THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL COURT DIVISION)
MISCELLANEOUS APPLICATION NO. 843 OF 2013
(Arising Out of Civil Suit No. 46 of 2013)
ASIA RIZO NABISERE………………..…….RESPONDENT
BEFORE HON. LADY JUSTICE HELLEN OBURA
This application was brought under section 98 of the Civil Procedure Act (CPA) Cap 71, Order 36 rule 11 and Order 52 rule 1 and 2 of the Civil Procedure Rules (CPR) for orders that court set aside the ex-parte judgment entered in High Court Civil Suit No. 46 of 2013, and the applicant be granted unconditional leave to appear and defend the suit. The applicant also seeks for an order that costs of the application be provided for.
The grounds for this application as stated in the notice of motion and the affidavit in support sworn by the applicant are that: - (1) the applicant was never served with the summons as he resides in Japan, (2) the applicant is not indebted to the respondent, (3) the applicant has a good defence and, (4) it is in the interest of justice to set aside the exparte judgment.
An affidavit in reply opposing the application was sworn by the respondent who averred that the applicant was duly served with the court summons, firstly by direct service upon him which he refused to acknowledge despite receiving the same and secondly by advertising the summons in the New Vision newspaper under court order. The respondent further averred that the applicant has not raised any defence in the plaint.
The first time this application came up for hearing the applicant was represented by Mr. Mark Bwengye but there was no appearance for the respondent who was reported not to have been served yet so the matter was adjourned to another date and the parties agreed to file written submissions which they did and I have duly considered them in this ruling.
Counsel for the applicant argued that the alleged service of summons in summary suit upon his client was not effective for two main reasons, firstly; that the applicant who resides in Japan could not have been personally served at his residence in Uganda. Secondly, that the court order that directed substituted service is suspect because when the applicant learnt of the order of attachment of his property he instructed his lawyers to check the court registry and when they did so no application for substituted service was found. Apart from challenging the order as being suspicious, counsel did not address court on whether or not the substituted service would be effective if this court finds that there was an application for substituted service and the order was properly issued.
The applicant’s counsel submitted that, as stated in the affidavit in support, the applicant is not in any way indebted to the respondent as claimed in the suit. He prayed that this court sets aside the default judgment and grants the applicant leave to appear and defend the suit.
Conversely, it was submitted for the respondent that the application is incompetent because it is supported by a defective affidavit. The defect is alleged to have been caused by two factors. The first one is that the averments in paragraphs 9, 10, 11 & 12 show that the affidavit is in support of an application for stay of execution and not application to set aside a default judgment. The second factor is that the affidavit contains falsehood in so far as the applicant states that upon perusal of the court record the application for substituted service was not found and yet there was Misc. Application No. 154 of 2013. The cases of Jetha Brothers Ltd v Mbarara Municipal Council & 4 others HC. Misc. Application No. 31 of 2004 and Bitaitana v Kananura HC. Civil Appeal No. 47 of 1977 were relied upon for the position that an affidavit that contains obvious falsehood naturally becomes suspect and the application it supports is bound to fail. Counsel for the respondent on the basis of those authorities urged this court to strike out the affidavit for containing falsehood and also strike out the application for being unsupported by affidavit.
Without prejudice to the above submissions on the preliminary point of law, counsel for the respondent raised three issues which he submitted upon in opposition to the application, namely; (1) whether service of summons was not effective, (2) whether there is any other good cause that prevented the applicant from entering appearance within the prescribed time under the law, and (3) whether there is merit in the defence of the case itself.
On the first issue, he submitted that the applicant was properly served when the summons in summary suit was advertised in the New Vision newspaper as directed by court. He argued that the applicant’s contention that he was not there is merely speculative and unbelievable as he did not account for his whereabouts on the stated date of service. He prayed that this court be pleased to reject that clumsy averment.
Counsel for the respondent submitted based on paragraphs 3 and 4 of the affidavit in reply that the respondent duly complied with the provisions of Order 5 rule 17 of the CPR which provides for examination of serving officer. Furthermore, that the order for substituted service was properly obtained the applicant having applied for the same vide Misc. Application No. 154 of 2013.
