third Party….
 In Birmingham and District Land Co. Vs. London and North Western Railway Co. (1887) 34 Ch. D 261 at 271, Cotton LJ had
clarified:
 “Of course if A requests B to do a thing for him, and B in consequence of doing that act is subject to some liability or loss, then
in consequence of the request to do the act the law implies a contract by A to indemnify B from the consequence of his doing
it. In that case there is not an express but an implied contract to indemnify the party for doing what he does at the request of
the other.”
 In the same case (Birmingham supra), Bowen LJ drew a distinction between the right to indemnity as against the right to
damages in the following terms:
 “A right to indemnity as such is given by the original bargain between the parties. The right to damages is given in
consequence of the breach of the original contract between the parties.”
 The foregoing decisions were applied in Edward Kironde Kaggwa vs. L. Costaperaria & Another (1963) 1 EA 213. In that case, the
plaintiff sued the defendant for damages arising from the latter’s trespass on his land, in the course of which he removed some
soil therefrom. The defendant sought indemnification from a third party who had allegedly given him a license to enter onto the
land and remove the soil. It was held that the defendant could establish a claim against the third party for damages for breach
of contract or misrepresentation but not indemnity.
 Similarly, in the instant case I find nothing in the sale agreement between the two parties that would denote an express or
implied obligation to indemnify the Applicant. In my considered view, there is no legal or equitable basis for a finding that the
misrepresentation by the Respondent created upon him an obligation to indemnify the Applicant for any liability that could arise
therefrom. On the contrary, the need for due diligence and inquiry prior to any dealings in land has been duly recognised as an
integral process in land transactions. See Kampala Land Board & Another vs. Venansio Babweyaka & Others Civil Appeal No. 2
of 2007 (SC). In my judgment, therefore, misrepresentation per se would not entitle the applicant to a right to indemnity as
against the Respondent, but rather establishes a claim for damages against the proposed third party.
 In the result, I would dismiss this application with no order as to costs.”
Issuance of Third Party
Notice…Procedure
In Senfuka Isaac v Fred Kakooza HCMA 554 of 2014 (HC at Nakawa), Lady Justice Elizabeth Nahamya stated that:
“It is important to note that the issuance of a third party notice is applicable in proceedings where there exists someone from
whom the Defendant, in case he is himself found liable in an action, is entitled to recover some portion of the amount of money
which he would have to pay to the Plaintiff known as contribution or will be entitled to be wholly reimbursed or entitled to an
indemnity. Hence, in accordance with the facts, the cause of action in High Court Civil Suit No. 223 of 2014 Mukisa Racheal vs.
Ssenfuka Isaac & Another is different from the Applicant’s claim against the Respondent herein. In the High Court case of Lake
Victoria Bottling Co. & 2 Others vs. Crown Bottling Ltd Civil Suit No. 220 of 1992 reported in [1994] KALR 572 Byamugisha, J.
while handling an Application of this nature, held that before Court can exercise its discretion to issue Third Party notice, it has
to evaluate the allegations of the Plaintiff in terms of his legal claim to the relief he is seeking. The Court also has to evaluate the
Defendant’s allegations against the Third Party. Therefore, Court has to be satisfied that the substance of each claim is the same
and that there is a linkage between all the claims before issuing the notice.”
Procedure
This is stipulated in Order 1 rule 14(2) which stipulates that:
“The leave shall be applied for by summons in chambers ex parte supported by affidavit.”
Seer: Lasto Bosco Mayanja vs Lugya Ronald, HCMA 1236 of 2014 (Land Division)

A copy of the notice is to be filed and served on the person according to the rules relating to service of summons (Order 14 rule
2(3) CPR) and according to sub rule 4, the notice shall state the nature and grounds of the claim and shall, unless otherwise
ordered by the court, be filed within the time limited for filing his or her defence.

The notice takes the form of Form 23 of Appendix A to these Rules with such variations as circumstances require, and a copy of
the plaint shall be served with the notice. (Order 1 rule 14(5) CPR.
Appearance or Nonappearance of a third party
Under Order 1 rule 15 of the CPR, it is provided that:
“If a person not a party to the suit who is served as mentioned in rule 14 of this Order (hereafter called the “third
party”) desires to dispute the plaintiff’s claim in the suit against the defendant on whose behalf the notice has
been given, or his or her own liability to the defendant—
(a) the third party must enter an appearance in the suit on or before the day specified in the notice; and
(b) in default of his or her so doing he or she shall be deemed to admit the validity of the decree obtained against
the defendant, whether obtained by consent or otherwise, and his or her own liability to contribute or indemnify,
as the case may be, to the extent claimed in the third party notice, except that a person so served and failing to
enter an appearance within the period fixed in the notice may apply to the court for leave to enter an appearance,
and for good cause such leave may be given upon such terms, if any, as the court shall think fit.”

Order 1 rule 16 provides that:

“Where a third party makes default in entering an appearance in the suit, in case the defendant giving the notice
suffers judgment by default—
(a) the defendant shall be entitled, after causing the satisfaction of the decree against himself or herself to be
entered upon the record, to judgment against the third party to the extent of the contribution or indemnity
claimed in the third party notice; and
(b) the court may upon the application of the defendant pass such judgment against the third party before the
defendant has satisfied the decree passed against him or her, but the court may set aside or vary any judgment
passed under this rule upon such terms as may seem just.”
 Appearance and Nonappearance
Order 1 rule 17 states that:
“Where a third party makes default in entering an appearance in the suit, in case the suit is tried and
results in favour of the plaintiff, the court may either at or after the trial enter such judgment as the
nature of the suit may require for the defendant giving notice against the third party; but execution of
the judgment shall not be issued without leave of the court, until after satisfaction by the defendant
of the decree against him or her; and if the suit is finally decided in the plaintiff’s favour, otherwise
than by trial, the court may, upon application ex parte supported by affidavit, order such judgment as
the nature of the case may require to be entered for the defendant giving the notice against the third
party at any time after satisfaction by the defendant of the decree obtained by the plaintiff against
him or her.”

