Court name
Commercial Court of Uganda
Judgment date
18 June 2014

Kayonza Distributors Ltd & 2 Ors v Bank of Africa Uganda Ltd (Miscellaneous Application-2014/360) [2014] UGCommC 81 (18 June 2014);

Cite this case
[2014] UGCommC 81

THE RUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

 

MISCELLANEOUS APPLICATION NO. 360 OF 2014

(ARISING FROM MISC. APPLICATION 105 OF 2014)

(ARISING FROM CIVIL SUIT NO. 545 OF 2013)

 

  KAYONZA DISTRIBUTORS LTD

  SEZI MITEGYEKO AND

JANET MITEGYEKO …………………..APPLICANTS/DEFENDANTS

 

VERSUS

 

  BANK OF AFRICA UGANDA LIMITED … RESPONDENT/PLAINTIFF

 

BEFORE HON. JUSTICE FLAVIA SENOGA ANGLIN

 

RULING

 

The application was made under S.33 of the Judicature Act, S.98 C.P.A, Order 44 rules 2, 3, C.P.R seeking leave of court to appeal against the order issued in Misc. Appl. 105/14, where the Applicants were directed to deposit shs. 500,000,000/- as a condition for leave to appear and defend C.S. 545/13, and costs of application.

 

The Applicants also sought an order staying the execution of the order in Misc. Appl. 105/14 until intended appeal is disposed of.

 

Costs of the application were also applied for.

 

The application was supported by the affidavits of the Second Applicant which were relied upon at the hearing.

 

The grounds for the application are set out in the motion and I will not bother to repeat them here.

 

The application was opposed by the Respondent in the affidavit in reply sworn by one Grace Nabukenya.

 

When the application was called for hearing on 28.05.14, Counsel for the Applicant referred to the motion and supporting affidavit and submitted that since court found a triable issue and set aside exparte decree, court ought to have granted the Applicants unconditional leave.

 

That there being an issue of the validity of the documents relied upon by the Respondent; the Applicants ought to be given a chance to defend themselves.  That this was coupled with the issue of the suit pending against the Third Defendant / Applicant in the Land Division.

 

Further that by directing parties to get an auditor, it means amount demanded is not liquidated and that the claim of the loan was premature.  And by requiring the Defendants to deposit such large sum of money, the court denied them a chance to be heard.

 

He prayed for application to be allowed with costs.

 

Counsel for the Respondent argued that the application could not be sustained and should be dismissed.

 

It was argued that, although the order sought to be appealed against was made aganist three people, the application is supported only by affidavit of Second Applicant in a representative capacity without complying with the 0.3 rr 1 and 2 C.P.R.  That such application cannot be executed.

 

That under 0.36 r 8 C.P.R., court has power to grant conditional leave.  And since the conditions set by court were not complied with, the application is untenable.

 

Also that S.98 C.P.R. cannot apply since there is a specific procedure.  The case of Makula International Ltd vs. Cardinal Nsubuga and Another [1982] ACB11 was relied upon.

 

Relying upon the case of Kandalal Restaurant vs. Davish & Co. [1952] EACA 77, it was asserted that courts have discretion to give conditional leave to defend and Applicants therefore have no locus to question the legality of court’s power, otherwise courts order would be in vain.

 

It was pointed out that, the Applicants having failed to deposit the sum directed by court within the prescribed time, the applicants were not entitled to file a defence.  And that Respondent applied for and obtained a decree.

 

The decree remaining on record and is enforceable and the orders sought by Applicant will not be effective.

 

It was also contended that the Applicants’ affidavit dwells on the merits of the matter which cannot be determined at this stage.

 

And that the Applicants have, failed to abide by the orders of the court have no right to seek leave to appeal.  It was prayed that application be dismissed.

 

In rejoinder, Counsel for the Applicants stated that the deponent of the supporting affidavit as Managing Director has authority to do so and has knowledge of the facts.

 

Further that, if there is a triable issue an Applicant is entitled to unconditional leave to defend.

 

S.98 C.P.A was relied upon for court to exercise its inherent powers.

 

Also that the written statement filed within time as stipulated and appeal is against part of the order and not all.  And since defence was filed within time, entering judgment was irregular and application will be made to set aside judgment.

 

The submissions of both Counsel have been heard and given the best consideration in the circumstances.

 

According to decided cases, court will grant leave to appeal in civil proceedings, where it appears on the face of it that there are grounds of appeal that deserve serious consideration.  – See Sango Bay Estates Ltd vs. Dresdner Bank.

 

In the present case, the Applicant sought leave to appeal against the decision of this court “granting conditional leave to defend the suit”.

 

However, it apparent from 0.36 rr 8, 10, and 11 that court has powers to grant conditional leave to defend a suit.

 

The said rules provide as follows:-

 

0.36 r 8 C.P.R “ Leave to appear and defend the suit may be given unconditionally or subject to such terms as to the payment of monies unto court, giving security, or time or mode of trial or otherwise as the court may think fit.

 

Under 0.36 r 10 C.P.R. – court can make orders for further conduct of the suit.

 

  • “ Where leave, whether conditional or unconditional, is given to appear and defend, the court shall have power to give all directions and make all orders to pleadings, issues, and any further steps in the suit as may then appear reasonable or necessary, or may order the suit to be immediately set down for hearing”.

 

The order to defend on condition was accordingly within the law.  And though the earlier decree was set aside and execution stayed, still this court had the discretion under 0.36 r 11 C.P.R to give leave to appear and defend the suit …. “on such terms as the court thought fit”.

 

The Applicant could have sought review of the courts directive to deposit the shs. 500,000,000/- and desisted from filing a written statement of defence without fulfilling the conditions set by court.

 

For all those reasons, I find that the Applicant has not established any serious issues that deserve determination by the Court of Appeal and neither has they established that they were denied a legal right.

 

The orders granting conditional leave to defend were made within the Civil Procedure Rules and to grant the Applicants leave to appeal would only serve to further delay the proceedings.

 

  • Refer to Election Petition 29/96 – Margaret Ziwa and Nabagesera and Among Annet Anitu vs. Electoral Commissioner and Rose Akullo Misc. Appl. 207 /06

 

The application is disallowed with costs to the Respondent.

 

 

FLAVIA SENOGA ANGLIN

JUDGE

18.06.14