On the 2nd issue, counsel for the applicant cited the case of Nicholas Roussos vs Gulamhussein Habib Virani & Another, Civil Appeal No.9 of 1993 (SC) (unreported), where the Supreme Court stated that courts have attempted to lay down some of the grounds or circumstances which may amount to sufficient cause and these include mistake by an advocate though negligent, ignorance of procedure by an unrepresented defendant and illness by a party but failure to instruct counsel was held not to be sufficient cause.
Counsel then argued for the respondent that the applicant has not shown any good cause which prevented him from entering appearance within the prescribed time and so this court should not grant him the orders sought.
I must however point out that the term entering appearance used by counsel for the respondent was a requirement under the old law which is no longer applicable. What the applicant was required to do was filing application for leave to appear and defend the suit as provided under Order 36 rule 3 (1) of the CPR.
On the third issue, it was submitted for the applicant that there is no merit in the applicant’s defence if at all there is a defence. Counsel for the respondent argued that while they agree with the principle in Abubaker Kato v Tomson Muhwezi [1992-93] cited by counsel for the applicant, the applicant has not demonstrated the existence of bonafide triable issues of fact or law which court ought to determine between the parties apart from the evidence from the bar which is not contained in the affidavit in support. Counsel prayed that the application be dismissed with costs.
The applicant filed a rejoinder in which counsel reiterated his earlier submissions and argued that the respondent did not follow the requirement of repeated service with diligence before resorting to substituted service. He submitted that the affidavit is not defective but did not specifically address the two factors raised by counsel for the respondent as making the affidavit defective. On good cause, counsel submitted that the applicant’s being away in Japan for business is good cause.
I have carefully considered the above submissions and I would like to deal with the alleged defect of the affidavit in support before I consider the merits of the application. I have perused the affidavit in support of this application filed on 24th September 2013 and have failed to appreciate why counsel for the respondent holds the view that the affidavit was in support of an application for stay of execution and not this application for setting aside a default judgment.
Paragraphs 9, 10, 11 and 12 that were singled out in my considered view contain nothing which suggests that the application is for stay of execution. On the contrary, in paragraph 9 the applicant averred that there was no application on record to cause substituted service on him and in paragraph 10 he denied ever accepting service from his premises because he was not at his residence. Similarly, paragraphs 11 and 12 contain denial of the applicant’s indebtedness to the respondent and instead the applicant states that the respondent owes him lots of money. These averments are in order because they are in response to what is averred in the affidavit in support of the plaint in summary suit. In addition, the applicant is seeking for leave to appear and defend the main suit as well so there is need to show that there are bona-fide triable issues. I therefore do not see the basis for counsel for the respondent’s submission that the affidavit is in support of an application for stay of execution.
On the alleged falsehood contained in the affidavit, I have carefully considered the basis for the allegation and my considered view is that the averment that upon perusal of the court record the applicant’s counsel did not find any application for substituted service is a question fact which depended on what was obtaining at the court registry at the time the court record was perused. It is not uncommon for files for interlocutory applications handled by the registrar to be kept separately from the main file. It is therefore possible that by the time the records were perused the two files had not yet been put together. It would therefore not be just for this court to declare the averment as being false simply because the files are now together without knowing the actual situation at the time.
For the above reasons, I overrule the objection for lacking merit and proceed to consider the merits of the application.
On whether or not there was effective service of summons on the applicant, I have looked at the affidavit in support of the application for substituted service sworn by the process server who allegedly effected service on the applicant personally on 6th February 2013 at his residence at Lubowa. It is the applicant’s case that he was in Japan where he resides and does business. I have also looked at the plaint in summary suit that was allegedly served on the applicant. It is noteworthy that the respondent acknowledged this when she described the applicant/defendant in paragraph 1 thereof that he is a male adult Ugandan who ordinarily resides in Japan to whom the plaintiff’s advocate undertake to effect court service.
