Court name
Commercial Court of Uganda
Judgment date
7 August 2013

Mulenga VStanbic Bank (U) Ltd (Miscellaneous Application-2013/200) [2013] UGCommC 138 (07 August 2013);

Cite this case
[2013] UGCommC 138

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA

AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 200 OF 2013

ARISING FROM H.C.C.S. NO 288 OF 2010

MULENGA CHRISTOPHER} ...............................................................APPLICANT

 VERSUS

STANBIC BANK (U) LTD}................................................................ RESPONDENT

RULING

The Applicant commenced this application by Notice of Motion under the provisions of section 98 of the Civil Procedure Act, Order 36 rule 11 and Order 52 of the Civil Procedure Rules for orders that the decree in summary suit number 288 of 2010 is set aside. It is for orders that execution by way of arrest and detention of the applicant is set aside. That the applicant/defendant to the summary suit is granted leave to file a written statement of defence and for costs of the application be provided for.

The applicant sets out nine grounds in support of the application. The first ground is that the applicant was not personally served with the summons. Secondly the service of summons was not effective. Thirdly the applicant has a good defence to the plaintiffs/respondents claim. Fourthly the applicant disputes being a guarantor to the loan, the subject of civil suit number 288 of 2010. Among other things the applicant avers that there are triable issues and the applicant should be permitted to defend the suit and that the respondent has no cause of action against the applicant. The decree that was extracted by the respondent was irregular and illegal insofar as it provides for interest at 21% per annum in the summary suit. The proceedings in the main suit were marred with procedural irregularities and the applicant was not served with a notice to show cause why execution should be levied against him. Finally the applicant pleads that the ends of justice demanded that the application is granted.

The application is supported by the affidavit of the applicant, Mr Mulenga Christopher which repeats the averments in the notice of motion namely that he was never served with summons in civil suit number 288 of 2010. He became aware of civil suit number 258 of 2010 when he was served with a warrant of arrest in execution. The warrant is dated 27 February 2013. The applicant relies on the affidavit of service on the court record sworn by one Reuben Tumusiime and was advised by his counsel that it proves that there was no effective service on him. The applicant is a resident of Kabale. The applicant claims that he never obtained an overdraft facility of Uganda shillings 150,000,000/= from the respondent nor was he a guarantor for the same. The applicant avers that because he was not a guarantor to the loan, there are triable issues which ought to be tried by the court. Furthermore the decree which had been issued awarded interest in the summary suit at 21% per annum irregularly.

The respondent opposed the application and filed two affidavits in reply. The first affidavit is that of Mr. Francis Niwagaba, the respondent’s legal officer. He avers that the applicant was effectively served with summons as demonstrated by the affidavit of service. It is not true that the applicant only became aware of civil suit number 288 of 2010 when he was served with a warrant of arrest dated 27 February 2013. It is further incorrect to say that the applicant could only be served in Kabale. Furthermore it is not true as maintained by the applicant that he only became aware of civil suit number 288 of 2010 when he was served with a warrant of arrest dated 27 February 2013. He asserts that the applicant was at all material times aware of the suit and the respondent's efforts to execute the decree because the applicant's letter dated 14th of June 2012 and attached to the affidavit explicitly admits that he was aware of the warrant of arrest against him arising from the suit. The applicant has at all times been in negotiations with the respondent to settle the decreed sum. The applicant in another letter addressed to the respondent by his counsel, acknowledged his obligation to settle the amounts in dispute.

The deponent further avers that the applicant duly executed a personal guarantee in favour of the respondent on 16 October 2008 to secure a credit facility of Uganda shillings 150,000,000/= advanced by the respondent to Messieurs Akiphar Pharmaceuticals Ltd. Consequently Counsel Francis avers that the applicant has no defence to the suit. Furthermore there is nothing irregular or illegal about an award of interest at the rate of 21% per annum which was agreed upon by the judgement debtors. Consequently he asserts that the applicant's application is an abuse of the process of court having been brought in bad faith to frustrate the respondent's efforts to realise the fruits of its judgement.

