Court name
Commercial Court of Uganda
Judgment date
23 July 2014

Ddungu v Stanbic Bank (Miscellaneous Application-2013/902) [2014] UGCommC 103 (23 July 2014);

Cite this case
[2014] UGCommC 103

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

[COMMERCIAL DIVISION]

MISC.  APPLICATION No. 902 OF 2013

(Arising from Civil Suit NO. 435 OF 2013)

WINNIE FREDRICK DDUNGU ::::::::::::::::::::: DEFENDANT/APPLICANT

T/A DDUNGU WINNIE TRADERS

VERSUS

STANBIC BANK (U) LIMITED :::::::::::::::::::: PLAINTIFF/RESPONDENT

 

BEFORE HON. JUSTICE B. KAINAMURA

 

RULING

This ruling arises from an application by way of Notice of Motion under Order 9 rule 12 & 27 and Order 22 rule 23 & 26 of the Civil Procedure Rules. The Applicant seeks orders that:-

  1. A default judgement or decree entered against the applicant in the above suit be set aside and the suit heard inter-parties.
  2.  Costs of the application be provided for.

The grounds of the application are set out in the affidavit in support of the Notice of Motion sworn by Mr Fredrick Ddungu the applicant. He deposed that he was sued by the respondent for the recovery of UGX 1,044,820,233/= which arose out of a mortgage he undertook and a default judgment was entered against him. He prays that the judgment be set aside based on the fact that the court process was served on Kalenge, Ssemambo & Co Advocates who neither had express or implied authority to represent him in the matter. He denied liability for the debt stating that the respondent had sold the mortgaged property which in his view was over and above what could cover the debt. In conclusion, the applicant seeks that a default judgement be set aside and the suit heard inter –parties.

The respondent filed an affidavit in reply sworn by Mr. Musana Nelson a law clerk with the respondent Counsel’s firm AF Mpanya Advocates. He stated that he received the applicant’s summons and telephone number 0392940300 from Mr. Brian Kalule who had conduct of the matter. He deposed that the applicant referred him to his lawyers M/s Kalenge, Ssemambo & Co. Advocates on whom he effected service.

In rejoinder the applicant deposed that he is not indebted to the respondent. He additionally stated that he cannot be held responsible for the professional negligence of his former Counsel. He thus prayed that the default judgement be set-aside and the case heard on its merits.

The applicant’s Counsel submitted that there are four grounds on which the application was made which are that:-

  • The applicant is not at all indebted to the respondent
  • The applicant’s Counsel M/s Ssemambo & Co. Advocates did not file a defence.
  • The grounds above raise triable issues.
  • Justice requires that the parties be heard inter-parties.

He added that the affidavit in reply did not negate the grounds stated save for the second ground since his Counsel was served but he did not file a defence in time/ or at all. He further stated that the applicant had settled the debt by paying some money and the rest was recovered by selling off the mortgaged property. In conclusion, Counsel invited court to allow the applicant to file his defence.

The respondent’s Counsel submitted that the application should have been brought under Order 36 rule 11 since the original suit was brought under Order 36. He also stated that the service on the applicant’s Counsel was sufficient despite the fact that the applicant denied having given M/s Kalenge Ssemambo & Co. Advocates instruction to have conduct of the matter. He cited Order 3 rule 4 of the CPR which renders service on one’s Counsel as effective as service on the person. In further submission, Counsel argued that the applicant by denying he had given instructions depicts that the applicant did not come with clean hands. He therefore submitted that the application should be dismissed with costs for the failure by the applicant to show sufficient cause for non- appearance or in the alternative conditional leave be granted requiring the applicant to deposit into court the decretal sums or a security of equivalent value.

In rejoinder, Counsel for the applicant urged that the application was properly filed though Order 36 rule 11 of the CPR as it was also an option.  He stated that it was not the applicant’s fault that     M/s Kalenge, Ssemambo & Co. Advocates was verbally instructed who later did not file the defence. Furthermore, Counsel stated that the service would have been on the applicant in person than a mere call. He concluded that the applicant had a defence that requires examination by court and hence requires that it be heard inter-parties.

Decision of the court

This application was brought under Order 9 rule 12 and 27 and Order 22 rule 23 and 24 of the CPR. The facts are clear that the applicant was sued by the respondent for the recovery of Shs. 1,044,820,233/= which was offered under a mortgage. A default exparte judgement was entered following the applicant’s failure to apply for leave to appear and defend. I have critically annalysed the submissions of both Counsel. I will address the issue of procedure that came up in submissions first.

The applicant’s Counsel proceeded under Order 9 rule 12 & 27 to set aside the default judgement and Order 22 rule 23 & 26 to stay execution. Counsel for the respondent disagreed with the procedure submitting that Order 36 rule 11 was the proper procedure in this matter. In the case of Kingstone Enterprises Ltd & 2 others Vs Metropolitan Properties Ltd HCT-CC-CS-129-2011(arising from HCT-CC-CS-129-2011) a similar question on procedure arose and Obura J had this to say;

“ Be that as it may, looking at the orders sought for in this application, there is no doubt that the applicant intended to set aside the decree, stay execution and seek leave to appear and defend the suit as provided for by Order 36 rule 11 of the CPR . While I agree that the procedure adopted by bringing this application Under Order 9 rule 27 and 29 of the CPR was a mistake on the part of the applicant’s Counsel, i do not find that it is fatal.....see Kinyanjui & AnothrE Vs Thande & AnotheR [1995-98] E.A 159....”

