[2025] UGCommC 138

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL ON) MISCELLANEOUS APPLICATION NO. 1022 OF 2024 (ARISING FROM CIVIL SUIT NO. 1651 OF 2023)**

**ALLAN LWANGA ] APPLICANT**

**VERSUS**

### 15 **I & M BANK (UGANDA) LIMITED ] RESPONDENT**

#### **Before: Hon. Justice Ocaya Thomas O. R**

#### **RULING**

#### 20

#### **Introduction:**

This application was brought by way of Notice of Motion under Article 28(1) of the 1995 Constitution, Section 98 of the Civil Procedure Act, Order 36 Rule 11, Order 52 Rules 1 and 3 of the Civil Procedure Rules, seeking the following orders:

(1) An Ex-parte decree arising from Judgement in default in Civil Suit No.1651 of 2023 25 be set aside and the Applicant herein be granted leave to appear and Defend in Civil Suit No.1651 of 2023.

(2) Any proceedings and /or Execution arising from a Judgement in Default in Civil Suit No. 1651 of 2023 be set aside.

- (3) This Court gives any order it deems necessary for the ends of Justice.

30 (4) Costs of being in the main suit.

The grounds of this Application are contained in the affidavit of the applicant, Allan Lwanga, and that the Applicant was served with Civil Suit No. 1691 of 2023 in a substituted service through News Paper (The Daily Monitor) on the 17th January 2024 but the Applicant saw

the advert on the 20th 35 January 2024 and the Applicant instructed his lawyers of M/S Kasasa


5 Kiwanuka & Co. Advocates to file an application for leave to appear and Defend which was filed on the 30th January 2024.

That the Respondent filed an application for a default Judgement on the 31st January 2024 and the Court signed the same on 1st February 2024 whereupon the Respondent has now

10 proceeded to file an application for taxation of costs and that the same was not served on the Applicant.

In the supporting affidavit of the Applicant, Allan Lwanga, he stated that he applied for a salary loan facility from Orient Bank, now I & M Bank Uganda Limited of UGX 15 200,000,000/=, and the same was approved and disbursed in January 2022 for payment within 60 months. That the loan was serviced until he lost his employment at which point he started engaging the Bank for a restructure and attached is Annexure B which are copies of the alleged email correspondence.

That it was astounding seeing a Newspaper advert for the substituted service on the 17th 20 of January 2024 and he instructed his advocates of M/S Kasasa, Kiwanuka & Co. Advocates to file an application for leave to appear and defend which they filed on the 30th of January 2024 and a draft was attached as Annexure C. That he kept on seeking updates from his lawyers who told him the application was not signed and fixed yet.

That he only heard about the case on the 27th of May 2024 when he received an email communicating to him about a taxation hearing scheduled for the following morning on the 28th of May 2024 at 10:00 o'clock yet he has always been waiting for the court to fix the Application for leave to appear and Defend the Application.

That the actions of the Plaintiff are not clean and he was advised by his lawyers of M/S Kobuusu Muhumuza & Co. Advocates that once a matter is filed, it cannot be disposed of without being heard and that it was an error to proceed and sign the Judgement in Default yet there was an Application for leave file and defend.

- 5 That the Application that was filed was not frivolous as he had a plausible defense to the suit wherein he intended to raise a preliminary point of law that the Plaintiff/Respondent has no cause of action against him since he is not indebted to the Respondent for the loan that was illegally disbursed to him on 29th April 2023. A draft of the Written Statement of Defense was attached as Annexure D. - 10

That it is only fair, reasonable, and in the interest of justice that this application be granted with costs to the Applicant and that it is also prudent that this honorable court sets aside the Judgement in Default and any proceedings thereunder.

- 15 The Respondent filed an affidavit in rejoinder sworn by Peace Kanyonyonzi, the Respondent's Collections and Recoveries Officer and contended that the Applicant's Application is defective, incompetent, supported by a false affidavit, barred by law, and is brought in bad faith. - 20 That on the 29th April 2023, the Respondent disbursed a loan sum of UGX 136, 107, 930/= directly onto the Defendant's Account No. 52846607010108 and that the Applicant agreed to repay the loan on demand at an interest rate of 17% per annum.

