Court name
Commercial Court of Uganda
Judgment date
28 August 2015

Ndibazza Naima v Acacia Finance Ltd (Miscellaneous Application-2014/1144) [2015] UGCommC 100 (28 August 2015);

Cite this case
[2015] UGCommC 100

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 1144 OF 2014

(ARISING FROM MISC APPLICATION NO 673 OF 2014 AND

ARISING FROM HIGH COURT CIVIL SUIT NO 501 OF 2014)

NDIBAZZA NAIMA}.............................................................................APPLICANT

VS

ACACIA FINANCE LIMITED}..............................................................RESPONDENT

BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicant applied by Notice of Motion under the provisions of Order 9 rule 23 of the Civil Procedure Rules as well as Order 52 rules 1 and 3 and section 98 of the Civil Procedure Act for an order that the dismissal order in Miscellaneous Application Number 673 of 2014 is set aside; that the decree in civil suit number 501 of 2014 be vacated or set aside; that Miscellaneous Application Number 673 of 2014 be reinstated and heard on merits inter parties and costs of the application be in the cause.

The grounds of the application are contained in the affidavit of the Applicant as well as referee stated in the notice of motion. The Applicant is the registered proprietor of the suit property and was never notified about the hearing of the application for unconditional leave to appear and defend the suit. The Applicants former lawyers were negligent and never did due diligence. The Applicant is not indebted to the Respondent in the sums claimed that all. Finally it is averred that it is just and equitable that the application is allowed and the main application had and determined on merits.

The Applicant deposes in the affidavit in support of the application that her application for unconditional leave to appear and defend the suit was dismissed on 10 October 2014 for want of prosecution. She was however never informed about the hearing date of the application and came to learn about the dismissal of the application when the court bailiff served her with a letter. She deposes that her former lawyers were negligent and never updated her about the progress of the application and she ought not to be punished for the negligence of her former lawyers. Prior to the dismissal of the application she had instructed Messieurs Kajeke and Maguru and Company Advocates who did not exercise diligence when the application was dismissed. On the basis of information from Counsel she deposes that mistakes of Counsel should not be visited on the client. She is the registered proprietor of the suit property and never borrowed the alleged money. As the registered proprietor, she ought to be given an opportunity to be heard before determination of the issues to do with her property. She has a lot of interest in the application for unconditional leave to appear and defend the suit. She is not indebted to the Respondent in the sums claimed or at all. Lastly she deposes that it is just and equitable that the application is allowed and the main application heard and determined on merit inter parties.

The Respondent opposed the application and in the affidavit in reply, the manager of the Respondent Company Karungi Susan deposes that she became aware of the application on 14 April 2015 after the case had been cause listed. The Applicant’s affidavit is tainted with falsehoods and should not be relied upon. Furthermore the Applicant’s application for leave to appear and defend has no merit. She was informed by her lawyers that the Applicant filed miscellaneous application number 1065 of 2014 on 28 November 2014 and it was struck out on 28 February 2015. The current application was filed on 23 December 2014. By the time the current application was filed on 23 December 2014, miscellaneous application 1065 of 2013 was still in existence and had not been disposed of. It is therefore irregular to have to applications at the same time seeking for the same remedies. The irregularity is intended to mislead the court. The Applicant filed an application for leave to appear and defend which was dismissed on 10 October 2014 for non-attendance. In her affidavit in support of miscellaneous application number 673 of 2013 the Applicant admitted paying part of the claim and further that she did not get the money alone and wanted one David Sabuka Tigatoolwa also paid part of the money. The Applicant contradicts herself when she states that she is not indebted to the Respondent at all in this application contrary to what she stated earlier in the former application. On the basis of information from her Counsel, she deposes that the Applicant has departed from a previous pleading and as such the court cannot sanction such a departure. Though the Applicant alleges that she is not indebted to the Respondent at all, she does not prove that she paid any monies owing to the Respondent. The application is an abuse of court process, has no merit and is brought in bad faith. The Applicant is indebted to the Respondent and is merely buying time and therefore denying the Respondent the fruits of its judgment. The money that is due and owing to the Respondent is now Uganda shillings 139,234,450/= including the decretal sum and interest and costs of the suit. Alternatively if the court deems it fit to grant the application, it should be on condition that the Applicant deposits the sum of Uganda shillings 139,234,450/= in court.

The Applicant is represented by Counsel Joseph Luzige while the Respondent is represented by Counsel Bill Mamawi.

