THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)
MISCELLANEOUS APPLICATION NO. 045 OF 2011
[ARISING FROM CIVIL SUIT NO. 0429 OF 2010]
KISAWUZI HENRY::::::::::::::::::::::::::::::::: DEFENDANT/APPLICANT
VERSUS
MOSES KAYONDO::::::::::::::::::::::::::::::PLAINTIFF/RESPONDENT
BEFORE: HON. LADY JUSTICE IRENE MULYAGONJA KAKOOZA
RULING
The applicant/defendant brought this application under Order 36 rule 11 and Order 52 rules 1 and 3 Civil Procedure Rules (CPR). He sought for an order to set aside the judgment and decree that were entered against him in HCCS 429 of 2010 and for stay of execution of the same decree. He also sought for leave to file a defence in the suit. The salient grounds of the application stated in the notice of motion were that the defendant was not served with summons in the suit and the process server that deposed the affidavit to prove service lied; that the cheque relied on in the suit was forged and the defendant did not owe the plaintiff any money.
The background to the application was that in the main suit the plaintiff alleged that he entered into an agreement with the defendant to supply him with a motor vehicle, Range Rover Motor Sport of the 2007 model, at the cost of US$ 40,000. The plaintiff pleaded that he advanced US$ 30,000 to the defendant as part payment of the purchase price but the defendant failed to deliver the motor vehicle to him. It was also the plaintiff’s case that as indemnity for the money advanced, the defendant issued him with a cheque for US$ 30,000 drawn against the United Bank of Africa. That on several occasions the defendant prevailed upon him not to bank the cheque but he also failed to refund the monies advanced or deliver the motor vehicle. He thus filed a summary suit to recover the amount advanced based on the cheque.
The defendant’s application was supported by his affidavit deposed on 27/01/2011. The plaintiff filed an affidavit in opposition deposed on 22/03/2011. The defendant filed an affidavit in rejoinder deposed by Sempebwa Dennis on 22/03/2011, and an additional affidavit in rejoinder which he himself deposed on the same day.
In his affidavit in support, the defendant averred that the summons in the suit was never served upon him and the affidavit of service that was deposed by one Yunusu Bate on 15/12/2010 was riddled with falsehoods. He further averred that the cheque whose copy was attached to the plaint, a Photostat copy of which he attached to his affidavit as Annexure “II” was forged because the signature thereon was not his signature. He further averred that he had no reason to issue the said cheque because he did not owe the sum of US$ 30,000 claimed by the plaintiff in the suit or at all. He went on to aver that he has a full and complete defence to the suit and attached a copy of the proposed WSD to the affidavit as Annexure “IV.” That as a result there were several triable issues in the suit and they justified setting aside the decree to enable the suit to be heard on its merits.
In his affidavit in reply the plaintiff averred that summons and pliant were effectively served upon the defendant. That the defendant signed the cheque whose copy was attached to the plaint and it was genuine. He further averred that he had a handwriting expert examine the cheque who arrived at the conclusion that it was indeed signed by the defendant. He attached a copy of the handwriting expert’s report dated 17/03/2011 to his affidavit as Annexure “B”. He further averred that the defendant issued the cheque to him as indemnity in case he failed to deliver the motor vehicle that he had agreed to import for him in the event that he failed to do so within the specified time. He further averred that the defendant not only issued him with the contested cheque but he also entered into an agreement in which he stated that he issued the said cheque as security for failure to deliver the motor vehicle by 30/07/2008. A Photostat copy of the agreement dated 8/07/2008 was Annexure “A” to the plaintiff’s affidavit. The plaintiff thus asserted that the defendant had no defence at all to the suit.
In his affidavit in rejoinder, Dennis Sempebwa averred that the plaintiff’s affidavit was full of falsehoods. He went on to state that in 2008, the plaintiff approached him and he sold to him the Range Rover Sport that is the subject of the suit. That he paid US$ 40,000 to the plaintiff as consideration for the purchase and the plaintiff delivered the motor vehicle to him. He further averred that he later sold the same motor vehicle to one Tom Mugenga and it was now registered as UAL 422L.