That the Applicant defaulted on his loan repayment obligations and disappeared completely 25 without trace whereupon on the 13th December 2023, the Respondent instituted a summary suit against the Applicant to recover the sum of UGX 136,107,930/= plus interest thereon at 17% per annum.

That on the 17th January 2024, the Applicant was served with a summons in the Daily 30 Monitor News Paper, a fact he admits in paragraph 7 of the affidavit in support of the application. Having failed to apply for leave to appear and defend the suit within ten days, the Court was entitled to enter a default judgment on 1st February 2024 in accordance with Order 36 Rule 3(2) of the Civil Procedure Rules.

35 That the Applicant's application does not disclose any bonafide triable issues which raises a prima facie defense and the Applicant did not attach any evidence to prove that he is not

5 indebted to the Respondent in the sum of UGX 138,054, 249/= plus the accrued interest thereon; and that the Applicant is still indebted to the Respondent to date.

This matter came for mention on 12th September 2024 in the presence of Paul Kaweesi from Libra Advocates for the Respondent and Tumwesigire Evaristo from Kabuusu Muhumuza &

- 10 Co. Advocates for the Applicant, both parties were absent. Counsel Tumwesigire Evaristo stated that the Respondent having filed their affidavit in reply on 10th September 2024, they sought for time to file a rejoinder and the Court granted them time to file by 16th September 2024, and the matter was adjourned to 23rd September 2024 at 12:00 pm for hearing. - On the 23rd 15 September 2024, both Counsel were present and the parties were absent, Counsel Tumwesigire Evaristo for the Applicant prayed for more time to file a rejoinder that the Applicant is in Canada for medical treatment. The court granted the Applicant more time to file his affidavit in rejoinder by the 25th of September 2024 together with their written submissions. The Respondents were to file their submissions by 1st October 2024 and 4th - 20 October 2024 for the Applicant's submission in rejoinder, if any.

The Applicant despite being given sufficient time to file their affidavit in rejoinder, did not file any, and neither did he apply for an extension of the timeline set down by the Court. The Respondent filed their submission timely on 1st October 2024 whereas the Applicant filed 25 its submission on the 4th October 2024 out of the timeline set by Court.

Proceedings in court are self-designed so that an aggrieved party brings a complaint against another party and the party complained against makes a reply being the Defendant/Respondent. By the time, a party commences a matter in court, he or she must

30 be purposely intent to act and manifest the matter in such a way that the justice he or she is seeking is obtained and that includes following the set procedures in prosecuting matters and the instructions that follow from court, failure to do so is detrimental to the litigant's case. This is also statutorily provided for under Order 17 Rule 4 which provides that:-

#### 5 *The court may proceed notwithstanding either party fails to produce evidence.*

*"Where any party to a suit to whom time has been granted fails to produce his or her evidence, or to cause the attendance of his or her witnesses, or to perform any other act necessary to the further progress of the suit, for which time has been allowed, the court may, notwithstanding that default, proceed to decide the suit immediately."*

The import of the foregoing provision empowers the court to close a case of any party who does not adhere to Court orders and instructions. There are a plethora of court decisions to the effect that a decision made under Order 17 Rule 4 is a decision on merits which gives rise to a decree. See *Mwangushya J (as he then was) in A P Bhimji V Michael Opkwo Misc* 15 *Application No 423/2011***.**

In *Salem A. H Zaidi V F. H Humeidan [1960] EA 92* which is still good law. The import of the Order 17 Rule 4 was discussed and that the position is that a judgment pronounced against a party under this rule "must be deemed to be a decision on the merits and have the same 20 effect as a dismissal upon evidence."

