THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISC APP NO 454 OF 2014

(ARISING FROM HCCS NO 362 OF 2013)

JOLLY TUMUHIMBISE}...................................................APPLICANT/DEFENDANT

VERSUS

JULIE OTAGE}................................................................RESPONDENT/PLAINTIFF

BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicant brought this application under the provisions of Order 36 rule 11 and Order 52 rules 1 and 3 of the Civil Procedure Rules as well as section 98 of the Civil Procedure Act, for orders that the decree issued ex parte in the main suit is set aside and the warrant of arrest issued in execution of the decree is also set aside. Secondly the Applicant seeks unconditional leave to appear and defend the suit. Finally the Applicant prays that the costs of the application are provided for.

The grounds of the application are that the Applicant is not indebted to the Plaintiff/Respondent in the amount claimed and therefore the plaint discloses no cause of action against the Applicant and the Applicant has a very good defence to the whole of the Plaintiff’s claim. Secondly summons were deliberately and intentionally not served upon the Applicant/Defendant and the Applicant did not have the opportunity of seeing the summons advertised in the Monitor Newspaper and it became impossible for her to apply for leave to appear and defend the suit. Thirdly the Applicant is not a party to the agreement which forms the basis of this suit. The agreement is illegal as it includes interest whereas the Respondent does not have a legal basis to charge interest. Fourthly this suit is wrongly brought under summary procedure and the plaint includes a prayer for interest which is not contractual. Fifthly if the decree is not set aside the Applicant will suffer irreparable loss and gross injustice. Finally it is in the interest of justice that the decree and execution, if any, be set aside.

The application is supported by the affidavit of the Applicant sworn to on 10 June 2014. The deposition of the Applicant is that on 18 November 2013 her husband Mr Nuwagira Silver was arrested by court bailiffs on a warrant of execution issued by the Execution Division of the High Court and produced before the Registrar Execution Division who ordered him to be released so that he can apply to the Commercial Court to set aside the decree. The arrest of the husband of the deponent compelled her to trace the civil suit file whereupon she discovered that she was also a Defendant in the same suit and an order had been issued against her and other Defendants jointly to pay US$14,930 plus costs of the suit taxed at Uganda shillings 5,483,500/=. She alleges that it was the first time for her to know about the suit against her because she had never been served with summons and was totally unaware of the suit. In the plaint, the Plaintiff claims the basis of the suit as an investment agreement wherein the Plaintiff invested US$5000 was supposed to get US$14,930 at the end of six months from the Defendants. The correct party to the investment agreement is Spotlight Investments Ltd. The Applicant maintains that she never entered into any agreement with the Plaintiff/Respondent and the Respondent has never lent any money to her. The Respondent had been issued with the cheques the basis of the claim in the main suit and the cheque was issued by Messieurs Spotlight Investments Ltd and she has never issued any cheque to the Respondent/Plaintiff. The Applicant maintains that she is not indebted to the Plaintiff and she cannot be in breach of an agreement to which she is not a party.

The Applicant further deposes that the Plaintiff is well-known to her but she avoided causing summons to be served upon her knowing that she has a very good defence to the whole claim and instead made sure that the summons were advertised in the monitor newspaper which was very difficult for her to read. Secondly the Plaintiff knows her home very well and together with other Christians has been praying at her home and sometimes at the Respondent’s home at Mugula Road, Nakasamba village, Division A, Entebbe Municipality. Sometimes they would pray at other homes and the Plaintiff knows her home but deliberately did not disclose the fact of filing the suit to the Applicant. The Applicant did not read the Monitor Newspaper containing the summons and was not aware of the suit until when her husband was arrested. The Applicant's husband applied to set aside the decree and warrant of arrest which were set aside in Miscellaneous Application Number 1009 of 2013.

The Applicant is represented by Maxim Mutabingwa who had also filed Miscellaneous Application Number 1009 of 2013 on the behalf of Nuwagira Silver. The grounds of the application and the submissions in this application are relatively the same. Nuwagira Silver is the fourth Defendant to the main suit while the Applicant is the fifth Defendant. The Applicant is the wife of Nuwagira Silver, the fourth Defendant and both are resident in the same home and have the same address for purposes of service of court process.