In his affidavit in rejoinder the defendant repeated the contents of his affidavit in support and added that he delivered the motor vehicle that the plaintiff paid him for and he did not owe him any money. He further averred that the plaintiff sold the same motor vehicle to Dennis Sempebwa. He went on to state that the report that was submitted by A. M. Ntarirwa, the handwriting expert, to the plaintiff could not be relied on because the same was unethical, unprofessional, biased and full of falsehoods. That the report was made in conflict of the handwriting expert’s interests because the defendant also appointed the same expert to verify the authenticity of his signature on the cheque in dispute. That the handwriting expert delivered a report to the defendant’s advocates in which he stated that he had never seen an original of the cheque in issue. That in so doing he cast doubt on his opinion to the plaintiff when he stated that he had to see the original of the cheque that the defendant required him to examine before making conclusive findings on its author. The defendant attached the handwriting expert’s report, which was dated 25/02/2011, to his affidavit as Annexure “R2”. The defendant further averred that the handwriting expert returned the finding that there were differences in the defendant’s signature in the questioned cheque and specimens that he had provided.
The defendant went on to aver that the handwriting expert took instructions from the plaintiff and delivered a contradictory report to what he had submitted to him over the same document and signature. He challenged the opinion of the handwriting expert because he examined his signature on the contested cheque on the instructions of the plaintiff without extracting a specimen of his (the defendant’s) signature from him. He also challenged the authenticity of the specimen signature that the handwriting expert relied on in his analysis for the plaintiff and asserted that the affidavit from which he extracted it did not exist because he did not depose any affidavit in the instant application on the 15/12/2010, as alleged in the report. He therefore asserted that the report of the handwriting expert to the plaintiff was inconclusive because he did not make a finding that the defendant signed the contested cheque but only stated that the signature on the cheque and the affidavit dated 15/12/2010 “were written by one and the same person.” He then concluded that the plaintiff’s affidavit in reply ought to be struck out because it was misconceived and riddled with falsehoods.
At the hearing of the application, Mr. Simon Tendo Kabenge who represented the defendant submitted that it was not proved that the summons in the suit were served on the defendant because he averred that he never met with the process server as averred in the affidavit of service. He went on to submit that the defendant was an educated man who displayed vigilance when he filed the current application; he could not have failed to instruct an advocate to apply for leave to defend if summons had been served upon him in the suit. He further submitted that there was cause to set aside the decree because the defendant averred that he delivered the car in dispute to the plaintiff who sold it off to another.
Mr. Tendo Kabenge further submitted that the defendant would raise a counterclaim for US$ 10,000 against the plaintiff it he is allowed to filed a defence. He went on to challenge the report of the handwriting expert to the plaintiff because, in his view, it was based on a falsehood, made in conflict of interest and the specimen used in the analysis, i.e. an affidavit dated 15/12/2010, did not exist. In support of this submission, Mr. Tendo said that by the 15/12/2010 M/A 045 of 2011, alleged to be the source of the affidavit did not exist because the defendant did not yet know about this suit on that date; he therefore could not have deposed the said affidavit. He also charged that the report was based on an agreement that was denied by the defendant. He then submitted that the specimens for use in handwriting analysis must be extracted from the author of the questioned document.
Mr. Kabenge went on to submit that the evidence by affidavit presented triable and controversial issues that could not be dealt with in a summary manner. Relying of Order 36 rule 6 he asserted that the defendant had proved that there was good cause for the decree against him to be set aside. He relied on the decision in Maluku Interglobal Trade Agency Ltd. v. Bank of Uganda [1985] HCB 65 for the submission that on the evidence adduced by the defendant he has a complete defence to the suit and leave to defend it should be granted to him.