The Applicant in this application failed to comply with the Court's directions and filed their submission on the 04th October 2024, three (3 days) after the Respondent complied with Court orders and filed theirs timely, which should have been the submission in reply. Now, 25 this Court is under no obligation to consider the Applicant's submission due to the fortified position Order 17 Rule 4 grants the Court. However, the Court shall proceed to consider the Applicant's submission in this application for the sole purpose of clarity and finality.

#### **Representation:**

30 The Applicant was represented by the law firm of M/s Kabuusu Muhumuza & Co. Advocates while the Respondent was represented by M/s Libra Advocates.

#### **Evidence and Submissions:**

The Applicant led his evidence by way of an affidavit in support of the Notice of Motion

35 deponed by Allan Lwanga, the Applicant. The Respondent equally led evidence by way of an

5 Affidavit in reply deponed by Peace Kanyonyzi, the Respondent's collections and Recoveries officer.

I have not felt the need to restate the submissions herein, suffice to say that the court has considered them in arriving at its decision.

#### **Issues:**

- 1. Whether there are sufficient grounds to warrant the Setting aside of the Ex-parte decree arising from Judgement in default in Civil Suit No.1651 of 2023. - 2. Whether the Applicant herein be granted leave to appear and Defend in Civil Suit 15 No.1651 of 2023.

#### **Decision:**

## Issue 1: **whether there are sufficient grounds to warrant the Setting aside of the Exparte decree arising from Judgement in default in Civil Suit No.1651 of 2023.**

20 Order 36 Rule 11 of the Civil Procedure Rules provides that: -

"After the decree the court may, if satisfied that the service of the summons was not effective, or for any other good cause, which shall be recorded, set aside the decree, and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the court so 25 to do, and on such terms as the court thinks fit."

*Service:*

One of the grounds of an application for setting aside a decree under the provisions of Order 36 Rule 11 to succeed is non-service or ineffective service, it must be demonstrated that the

30 service of summons was ineffective. See *RM Market Links & 3 Ors v Ugafin (U) Ltd HCMA 334 of 2019, Lydia Naiga v Ask Services Limited HCMA 482/2020*, *Attorney General v Wazuri Medicare Limited HCMA 283/2023*.

In the instant application, the Applicant in his affidavit in support stated that he was never 35 served with the summary suit by the Respondent and that he only got to know about the suit when it appeared in the News Paper (The Daily Monitor) of 17th January 2024. 5 Order 5 Rule 18(1) and (2) on service of summons provides that:-

"Where the Court is satisfied that for any reason the summons cannot be served in the ordinary way, the Court shall order the summons to be served by affixing a copy of it in some conspicuous place in the courthouse, and also upon some conspicuous part of the house, if any, in which the defendant is known to have last resided or carried on 10 business or personally worked for gain, or in such manner as the court thinks fit.

(2) substituted service under an order of the court shall be as effectual as if it had been made on the defendant personally."

The Applicant in paragraph 7 of his affidavit in support stated that he was astounded when he saw the advert (for the substituted service) on the daily Monitor Newspaper on the 17th 15 of January 2024 and in paragraph 8 that upon learning suit, he instructed his lawyers of M/S Kasasa Kiwanuka & Co. Advocates to apply for leave to enter and defend. That he kept following up on the matter with his advocates who told him the application had not been fixed yet.

In his submission, the Applicant further stated that there was no application made for substituted service in this matter by the Respondent and the service via the advert in The Daily Monitor News Paper of 17th/01/2024 was illegal contrary to Civil Procedure Rules.

- The issue raised by the Applicant in his submission about the legality of the substituted 25 service is one that goes into the root of everything in the application, for the Court as it is has to first look into to ascertain the claim as Court cannot sit and watch an illegality brought to its attention go unchecked. See the Supreme Court decision in *Makula International Ltd v His Eminence Cardinal Nsubuga & Anor [1982] UGSC 2.* - 30 I have had the opportunity to peruse the main suit CS-1651-2023 and the related applications to wit, Misc. Application No. 3068 -2023, I & M Bank (U) Ltd V Lwanga Allan, which was filed on ECMISS on the 20th/12/2023. It is an application to apply for substituted service against the Applicant by the Respondent vide a Newspaper of wide circulation. The ruling and order in the application for substituted service was granted on the 15th/01/2024 - 35 by Her Worship Mastula Mulondo.