The second affidavit in reply and opposition to the applicant's application was sworn to by Bazira Gerald Tusiime, the court bailiff trading as Batume Auctioneers. He avers that it is not true that the applicant became aware of civil suit number 288 of 2010 when he was served with a warrant of arrest dated 27th of February 13 by him on 25 March 2013. He received several instructions to execute the decree by arrest of the judgement debtors including the applicant in a warrant of arrest dated 5th of June 2012. On 13 June 2012 he personally served the applicant with a warrant at his office premises in Kabale whereupon the applicant informed him that he had made arrangements with the respondent to settle the judgement debt and there was no need to commit him to civil prison. On 14th of June 2012 he held a meeting with the respondent's branch manager at Kabale and the manager confirmed that discussions were under way between the applicant and the respondent to resolve the matter amicably. On the same 14 June 2012 in the meeting the applicant presented to him with a letter dated 14th of June 2012 addressed to the respondent wherein the terms under discussions were enumerated. In conclusion he avers that the applicant was at all material times aware of HCCS number 288 of 2012 and the respondent intention to execute the decree arising there under.

At the hearing of the application Mr Nsubuga Kenneth represented the applicant while Noel Muhangi represented the respondent. Counsels filed written submissions for and against the application.

The applicants counsel after summarising the facts contained in the affidavit of the applicant set up above submitted on whether there was effective service of summons on the applicant. He contended that the applicant was never served with summons in civil suit number 282 of 2010 requiring him to file a defence and only got aware when he was served with a warrant of arrest in execution. The applicant's case is that he lives in Kabale by the respondent claimed to have effective service in Kampala according to the affidavit of service of one Reuben Tumusiime. The affidavit in reply by one Bazira Gerald Tusiime in paragraph 5 thereof merely avers that he personally serve the applicant with a warrant of arrest in Kabale further supporting the fact that the respondent knew that the applicant resides and works in Kabale and not Kampala.

As far as the law is concerned, the applicants counsel submits that under Order 5 rule 10, summons have to be served on the defendant in person unless he or she has an agent empowered to accept service in which case service on the agent shall be sufficient. Under Order 5 rule 9, where there are several defendants, service shall be made on each defendant. The respondent filed a summary suit against the applicant and several other defendants and the affidavit of service on record was delivered on the premises of the first defendant wherein it was concluded that the applicant had been served. The applicant was never served as required by Order 5 rules 1, 8, 9 and 10 of the Civil Procedure Rules. There was therefore no effective service on the applicant. The affidavit of service indicates that service was effected on the premises of Akiphar Pharmaceuticals (U) Ltd, the first defendant in the suit. The applicant is neither a director nor a shareholder in the first defendant nor did he ever conduct any business in its premises. Counsel relied on the case of Lwanyaga vs. Ruth Nakyewa HCCS No. 707 of 2001 for the proposition of law that under order 33 rule 11 of the Civil Procedure Rules, upon the court been satisfied that service of summons was not effective, the court may set aside the decree or stay execution and may give leave to the defendant to appear and defend the suit.

Secondly the applicant has a good defence to the claim and triable issues arise. The applicants case is that in never obtained an overdraft facility of Uganda shillings 150,000,000/= from the respondent and never guaranteed anyone to obtain such a facility. All that the applicant needs to show is that triable issues arise which ought to be tried and not that he has a good defence on the merits according to the case of Toro and Mityana Tea Company Ltd versus Ibingira Charles reported in 1995 IV KALR at page 20. In reply the respondent alleges that the applicant executed a personal guarantee but never provided any evidence to that effect. In those circumstances a triable issue arises that ought to be tried. Counsel further relied on the case of Zeinab Bandali versus Gold Trust Bank Ltd miscellaneous application number 800 of 1997 of the High Court.

On the question of procedural irregularities, counsel submitted that the decree issued was irregular and illegal because it awarded interest in the summary suit. Secondly the applicant was not served with notice to show cause why execution should not be levied against him. In execution by way of arrest and detention, it is a prerequisite or requirement for the judgment debtor to be served with notice to show cause why execution should not be levied against him or her. Counsel prayed that the decree in summary suit in HCCS number 288 of 2010 is set aside, execution by way of arrest and detention of the applicant is set aside and the applicant/defendant is granted leave to file a written statement of defence with costs of the application to be borne by the respondent.

In reply the respondents counsel opposed the application. The first issue was whether service of summons in HCCS No 288 of 2012 on the applicant was not effective.