For the plaintiff, Mr. Geoffrey Nangumya submitted that the grounds relied on to set aside the decree did not warrant such a decision. That the defendant did not produce telephone records to prove that he received no call from the process server though he mentioned them in his affidavit. He asserted that the process server recounted the conversation he had with the defendant and the manner in which he directed him to where to find him and he went there and served him. Further that the defendant denied service only because he was not prepared to appear in court to defend the suit. He invited court to find that the defendant was only trying to run away from his liability.
Regarding the alleged forging of the cheque that is the subject of the suit, Mr. Nangumya submitted that the defendant contradicted himself about it. He drew it to my attention that while in his affidavit in support of the application the defendant stated that he had no reason to issue the cheque as alleged or at all and did not issue it, the handwriting expert’s report which he attached to his affidavit in rejoinder stated that the two questioned signatures towards the bottom of the cheque fell within the writer’s variations, meaning that the defendant was the author of the signature on the questioned cheque. Because of this contradiction in the defendant’s affidavits, counsel for the plaintiff submitted that his defence was not bona fide.
Regarding the “agreement of understanding” Annexure “A” to the affidavit in reply, counsel for the plaintiff submitted that the defendant did not in any of his affidavit deny having signed it. He therefore concluded that the fact that he signed the agreement should be believed. He went on to submit that since the agreement referred to the cheque in dispute and it was agreed therein that the defendant issued it, he should not turn round and say that the cheque is a forgery. Counsel further pointed out that the defendant contradicted himself when he said he knew nothing about the cheque, Annexure “A” to his affidavit in support, and then turned around and stated that he delivered the motor vehicle to the plaintiff.
He went on to submit that the averments that the defendant delivered the motor vehicle to the plaintiff who sold it to another were also lies because there was no evidence to show that the motor vehicle that the defendant alleged to have delivered to the plaintiff was the very one that the plaintiff was alleged to have sold to Dennis Sempebwa. He further submitted that the fact that Sempebwa stated the registration number of a Range Rover Sport did not prove that it was the same vehicle that the defendant alleged to have imported and delivered to the plaintiff. He charged that the defendant ought to have produced documents such as a bill of lading or documents of transfer to prove that it was the same motor vehicle in this dispute.
Mr. Nangumya went on to submit that the allegation that the defendant would lodge a counterclaim against the plaintiff was evidence from the bar because it was neither stated in any of the defendant’s affidavits nor mentioned in the proposed written statement of defence filed with the application. Regarding the divergence in the dates in the specimens examined by Mr. Ntarirwa for the plaintiff, he stated that Mr. Ntarirwa must have made a mistake and confused the dates of the various documents that were supplied to him. That in any event, the stated divergence would not invalidate the whole report submitted to the plaintiff. He thus concluded that the defendant had failed to prove any triable issue that would warrant a full trial in the matter. He then prayed that should court find that it was necessary to go on to have a full trial of the suit, then leave should be granted to defend the suit only on condition that the defendant deposits the amount claimed in court before he files a defence. He prayed that the application be dismissed with costs.
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.”
What needs to be established therefore is whether or not there was effective service of summons on the defendant and if that is found to be in the positive, then other good cause has got to be established that would justify the stay of execution, if any, and the setting aside of the decree.
Regarding the question whether the service of summons said to have been effected upon the defendant on 1/12/2010 was effective, the affidavit of Yunusu Bate is the only document that ought to be examined. Order 5 rule 10 provides that wherever it is practicable, service shall be made on a defendant in person. In his affidavit of service, Yunusu Bate stated that he called the defendant on a mobile telephone No. 0392-940295 to establish where he could find him; that the defendant responded and directed him to find him at Jamada’s Washing Bay on Dewinton Road, next to Walusimbi’s Garage; that he then got transport to the appointed place where he found the defendant. He further stated the time at which he met him as 3.00 p.m., and that he tendered the summons and plaint to him after explaining the purpose of his call on him, and which the defendant accepted. Bate further averred that after the defendant read through the documents, the defendant informed him that there was no need for him to acknowledge receipt thereof by affixing his signature on them because he was going to settle the matter out of court. Bate then returned a copy of the unsigned summons to court.