- 5 Therefore, I find that there is no merit in the applicant's allegation which can only be understood as an attempt to mislead the Court. Granted an application for substituted service is an *ex parte* application but a little due diligence would have shown the Applicant the existence of the application and save the Court's time. - 10 I agree with counsel for the Respondent that indeed, substituted service is a recognized mode of service and has been held effective. See *Dr. Bweyale Josephine V Jomayi Property Consultation Limited Civil Revision No. 13 of 2020*.

The Applicant in this case does not deny not being served, he acknowledged service under 15 Paragraph 7 of his affidavit in support, and in paragraph 8 he allegedly filed an application for leave to enter and appear on 30th /01/2024.

This is a material fact of admitting to be served with the summons and being aware of the suit hence the alleged application they purport to have filed. See Section 22 of the Evidence 20 Act.

In the premises, I find this ground has not been proved by the Applicant.

## *Good cause:*

- 25 This honorable Court in *Patrick Katto v Dirk Ten Brink MA-791-2023*, cited with approval the definition of what amounts to a good cause in such an application as was defined in *Pinnacle Project v Business In Motion Consultants HCMA 362-2010* as a "legally sufficient reason" and in *Dr. B. B Byamugisha v Alison Kantarama HCMA 299-2019* which also defined as the " the legal burden placed upon a litigant, usually by court, to show why a 30 particular request should be granted or an action or omission excused".

The requirement of a "good cause" is contained in Order 36 Rule 11 which states "…or for any other good cause". This court also differentiated between "a good cause" and a "sufficient cause" in the case of *Patrick Katto v Dirk Ten Brink (supra)* as it cited the decision of the

35 Indian Supreme Court in *Arjun Singh v Mohindra Kumar & Others, AIR 1964 SC 993,* that:

5 -*The only difference between a "good cause" and "sufficient cause" is that the requirement of a good cause is complied with on a lesser degree of proof than that of a "sufficient cause"*

The requirement of a good cause puts the onus on the Applicant to show cause why the Court should exercise its discretion in their favor in light of a particular default, in this case, why

10 the Applicant failed to enter appearance.

It is trite law that where the Defendant in a summary suit fails to file in court an application for leave to appear and defend the suit within 10(ten) days under Order 36 Rule 4 in the prescribed manner in Form 4 Appendix A, then the Court can go ahead to issue a default 15 judgment in favor of the Plaintiff.

The Applicant attached an ECMISS printout of a screenshot as Annexure C which upon examination is not very clear as the printout does not show whether the Application was admitted upon following the filing on ECMISS procedures or if they simply uploaded the 20 documents on ECMISS.

Nonetheless, the Applicant in his affidavit in support stated that after instructing his lawyers of M/S Kasasa, Kiwanuka & Co. Advocates to file the application to enter and defend the summary suit, that he kept following up with the lawyers who told him the application has

25 not been signed and fixed yet.

This Court in *Patrick Katto v Dirk Ten Brink (supra)* stated that there is a difference between "admission" and "fixing". In the ECMISS system, an application will typically be admitted before it is fixed. Admission is the onboarding of the document on the record, the electronic

- 30 process replaced the manual stamping, and placing the document on the file. An application does not need to be fixed (allocated date and heard) before the same is admitted. Whereas the duty of admitting documents filed in ECCMIS and fixing applications is one of court, a litigant is expected to aggressively follow up on the admission and/or fixing of their documents/matters. An inordinate delay to do so may preclude a party from the court's - 35 protection or discretionary reliefs. See *ABJ Engineering and Contracting Co. KSC V Align Electrical Group Company Limited HCMA 122/2023.*


- 5 Further, the Applicant argues that the application for leave to appear and defend was filed on ECMISS on the 30th/01/2024, while the notice was served on the 17th/01/2024, the last day of the prescribed ten (10) days period is supposed to be on the 28th/01/2024 which is a Sunday and thus not counted and so it moves to the next working day which was Monday 29th/01/2024 whereas the application was filed on 30th/01/2024 making it still late by a day - 10 and barred by law. The Applicant in this argument tried to mislead the Court but days herein are the right number of days when computed.