Under Order 1 rule 18, it is provided that:

“If a third party enters an appearance pursuant to the third party notice, the defendant giving the
notice may apply to the court by summons in chambers for directions, and the court, upon the hearing
of the application, may, if satisfied that there is a proper question to be tried as to the liability of the
third party to make the contribution or indemnity claimed, in whole or in part, order the question of
such liability, as between the third party and the defendant giving the notice, to be tried in such
manner, at or after the trial of the suit, as the court may direct; and, if not so satisfied, may order such
judgment as the nature of the case may require to be entered in favour of the defendant giving the
notice against the third party.”
 In the case of Bankshire Technologies Ltd v Derr Logistics Ltd and Enhas ( as Third Party), HCMA 517 of 2015 (Commercial
Court), Justice Madrama observed that:
 “Third Party proceedings can be considered independently of the Plaintiff's suit against the Defendant. Order 1 rule 18 of the
Civil Procedure Rules provides that where the Third Party has entered appearance pursuant to a Third Party notice, the
Defendant giving the notice may apply to the court by chamber summons for directions and the matter is primarily between
the Defendant and the Third Party. Where the court is satisfied that there is a proper question to be tried as to the liability of
the third-party to make contribution or indemnity claim, in whole or in part, it may order that the question of such liability as
between the third-party and the Defendant should be tried in such manner at or after the trial of the suit as the court may
direct.
 In Stott v West Yorkshire Road Car Co Ltd and another (Home Bakeries Ltd and another, third parties) [1971] 3 All ER 534 and
at page 537 Lord Denning MR considered Third Party proceedings as independent of the main action. He held that Third Party
proceedings may continue even after a settlement between the Plaintiff and the Defendant and whether the settlement is on
the merits or not. He said:
 “I turn now to the point of procedure. It was said that in consequence of the settlement, the original action is dead, and
being dead, there is nothing on which the Third Party proceedings can bite. I cannot agree with this contention. ... once
the action itself is settled, the Third Party proceedings can proceed in just the selfsame way as if they had been started by
a separate action. It is not necessary to bring a new action.”
 Salmon L.J at 539 further added that proceedings between the Plaintiff and Defendant do not necessarily prejudice trial of
proceedings between the Defendant and Third Party. He held:
 ‘It is obvious that when these third party proceedings are fought out, the views which I have expressed cannot
conceivably prejudice the third parties. They will be fully entitled to raise in their defence to third party proceedings that
the Defendants were not to blame at all. They can also raise the defence that they, the third parties, were not to blame.
They could, I suppose, if they liked, say that they were wholly to blame for the accident and that therefore there was no
negligence whatever on the part of the Defendants.”
Objects and Nature of Third Party Proceedings
Objects
1. To prevent multiplicity of actions and to enable court to settle disputes between all parties in one proceeding and save
expenses.
2. To prevent the same issue from being heard twice with a possibility of different results.
3. To have the issue between defendant and 3rd party resolved in the original action between the plaintiff and defendant.
4. To have the issue between defendant and 3rd party decided as soon as possible after the decision in the original action
between the plaintiff and defendant.

In lieu of commencing 3rd party proceedings, the defendant may sue a 3rd person, in a separate action to enforce his rights.

Nature of third party proceedings

This order applies only to cases where the defendant claims to be entitled to contribution or indemnity against a third party.

A third party proceeding is in effect an independent action with a 3rd party becoming a defendant, with a right to counter claim
or having the right to conduct a discovery of opposing parties. Where the main action is settled, a 3rd party proceeding may
still continue. A 3rd party may be dismissed for want of prosecution, even though the main action is still proceeding.

Under the rules of court, a 3rd party is not strictly a defendant against the plaintiff in the original suit, but the rules generally
provide that a 3rd party may dispute the liability of the defendant on the original action to the plaintiff.

A 3rd party may also under the rules take third party proceedings against any other person including the plaintiff in the original
action (See rule 20).

When the 3rd party claims contribution or indemnity, such third party may counter claim against the defendant in the original
action, at whose instance he was made a 3rd party, but not against the plaintiff in the original action. As a 3rd party is not a
party to that action.
Scope of Third Party Proceedings
In Sango Bay Estates vs. Dresdner Bank [1971] EA 307, it was stated that the general scope of third party
procedure is to deal with cases in which, all the disputes arising out of a transaction as between the Plaintiff
and the Defendant, and between the Defendant and a Third Party can be tried and settled in the same action.
Similarly the case of Yafesi Walusimbi vs. Attorney General [1959] EA 223 where it was held that in order for a
Third Party to be lawfully joined, the subject matter between the Third Party and the Defendant must be the
same as the subject matter between the Plaintiff and the Defendant and the original cause of action must be
the same. Court also held that the Defendant must have against the Third Party a direct right of indemnity,
which right must, generally, if not always, arise from a contract express or implied.

A claim for contribution or indemnity may arise out of an express or implied contract or from the relationship
of parties or where a right of indemnity exists, when the relationship between the parties is such that either in
law or equity, there is an obligation upon one party to indemnify the other.

Facts in the original suit and the 3rd party proceedings must be related. The real question to determine is
whether on considering the facts upon with the plaintiff relies against the defendant in the main action, issues
arise of the relations between the defendant and the 3rd party. There must be a connection of fact or subject
matter between the claim upon which the plaintiff sues in the main action and the claim of the defendant
against the 3rd party.
 END OF SLIDES