The learned Deputy Registrar thought that the affidavit of Bate contained sufficient particularity of the service on the defendant and she entered judgment in default of an application for leave to defend on the basis of his affidavit. I do not fault the decision of the Registrar on that for I was also of the view that there was sufficient information and particularity to show that the process server did meet the defendant on 1/12/2010 at Jamada’s Washing Bay, as he averred. I say so because the defendant did not deny that telephone No. 0392-940295 attributed to him was his. In addition, I did not believe that the process server had an interest in the matter that would incite him to aver that the defendant promised to settle the matter out of court. I was also led to believe that it was for that reason that the defendant refused to acknowledge receipt of the process by placing his hand on the copy for return to court. I therefore would not set aside the decree on the ground that the service of summons and the plaint was not effected upon the defendant.
That then leaves me with the obligation to explore whether the defendant has raised other “good cause” to set aside the decree. There is no definition of the term “good cause” in the CPR. Neither is there a definition of it in the Civil Procedure Act. Authority regarding what it means then lies in previous decisions of the courts that have tried to enunciate the term.
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.
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, where he stated 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 against the defendant are hereby set aside for they were entered only because he failed to take a particular step in the case within the specified time.
The second limb of Order 36 rule 11 CPR is that court 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. The defendant in this case raised a triable issue in his affidavit in support when he stated that the cheque on which the suit was premised was forged. He raised another triable issue in his affidavit in rejoinder when he stated that he delivered the motor vehicle in dispute to the plaintiff. The delivery of the motor vehicle was also the subject of Sempebwa’s affidavit in rejoinder. What needs to be considered then is whether it is reasonable in the circumstances to grant unconditional leave to defend the suit in view of the defences proffered. Mr. Kabenge referred me to the decision in Maluku Interglobal Trade Agency v. Bank of Uganda (supra) for the criteria to be considered before leave is granted to defend a suit under Order 36 CPR.
In the Maluku case, at page 66 of the Bulletin it was held that:-
“Before leave to appear and defend is granted the defendant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law. When there is a reasonable ground of defence to the claim, the plaintiff is not entitled to summary judgment. The defendant is not bound to show a good defence on the merits but should satisfy court that there was an issue or question in dispute which ought to be tried and the court should not enter upon the trial of the issue disclosed at this stage.”
It is also the position, according to the same decision, that the defence must be stated with sufficient particularity to appear genuine; general or vague statements denying liability will not suffice.
The principle was re-stated in Abubakar Kato Kasule v. Tomson Muhwezi [1992-1993] HCB 212 where Kireju, J, (RIP) ruled that under Order 33 rule 4 (now O.36 rule 4) a defendant who seeks leave to appear and defend is required to show by affidavit or otherwise that there is a bona fide triable issue of fact or law. That the applicant is not bound at this stage to show that he has a good defence on the merits of the case, but ought to satisfy court that there is a prima facie triable issue in dispute which the court ought to determine between the parties. The court further ruled that at this stage it was not entitled to enquire into the merits of the issues raised. But in spite of that the court went on to hold:-
“In all applications for leave to appear and defend under Order 33 rules 3 and 4, the court must study the grounds raised to ascertain whether they raised a real issue and not a sham one, i.e. the court must be certain that if the facts alleged by the applicant/defendant were established, there would be a plausible defence; if the applicant/defendant has a plausible defence he should be allowed to defend the suit unconditionally.”
In Corporate Insurance Co. Ltd. v. Nyali Beach Hotel Ltd. [1995-1998] EA 7, an appeal against judgment entered summarily where the defendant failed to show that there were triable issues, the Court of Appeal of Kenya ruled that leave to defend will not be given merely because there are several allegations of fact or law made in the defendant’s affidavit. The allegations are investigated in order to decide whether leave should be given. As a result of the investigation even if a single defence is identified or found to be bona fide, unconditional leave should be granted to the defendant.
