REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMAPALA
MISC APPL NO. 330/08
[Arising from Civil suit No. 148 of 2008]
1. KIBULI GIRLS HIGH SCHOOL LTD]
2. GASTER KYAWA MUGOYA]::::::APPLICANTS/DEFENDANTS
BEFORE: HON LADY JUSTICE M.S ARACH-AMOKO
This is a ruling in respect of an application filed in this court by Notice of Motion under the provisions of O.36 r 4 and O. 52 rr.1 & 3 of the Civil Procedure Rules for orders that:
The Applicants/Defendants be granted unconditional leave to appear and defend the suit.
ii) Costs of the application be provided for.
The background to the application is that the 1st Applicant, Kibuli Girls High School Ltd, and the respondent, executed a sale agreement dated 6th September, 2007 for the sale of a piece of land described as “Private Mailo land comprised in BUSIRO Block 401-Plot 267, at Bwebajja approximately 12.14 HECTARES”. The purchase price was shs 1,155,000,000 (one billion, one hundred and fifty five million shillings).
The terms of payment were that:
“The Buyer pays shs 110,000,000 by cash, to the seller upon signing this agreement, the receipt of which the seller hereby acknowledges by signing on this agreement and the balance of shs 1,045,000,000/= (one billion, forty million shillings) to be paid after securing the decree in the seller’s favour vide HCCS No. 504/06 from the date hereof”
The agreement also contained inter alia, the following clause entitled refund of consideration:
“Notwithstanding the foregoing, if this sale is successfully challenged, nullified, annulled or otherwise invalidated at the instance of any third party, or if a court of competent jurisdiction in Uganda sets aside this sale on the basis of want of title on the part of the seller or on account of any defect in the seller’s ownership or lack of authority to sell or concealment or withholding of any information or non disclosure of the same which information was/is material to the validity of the seller’s ownership then the seller shall fully indemnify the buyer in the event of the occurrence of any of the above events set out thereinabove occurring or in case any dispute concerning the sold property interest acquired as a result of this sale, then the seller shall wholly refund the purchase price paid to it including all expenses incurred arising directly or indirectly out of and incidental to this sale plus interest thereon at the prevailing bank rate”
The 2nd applicant, a director of the applicant signed the agreement on behalf of the 1st applicant.
HCCS No. 504/06 is still pending in Court. The respondent however appears to have changed his mind about the deal, and wants his money back. He has made several demands and efforts to get the applicants to refund his money, but in vain. The applicants were not willing to do so. This culminated into the arrest of the 2nd Applicant, who is the 1st Applicant’s Managing Director, by the Police in March, 2008. At the C.I.D Head Quarters, in abid to refund the money, the 2nd applicant issued three postdated cheques worth shs 130 million on the first applicant’s DFCU Bank account. He was thereafter released on police bond after being charged with the offence of obtaining money by false pretences. When the respondent banked the said chaques, the bank returned them unpaid with the endorsement “not arranged for” or “N.A.F”. Consequently, the respondent filed HCCS No 148/08, out of which this application arose in this court, under summary procedure, to recover the said money.
Upon receipt of summons, the applicants filed this application for leave to appear and defend the said suit on the grounds that:
1) The applicants have a reasonable defence to the suit namely:-
a) There is no cause of action maintainable by the respondent against the applicants.
b) The 2nd applicant has never contracted with the respondent and as such, he cannot be sued by the respondent.
c) The respondent is not entitled to a refund by the 1st applicant because the sale agreement has never been challenged, nullified, annulled or otherwise invalidated at the instance of any third party.
d) The cheques worth Ug shs 130,000,000/= ( one hundred and thirty million shillings) issued to the respondent by the 1st applicant were issued under duress.
e) The above raises definite triable issues which warrant this honorable court to grant leave to the applicants to appear and defend the suit.
2) It is fair and equitable.
Mr. Gaster Mugoya the 2nd applicant swore the affidavit in support of the application dated 25th June, 2008. Mr. Mugambwa the respondent filed an affidavit in reply dated 16th October , 2008 opposing the application on the ground that it lacks merit and there are no triable issues raised therein, as seen from the attachment marked ‘B’ in which the applicants admit that they own the respondent money which is the subject of the said suit.
The position in respect of applications of this nature is very clear. The applicant/defendant is not bound to show a good defence on the merit. He must however satisfy the court that there is an issue or question in dispute which ought to be tried commonly referred to as triable issue, or issues.[See: Maluku Interglobal Trade Agency Ltd-vs-Bank of Uganda  HCB 65.
In the case before me the question is therefore whether there are triable issues raised as alleged by the applicants.
Upon perusal of the application and the affidavit in support, I find that triable issues have been raised actually by both sides. The applicants’ triable issues are:
1) Mathew Ngugo for Respondents
3) Okuni Charles Court Clerk
Absent: -Counsel for Applicants