Court name
Commercial Court of Uganda
Judgment date
2 December 2014

Global Auto Parts (U) Ltd v BAN Trading Co. Ltd (Miscellaneous Application-2014/422) [2014] UGCommC 165 (02 December 2014);

Cite this case
[2014] UGCommC 165

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

 

MISCELLANEOUS APPLICATION NO.422 OF 2014

(ARISING FROM CIVIL SUIT 767 OF 2013)

 

GLOBAL AUTO PARTS (U) LTD.  …………… APPLICANT/DEFENDANT

 

VERSUS

 

BAN TRADING CO. LTD. ………………..……RESPONDENT/PLAINTIFF

 

BEFORE: HON. LADY JUSTICE FLAVIA SENOGA ANGLIN

 

RULING

 

This application was brought under 0.36 rr 3 (1) and 4 and 0.52 rr 1, 2 and 3 C.P.R, seeking leave of this court granting the Applicant / Defendant unconditional leave to appear and defend the suit.

 

Costs of the application were also applied for.

 

The application was supported by the affidavit of John Fisher Senkungu which was relied upon at the hearing.

 

Briefly, it can be discerned from the application that the Applicant denies default in payment for all the hire purchase transactions they have been involved in with the Respondent.

 

It is asserted that the two parties have been carrying out business together since 2006; but that the transaction leading to the main suit was affected by various negative economic changes from which the Applicant is still recovering.

 

But that otherwise, the Applicant has never at any time neglected to pay or shown any intention to fleece the Respondent of its money but is no longer able to pay in big amounts as required by the Plaintiff.

The Respondent filed an affidavit in reply deponed by Masaki Bando, setting out the transaction from which the suit arose and emphasizing that the Applicant does not deny indebtedness to the Respondent and totally failed to comply with the payment schedule of the sales agreement dated 28.11.11 and therefore has no defence to the suit and application should not be allowed.

 

There is no affidavit in rejoinder from the Applicant.

 

Both parties were allowed to put in submissions which they did.  The submissions were filed on the dates indicated therein.

 

Counsel for the Applicant submitted that for an application of this nature to be allowed, courts have decided that the application must disclose a triable issue to be determined but not a good defence on the merits.  The case of Toro and Mityana Tea Co. Ltd vs. Ibingira Charles [1995] 4 KLR 20 – Lady Justice Bahigeine was cited in support.

 

Counsel emphasized the good working relationship and communication of the parties in paragraphs 3, 6 and 8 of the supporting affidavit.

 

Arguing that the transaction the subject of the main suit was packaged by the Respondent, it was stated that the Applicant failed to sell the goods due to their and high cost. And that this discloses a triable issue.

 

Further that the transaction also attracted higher taxes forcing the Applicant to obtain a loan from Centenary Bank and the Respondent was to set more friendly terms of payment because of that reason.  The case of Hajji Sulaiman Kawere vs. Emmanuel Pinto [1998] I KALR 133 was relied upon for 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”.

 

Counsel reiterated that the Applicant only defaulted due to economic factors partly occasioned by the Respondent and that this raises a triable issue for which the Applicant is entitled to be heard in the interests of justice.

That recourse to court by the Respondent was in bad faith as Applicant had indicated intention to settle the sums due by way of installments.

 

It was prayed that court reverts to S.98 C.P.A to grant the application.

 

In reply, Counsel for the Respondent gave the background leading to the suit; and then strongly opposed the application; contending that it does not disclose a bonafide triable issue to warrant the grant of leave to appear and defend the suit.  It was also pointed out that there was no affidavit in rejoinder and the annexture –J3 relied upon by the Applicant was in respect of another transaction which was not the subject of the head suit.

 

However, Counsel agreed with the position of the law regarding summary procedure as submitted by the Applicants and cited the case of MMK Engineering vs. Matrust Ug Ltd Miscellaneous Application 128/12, were principles for determining whether to grant leave to defend were set out.

 

Counsel recited the said principles, and emphasized that the Applicants “allegations of fraud, (in this case any alleged wrong doing by the Respondent) however strongly may be the words in which they are stated, are insufficient to amount to an averment of fraud on which any court ought to take notice.  That otherwise without any plausible defence established, the Applicant is not entitled to leave to defend.  The case of Abubaker Kato Kasule vs. Tomson Muhwezi [1992-3] HCB 212 was cited in support.

 

Reiterating that the Applicant had not raised any triable questions of law and fact but was only disclosing a sham defence not related to the suit before court; Counsel applied for dismissal of the application adding that the East African Court Appeal had observed that “it is desirable and important that the time of creditors and of courts should not be wasted by the investigations of bogus defences….”

 

In the alternative, Counsel proposed that, if court was inclined to give the Applicant leave to defend, then it should be conditional upon the Applicant depositing the money claimed by the Plaintiff in court.

 

Court agrees that the principles for allowing applications for leave to defend are as stated by both Counsel.  And bearing those principles in mind, together with the submissions of both Counsel and applying them to the circumstances of this application, I wish to state from the outset that I am more persuaded by the submissions of Counsel for the Respondent.

 

It is apparent from the grounds of the application that the Applicant is not denying that it owes the Respondent any money but only advances reasons for the failure to repay the sum due and owing and indicates a desire to be allowed to pay installments on the grounds that, in the transactions had with the Respondent, they have never failed to pay.  Plus that they have a long business relationship with the Respondents.

 

I find that these grounds amount to mitigating factors but do not disclose any bonafide triable issues which would entitle the Applicant to leave to defend the suit.

 

Once indebtedness is admitted and there is no triable issue disclosed, the court is left with no other alternative than to enter decree against the Applicant in the sum claimed by the Respondent.

 

Entering of the decree in such circumstances would be in line with the intention for which summary proceedings were provided for.  And that is “Order 36 C.P.R.  “Is intended to enable a party with a liquidated 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 delaying tactics of the Defendant”. – See the case of Zolla and Another vs. Ralli Brother Ltd [1969] EA 691 al P.694 as per Sir Newbold P.

 

The case refers to 0.35 then which is now 0.36 C.P.R.

 

Court has found no good reason advanced by the Plaintiff to defer from that holding.

 

For all those reasons the application fails and is accordingly dismissed with costs to the Respondent.

 

Decree is hereby entered for the Respondent in the sum claimed in the plaint, together with interest at court rate on prayer (a) from the date of filing the suit until payment in full.

 

Costs of the suit are also granted to the Respondent.

 

Court wishes to observe that, these litigation costs would have been avoided if the Applicant had instead sat with the Respondent and agreed on the installments he wishes to pay.

 

 

 

FLAVIA SENOGA ANGLIN

JUDGE

02.12.14