THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO.666 OF 2014

(ARISING FROM MISCELLANEOUS APPLICATION 281 OF 2014)

(ARISING FROM CIVIL SUIT NO. 136 OF 2012)

SSENYONGA ISSA T/A HAJI ISSA …..…… APPLICANT/DEFENDANT

VERSUS

PUJIANG CHAMBER INDUSTRY & TRADE CO.LTD.…………….……RESPONDENT / PLAINTIFF

BEFORE: HON. LADY JUSTICE FLAVIA SENOGA ANGLIN

RULING

This ruling arises out of an application made under 0.36 r 11 and 0.52 rr 1, 2, and 3 C.P.R and S.98 C.P.A.  The application seeks orders that:-

• The exparte judgment and decree entered on 09.04.14 be set aside.

• The Applicant be granted unconditional leave to appear and defend the main suit.

• Costs of the application were also applied for.

The application is supported by the affidavit of Mutyaba Najub, one of the Applicant’s lawyers.  It was read and relied upon at the hearing.

There is an affidavit in reply deponed by Carolyne Mbambazi, one of the Advocates for the Respondent Company.

The application was first called for hearing on 26.11.14 when court was informed by Counsel for the Respondent that it was evident from the documents attached to the application that money for the Respondent was disbursed to Counsel who was previously handling the case, but was not remitted to the Respondent/Plaintiff.

However that, more money was still due and owing to the Respondent from the Applicant and that Counsel for the Applicant had intimated that they were ready to transmit the money to Counsel for Applicant for onward transmission to the Respondent.

An adjournment was sought to enable both Counsel map a way forward and probably pursue the claim against the Respondent’s previous lawyer.

Adjournment was granted until 10.12.14.

When the application was called then, both Counsel after referring to the previous proceedings indicated to court that they were ready to proceed.

Court was informed that the Advocate now appearing for the Respondent had just been engaged and a note of change of Advocates filed.  They indicated that they had been instructed to proceed with the Application as the consent was in respect of an amount which the Respondents felt was below the figure sought in the suit.  Hence the hearing of the application.

Counsel for the Applicant recited the provisions of the law under which the application was made and the orders sought there under; plus the supporting affidavit.

He then submitted that at the time the judgment and decree were entered exparte, there was already an application for leave to appear and defend on record which had been filed on 01.04.14, yet judgment was entered on 09.04.14 – paragraph 2 supporting affidavit and Annexture A.  That accordingly the judgment and decree were entered in error.

Further that the Applicant is not indebted to the Respondent in the sum of $91,308 as claimed – Referred to paragraph 4 of supporting affidavit.

He pointed out that the Applicant had entered in agreement with the Respondent’s Attorney Mudyobore Musato the effect that the amount payable was us $ 46,308 – as per paragraph 5 and Annexture A to the supporting affidavit.

A payment schedule was agreed upon as a result of the agreement and the Applicant paid a total of $37,800 on diverse dates.  The balance is $85,008.  – Paragraph 6 and 7 and Annexture D to the supporting affidavit.

Accordingly, Counsel asserted, there are triable issues of law and fact warranting court to grant the Applicant leave to defend the main suit as he was condemned unheard.

It was then prayed that application be granted with costs.

In opposing the application, Counsel for the Respondent relied upon the affidavit in reply to the motion.  He submitted that the default judgment was rightly entered as at the time it was entered, there was no application for leave to defend on record.

In the alternative but without prejudice to the foregoing, Counsel argued that if court finds that there was an application for leave to defend, at the time judgment and decree were entered, then the Applicant had never bothered to fix and serve it upon the Respondent contrary to 0.36 r 4 C.P.R – which makes it mandatory to serve the application and affidavit on the Respondent / Plaintiff.

Counsel insisted that the Applicant is indebted to the Respondent in the sum claimed in the plaint. And that the Respondent has never authorized the donee to variate the amounts claimed as indicated in Annexture C to the plaint.  The done was instructed to claim $91,308 as indicated in the power of Attorney and the Respondent is not privy to the agreement between the done and the Applicant.

That since in the motion and the supporting affidavit the Applicant neither denies being indebted in part or in total to the Respondent, there are therefore no triable issues of law or fact warranting court to grant the orders sought.

But that in case court is inclined to allow the application, it should be with orders to deposit part of the amount claimed in court under 0.36 r 8 C.P.R. 

Otherwise that, the application should be dismissed with costs.

In rejoinder, Counsel for the Applicant insisted that application had been duly filed but could not be fixed for hearing, as default judgment had already been entered and Applicant could only apply to set aside.
 

That the main suit was filed by the Attorney himself who had powers to negotiate on behalf of the Respondent and the powers of Attorney had not been revoked – paragraph 4 affidavit in reply.

And it would also be unfair to order the Applicant to deposit money still in contention.  Counsel reiterated earlier prayers.

The submissions of both Counsel have been heard and given the consideration that they deserve.