I have also looked at paragraph 4 (b), (c) and (d) of the same plaint where it is stated that the money was paid through Telegraphic Transfer (TT) and cash payments. The documents attached to support the claim also confirm this and the fact that the cash receipts were not received directly by the applicant. If indeed the applicant ordinarily resides in Japan and the money was sent to him through TT, the question is: would he have been around at his residence at the time of service as alleged?
To my mind once the respondent/plaintiff pleaded that the applicant ordinarily resides in Japan it was the duty of her counsel to ensure that the proper procedure of service upon him out of jurisdiction as provided for under Order 5 rules 22 (c), 24 and 26 were followed unless she could prove that the applicant was in Uganda at the particular time the process server in her company allegedly served the applicant from his residence at Lubowa. Short of that, this court is inclined to agree with the applicant that at the time of the alleged service of the summons he was in Japan where it is not disputed that he ordinarily resides.
The respondent having pleaded in paragraph 2 of her plaint that the applicant ordinarily resides in Japan now wants to convince this court that the applicant was in Uganda at his residence in Lubowa when he was allegedly served with summons. It is therefore her duty to prove that fact to court. However, contrary to the well established principle of law that he who alleges must prove, the respondent sought to shift the burden by challenging the applicant to prove that he was in Japan. The burden could only shift after the respondent has adduced evidence to show that the applicant was at his residence and not in Japan where she knows he ordinarily resides.
Since the respondent has not proved on a balance of probabilities that the applicant was at his residence, it is the finding of this court that the affidavit of service and that in support of the application for substituted service were tainted with falsehood and therefore the order for substituted service was issued in error. In any event, the applicant who is known to ordinarily reside in Japan could not have been effectively served by advertising the summons in the New Vision being a local newspaper. If the respondent was being honest, she should have applied for service of the applicant out of the jurisdiction under Order 5 rule 24 and the court would have given direction on the manner in which the summons was to be served in accordance with Order 5 rule 26.
In the circumstances, it is the finding of this court that the purported service on the applicant was irregular and therefore not effective because it did not serve the desired intention of making him aware of the suit so that he could take the necessary action to defend himself. On the basis of this finding alone this application would succeed and this court would set aside the default judgment and I so order.
However, since the applicant is also seeking for leave to appear and defend the suit, I will also consider the conditions necessary for grant of such leave.
In the case of Abubakar Kato Kasule vs Tomson Muhwezi [1992-1993] HCB 212 it was held 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.
Duffas, P. explained what is meant by a defence on the merits in the case of Patel vs Cargo Handling Services Ltd.  EA 75 at 76, when he 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.
I have considered the intended defence of the applicant as stated in paragraphs 11, 12, 13 and 14 of the affidavit in support of the application. In effect, the applicant denies being indebted to the respondent and instead contends that the respondent owes him lots of money as a result of mismanaging and causing the collapse of his shop at Ndeeba in which she was employed to sell motor spare parts and to date she has not accounted for the proceeds. He further contends that the respondent has with the intention of further ruining his remaining business connived with the police to keep him insecure while operating his business in Uganda and to that end he has several times been beaten and detained by the police. In other words, it is the applicant’s case that the respondent’s claim is not genuine as it is intended to cover up her wrong.
The respondent did not controvert the above contention in her affidavit in reply apart from stating summarily that the applicant has not raised any defence whatsoever on the claims contained in the plaint.
It is my finding that the applicant has raised some prima facie triable issues that merit giving him opportunity to be heard in the main suit. Therefore it is my considered view that the applicant has met the test for grant of leave to appear and defend the suit and his prayer is accordingly granted.
In the result, the default judgment entered in HCCS No. 46 of 2013 is set aside and leave is granted to the applicant to appear and defend the suit. He shall file and serve the written statement of defence within fifteen days from the date of this ruling.
Costs shall be in the cause.
I so order.
Dated this 6th day of July 2015.
Ruling delivered in chambers at 3.00 pm in the presence of Mr. Mark Bwengye for the applicant. The respondent and her counsel were absent.