THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)
MISCELLANEOUS APPLICATION NO. 0215 OF 2011
[ARISING FROM CIVIL SUIT NO. 0458 OF 2010]
KANAKULYA JOSEPH :::::::::::::::::::::::::::::::::::::::::::::APPLICANT
VERSUS
AFRICA POLYSACK IND. LIMITED:::::::::::::::::::::::::RESPONDENT
BEFORE: HON. LADY JUSTICE IRENE MULYAGONJA KAKOOZA
RULING
The applicant brought this application under the provisions of Order 36 rule 11 of the Civil Procedure Rules. He sought for orders that execution in HCCS 458/2010 be stayed, that the default judgment entered against him in the suit be set aside, and that he be granted unconditional leave to appear and defend the suit.
The grounds stated in the notice of motion were that the lawyer with the firm of advocates who had conduct of the suit left the firm before the conclusion of his application for leave to appear and defend the suit; that the same advocate was in possession of the case file and other lawyers in the firm did not know that the matter had been set down for hearing; that he has a good defence to the suit because his liability was incorrectly and fraudulently stated.
The application was supported by an affidavit deposed by the applicant on 20/04/2010. The respondent filed an affidavit in reply to oppose the application deposed by Subhasit Chartterjee, the Finance Manager of the Respondent, on 17/04/2011.
In his affidavit, the applicant stated that he retained Katuntu & Co. Advocates to represent him in HCCS 485/2010 and his file was assigned to one Angulo Emmanuel, an advocate practicing with that firm. That the said Mr. Angulo required him to depose an affidavit in support of his application for leave to appear and defend the suit, which he did on 12/01/2011. That he knew his case was proceeding well till he was informed that judgment had been entered against him. That he then learnt that Mr. Angulo left the firm of Katuntu & Co. in February 2011, and his application for leave to appear and defend was dismissed in the absence of counsel.
In support of the ground that he has a good defence to the suit the applicant stated that the plaint lacked particulars as to the cause and origin of the sum of shs. 192,700,540/= claimed by the plaintiff. That he could not have accumulated such a debt because his indebtedness to the respondent was not meant to go beyond a ceiling of shs. 10m named in a memorandum of understanding with the respondent, Annexure “A” to his affidavit. He further averred that he obtained a copy of the ledger account of January to March 2010 from the respondent and noted that the respondent had on several occasions billed him for goods that he had not ordered or received; that substantial cash payments that he had made had not been credited to his account; that other payments that he made on the respondent’s manager’s account, Mr. Twinamasiko Jackson, at Stabic Bank had also not been credited to his account. That in view of all this, the respondent’s claim against him was false, inaccurate and fraudulent. That the claim was also incompetently brought under Order 36 CPR.
In his affidavit in reply, Mr. Charterjee deposed that the applicant’s lawyers could not have known that the application for leave was coming for hearing because an affidavit in reply was served upon them in M/A No. 25/2011. A copy of the affidavit in M/A No. 25/2011, showing the acknowledgment of receipt of the same by Katuntu & Co. Advocates on 15/03/2011, was attached to the affidavit as Annexure “A.” That it was the applicant’s advocates that fixed the application for hearing and served it upon counsel for the respondent. That the applicant therefore did not show that he intended to attend the hearing of the application; neither did he show that he was represented by Mr. Angulo and not M/s Katuntu & Co. Advocates, generally. Finally that the applicant’s defence to the suit had no merit and therefore leave to defend the suit ought not to be granted to him.
In his submissions for the applicant Mr. Galisonga stated that the applicant had proved to court that he made an effort to hire an advocate but the said advocate disappointed him when he failed to appear in court and prosecute the application for leave to defend. He relied on the decision in Hakima Kyamanywa v. Sajjabi Chris C/A No, 1 of 2006 where in the Court of Appeal ruled that the mistake of counsel amounts to sufficient cause for setting aside a judgment in default under Order 9 rule 24 CPR, and prayed that the judgment be set aside and the applicant be granted leave to defend the suit.
Mr. Kigozi for the respondent argued that the applicant did not prove that Mr. Angulo had personal conduct of the case, as opposed to the firm of Katuntu & Co. in which he said there were many advocates. That the applicant should have followed up the application himself and his failure to attend it showed that he had abandoned the application. He finally argued that the applicant does not have a defence to the suit; that he actually admitted his indebtedness to the respondent in his pleadings in the previous application (M/A 25/20110. That his filing of the instant application was meant to stifle the efforts of recovering the debt that he owes to the plaintiff.