A look at the record indicates that the summary suit was filed on 12.04.12.  The summons in summary suit were issued on the same date.  However, the affidavit of service indicates that the summons in summary suit were given to him for service on 24.03.12.  There was no service of summons until 25.03.14 by substituted service by way of advertisement in Daily Monitor Newspaper.

The summons were published on 25.03.14 in Daily Monitor Newspapers. 

This is borne out by the advertisement that appeared in the same Newspaper on 25.03.14 – attached to the affidavit of service.

The judgment in summary suit was applied for on 09.04.14 and entered on 23.04.14 – when the application for leave to defend was filed on 01.04.14 and the court order indicates that, that fees were paid on that day.  The application has never been signed by the Registrar to date and no reasons were given for failure to sign the application. Without any evidence to the contrary, I must state that I am persuaded by the arguments of Counsel for the Applicant and find that by the time the judgment and decree were entered against the Applicant, the application for leave to defend had already been filed by the Applicant.

The judgment and decree were accordingly entered in error.  And it is only fair and just that they be set aside; and they are hereby accordingly set aside as prayed by Counsel for the Applicant.

Court observes that, without the application being signed by the Registrar, though duly filed and received by court, it could not be served on the Respondent.

What remains is for court to determine whether the Applicant should be granted leave to defend the summary suit.

Courts have repeatedly stated that; in applications of this nature, “ the burden is on the Applicant to show that there is a triable issue of fact or law” – Refer to Hasmani vs. Banque De Congo Belge (1938) EACA 59 and Toro and Mityana Tea Co. Ltd. Vs Ibingira Charles [1995] 4 KLR 20.

Further that “if an affidavit discloses triable issues of fact, summary judgment should not be granted”.  See Kirat Singh and Co. vs. Punja Meghji (1952) 19 EACA 33 and Standard Chartered Bank vs. Walker [1982] 3 ALL ER 937.

It has been emphasized that even “if there is one triable issue, if bonafide, that would entitle a defendant to unconditional leave to defend in an application and leave should be granted”.  Refer to Five Continents Ltd vs. Mpata Investments Ltd CA 306/2000 [2003] KLR 443 and [2003] IEA 1.

However, “the defence must be stated with sufficient particularity to appear genuine.  General or vague statements denying liability will not suffice” – Maluku Interglobal Trade Agency Ltd vs. Bank of Uganda [1985] HCB 65.

In addition court is required to “study the grounds raised and ascertain whether they raise real issues and not sham ones.  That is, court must be certain that if the facts alleged by the Applicant/Defendant were established, there would be a plausible defence.” – See Abubaker Kato Kasule vs. T. Muhweai [1992 -93] HCB 212

In the present case, as earlier pointed out in this ruling, the Applicant denies indebtedness in the sum claimed in the plaint, contending that the agreement entered into with the Attorney of the Respondent was to the effect that the sum payable was $46,308.  A payment schedule was agreed upon and payment of $37,800 has so far been made leaving only a balance to be paid.  Refer to paragraphs 4, 5, 6 and 7 and Annexture D to the supporting affidavit.

The Respondent on the other hand insists that Applicant is indebted in the sum claimed, and as the donnee had no authority to vary the amounts claimed as per Annexture C to the plaint, the Respondent is not privy to the agreement between the donnee and the Applicant.  And that since Applicant is not denying indebtedness, there are no triable issues established.

I must state however, that am not persuaded by the arguments of Counsel for the Respondent.  The presence of the agreement between the Applicant and the Respondent’s Attorney and the fact that some money has been paid to the said Attorney raises issues as to whether the Respondent is privy to that agreement and what balance if any is due to the Respondent.  These are triable issues which cannot be effectively and finally determined unless the Applicant is heard.

Court is fortified in its view by the principle that “the presence of an oral agreement between the parties for measures of payment cannot be denied and it is enough to establish a triable issue”.  Refer to the case of Hajji Sulaiman Kawere vs. Emmanuel Pinto [1998] IKALR 133.  How much more so in the present case, where there is a written agreement setting out sum allegedly payable and where a payment schedule was agreed upon.

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As already stated, this agreement and the payment schedule referred to raise triable issues which entitle the Applicant to unconditional leave to defend.

Counsel for the Respondent’s arguments to the contrary are therefore rejected.  And since the sum of money to be paid to the Respondent remains in issue, it would unjust to require the Applicant to deposit it in court.

It is clear that bonafide triable issues have been established as a result of which the Applicant is entitled to unconditional leave to appear and defend.

The application is accordingly allowed for all those reasons and the following orders are made:-

1. The exparte judgment /Decree entered against the Applicant on 09.04.14 be and is hereby set aside.

2. The Applicant is granted unconditional leave to defend the suit.

3. The defence should be filed by the Applicant and served upon the Respondent within ten days from the date of this ruling.

4. Costs will abide the outcome of the main suit.

FLAVIA SENOGA ANGLIN

JUDGE

11.12.14