I also refer to the Uganda Supreme Court decision of Re Christine Namatovu Tebajjukira [1992-93]HCB 85 which was  cited in the Kingstone Enterprises case  (supra) where court held that;

“The administration of justice should normally require that the substance of disputes should be investigated and decided on their merits and that lapses should not necessarily debar a litigant from the pursuit of his rights”

It is my considered opinion that the procedural error in this application is not fatal and the matter should be heard on its merits.

 The grounds of the application as set out in the Notice of Motion and the affidavit in support are majorly based on the fact that service was done on M/S Kalenge, Ssemambo Advocates, a firm that had no instructions. The applicant in addition denies liability for the debt.

The applicant deposed in paragraph 3 in the affidavit in support of the Notice of Motion;

“That the court process was served upon Kalenge, Ssemambo Advocates instead of me in person without my express or implied authority” (emphasis mine)

However, in the affidavit in rejoinder, the applicant in paragraph 5 stated;

“That I am reliably informed by my lawyers M/s Mugoya Kyawa & Co. Advocates that the negligent professional conduct of my former Counsel, cannot be used as a conduit to deny me as a lay man, the justice being sought” (emphasis mine)

In his submission Counsel for the applicant on the issue of ineffective service stated that the applicant’s former Counsel who had been verbally instructed was served but the applicant was not served which rendered the court process defective.

Service of summons is provided for under Order 5 of the CPR specifically rule 10 which is to the effect that service wherever practicable shall be on the defendant in person or his agent. In addition Order 3 rule 4 CPR provides that service on one’s advocate is presumed effective service.

Mulenga JSC (as he then was) in Geoffrey Gatete and Angela Maria Nakigonya Vs Wiliam Kyobe S.C. C.A No. 7 of 2005 stated that the words “effective service” means having the desired effect of making the defendant aware of the summons.

The fact is that the applicant as observed earlier in this ruling was aware of the suit but relied on his former Counsel to handle it. 

In his affidavit in support under para 3, the applicant deposed that:-

“The court process was served upon Kalenge, Ssemabo & Co. Advocates instead of me in person, without my express or implied authority”

In the affidavit in reply deposed by a one Musana Nelson Munene a process server of M/s AF Mpanga Advocates, the said Munene deponed that he called the applicant on a telephone number the applicant supplied while applying for the loan and the applicant instructed him to serve his Counsel M/s Kalenga, Ssemambo Advocates. That the said firm of Advocates accepted service and stamped on the copy of the summons. Indeed in his affidavit in rejoinder, the applicant deposed that:-

“That in rejoinder to paragraph 6 of the affidavit in reply i still maintain that i have never been served with any court document in person and that i can not be held responsible for the professional negligence of Kalenge Ssemambo & Co. Advocates who failed to file a defence or such necessary court documents”. 

The above clearly indicate that the applicant was all along aware of the summons. His only concern is that he should not be denied justice on account of the negligence of his former Counsel.

In the case of Philip OngomVs Catherine Owata 2003 KALR 53 Mulenga JSC (as then was) had this to say:-

“A litigant ought not to bear the consequences of the advocate’s default unless the litigant is privy to the default or the default results from failure, on the part of the litigant to give to the advocates due instruction (emphasis mine)

In the two affidavits filed by the applicant he first denied any knowledge of the court process and later shifted the blame to the law firm of Kalenge, Ssemambo Advocates who failed to file a defence. The affidavit in reply by one Musana Munene the process server, a clear and detailed sequence of events is set out in paragraphs 7 to 13 from the time when he received summons to the time when the designated law firm was served and acknowledged service. The sequence shows that the applicant was actively involved and knew what was going on. The applicant does not even seek to controvert his involvement in his affidavit in rejoinder. Under paragraph 5 of the affidavit in rejoinder of 10th November 2013 the applicant averred:-

“That i am reliably informed by my lawyers M/s Mugoya Kyawa & Co Advocates that the negligent professional conduct of my former Counsel cannot be used as a conduit to deny me a lay man the justice being sought”.   

One can only infer that the applicant knew that C.S No 435 of 2013 had been filed against him and that he had instructed M/s Kalange Ssemambo Advocate to defend him. What did the applicant do next? He does not say. Neither does the firm he instructed clarify one way or another why they did not file a defence.

While it is now accepted in Uganda that a litigant’s right to a fair hearing as enshrined in Article 28 of the Constitution is paramount and should not be defeated on ground of his/her lawyers mistakes, such right is however vitiated if the litigant is guilty of dilatory conduct in the instruction of his lawyer (see Sepiriya Kyamulesire Vs Justine Bakachurika Bagambe Civil Appeal No. 20 of 1995 (SC).

As noted above, the applicant does not indicate in his affidavits on record what steps he took after instructing the law firm of M/s Kalenge Ssemambo Advocates to accept service of summons and handle the conduct of C.S No. 435 of 2013 on his behalf. In the result i find him guilty of dilatory conduct in his instructions to his lawyers.

In the result this application is dismissed with costs.

 

 

B. Kainamura

Judge

23.07.2014