The court went on to rely on the decision of Madan, JA, in Gupta v. Continental Builders [1978] KLR 83 at 87, and Pall, JA, observed that the merits of the issues are investigated to decide whether leave to defend should be given. Further that sometimes the prima facie issues which are preferred are rejected as unfit to go to trial being by their very nature, as disclosed to the court, incapable of resisting the claim. He explained that the court does not thereby shut out any genuine defences but what happens is that the court does not accept the prima facie issues as genuine. The court concluded that this is exactly the task which any court is required to perform on an application for summary judgment.
And in Kotecha v. Muhammed [2002] 1 EA 112 which is a decision of the Court of Appeal of Uganda, Berko, JA, ruled (with Okello and Engwau, JJA, concurring) that:-
“The summary procedure on specially endorsed plaint under Order 33 of our Civil Procedure Rules is similar to a writ specially endorsed under Order 3, rule 6 (Order 14, rule 1) of the English Rules of the Supreme Court. Therefore English authorities on that rule are of persuasive authority and provide (a) useful guide. Under the English Rule 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. See Saw v Hakim 5 TLR 72; Ray v Barker 4 Ex DI 279. The position is however, different where the Plaintiff sues under a cheque or Promissory Note or Bills of Exchange.”
{My Emphasis}
The court went on to explain the law on the basis of Chalmers and Guest on Bills of Exchange, Cheques and Promissory Notes and reproduced the following passage:-
“Order 14 Proceedings: where an application is made for a summary judgment in respect of a claim on bill of exchange, cheque, or promissory note the general Rule is that leave to defend will not be given save in exceptional circumstance”.
It was further explained relying on authorities in English law that that a Bill of Exchange is normally to be treated as cash. The holder is entitled in the ordinary way to judgment. If he is a seller who has taken bills for payment, he is still entitled to judgment; no matter that the Defendant has a cross claim for damages under the contract of sale or under other contracts. The buyer must raise those in a separate action. It therefore behoves this court to investigate the issues that have been raised above to establish whether they are bona fide or genuine triable issues that will stand trial or whether they constitute exceptional circumstances that would justify the granting of an order for unconditional leave to appear and defend the suit in the face of a bill of exchange.
The first defence proffered was that the cheque relied on was a forgery. However, the plaintiff raised doubt about that when he produced an agreement to support the cheque. It became clear from the terms of the agreement that the defendant had made an undertaking to make good loss for failure to deliver the motor vehicle by issuing the cheque in dispute as security. Although there is contention about the genuineness of the cheque that was the basis of the plaintiff’s suit, summary suits based negotiable instruments are never to be taken lightly. And this case is most peculiar; not only is there a cheque, but there is a written agreement between the parties relating to the same. It was therefore too much of a coincidence that the defendant issued a cheque and signed an agreement to make good the plaintiff’s deposit of monies to him and I will not ignore it.
I am particularly fortified in coming to the decision that it is very likely that the defendant did issue the cheque because in both reports of the handwriting expert he did say that it was very likely that the defendant signed the contentious cheque on which the plaintiff’s action was based. In the report produced by the defendant he stated:-
“The two questioned signatures towards the bottom of the cheque match very closely with the specimens provided in most of the letter constructions and in my opinion, fall within the writer’s variations.”
While in the report produced by the plaintiff he came to the conclusion that:-
“The similarities between them are such that in my opinion the above questioned signatures and specimen signatures were written by one and the same person.”
