[2001] UGHC 122
The court found that the applicant failed to raise any triable issue regarding the existence or legitimacy of the overdrawn account. The applicant's denial of the overdraft and lack of formal resolution were insufficient, as the act of drawing cheques resulting in an overdraft constituted an application for such...
Source-derived case information.
- Citation
- [2001] UGHC 122
- Parties
- Respondent: International Credit Bank Limited (in liquidation); Applicant: Sanyutex Limited
- Court
- High Court of Uganda
- Jurisdiction
- Uganda
- Case Number
- MISC. APPLICATION NO. 22 OF 2001
- Procedural Posture
- Miscellaneous Application / Ruling on Application for Leave to Defend Summary Action
- Outcome
- application dismissed; decree granted for plaintiff
- Judges
- Okumu Wengi, J
- Legal Topics
- Summary Judgment, Bank Liquidation, Overdrawn Account, Directors Authority, Liquidated Debt
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
International Credit Bank Limited (in liquidation)
Respondent
Sanyutex Limited
Applicant
Procedural Posture
Miscellaneous Application / Ruling on Application for Leave to Defend Summary Action
Legal Issues
- 1 Whether the applicant has a triable defence to the summary action for recovery of an overdrawn account.
- 2 Whether the overdraft was authorised and legitimate.
- 3 Whether the directors' dual roles estop the defendant from denying the overdraft transaction.
Ratio Decidendi
The court found that the applicant failed to raise any triable issue regarding the existence or legitimacy of the overdrawn account. The applicant's denial of the overdraft and lack of formal resolution were insufficient, as the act of drawing cheques resulting in an overdraft constituted an application for such overdraft, which was honoured by the bank. The dual role of directors in both entities further estopped the defendant from denying the transaction's authority. The court concluded that the defendant had no possible defence, rendering the application frivolous and vexatious. Accordingly, leave to defend was denied, and the plaintiff was entitled to a decree for the claimed sum,...
Court Disposition
application dismissed; decree granted for plaintiff
Orders
- Defendant to pay the plaintiff Ug. Shs. 37,695,155.
- Defendant to pay interest at 28% per annum on the decretal sum from the date of filing until payment in full.
Full Case Text
Judgment text and source record
37 paragraphs
### THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA MISC. APPLICATION NO. 22 OF 2001 (Arising out of H. C. C NO. 25 OF 2001)
## INTERNATIONAL CREDIT BANK LIMITED RESPONDENT/PLAINTIFF (IN LIQUIDATION)
#### VERSUS
#### SANYUTEX LIMITED APPLICANT/DEFENDANT
### BEFORE: THE HONOURABLE MR, JUSTICE R. Q. OKUMU WENGI
#### RULING
This is an application for leave to defend a summary action by ICB in liquidation to recover an overdrawn A/C. The applicant accepts having run an account with the plaintiff, but denies that it was overdrawn. He also states that ifit was overdrawn which is denied such overdrawing was not *<sup>U</sup><sup>p</sup>* authorised by a resolution. Learned counsel for the applicant Mr. Musika has contended that the application raises triable issues such as authority for the borrowing the proof ofthe action and drawings hence the terms of any alleged overdraft, and interest on the same. He concludes that the summary action is not satisfactory on these critical elements and the suit ought to proceed to trial. He has submitted a draft w.s.d to the same effect.
**1o**
**5**
On the other hand the respondent in his reply has annexed documents indicating a statement of balance. He has also drawn on the argument that the overdraft came about whilst the directors ofthe plaintiff bank were also the directors ofthe defendant company and as such were estopped from denying the truth ofthe 0/D transaction or authority for it.
**57-**
**IP**
*&*
Having perused the pleading and the documents in this case and heard counsel, I must state that summary actions are meant to recover liquidated debts. This would clearly include a debt stated in an account. My understanding ofthe law is that when a customer writes a cheque on his account and such drawing would result in an overdraft that cheque is itself tire application for the overdraft. Ifit is honoured by the bank whether or not there was no resolution the overdraft is legitimate if drawn. I have seen the statement and the fact that an account existed is not denied. I do not think that the liquidator confirmed the statement. I am not satisfied that there is any triable issue as to whether there was an overdrawn account in this case. Indeed I am satisfied that the defendant has no possible defence to this action which iftried would in my view succeed. For this reason I must dismiss this application with costs. I would add that the application is in
**2**
effect frivolous and vexations in so far as the officers ofthe ICB bank and that ofthe applicant were the same persons whose authority was needed to perfect the transactions.
In the premises the plaintiffis entitled to a decree vs the defendant with costs tire same to bear interest at 28% w.e.f. the date offiling this action till 4.0 payment.
R. O. Okumu Wengi
Judge
22/2/2001
Ruling read in open court in presence of all parties. *2&*
R. O. Okumu Wengi
Judge
22/2/2001
CERTIFIED CORRECT Sgd.^Lrrrrvrrt...... DEPUTY REGISTRAR
## THE REPUBLIC OF UGANDA
# IN THE HIGH COURT OF UGANDA AT KAMPALA
#### CIVIL SUIT NO. 25 OF 2001
#### INTERNATIONAL CREDIT BANK LIMITED (IN LIQUIDATION) PLAINTIFF
#### VERSUS
SANYUTEX LIMITED DEFENDANT
## ORDER
THIS SUIT coming before The Hon. Justice Richard Okumu-Wengi this 22nd day of February 2001 in the presence ofMasembe Kanyerezi, Esq., Counsel for the Plaintiff and L. B. Musika, Esq., Counsel for the Defendant;
IT IS HEREBY ORDERED as follows:-
- (a) That the Defendant pays to the Plaintiff Ug. Shs. 37,695,155/=. - (b) That the Defendant pays interest at the rate of 28% on the decretal sum from the date of filing this action till payment in full. - (c) That the Defendant pays costs ofthis suit.
**Q** ,2001. Given under my hand and the Seal ofthe Court this.^r.^rday of.
\_\_\_\_\_ **/p(**------ . JU&QfE/DEPUTY REGISTRAR