THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISC. APPLICATION NO. 527 OF 2014

KAGAME ROBERT:::::::::::::::::::::::::::::::::::::::::::::::::::APPLICANT

VERSUS

ZHANG CI QING::::::::::::::::::::::::::::::::::::::::::::::::::::RESPONDENT

BEFORE THE HON. MR. JUSTICE HENRY PETER ADONYO

RULING

1. Background.

This is an application is brought under the provisions of Order 36 rules 3& 11, Order 52 rule 1 and 3 of the Civil Procedure Rules S1 71-1 and section 98 of the Civil Procedure Act Cap 71 by notice of motion supported by affidavit deponed by Kagame Robert the applicant wherein he prays that this Honorable Court;

1. Sets aside the exparte judgment entered on the 16^th day of April 2014 in favour of the respondent/ plaintiff in Civil Suit No. 740 of 2013 Zhang Ci Quing v Kagame Robert & Saidi Nayingidde,
2. Execution of the said judgment and decree be stayed and/ or set for good cause.
3. Unconditional leave be granted to the applicant to defend the suit on its merits.

The grounds giving rise to this application are contained in the application but briefly are that;-

1. The applicant was never served with the summons to file a defence and got to know about the suit against him when he was arrested and committed to civil jail.
2. The applicant is not indebted to the respondent as alleged in the plaint as he has made payments of the money to the respondent’s company which is the actual importer of the shows which the applicant is alleged to have taken and not paid for.
3. That the amount of money so far paid by the applicant to H. T. Limited is more than what is allegedly owed by him to the respondent.
4. That claim in the suit does not fall under the provisions of Order 36 of the Civil Procedure Rules as it seeks for interest which was never agreed upon.

2.  Application:

The Applicant states that the respondent/ plaintiff filed a Civil Suit No. 740 of 2013 against the applicant under Order 36 claiming Shs 125,400,000/= as the value of the shoes sold to the applicant on credit. The applicant/ defendant contends that he is not indebted to the respondent as alleged in the plaint under Civil Suit No. 740 of 2013 as he made payments of all monies to the respondent’s company which is the actual importer of the shoes which the applicant/defendant is alleged to have taken and not paid for when in fact the amount so far paid by the applicant to H. T. Limited is more than what is allegedly owed by him to the respondent.

Basing on the affidavit of service deponed by the respondent’s lawyer, the respondent/ plaintiff on the 10^th of April 2014, filed in this court an application for judgment and basing on this false hood on the 16^th day of April 2014 a default judgment was entered against the applicant.

In all this, the applicant does not deny knowledge of the respondent neither does he deny any dealings with the company known as HT Ltd under which the respondent trades, however he denies any indebtedness as he states that he paid to HT Ltd (the respondent’s company operating a shop No.L2 201 on Trade Link Arcade William Street) all the money owed on account as the receipts clearly show.

The applicant deposes that because he was not duly served through falsehood rendered by the respondent, judgment was made against him in the main suit and eventually he was arrested and taken to a civil prison but later released.

 The law under summary procedure allows a party for leave to appear and defend. Order 36 Rule 3 of the Civil Procedure Act SI 71-1 provides for judgment in default of an application for leave to defend.

1. Upon the filling of an endorsed plaint and the affidavit as is provided for in rule 2 of this order the court shall cause to be served upon the defendant a summons in form 4 of the Appendix A of these Ruled or such other forms as may be prescribed and the defendant shall not appear and defend the suit except upon applying for and obtain leave from the court.

Furthermore, Order 36 rule 11 provides;

“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.”

From the above rule, it is apparent that a summary suit decree can be set aside if it is proved on a balance of probability that service of the summons was not effective or that there is any other good cause to warrant setting aside the decree. The court is also authorised to set aside any order for execution and give leave to a defendant to appear to the summons and defend the suit where it is reasonable to do so with the said orders made on such terms as the court thinks fit.

Relating this to the instant matter, I find from the applicant’s deposition that he was never served with the summons to file a defence and only came to know about the suit against him when he was arrested and committed to civil jail. This is believable as clearly paragraph 12 of the affidavit in support of the application the applicant show that one Walusimbi Nelson (the respondent’s advocate) purported to serve the applicant by placing the summons on the door of the applicant’s shop which could not have been true as it is depose that it was the practice of the business community to always affix notices on others shop doors whenever there is a communication to make and hence the applicant would have seen it. From this deposition and from the reply made by the respondent, I find that there was clearly no proper service made upon the applicant thus rendering any orders of this court based on that type of service to be of no consequence as is it is trite that under the provisions of Order 5 of the Civil Procedure Rules, that whereas service of summons can be made upon the defendant by affixing a copy of the same at a conspicuous place of his place of residence or place of work,  such mode of service is only be resorted to after the process server is certified that he has tried as much as possible to effect service of summons personally onto a defendant and has failed which in the instant matter I find not to be so as Mr. Walusimbi’s affidavit does not show that he made any efforts at finding the applicant and failed to do so thereby resorted to serving him by leaving a copy of the summons at the door of his shop. And so where evidence so that there has been no effort to serve the defendant personally, the courts have held that any other service is bad service. See: Jolly Tumuhimbise v Julie Otage HCMA No. 454 of 2014.

I find that in the instant matter, it is clear that the summons were not properly made since even there is evidence to show that  that even after the filing of the suit, counsel for the respondent continued to write letters of demand to the applicant without actually referring to the suit. Which I find was done in bad faith.

I therefore hold that the applicant was not duly served with summons and that on that ground, default judgment be set aside and the applicant be granted leave to appear and defend the suit.

The other matter which I find of interest is that while the respondent states in the plaint and his affidavit in reply and supplementary affidavit that the applicant is indebted to him in the tune of 125,000,000/= being the amount of money unpaid on an agreement between the two for the supply of shoes by the respondent to the applicant, the applicant denies owing any further moneys thus insisting  that he has since paid money to the respondent’s company HT Ltd on account and the amount so far paid was even more than what was owed.

It is apparent to me that both the parties herein have been in a business relation with each other for sometimes and clearly there is a dispute as to what is owing and owed to the the which requires investigations into and thus can only be done through a full triaql where each party is allowed to adduce evidence and thereafter the court deciding the matter on merits.

3. Orders:

Thus on the basis of the above,I would  find that the applicant has made a case for this application to be allowed which I proceed to do so and with further orders to set aside the default judgment in Civil Suit No. 740 of 2013 since good cause has been shown as I further stay  execution of the said judgment and decree and grant unconditional leave to the applicant to appear and defend the suit on its merits with costs of this application be in the cause.

I do so order accordingly.

Henry Peter Adonyo

Judge

9^th December, 2014