I therefore was not completely persuaded by what appears to be a diversionary argument by the defendant’s advocate that the specimen that the handwriting expert extracted from an affidavit in this suit was from an affidavit deposed on the 15/12/2010 before he became aware of the suit. There was only one affidavit in UCC M/A 045 of 2011 (this application) at the time the plaintiff deposed his affidavit and it was the defendant’s affidavit in support. Although it was dated 27/01/2011 and not 15/12/2010, coincidentally, the defendant’s affidavit in support had attached to it as Annexure “I” the affidavit of the process server which was deposed on 15/12/2010. The misstatement of the date of the defendant’s affidavit as 15/12/2010 is therefore quite understandable. I therefore did not believe the defendant’s averments that the handwriting expert’s analysis of documents sent to him on the plaintiff’s behalf was based on an affidavit that did not exist.
I was also not persuaded by the argument that the handwriting expert’s opinion was biased. If anything, he acted quite professionally when he refused to import the information that he obtained from the plaintiff’s advocates in his examination of documents presented by the defendant’s advocates on his behalf. Though he had seen the original of the contested cheque which was supplied with the instructions of the plaintiff’s advocates, Mr. Ntarirwa could not say for a fact that it was the original of the cheque that the defendant’s advocates presented for his examination. Therefore in his report to the defendant’s advocates he correctly stated that he could only make a conclusive finding on the handwritings and signatures on the cheque questioned by the defendant if he was availed the opportunity of examining its original.
And in cases of the examination of hand writings, the expert only expresses an opinion. In the case of Maulidi Abdullah Chengo v Republic [1964] 1 EA 122, it was held that the most that an expert on handwriting can properly say, in an appropriate case, is that he does not believe a particular writing was by a particular person or, positively, that two writings are so similar as to be indistinguishable. Court further held that the handwriting expert should point out the particular features of similarity or dissimilarity between the signature said to be forged and the signature on the questioned document. But he is not restricted to merely pointing out the features of similarity or dissimilarity between a forged signature and specimens of handwriting. He is also entitled to express without argument an opinion on whether two handwritings are the product of the same hand (Nguku v. Republic [2004] 1 EA 188).
It therefore cannot be said in this case that the handwriting expert did not attribute the signature on the original of United Bank of Africa (UBA) Cheque No. 00008327 (Exhibit A) to the author of the specimen signature in the affidavit in support in M/A 45/2011 in this court, and the memorandum of understanding. This is because at the beginning of his report he laid down his instructions clearly. They were to examine a questioned signature on the original of the cheque (Exhibit A) and compare them with the signatures of Henry Kisawuzi on Exhibit B and C to see whether they were signed by the same person or not. He clearly stated the known sample signatures of Henry Kisawuzi as those appearing on a certified true copy of an affidavit in support in Application No. 45 of 2011 at the High Court of Uganda at Kampala (Commercial Division) where he signed as deponent (Exhibit B), and an original copy of an “Agreement of Understanding” made between Moses Kayondo and Henry Kisawuzi on 8/12/2010 (Exhibit C). After detailing that he had observed significant similarities in letter design, pen pressure, relative letter proportions, initial and ending strokes, alignment, letter joins, trademark of a dot, and the slant and letter spacing, he came to his conclusion stated above.
I am therefore of the view that the expert’s report had to be construed as a whole and not piecemeal as counsel would have this court believe. And given the background that he had given in his report the handwriting expert did not have to repeat himself. The plaintiff submitted to him and he examined 2 specimen signatures known to have been written by the defendant and a questioned signature said to have been written by the same person. After he examined them he came to the conclusion that all three “signatures were written by one and the same person.” That could have been no other person other than the one whose signature was questioned and therefore mentioned in the report, the defendant.
In paragraph 17 the defendant further complained that the handwriting expert contradicted himself when he stated that there were differences between the questioned handwriting in the cheque and the signature therein which indicated that the specimens’ writer probably did not write the questioned entries for who to pay and the amount in words in the cheque. That in contradiction of this, the handwriting expert submitted a report that stated that the author of the cheque and the questioned signature submitted by the applicant was the defendant.