After negotiations between the parties failed, the court was addressed in written submissions. 2 July 2015 and in the course of negotiations between the parties Counsel Joseph Luzige informed the court that the Applicant actually admitted owing Uganda shillings 56,000,000/= by the gentleman David should be held responsible for payment of the civil. She intends to file a third party notice and find a way forward if she is allowed to file a defence. She would like a determination of how much she owes and who is liable. Because of the inconclusive nature of the representations of the Applicant through Counsel which the representations and not in writing, I fixed the application for ruling on 28 August 2015. The parties were at liberty to continue negotiating and if no settlement was reached, a ruling would be delivered as scheduled.

The initial submissions of the Applicant and that the application is granted or denied under the unfettered discretionary powers of the court. He dwelt on the fact that the mistake of Counsel should not be visited on the litigant who demonstrates that she or he has an interest in pursuing his or her motor in court. He relied on the case of Tropical Bank Africa Limited versus Grace Were Muhwana S.C.C.A. 03 OF 2012. It was held that mistakes or it inadvertence by Counsel should not be visited on the litigants themselves who come to court seeking substantive justice. The same holding can be found in the case of Crane Finance Company Ltd versus Makerere Properties S.C.C.A. No. 1 OF 2001.

The Applicant had applied for unconditional leave to defend the suit and was never informed of the hearing date and the same was dismissed for want of prosecution on 10 October 2014. She learnt about the dismissal when she was served with a letter from the bailiffs.

The Applicants Counsel submitted that miscellaneous application number 670 of 2014 was dismissed under Order 9 rule 23 of the Civil Procedure Rules for non-attendance at the hearing, the Applicants Counsel clearly shown that the Counsel was negligent and committed a mistake and should not be visited on the Applicant. Secondly under the same order, the Applicant can apply for reinstatement as she has done. He submitted that as the registered proprietor the Applicant is entitled to be heard as the court is meant to determine issues touching her property rights in the suit property. He contended that it would be a travesty of justice for the court to deny a hearing to the Applicant over rights to do with her property.

Furthermore the Applicant is not indebted to the Respondent Company to the amount alleged in the main suit. This can only be expanded when the Applicant is given a chance to adduce evidence in the main suit.

As far as the preliminary points of law raised by the Respondent are concerned, during proceedings in court, Counsel for the Respondent agreed to proceed with the hearing of the application on merit. In the premises he did not address the court on any preliminary matters. In the alternative he submitted that as a new Counsel he was not aware of the previous application before filing the current application. The Applicant is in the person who does not understand the legal technicalities. The allegations of irregularities can be overlooked by the court. This also applies to discrepancies in her evidence in respect to whether she is or is not indebted to the Respondent and if she is how much. He submitted that those issues can be expanded or incorporated in the application for leave to appear and defend or in the main suit given a chance.

The Respondent’s Counsel opposed the application and addressed the court on the grounds in the notice of motion. He contended that the Applicant limited his arguments to one principal issue which is the negligence of Counsel which was the result of failure of the Applicant to attend court on the scheduled date.

The fact that the Applicant is the registered proprietor of the suit property is not disputed by the Respondent. However on the submission that the Respondent is not indebted in the summons or at all, the Applicants own affidavit contributes and conflicts on this issue of whether she does not owed the Respondent any money or whether she is not indebted to the Respondent at all. Courts are very strict and not condone conflicting affidavits on the same matter. He relied on the case of Suleiman Kiggundu versus Greenland bank HCMA 303 of 2007 where the Applicants were a supplementary affidavit which was in conflict with the first affidavit and honourable lady justice Stella Arach Amoko refused the application on that basis. Counsel further relied on the case of Bitaitana vs. Kananura and Besigye vs. Museveni SCCA No. 1 of 2001. The law is that the inconsistencies in affidavits cannot be ignored because a sworn affidavit is not a document to be taken lightly and where it contains obvious falsehoods, it naturally becomes suspect. An application supported by a false affidavit is bound to fail because the Applicant in such a case does not go to the court with clean hands and tell the truth. The Respondents Counsel contends that the inconsistencies were groove contradictions and pointed with deliberate untruths been sold by the court and the Applicants application should be disallowed.