The submissions of the Applicant’s Counsel follows the same grounds and arguments as in the previous application between Nuwagira Silver and the Respondent namely HCMA 1009 of 2013. The Applicant's residence is the same residence of Nuwagira Silver and the same arguments for want of service applied to the Applicant’s case. I have consequently adopted the finding in the previous application which is fully quoted herein below:

“I have duly considered the facts, the laws cited and submissions of Counsel. The application is brought under Order 36 rule 11 of the Civil Procedure Rules. Order 36 rules 11 (supra) gives the court wide discretion and permits the filing of an omnibus application to set aside the decree or to stay execution or set aside execution and it provides as follows:

"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 question of whether service of summons was effective would have been sufficient to set aside the proceedings. The Applicant avers that the Respondent knows him and where he lives. In those circumstances substituted service would have been inappropriate without attempts to serve the Applicant at his residence. In the affidavit of service in the main suit paragraph 2 thereof Batanda Moses, a court process server of the High Court, deposes that he received copies of court summons dated 16th of September 2012 from this court for service upon the Defendant by way of substituted service. The court order was issued on 16 September 2013. The order attached orders that the Respondent/Defendants are to be served by substituted service through advertising in the newspapers and affixing a copy of the summons on the notice board of the court. Time for service of summons was also extended in the same order. As to whether the service produced the desired effect or was effective is unnecessary for me to determine since Order 36 rule 11 gives the court wide discretionary powers to set aside the decree on other just grounds. It is sufficient to conclude that since Applicant’s residence is known to the Respondent, service ought to have been attempted on him personally first. In those circumstances there was no proper service of summons on the Applicant.”

Consequently service on the fifth Defendant was not effective as concluded in respect of the fourth Defendant Mr Nuwagira Silver in the above ruling. Furthermore Order 36 rule 11 of the Civil Procedure Rules provides that: "… If satisfied that the service of the summons was not effective,… set aside the decree." The question as to whether service was "effective" was interpreted in the Supreme Court case of Geoffrey Gatete and Angela Maria Nakigonya versus William Kyobe Supreme Court Civil Appeal No. 7 of 2005. Mulenga JSC who delivered the judgment of the court with concurrence of the rest of the panel of Supreme Court Judges held at page 8 second paragraph to page 9 of the judgment as follows:

“It is apparent that in concluding that assumed service on Matsiko Kasiimwe was effective service, the courts below took the expression “deemed good service” referred to in order 30  rule 3 and the expression “effective service” referred to in order 36 rule 11 to mean the same thing and actually use them interchangeably.  In my view, the two expressions are significantly different.

The Oxford advanced learner’s dictionary defines the word “effective” to mean “having the desired effect; producing the intended result”.  In that context, effective service of summons means service of summons that produces the desired or intended result.  Conversely, in ineffective service of summons means service that does not produce such result.  There can be no doubt that the desired and intended result of serving summons on the Defendant in the civil suit is to make the Defendant aware of the suit brought against him so that he has the opportunity to respond to it by either defending the suit or admitting liability and submitting to judgment.  The surest mode of achieving that result is serving the Defendant in person.  Rules of procedure, however, provide for such diverse modes for serving summons that the possibility of service failing to produce the intended result cannot be ruled out in every case.

For example, in appropriate circumstances service may be lawfully made on the Defendant’s agent.  If the agent omits to make the Defendant aware of the summons, the intended result cannot be achieved.  Similarly, the court may order substituted service by way of publishing the summons in the press.  While the publication will constitute lawful service, it will not produce the desired result if he does not come to the Defendant’s notice.  In my considered view, these examples of service envisaged in Order 36 rules 11 as “service (that) was not effective.” Although the service on the agent and substituted service would be “deemed good service” on the Defendant entitling the Plaintiff to a decree under order 36 rule 3, if it is shown that the service did not lead to the Defendant becoming aware of the summons, the service is “not effective” within the meaning of order 36 rule 11.  (See Pirbhai Lalji vs. Hassanali (1962) EA 306).”