Order 36 rule 11 provides for setting aside decrees issued in default of applications for leave to defend in the following terms:-
“After the decree the court may, if satisfied that the service of the summons was not effective, or for any other good cause, which shall be recorded, set aside the decree, and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the court so to do, and on such terms as the court thinks fit.”
The applicant does not deny that summons in the suit was served upon him. Therefore, what needs to be established here is whether there is “other good cause” to set aside the decree and whether it is reasonable to grant him leave to defend the suit.
The ground that the applicant’s lawyer, Mr. Angulo failed to turn up because he had left the firm of Katuntu & Co. Advocates by the time the application was fixed for hearing on 30/03/2011 is not very convincing. This is especially so because in paragraph 6 of his affidavit the applicant averred that Mr. Angulo left Katuntu & Co. in February 2011. However, M/A No. 25/2011 which was dismissed was served on the respondent in March 2011 after Mr. Angulo left the firm. The applicant filed an affidavit in reply to that application on 24/03/2011 and it was served upon Katuntu & Co. Advocates on 25/03/2011, several days before the application was called on for hearing on 31/03/2011. Katuntu & Co. Advocates acknowledged receipt thereof by affixing their stamp on the affidavit in reply. I was therefore not persuaded that the applicant was disappointed by Mr. Angulo in particular, but by the whole firm of Katuntu & Co. Advocates. Though they fixed the application filed under the supervision of Mr. Angulo who had left the firm, they failed to attend the hearing thereof. The maxim that the mistakes of counsel should not be visited on the client therefore applies to this case.
There is also the paramount principle in cases where judgment has passed ex parte which was articulated by Lord Atkin in Evans v. Bartlam [1937] AC 473 at 480. The principle was applied in National Enterprise Corporation v. Mukisa Foods, Court of Appeal C/A No. 42 of 1997 and it is that “unless and until the Court has pronounced a judgment upon the merits or by consent, it is to have power to revoke the expression of its coercive power where that had only been obtained by failure to follow any of the rules of procedure.” For that reason, the judgment and decree passed against the applicant in the suit are hereby set aside for they were entered only because he failed to take a particular step in the case within the specified time. What then remains to be decided is whether it is reasonable to grant the applicant leave to defend the suit or not.
In Sulaiman Nsamba v. Fred Balinda; HCCS No. 102/98 (unreported), Akiiki-Kiiza, J., held that once an applicant for an order to set aside an ex parte decree under Order 33 (now 36) rule 1 establishes that he has a defence on the merits of the case, then in light of all facts and circumstances both prior and subsequent, it is just and reasonable to set aside the decree. And in Patel v. Cargo Handling Services Ltd. [1994] EA 75 at page 76, Duffas, P., stated that in this respect, a defence on the merits does not mean a defence that must succeed. It simply means triable issues which raise a prima facie defence and which should go to trial for adjudication.
The applicant says that he does not owe shs. 192,700,540/= claimed in the plaint because several payments that he made to the respondent were not credited to his account. This is quite a different defence from that which he made in M/A 025/2011 which was dismissed and in which he admitted that he owed shs. 40m to the respondent. Notwithstanding that, there is not much to go by in the plaint to establish the amount owed. Though the respondent’s claim is based on delivery notes, some of them are not signed. Others seem to have been signed by persons other than the applicant and whose identity is not explained in the plaint. That being the case, court would require further evidence in order to establish whether what is claimed on the basis of delivery notes and the statement annexed thereto tally. Applicant would also have to produce his documents to show that he paid the amounts that he claims to have paid either to the respondent directly or her employees. These facts show that the amount owed was not clearly defined and prima facie proved on the pleadings so as to entitle the respondent to summary judgment.
In Kotecha v. Mohammed [2002] 1 EA 112, it was held that the defendant is granted leave to appear and defend if he is able to show that he has a good defence on the merit(s); or that a difficult point of law is involved; or a dispute as to the facts which ought to be tried; or a real dispute as to the amount claimed which requires taking an account to determine; or any other circumstances showing reasonable grounds of a bona fide defence. Applying the dicta to the facts in this case, the applicant has proved that there is a dispute as to the amount owed and is thus entitled to leave to defend the suit.
In conclusion, the judgment and decree that were passed against the applicant in M/A 25/2011 are hereby set aside and the applicant is granted unconditional leave to defend the suit. He shall file a written statement of defence within 7 days from the date of this order and the costs of this application shall be in the cause.
Irene Mulyagonja Kakooza
JUDGE
25/05/2011