Counsel dealt with the question of fact that the applicant has not rebutted the assertion in the affidavit of service that he was served on the premises of the first defendant. It was not necessary therefore to serve him in Kabale. The applicant is a director of the first defendant. The applicant received the summons in dispute at the premises of the first defendant in Kampala. Subsequently the defendant's referred the matter to their lawyers Messieurs Synergy Solicitors and Advocates as confirmed by the lawyers letter dated 13th of July 2011 attached to the affidavit in reply of Mr Francis Niwagaba. Furthermore counsel contends that the applicant falsely avers in this affidavit in support of the application that he only became recently aware about the suit upon being served with a warrant of arrest dated 27 February 2013. The annexure to the affidavits in opposition clearly show that the applicant was at all material times aware of this suit and the summons. Counsel submitted that the falsehoods rendered the applicants affidavit suspect and therefore must be rejected by the court. Counsel therefore contended that the application is not supported by any valid affidavit and should be rejected according to the case of Bitaitana vs. Kananura [1977] HCB at page 34 and that of Joseph Mulenga versus Photo Focus Uganda Limited [1996] VI KALR  page 19.

On the second issue as to whether the respondent had a cause of action against the applicant in the summary suit on the ground that he did not guarantee the loan in dispute, the respondent on the other hand contends that the applicant has no defence to the suit and application does not raise any triable issues. In the first case counsel reiterated submissions that the applicant’s affidavit is tainted with falsehoods and cannot be relied upon. Paragraph 8 of the respondent's affidavit in reply sworn by one Francis Niwagaba is to the effect that on 16 October 2008, the applicant executed a personal guarantee to secure the loan in dispute and this is confirmed by the contents of annexure attached to the affidavit. Moreover the applicant does not contest the fact that the defendants in the summary suit including the applicant had been in negotiations with the respondent to settle the decretal sum and applicant expressly acknowledged being indebted to the respondent and agreed to settle the amounts in dispute. This is proved from the correspondence. In those circumstances the applicants intended defence is sham, it is not qualified or genuine and is based on falsehood with the intention of frustrating the respondent in its efforts to realise the fruits of the decree. In every application for leave to appear and defend the suit, the applicant must demonstrate that there is a bona fide triable issue according to the decision in Maluku Interglobal versus Bank of Uganda [1985] HCB at page 65. The applicant's application falls short of the standard set up in that case. Secondly the applicant has not demonstrated any reasonable grounds or good cause as provided for under order 36 rules 11 of the Civil Procedure Rules. It would be futile and a waste of the courts time to grant leave to the applicant to defend a claim he acknowledged to be liable for. The court has discretion to deny the applicant leave to defend the suit.

Alternatively, if the court is inclined to grant leave to the applicant to appear and defend the suit, such leave should be conditional.

Whether the decree extracted in the summary suit was irregular. The respondents counsel submitted that the applicant has not demonstrated why 21% interest was irregular. He does not show why it is illegal or irregular and there is no affidavit evidence in support of the allegation. Alternatively and without prejudice the respondents counsel contends that clause 4 of the annexure to the affidavit of Francis Niwagaba annexure SB4 provides for interest. In annexure SB2 the applicant admits a specific sum of Uganda shillings 205,343,105/= arising out of the suit.

Whether execution proceedings in the summary suit were irregular

Counsel submitted that the purpose of a notice to show cause was to enable the judgement debtor get to know of the judgement creditor's intention to execute the decree. However there is clear evidence that the applicant was aware of claims to execute the decree. In the letter dated 8th of October 2010 and fourth paragraph the applicant requested that the respondent halts the execution process. In the letter dated 14th of June 2012 the applicant admitted knowledge of the execution of the decree against him and the letter is annexure SB2. The applicant had ample notice of the intended execution but chose to ignore it and is guilty of dilatory conduct in bringing the application and the court should be pleased to disallow the same.

Ruling

I have duly considered the applicant's application and affidavits in opposition together with the annexure thereto. I have also read through the written submissions of both counsels.