In the previous application the Applicant avers that he had so far paid only Uganda shillings 3,000,000/=. She also admitted having obtained the loan and pledged as security the certificate of title of her property. On that basis under Order 13 rules 6 of the Civil Procedure Rules, any party may at any stage of the proceedings apply to the court for judgment or order upon such admission and should be entitled to without waiting for the determination of other questions between the parties and the court may pass judgment as it thinks fit (See Unicoff Ltd vs. Interfreight Forwarders HCCS 912 of 1996). The Applicant acknowledges that he is indebted to the Respondent and what she disputes is the amount. She had in the previous affidavits admitted only having been paid Uganda shillings 3,000,000/= only. In the premises the Respondent prayed before judgment on admission by the Applicant that he is indebted to the Respondent.

As far as the law on the mistake of Counsel not being visited on the litigant is concerned, the Respondents Counsel agreed with the law. However the Applicant seeks to have the application reinstated under Order 9 rule 23 of the Civil Procedure Rules which provides that the court may make an order setting aside the dismissal upon such terms as to costs or otherwise as it deems fit.

The application was brought to waste the time of the court and denied the Respondent fruits of his judgment and if the court should find it fit to grant the application, the sum of Uganda shillings 139,234,450/= which is the decreed sum should be deposited in court.

In rejoinder the Applicants Counsel submitted that the deposition of the Applicant that "I am not indebted to the Respondent in the sums claimed or at all" is not conflicting with her position as far as this application is concerned. It means that the total figure referred to as the sums due to the Respondent from the Applicant is disputed and therefore the Respondent is not indebted as claimed in that figure. It also means that the Respondent is not indebted as alleged. It does not mean that the whole figure is disputed. Consequently Counsel submitted that it was the question of English and interpretation. In the premises the whole pleadings must be put into consideration in determining the intention of the Applicant. The Applicant admitted the loan transaction with the Respondent and that she is indebted to the Respondent. This cannot be interpreted or understood to mean that she is not owe any money.

As far as the prayer for judgment on admission is concerned, the provisions of law quoted apply to situations where a litigant admits a specific sum unequivocally which is not the case in this case. In this case the Applicant does not admit the total claim and therefore judgment be entered against her for the figure she disputes. She should be unconditionally permitted to file a defence to prove the figures due to the Respondent in the interest of fair trial. She admitted Uganda shillings 56,000,000/= only and claims that there were two people who borrowed the money in question and she intends to apply for a third party notice.

Concerning the condition to deposit Uganda shillings 139,234,450/=, justice Owinyi Dollo found that this property is worth Uganda shillings 300,000,000/= only and since the title is in the hands of the Respondent together with possession, there is no need to deposit security for staying execution.

Ruling

I have carefully considered the submissions as well as the pleadings. The Applicant through Counsel and in the written submissions admits Uganda shillings 56,000,000/= but claims that she was not alone in obtaining the loan. On the strength of that assertion, she intends to file a defence and apply for the issuance of a third party notice against one David Sabuka Tigatoolwa. Lastly the Applicant would like the court to ascertain how much is owing to the Respondent under the loan facility.

The Respondent’s Counsel attacked the Applicant’s affidavit in reply on the ground that it is unclear and therefore intends to mislead the court. Firstly the Applicant had filed an earlier affidavit in support of an earlier application which has been dismissed. This was Miscellaneous Application No. 0673 of 2014. The Applicant deposed in the affidavit in support thereof sworn to on the 1st of August 2014 that she got the loan with David Sabuka Tigatoolwa who ought to pay part of the money. She deposed that she had so far paid 3,000,000/=. She further deposed that she pledged a certificate of title with the Respondent as security for the loan and the loan was secured.

In that application as well as in this application the Applicant does not deny the loan transaction. In the affidavit in reply Karungi Susan, The Manager of the Respondent, gave the details of the loan agreement and what was owed. According to the Respondent the Applicant’s affidavit denying that she owed money was a falsehood and should not be allowed.

I find this application troubling on the ground that it seeks to set aside the dismissal of MA No. 673 of 2014 and for the decree to be vacated and application reinstated. This is an application filed under order 9 rule 23 of the Civil Procedure Rules which provides as follows:

“23. Decree against Plaintiff by default bars fresh suit.

(1) Where a suit is wholly or partly dismissed under Rule 22 of this Order, the Plaintiff shall be precluded from bringing a fresh suit in respect of the same cause of action. But he or she may apply for an order to set the dismissal aside, and, if he or she satisfies the court that there was sufficient cause for nonappearance when the suit was called on for hearing, the court shall make an order setting aside the dismissal, upon such terms as to costs or otherwise as it thinks fit, and shall appoint a day for proceeding with the suit.

