Court name
Commercial Court of Uganda
Judgment date
9 August 2013

Yawe v Asaba (Miscellaneous Application-2013/128) [2013] UGCommC 140 (09 August 2013);

Cite this case
[2013] UGCommC 140

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL COURT DIVISION)

MISC. APPLICATION NO. 128 OF 2013

(Arising from Civil Suit No. 61 of 2013)

 

AHAMADA YAWE…......................................................APPLICANT

VERSUS

ASABA STEPHEN IRUMBA………………………….RESPONDENT

 

BEFORE: HON. LADY JUSTICE HELLEN OBURA

 

 

RULING

 

The applicant brought this application under the provisions of Order 36 rule 4 as well as Order 52 rules 1 and 3 of the Civil Procedure Rules (CPR). He sought for orders that unconditional leave to appear and defend the suit be granted and costs of the application be provided for.

The grounds of the application as stated in the notice of motion were firstly, that there is no cause of action maintainable by the respondent/plaintiff against the applicant/defendant. Secondly, that there was no sale or mortgage of the property comprised in Kyadondo Block 216 Plot 1810 land at Buye (hereinafter referred to as the suit property) by the applicant/defendant. Thirdly, that the transaction was fraudulent. Fourthly, that the above three grounds raise definite triable issues on which this court ought to grant unconditional leave to the applicant/defendant to appear and defend the suit. Lastly, that it is fair and equitable that this application be granted.

The application was supported by an affidavit deposed by the applicant. In opposition to the application, the respondent deposed an affidavit in reply. In answer to the respondent’s affidavit, the applicant deposed a further affidavit in reply. Counsel for both parties filed written submissions for and against the application and the same are considered in this ruling.

It was submitted for the applicant that the respondent does not have a right over the suit property as alleged in H.C.C.S No. 61 of 2013. It is the applicant’s case that the respondent entered into the agreement fraudulently and without the applicant’s consent and therefore has no right whatsoever over the property. While relying on Auto Garage & Another vs Motokov (No.3) [1971] E.A 514, it was argued for the applicant that no right of the respondent has been violated since it does not exist and the applicant is therefore not liable for any violation against the respondent.

Counsel for the applicant also submitted that there was neither a mortgage nor a sale of the suit land because the applicant disputes the respondent’s claim that there was an agreement of sale of the suit property. To support this position reliance was made to Cheshire, Fifoot and Furmaston’s Law of Contract 11th Edition at page 296 to the effect that since an agreement depends on consent, it should follow that agreement obtained by threats or undue persuasion is insufficient.

The applicant’s counsel further relied on the case of Kampala Bottlers Ltd vs Damanico (U) Ltd Civil Appeal No. 22 of 1992 where Wambuzi C.J (as he then was) defined fraud to mean actual fraud or some act of dishonesty. On that basis it was argued for the applicant that the transaction was fraudulent because the applicant was fraudulently forced to sign the agreement yet the respondent handed the money over to his associates rather than to him.

In addition, counsel for the applicant argued that there are triable issues raised by the applicant’s affidavit in support to justify the grant of this application. The applicant’s counsel referred to the case of Begumisa George vs East African Development bank Misc. Application NO. 451 of 2010 where the Court confirmed the position of law in Uganda that an applicant who comes to court seeking for leave to defend a suit under Order 36 CPR must show that he/she has a good defence on the merits or that there are circumstances showing reasonable ground or a bona fide defence and the defence raised must not be a sham. Accordingly, it was argued for the applicant that he did not consent to the sale of the suit property and as such all contents of the plaint except as regards his particulars, the respondent’s particulars and the jurisdiction of this court are disputed.

For the respondent, it was argued that he has a cause of action against the applicant based on the case of Auto Garage & Another vs Motokov (Supra) since he has a right having purchased the suit property vide a sale agreement dated 7th January 2012, and the applicant having duly received the full lump sum of the purchase price has violated the respondent’s right to use his property by refuting the said land transaction, erecting structures on the land and refusing to grant vacant possession to the respondent over the same.

Counsel for the respondent argued based on the respondent’s averments in his affidavit that the applicant received the purchase price but does not want to let go of the land yet the purpose of Order 36 as  stated in the case of Begumisa George vs East African Development bank (supra) is to enable a plaintiff with a liquated claim to which there is clearly no good defence to obtain a quick summary judgment without being unnecessarily kept from what is due to him by the delaying tactics of the defendant.

Additionally, counsel for the respondent contended that the respondent does not find any fraudulent act on his part but submits that it is the applicant who is fraudulent. It was then argued for the respondent that it is the applicant who is trying to be fraudulent/dishonest having sold land, received the full purchase price but does not want to either hand over the same or refund the purchase price and yet the applicant cannot claim both the  money and the land at the same time. 

In rejoinder, the applicant’s counsel reiterated the submissions made earlier and added that the applicant has raised grave triable issues for instance no cause of action on the part of the respondent which require a trial to resolve. Secondly, that the purported sale agreement was made by threats and coercion thereby eliminating the element of consent and in that way raising a triable issue. It was further contended that it is trite law that allegations of fraud must be proved since such allegations cannot be dealt with in a summary suit.

I have carefully considered the affidavits in support and against this application together with their attachments. I have also considered the submissions of both counsel. Order 36 rule 4 CPR under which this application was brought provides;

“An application by a defendant served with a summons in Form 4 of Appendix A for leave to appear and defend the suit shall be supported by affidavit, which shall state whether the defence alleged goes to the whole or to part only, and if so, to what part of the plaintiff’s claim, and the court also may allow the defendant making the application to be examined on oath...”

While considering this provision, in the case of Abubakar Kato Kasule vs Tomson Muhwezi [1992-1993] HCB 212 Kireju J. (RIP) ruled that under Order 33 rule 4 (the current Order 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. 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.

Similarly, in the case of Kotecha vs Mohammed [2002] 1 EA 112, it was held that 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.

In the case of Patel vs Cargo Handling Services Ltd. [1994] EA 75 at 76, Duffas, P., stated that, 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.

In the instant case, the applicant claims he has never consented to the sale of the suit property to the respondent and so the alleged sale agreement was entered fraudulently. I believe this is a prima-facie defence to the plaintiff’s claim because it is a cardinal principle of law that a contract must be freely entered into by both parties. It therefore follows that where one party to a contract alleges lack of consent serious issues of law and fact arise which court would have to hear and determine on the merits. Therefore this court would be inclined to allow this application so as to determine the allegation of fraud which must be specifically pleaded and strictly proved. This cannot be done in a summary manner. Both parties are accusing each other of dishonesty and fraud so those allegations need to be properly investigated and conclusively determined by hearing the main suit.

For those reasons, it is my considered view that the applicant has met the test for grant of this application and it is accordingly allowed. The applicant shall file a written statement of defence within 10 (ten) days from the date of this order and the costs of this application shall be in the cause.

I so order.

Dated this 9th day of July 2013.08.12

 

Hellen Obura

JUDGE

Ruling delivered in chambers at 3.30 pm in the presence of Ms. Nalume Teddy holding brief for Mr. Elsa Babwegomba for the respondent. The applicant and his counsel were absent.

 

JUDGE

09/08/13