The first and primary question is whether the applicant was duly served with summons in the summary suit HCCS number 288 of 2012. The affidavit of service of summons on the applicant is sworn by one Reuben Tumusiime a process server of the High Court and was filed on court record on 24 August 2010. In this suit the applicant was the fourth defendant while Akiphar Pharmaceuticals Uganda Limited is described therein as the first defendant. Paragraph 3 of the affidavit of service avers that the defendants are not personally known to the process server. He inquired from Mr Noel Muhangi, the advocate handling the matter where to find the defendants for purposes of service of summons wherein he was informed that the first defendant was situated on Rubaga Road. Accordingly on the 2nd of August 2012 he proceeded to the premises of the first applicant and inquired from the lady receptionist about the whereabouts of the three defendants including the applicant for purposes of service of summons on them on behalf of their company. Paragraph 6 of the affidavit of service is very revealing about what actually happened.

The process server avers that the receptionist informed him that Mr Mulenga Christopher was on some land business trip. She advised him to leave the original copies of the summons and plaint and for purposes of service on the directors when they come back to the office and that he would collect his acknowledged copies soon thereafter. In paragraph 7 he avers that on 6 August 2010 he went back to the company premises with a view to collecting the said summons. He found the same lady (receptionist), who informed him that she had handed over the summons and plaint to the directors for acknowledgement but that they had not returned to her the signed copies for collection. The receptionist then offered to call one of the directors’ one Rogers Mugambwa. Upon calling Mr Rogers, the court process server was informed that he had forwarded the documents to the company lawyers who received them on behalf of the company and on their behalf. He subsequently made an affidavit of service accordingly.

That is no evidence of any acknowledgement of service attached to the affidavit of service. There is no evidence in the affidavit that Mr Mulenga Christopher had been served with court process personally. The evidence is clearly that Mr Rogers Mugambwa, a director of the first defendant, received all the court documents and forwarded them to the company lawyers. The court process server was informed on phone that the company lawyers had received the court summons on behalf of the company and on behalf of the directors. The first question is therefore a question of fact as to whether the applicant was served with summons in HCCS No 288 of 22. Order 36 rule 3 (1) of the Civil Procedure Rules provides that upon filing of an endorsed plaint and an affidavit as provided for in rule 2, the court shall cause to be served upon the defendant a summons in Form 4 of appendix A of the rules or such other form as may be prescribed on the defendant. The general mode of service of summons on defendants is provided for under Order 5 of the Civil Procedure Rules. I agree with the submission of the applicants counsel that the rules prescribe the mode of service on the defendant. Under Order 5 rule 9, where service is to be effected on several defendants, service shall be effected on each defendant. Order 5 rule 9 provides as follows:

            "9. Service on several defendants.

Except as otherwise prescribed, where there are more defendants than one, service of the summons shall be made on each defendant.

The affidavit of service of Reuben Tumusiime clearly indicates that there was no service on each of the defendants. Court documents were forwarded by the receptionist of the first defendant to one of the directors called Rogers Mugambwa. Mugambwa allegedly talked on the phone to the receptionist and indicated that he had forwarded all the documents/summonses to the advocates for the company/first defendant. There was therefore evidently no service of summons on each defendant in terms of order 5 rule 9 of the Civil Procedure Rules. Secondly, rule 10 prescribes that service shall be made on each defendant in person or on his or her agent. Rule 10 is reproduced herein below for ease of reference and provides as follows:

            "10. Service to be on defendant in person or on his or her agent.

Wherever it is practicable, service shall be made on the defendant in person, unless he or she has an agent empowered to accept service, in which case service on the agent shall be sufficient.

Again it is evident from the affidavit of service of Reuben Tumusiime that service was not effected on the applicant personally as prescribed by rule 10 of Order 5 of the Civil Procedure Rules. In fact there is no evidence that the applicant had received the summons from the lawyers. There is no evidence that the lawyers are agents of the applicant. It is the applicant to instruct any lawyer of his choice to represent him in any matter in which he is summoned by the court. The application was brought under the provisions of Order 36 rule 11 of the Civil Procedure Rules which provides inter alia as follows: "… (the court) if satisfied that service of the summons was not effective, or for any other good cause,” The words used are that if service of summons was not effective, the court may set aside the decree. The question of whether service of summons as envisaged under rule 11 is effective or not was considered by the Supreme Court in the case of Geoffrey Gatete and Angela Maria Nakigonya versus William Kyobe Supreme Court Civil Appeal No. 7 of 2005. The judgment was delivered by Mulenga JSC with concurrence of the rest of the panel of Supreme Court judges. Accordingly the words "effective service" means having the desired effect of making the defendant aware of the summons. In other words, making the defendant aware means making the defendant aware within the period prescribed of what to do upon being served. It is quite evident under Order 36 rule 3 (2) that the defendant served with a summary plaint is required to make an application for leave to defend the suit within the period prescribed in the summons. If they get to learn about the summons at a later date from that of the purported service, they would be unable to make that application within the prescribed time and the plaintiff would be entitled to judgement under the provisions of Order 36 rule 3 (1) of the Civil Procedure Rules. At pages 8 and 9, Honourable Justice Mulenga JSC held as follows:

"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 defendants 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).”

The second aspect of the case is that an advocate is required to obtained instructions from the client before taking action on any matter unless such an advocate is a recognised agent under the provisions of Order 3 of the Civil Procedure Rules. I considered a similar question in the case of Lakhman Bhimji versus Manor Developments Ltd MA 105 of 2010 (arising from Civil Suit No 35 of 2013). During the hearing of the application, it was contended for the respondent that the application for leave to appear and defend under the provisions of order 36 of the Civil Procedure Rules had been made out of time. In that case service had been effected on the applicant’s counsel who was away upcountry. He was called on phone and later on found the summons in his office. This is what the court said:

“Application for leave has to be made within 10 days as stated in the summons and as provided under order 36 rules 3 of the Civil Procedure Rules.

I agree with Paul Baingana that he could not receive service of summons for a fresh suit on behalf of the Defendant. Firstly, being a fresh matter, he would need instructions of his client in terms of the contents and merits of the application in order to represent him effectively. Secondly, and more fundamentally, is the ethical question of how an Advocate can take up any matter without instructions of a client. A lawyer has no authority to act for anybody without instructions.

The Advocates (Professional Conduct) Regulations, Statutory Instrument 267—2, regulation 2 (1) forbids an advocate from acting without instructions: it provides:

 

“2. Manner of acting on behalf of clients.

(1) No advocate shall act for any person unless he or she has received instructions from that person or his or her duly authorised agent. ..”

 

Consequently, Paul Baingana had not been instructed by the 11th of February 2010. In any case he could not be instructed because the defendant/applicant had not yet been served. In terms of the rules of procedure, there was no effective service on the Applicant. To put it simply he had not yet received the documents of service from the plaintiff and he was incapable of giving instructions to any lawyer of his choice.”

A lawyer could not receive court process on behalf of his client unless he is a duly authorised agent under the provisions of Order 3 of the Civil Procedure Rules. A lawyer cannot take action without instructions.

Both counsels submitted on the subsequent proceedings which had taken place as to whether the applicant was aware of the suit and execution proceedings. I do not need to decide the case on any other basis. On the basis of the prescribed procedure under the provisions of Order 5 rules 9 and 10 and Order 36 rule 11 of the Civil Procedure Rules I am satisfied that there was no effective service of a summary plaint on the applicant. The basis of the conclusion is contained in the affidavit of service of Reuben Tumusiime, the court process server. I therefore would not deal with the question of whether the applicant had made some inconsistent or false statements in his affidavit in support of the application. It is abundantly evident that there was no proper service on the applicant. Service is a question of due process and the right to a fair hearing guaranteed under article 28 of the Constitution of the Republic of Uganda. A defendant has to be given the prescribed time within which to apply for leave to appear and defend the action under order 36 rules 3. The prescribed time is 10 days. Service of court process by which a defendant is ordered to file a defence within the prescribed time is a matter of fundamental justice. Even if the defendant subsequently got to know about the service, if he was not effectively served, he obviously would not have known within the time and to be able to instruct counsel and file an application within 10 days. It is not a question of whether the applicant has got a defence to the action, a matter to be considered in the application for leave to appear and defend. In those circumstances, under order 36 rules 11, I am satisfied that there was no effective service of summons on the applicant and the decree of the court as against the applicant specifically shall be set aside.