Mr. Tendo for the defendant submitted about this paragraph of the defendant’s affidavit as one that showed that the handwriting expert’s opinions should not be relied upon by this court due to this alleged contradiction between the reports submitted by both parties and authored by the same expert. But with all due respect to counsel for the defendant, he ought to have noted that the instructions given by both parties to the handwriting expert were different. While the defendant sought to have both the signature in the Photostat copy of the cheque as well as other writings thereon examined, the plaintiff only sought to have several signatures including that in the original of the cheque examined. It was therefore not surprising that the handwriting expert’s report turned out the way it did.
I therefore do not agree that the report that Mr. Ntarirwa submitted to the defendant contradicted the one that he submitted to the plaintiff though there was a difference in the two reports. While both reports concluded that the signature on the questioned cheque was that of the defendant, the handwriting expert’s report to the defendant concluded that the author of the entry in words and the payee was different from the person who signed the cheque. Meaning that the signer could have issued a signed blank instrument to the plaintiff and he or some other person filled in the words thereafter.
There is one question that needs to be answered in that regard. Would the fact that the person who filled in the amount in words and the payee appeared to different from the person who signed the cheque invalidate the cheque or constitute a defence to a suit under Order 33 CPR? Recourse has to be had to the Bills of Exchange Act for the answer to that question.
Section 2 (4) of the Bills of Exchange Act provides that a bill is not invalid by reason that it is not dated; neither is it invalid by reason that it does not specify the value given or that any value has been given therefore. In addition, s.19 (1) of the Bills of Exchange Act provides as follows:-
“19. Inchoate instruments
(1)
Where a simple signature on a blank stamped paper is delivered by the signer in order that it may be converted into a bill, it operates as a prima facie authority to fill it up as a complete bill for any amount the stamp will cover, using the signature for that of the drawer, or the acceptor, or an endorser; and, in like manner, when a bill is wanting in any material particular, the person in possession of it has a prima facie authority to fill up the omission in any way he or she thinks fit.”
{My Emphasis}
According to s. 19 (2) of the Bills of Exchange Act, in order that any such instrument when completed may be enforceable against any person who became a party to it prior to its completion, it must be filled up within a reasonable time, and strictly in accordance with the authority given. Reasonable time for this purpose is a question of fact; but if any such instrument after completion is negotiated to a holder in due course, it shall be valid and effectual for all purposes in his or her hands, and he or she may enforce it as if it had been filled up within a reasonable time and strictly in accordance with the authority given.
The next question that would then have to be answered is whether there is any evidence on the record as it stands that there was authority to fill in the bill. The handwriting expert found that the defendant signed both the cheque and the “agreement of understanding” (Annexure “A” to the affidavit in reply). The defendant did not deny that he signed it. The terms of the memorandum of understanding were as follows:-
“1. It is hereby agreed on this 8th July 2008 between the above mentioned persons that Mr. Henry Kisawuzi has received $30,000 (United States Dollars Thirty thousand only) from Mr. Moses Kayondo as deposit payment of a Ranger Rover Motor Sport 2007 which is consigned to Kampala via Mombasa by Bill of Lading Number …
2. Mr. Henry Kisawuzi has given Mr. Moses Kayondo a Cheque Number, 0008327 worth $30,000- from Account Number 0113000331 in the names of Sayuzi Henry from United Bank of Africa (UBA) as security for failure to deliver the Range Rover Sport 2007 by 30th July, 2008.
3. This has been agreed by consent of the two persons mentioned above.”
Both parties then signed the memorandum of understanding and apparently the defendant handed over the cheque to the plaintiff. And although the name “Kisawuzi” was consistently misspelled in the memorandum of understanding, the defendant corrected this when he wrote his name properly at the bottom of the agreement as “Henry Kisawuzi” and then affixed his signature thereto. Therefore, if the plaintiff or someone by his authority on the 20/07/2008 filed in the particulars of the payee in the cheque as “Moses Kayondo” and the amount to be paid to him as US$ 30,000, it is not a plausible defence, if at all, that the amount and payee of the cheque were invalid for having been filled by a different person than the defendant who issued it. I therefore find that cheque was valid.