(2) No order shall be made under this rule unless notice of the application has been served on the opposite party.”

In other words the Applicant was not present when the application was called for hearing. It was dismissed under order 9 Rule 22 of the CPR and a default decree entered under the provisions of Order 36 rule 3 of the Civil Procedure Rules. In terms of order 9 rule 23, it is a dismissed suit which is reinstated where it is proved that there was sufficient cause for non appearance of the Applicant or Plaintiff when the suit called on for hearing. The result of a successful application is reinstatement of the dismissed suit or application.

However in this case there was not just a dismissal of the application for leave to defend a summary suit. What happened is that there was in addition a default judgment entered against the Applicant. Even if the dismissal of the application is set aside, it would be necessary to set aside the decree.

The Applicant erroneously proceeded under Order 9 rule 23 of the Civil Procedure rules. The correct rule where a default judgment is entered under Order 36 rule 3 of the Civil Procedure Rules is Order 36 rule 11 of the Civil Procedure Rules. This rule permits the court to set aside the decree on any good cause and non appearance for sufficient cause may be considered under the premises of good causes.

The application proceeded as it is and no prejudice has been occasioned to the Applicant or the Respondent by proceeding as if the application was filed under order 36 rule 11 of the Civil Procedure Rules under which rules the court may set aside the decree or stay execution or set execution aside and may give leave to defend if it appears reasonable to do so. Both parties submitted on the premises for the decree to be set aside and whether leave should be granted. In the premises I will handle the application on the merits.

As far as the alleged defective affidavit evidence is concerned, the Applicant at the hearing further admitted the loan and a certain amount of money as owing and the Respondents Counsel applied for judgment on admission. The alleged contradiction in the affidavit can be ignored on the ground that they do not specifically deny or admit liability. Secondly the correct approach should have been to seek further and better particulars from the Applicant and not defeat the application because the affidavit was lacking in a material particular.

Where there are defects in an affidavit and according to Odgers' Principles of Pleading and Practice in Civil Actions in the High Court of Justice 22nd edition, it can be cured by the filing of a further affidavit at the hearing (See Les Fils Dreyfus vs. Clark [1958] 1 ALL ER 459). In the case of Les Fils Dreyfus Et Cie Sociétaé Anonyme v Clarke [1958] 1 All ER 459 an application was supported by a defective affidavit and the issue decided by the Court of Appeal was whether if there is a defect in the affidavit filed, it cannot thereafter be cured? PARKER LJ who delivered the judgment of the court after considering several authorities held that there always has been and there is jurisdiction in the court to allow the affidavit to be supplemented, and that in deciding jurisdiction one looks at the matter at the end of the day on the affidavits which have been filed.

In this case the Applicant was however not ordered by the Registrar or the Judge to supplement the affidavit to give further and better particulars of the alleged defence or be cross examined on the particulars of the defence. The Applicant did not comply with the provisions of Order 36 rule 4 of the Civil Procedure Rules which stipulates that the affidavit shall indicate whether the defence alleged goes to the whole or part only and if so to which part of the claim. It was not sufficient to depose that the details of the defence will be provided at the trial. There was a specific claim under a specific contract of a term loan. In the previous application the Applicant averred that she has so far paid Uganda shillings 3,000,000/=. She does not specify what is outstanding but claims that another person was jointly liable to pay. Eventually through her Counsel she admitted 56,000,000/= as owing but wants to defend the suit through shifting liability to a third party and ascertaining what owes.

That notwithstanding does the application as it stands discloses any plausible defence or any issue fit for trial?

Order 36 rule 2 of the Civil Procedure Rules provides that where a Plaintiff seeks only to recover a debt or liquidated demand in money payable by the Defendant, with or without interest arising upon a contract, express or implied, he or she may at the option of the Plaintiff, institute a suit by presenting a plaint in the prescribed form accompanied by an affidavit made by the Plaintiff or by any other person who can swear positively to the facts, verifying the cause of action, the amount claimed, if any and stating that in his or her belief that there is no defence to the suit. In this case the Plaintiff claimed a liquidated amount of Uganda shillings 115,830,000/= which was awarded in the default decree dated 15th Oct 2014 with interest at court rate from the date of judgment till payment in full. The purpose of a summary suit under is discussed by Parker L.J in the case of Home and Overseas Insurance Co Ltd v Mentor Insurance Co (UK) Ltd (In Liquidation) [1989] 3 All ER 74 where Parker LJ held at page 77 that:

“The purpose of Ord 14 is to enable a Plaintiff to obtain a quick judgment where there is plainly no defence to the claim. If the Defendant’s only suggested defence is a point of law and the court can see at once that the point is misconceived the Plaintiff is entitled to judgment. If at first sight the point appears to be arguable but with a relatively short argument can be shown to be plainly unsustainable the Plaintiff is also entitled to judgment. But Ord 14 proceedings should not in my view be allowed to become a means for obtaining, in effect, an immediate trial of an action, which will be the case if the court lends itself to determining on Ord 14 applications points of law which may take hours or even days and the citation of many authorities before the court is in a position to arrive at a final decision.”

Does the Applicant plainly have no defence? If there is an alleged defence is it plainly misconceived or is it an arguable ground of defence? Whenever a genuine defence, either in fact or law, sufficiently appears, the Defendant is entitled to unconditional leave to defend. The Defendant is not required to show a good defence on the merits. Where the court is satisfied that there is an issue or question in dispute which ought to be tried, it should grant leave to defend. The defence should be bona fide and stated with sufficient particularity, as appear to be genuine (See Odgers' Principles of Pleading and Practice in Civil Actions in the High Court of Justice 22nd edition at pages 75 and 76). In an application for leave to appear and defend a suit under O. 36 of the Civil Procedure Rules S.I 71-1, the Applicant must show that there are triable issues to be determined in the suit (see Maluku Interglobal Agency Ltd. v. Bank of Uganda [1985] HCB 65). In Abu Baker Kato Kasule vs. Tomson Muhwezi [1992-93] HCB 212, where it was held that “In all applications for leave to appear and defend the court must be certain that if the facts alleged by the Applicant/Defendant were established, there would be a plausible defence in which case the Defendant should be allowed to defend the suit unconditionally. On the other hand the case of Corporate Insurance Co. Ltd. v. Nyali Beach Hotel Ltd [1995-1998] EA 7 decided by the Court of Appeal of Kenya holds that leave to defend will not be given merely because there are several allegations of fact or of law made in the Defendant’s affidavit. The merits of the issues are investigated to decide whether leave to defend should be given. Sometimes the prima facie issues which are preferred can be rejected as unfit to go to trial because by their very nature and as disclosed they are incapable of constituting a defence to the claim. The court has to establish whether they are bona fide or genuine issues for trial that will stand trial.

My considered holding is that the Applicant’s alleged defence has not been stated with sufficient particularity so as to show whether the Plaintiffs claim is over and above what is outstanding. She admits Uganda shillings 56,000,000/= orally through Counsel but does not deny the outstanding. Instead she avers that the loan was to be paid by another person. If the decree is set aside the Applicants application in MA 673 remains and it avers clearly that the Applicant only paid Uganda shillings 3,000,000/= and part of the loan is to be paid by one David Sabuka Tigatoolwa. The said David is a third party in that he is not privy to the term loan agreement Annexure “A” to the plaint. In the annexure the term loan agreement is between the Applicant and the Plaintiff. It is the Applicant who undertook to repay the loan. The relationship between the Applicant and the third party is not part of the written agreement and oral evidence thereof can be excluded under sections 91 and 92 of the Evidence Act.

The Applicant is by the Respondent’s suit not precluded from and is at liberty to sue the third party in another suit for indemnity on whatever ground she alleges that he is supposed to pay part of the loan.

In the premises the Respondent is entitled to judgment on admission in the sum of Uganda shillings 56,000,000/= without prejudice to the decree.

Because the defence that the Applicant is not liable to the whole amount is vague and does not have sufficient particulars against the definite claim of the Respondent based on a term loan agreement, the only issue seems to be that the Applicant alleges that she does not know how the total amount was arrived at. The respondent has the statement and she can access it. She already averred that she only paid Uganda shillings 3,000,000/= and produced the deposit slip. She has not produced another deposit slip for any further payment. In execution proceedings any payments after the suit was filed can always be offset from the total outstanding.

In the premises the applicant’s application lacks merit and there is no basis for setting aside the default decree. The Applicant’s application stands dismissed with costs.

Ruling delivered on the 28th of August 2015

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Mamawi Bill for the Respondent

Segamwenge Hudson Holding brief for Joseph Luzige for the Applicant

MD of Respondent Mr. Byenkya Julius in court

Charles Okuni: Court Clerk

 

Christopher Madrama Izama

Judge

28th August 2015