The second matter to be considered is whether the applicant's application raises any triable issues. The only triable issue raised by the defence is that there was no cause of action against the applicant. The basis of the assertion as contained in the intended written statement of defence and attached to the affidavits in support of the application is that the defendant has never been a guarantor to the overdraft facility, the subject matter of the suit. The question of whether an application raises triable issue is ordinarily considered in an application for leave to appear and defend the suit under the provisions of order 36 of the Civil Procedure Rules. In this case however, it has to be decided on the basis of order 36 rules 11 which assume that the decree has already been issued against the applicant. The court is already satisfied that the service of summons was not effective and that provides the basis of the exercise of the discretion of the court on whether to set aside the decree.

Upon setting aside the decree, the question of whether the applicant should be granted leave to appear and defend the suit takes on a new dimension. In the first place, the applicant never had an opportunity to apply for leave to appear and defend the suit. Consequently the remainder of the application deals with whether leave to defend the action/summary suit should be granted. If leave is refused, the respondent would be entitled to a decree against the applicant with the only difference that the applicant has been given a chance to present any triable issues. Rule 11 provides that the court may give leave to the defendant to appear to the summons and to defend the suit, if it appears reasonable to the court to do so and on such terms as the court thinks fit.

The question to be considered therefore is whether it is a reasonable to give leave to the defendant to appear to the summons and to defend the suit and if so whether it should be on any terms.

To the submission of the applicants counsel that there are triable issues on the basis of the averment of the applicant that he is not a guarantor to the loan which is the subject matter of the summary suit and which guarantee provides the basis of the suit against him, the court will review the materials presented by the respondent. The applicant argued that the respondent has not produced any material to support the contention that the applicant guaranteed the loan in question. The basic document relied upon by the respondent are attached to the affidavit of Francis Niwagaba in this affidavit in reply. The first letter relied upon is annexure SB2 and is dated 14th of June 2012 signed by the applicant and another director. It is signed on the letterhead of Mulenga and Company Limited. It is addressed to the Manager Stanbic Bank Kabale. The letter writes that the directors are aware of obligations of the first defendant company. The letter is not an acknowledgement of indebtedness by the applicant but that of the first defendant which is Akiphar Pharmaceuticals Ltd. It does not even make any reference to any guarantee agreement by the applicant. The letter annexure SB3 is from Synergy advocates and addressed to the advocates of the respondent. In the letter they write that they act on the behalf of the defendants and referred to an earlier letter of 8 October 2010 in which the write that their client was committed to pay the amount due within a period of eight months. They referred to the defendants generally but do not indicate which particular defendant made the offer. However they indicate that the client is in the process of disposing of one of its properties. It is not indicated who the registered proprietor of the land is or was. SB4 is a facility letter and offers a loan to the first defendant company. SB5 is a guarantee agreement in which the applicant guaranteed to pay Uganda shillings 150,000,000/=. It is purportedly signed by the applicant but does not have the names of the applicant in the signature page. It is witnessed by an official of the respondent. The guarantee agreement is dated 16th of October 2008.

The sole intended defence of the applicant is that he never executed a guarantee agreement in favour of the bank guaranteeing payment of the sum claimed in the summary plaint. The only question that arises in my mind in the circumstances of the case is whether Mr Mulenga Christopher is indeed the person who signed the guarantee agreement dated 16th of October 2008 guaranteeing repayment of Uganda shillings 150,000,000/= in default of the principal debtor. Perusal of the document per se only leads to a signature which may well be that of the applicant. However because of the blatant denial, the question of fact may be tried.

In those circumstances, the applicant is given conditional leave to appear and defend the suit. This is in view of the failure of the applicant to file an affidavit in rejoinder to rebut the agreement executed on 16 October 2008. Furthermore, it is not indicated as to how much money has been paid if at all so far towards settlement of the decreed sum as far as the other defendants are concerned. There is no evidence as to what happened to the proposal of the company to sell some land in order to settle its indebtedness to the respondent bank. In the circumstances of the case, the applicant shall deposit a sum of Uganda shillings 20,000,000/= or deposit security in lieu thereof to the satisfaction of the Registrar of the Commercial Court Division. The deposit shall be made within a period of 40 days from the date of this order.

Notwithstanding the condition of deposit of security above, the applicant shall file a defence within 14 days from the date of this ruling. The costs of this application are costs in the cause.

Ruling delivered in open court the 7th day of August 2013

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Ssekitto Moses holding brief for Nsubuga Kenneth for the applicant

Applicant not in court

Charles Okuni: Court Clerk

 

Christopher Madrama Izama

Judge

7th August 2013