From the evidence adduced, the Applicant was not duly served because the Plaintiff was aware of the residence of the fifth Defendant and did not have the summons served at their residence. In paragraph 3 of the summary suit, the Plaintiff undertook to effect service of court process on the Defendants but did not disclose the address for service of the Defendants. It is a requirement under Order 7 rule 1 (c) of the Civil Procedure Rules that the plaint shall contain: "the name, description and place of residence of the Defendant, so far as they can be ascertained;". Secondly because summons were advertised in the Monitor Newspaper and the Applicant/fifth Defendant never came to learn about the advertisement and only came to know about this suit when her husband was arrested, there was no effective service on the fifth Defendant/Applicant to this application. Accordingly because there was no effective service, the decree and the warrant of arrest issued against the fifth Defendant/Applicant dated 14th of November 2013 is set aside.

As far as the application for unconditional leave to appear and defend the suit is concerned, the Applicant has advanced the same grounds as that of Nuwagira Silver vs. Julie Otage in Miscellaneous Application Number 1009 of 2013. The facts are exactly the same, the grounds of the application and the submissions of Counsel are exactly the same and the ruling dated 6th of June 2013 applies with equal force to the Applicant’s application. The ruling of 6 June on the issue of whether there is a triable issue is as follows:

" I have also considered the argument that the agreement in paragraph 5 of the plaint annexure "A" is an investment agreement between Spot Light Investments Ltd and Julie Otage, the Plaintiff in the main suit and not the Applicant. In paragraph 5 (a) of the plaint the Respondent avers as follows:

"On the 6th day of February 2012, the Plaintiff signed an investment Agreement with the Defendants where she agreed to invest US$5000 for six months. A copy of the Agreement is attached hereto and marked "A".

In paragraph 5 (b) the Plaintiff further avers as follows:

"Following the said agreement, the Plaintiff released US$5000 to the Defendants which was duly received and acknowledged. A copy of the receipt of payment is attached hereto and marked "B".

The affidavit in support of the summary suit deposed to by Julie Otage confirms on oath that the facts in the plaint are true. The agreement annexure "A" referred to in paragraph 5 of the plaint is between Messieurs Spot Light Investments Ltd and the Plaintiff. Spot Light investments limited is described as a private company business duly incorporated in the Republic of Uganda. The agreement itself is signed by certain directors of Spot Light investments Ltd whose names are not disclosed. Secondly the receipts referred to as annexure "B" was also issued by Spot Light investments Ltd. Thirdly a cheque issued to the Plaintiff for US$14,930 was issued by Spot Light Investments Ltd. The entire claim of US$14,930 is not only reflected in the attached cheque leaf annexure "C" to the plaint and paragraph 5 (c) thereof, issued by Spot Light investments Ltd but it is averred therein that the Defendants issued a post dated cheque in favour of the Plaintiff to secure the sum and which cheque bounced on presentation of the same.

The connection between Spot Light investments Ltd and the Applicant in this application are not clear from the documentation attached to the plaint.

There is a good cause disclosing a triable issue that the Applicant was sued in his individual capacity and he may be able to avoid liability on the ground that he has no agreement with the Respondent/Plaintiff. In other words without considering the merits of the Plaintiffs claim, the Applicant alleges that he is a stranger to the contract sued upon and ought not to have been sued. In the premises there is a good cause for setting aside the decree in order to permit the Applicant to file a defence and defend himself.”

In the above quoted application therefore the Defendant was granted leave to file a written statement of defence and defend the suit. The Applicant in this application has advanced the same grounds and arguments and is granted unconditional leave to defend this suit. The Applicant is given 14 days from the date of this order to file a defence to this suit and costs of the application shall abide the outcome of the main suit.

Ruling delivered in open court the 22^nd day of August 2014

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Jolly Tumuhimbise in Court

Charles Okuni: Court Clerk

Christopher Madrama Izama

Judge

22/08/2014