It is emphasised that the defendant did not deny that he signed the agreement attached to the plaintiff’s affidavit in reply as Annexure “A.” His only defence was that it was overtaken by events when he allegedly delivered a Range Rover Sport (2007) to the plaintiff. But there are facts that cast doubt on that defence as well. First of all, it was not established as a fact that the motor vehicle said to have been delivered to the plaintiff was the vehicle that the defendant claims to have imported. And it is the law that a defence proffered by a defendant in matters such as this one must have sufficient particularity for them to be considered genuine. No genuine identification of the motor vehicle was proffered in terms of an engine or chassis number because no bill of lading or registration documents were mentioned.
Doubt is also raised because the defendant’s case seems to be that he delivered the motor vehicle to the plaintiff who had paid only US$ 30,000 out of US$ 40,000. The defence that he delivered the motor vehicle is especially doubtful because it is not the first that he raised. He only raised it after the plaintiff filed an affidavit in reply to his application. Certainly, a man who has delivered a motor vehicle worth all of US$ 40,000 would not wait for anything to state that he did so.
It also did make commercial sense that the defendant knew before he filed this application that the motor vehicle he claims to have delivered to the plaintiff was resold to another before the plaintiff paid the whole of the purchase price for it. Further that the next buyer sold it to yet another (Tom Mugenga) who is said to be now in possession of it. I was not persuaded by the implication that the defendant stood by and did nothing while the motor vehicle changed hands because in Uganda, US$ 10,000 is not small change; it amounts to almost shs 24m today. Although counsel for the defendant submitted that the defendant would be raising a counterclaim for that amount, it was never stated in the proposed WSD filed with the application. Counsel simply gave evidence about a proposed counterclaim from the bar, not because the defendant had expressed any intention as a fact in his affidavits that he would raise a counterclaim for the balance outstanding.
There were some nebulous references by Mr. Kabenge in his submissions to an allegation that the plaintiff brought this suit against the defendant in bad faith to settle some other scores between them. That too was not the case as stated in the defendant’s affidavits. There is therefore no good reason for me to believe that this is a suit based on the plaintiff’s mala fides. On the contrary, given the facts and the law as discussed above, it is very possible that the defendant in this case denies that he signed the cheque presented by the plaintiff just to buy time by engaging in protracted litigation for no good cause. That would no doubt defeat the spirit and intent of Order 36 CPR. I therefore agree with Mr. Nangumya for the plaintiff that this is one of those borderline cases where leave must be granted to the defendant to defend the suit only conditionally, as is provided for by Order 36 rule 11 CPR, which states that leave may be granted on such terms as the court thinks fit.
I am fortified in coming to that conclusion by the decision of the Court of Appeal for East Africa in Churanjilal & Co. v. A. H. Adam (1950) 17 EACA 92. In that case, the defendant appealed against the decision of the Supreme Court of Kenya which gave judgment after finding that he had not clearly articulated a defence. The court found that there was a definite triable issue though the dispute was a borderline case. The court then ruled that the appellant should be allowed to argue his defence in the court below, but upon depositing security to the satisfaction of the court below for the amount of the claim and costs due, within a reasonable time.
In conclusion, leave is hereby granted to the defendant to appear and defend the suit. But before that, the defendant will deposit the amount claimed by the plaintiff in court by way of a banker’s draft or a banker’s guarantee from a reputable bank, acceptable to the Registrar and valid for at least one year, within a period of one month from the date of this order. Having done so, he may then file a WSD. In the event that he fails to so deposit the amount claimed, judgment shall automatically issue in favour of the plaintiff for the sum claimed in the plaint, without interest, together with the costs of the suit.
Irene Mulyagonja Kakooza
JUDGE
11/05/2011