In the premises, I find no good cause in the applicant's default in filing a proper or timely application to apply for leave and defend the summary suit in CS-1651-2023, I & M Bank (U)

15 Ltd v Allan Mwanga. In the case of *Post Bank (U) Ltd v Abdu Ssozi SCCA No. 8 of 2015*, the Supreme Court held that: -

> *If the Defendant fails to apply for leave to appear and defend in the time prescribed (which is 10 days), the Plaintiff is entitled to a decree for an amount claimed in the plaint with interests, if any.*

-

Issue 1 fails for not meeting the threshold required.

## Issue 2: **Whether the Applicant herein be granted leave to appear and Defend in Civil Suit No.1651 of 2023.**

25 Order 36 Rule 8 provides for leave to appear and defend in a summary suit, and states that:

*"Leave to appear and defend the suit may be given unconditionally, or subject to such terms as to the payment of monies into court, giving security, or time or mode of trial or otherwise, as the court may think fit."*

30 In Miter Investments Ltd V East African Portland Cement Co. Ltd M. A No. 0336 of 2012, it was held that :-

"In order to avoid judgement being entered for the Plaintiff, the defendant must show that there is a triable issue or that for some other reason, there ought to be a trial. Where the defendant raises a triable issue on his affidavit, he, must not at this stage be shut out,

35 and must have leave to defend, although his case may appear to be a weak one. On the

5 other hand, mere denials of the Plaintiff's case are insufficient. The defendant must clearly disclose the nature and extent of his defense in a clear language."

In the Applicant's affidavit in support of this application in paragraphs 17 and 18 he stated that he is not indebted to the Plaintiff/Respondent for the loan that was allegedly disbursed

10 to him on the 29th April 2023 and that all the amount that was disbursed onto his account on the 29th April 2023 was again collected by the same bank on the same day.

I have had the opportunity to peruse the Applicant's draft copy of the intended Written Statement Defense which was attached as Annexure D and in paragraph 17, the Applicant 15 stated that he never received any money from the Respondent/plaintiff, and in paragraph 9, he stated that he continued servicing the loan he received from the Respondent/Plaintiff.

In all these, I am inclined to agree with Counsel for the Respondent/Plaintiff and I surmise that the Applicant other than making general denials, is also inconsistent in his defense to 20 make any triable issue out of them.

What the Court is concerned with is a prima facie defense or a defense worthy of being tried in Court so that leave to appear and defend can be granted. Conjectures and inconsistent defenses are not satisfying to the Court. The Applicant's inconsistent in his Affidavit in 25 support and the Written Statement of Defense against another and in themselves shows the lack of defense worthy of a triable issue because a triable issue cannot have several versions against each other.

In the premises, I find that the Applicant has no triable defense to warrant the grant of leave 30 to appear and defend.

Issue 2 fails for lack of merit.

*Costs:*

**Section 27 of the Civil Procedure Act** provides that costs follow the suit unless there is a 35 strong reason to suggest the contrary and are awarded at the court's discretion. See, *Anglo-Cyprian Trade Agencies Ltd v. Paphos Wine Industries Ltd, [1951] 1 All ER 873.*

5 The Applicant shall bear the cost of this application having no merit in it.

In Conclusion:

- 1) This application is dismissed. - 2) The Respondent is awarded the Cost of this application.

I so order.

**Dated** this\_\_\_\_\_\_\_ day of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_2025, delivered electronically and uploaded on **ECCMIS** 28th March

**Ocaya Thomas O. R Judge,**

**28th March 2025**