[2025] UGCommC 146

#### 5 **THE REPUBLIC OF UGANDA**

# **IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) MISC. APPLICATION NO. 2643 OF 2024 (ARISING FROM CIVIL SUIT NO. 1396 OF 2024)** 10 **JOHN MATERANE KABALEGA ::::::::::::::::::::::::::::::::::::::::: APPLICANT**

## **VERSUS**

**JOHN BOSCO SSENYONGA :::::::::::::::::::::::::::::::::::::::::: RESPONDENT**

## **BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA**

#### **RULING**

#### 15 Introduction

This application was brought by way of Notice of Motion under **Section 98 of the Civil Procedure Act, Cap. 282**, **Order 36 rules 3 and 11** and **Order 52 rules 1 and 2 of the Civil Procedure Rules SI 71-1** seeking orders that:

- 20 1. The default judgment entered in *Civil Suit No. 1396 of 2024* be set aside. - 2. The Applicant be granted leave to file an application for leave to appear and defend the suit out of time. - 3. The Applicant be granted unconditional leave to appear and defend - 25 *Civil Suit No. 1396 of 2024*. - 4. Costs of the application be provided for.

#### 5 Background

The background of this application is contained in the Applicant's affidavit in support, and is summarized below:

- 1. That on 22nd November, 2011, the Applicant was contacted by a Clerk from the Respondent's lawyers stating that they needed to 10 serve him with the summons and a plaint under summary procedure. - 2. That the Applicant instructed the caller to serve the said Court papers to M/s F. Aogon & Co. Advocates and indeed service was effected on 22nd November, 2024. - 15 3. That the Applicant's lawyers informed the Applicant that they would merely receive the summons and that they would not commence any necessary action until the Applicant formalized his instructions. That the Applicant formally instructed his lawyers to commence action on 3rd December, 2024. - 20 4. That on 4th December, 2024, the Applicant was informed by his lawyers that a default judgment had been entered against him on the same day and that therefore, they could not seek leave to appear and defend the main suit. - 5. That the Applicant's delay to instruct his lawyers was not deliberate 25 but rather exacerbated by financial constraints to afford instruction fees and the illness of his mother. - 6. That the main suit raises triable issues of law and fact which merit the grant of unconditional leave to appear and defend.

In reply, the Respondent through an affidavit in reply, opposed the 30 application contending that:

- 5 1. The Applicant acknowledged receipt of the summons in *Civil Suit No. 1396 of 2024*. - 2. On 3rd December, 2024 and upon the lapse of the 10 days allowed under the summons, the Respondent's lawyers applied for and a default judgment was duly entered on the same day. - 10 3. The Applicant having been duly served, deliberately ignored, neglected and or failed to take reasonable steps to comply with the Court summons and the reasons advanced for his non-compliance do not constitute sufficient reasons to warrant the grant of this application. - 15 4. The application is merely an afterthought aimed at delaying the execution of the decree in the main suit having been filed on 9th December, 2024, six days after the lapse of the time allowed under the summons. - 5. The application as well as the intended Written Statement of Defence 20 and Counterclaim do not disclose any triable issues of law that require full adjudication and proof. - 6. In the alternative, should the Court be inclined to grant the application, it should grant conditional leave upon the Applicant depositing in this Court 50% of the claimed amount as security. - 25 In rejoinder, the Applicant reiterated his previous averments.

#### Representation

The Applicant was represented by **M/s F. Aogon & Co. Advocates** while the Respondent was represented by **M/s Katende, Ssempebwa & Co. Advocates, Solicitors & Legal Consultants**.

5 Both parties were directed to file their written submissions which they did and the same have been considered by this Court.

Issues for Determination

- 1. Whether the application raises grounds for setting aside the default judgment and decree in *Civil Suit No. 1396 of 2024*? - 10 2. Whether the application raises grounds for leave to appear and defend *Civil Suit No. 1396 of 2024*? - 3. What are the available remedies?

# Issue No. 1: Whether the application raises grounds for setting aside the default judgment and decree in *Civil Suit No. 1396 of 2024*?

15 Applicant's submissions

Counsel for the Applicant first relied on **Order 36 rule 11 of the Civil Procedure Rules** on setting aside decrees under this order. That in his affidavit in support, the Applicant deponed that much as his Counsel were served with the summons and plaint under summary procedure, they could not represent him until he had formally instructed them on 3rd 20 December, 2024 as he was not around to formalize his instructions as is required under **Regulation 2(1) of the Advocates (Professional Conduct) Regulations SI 294-2**. That in the case of *Simon Njuguna Ngugi Vs Equity Bank Limited HCCS No. 354 of 2012*, Court excused an 25 Advocate's failure to file a defence on time where the delay was due to lack of instructions and non-payment of fees.

Counsel further submitted that after the Applicant formalized his instructions, it was discovered that a default judgment had been entered against him on 4th December, 2024. That the delay in instructing Counsel

- 5 to file an application for leave to appear and defend was not deliberate but was occasioned by financial constraints and the illness of the Applicant's mother and this constitutes sufficient cause thus warranting the setting aside of the default judgment. Counsel also relied on the cases of *Patel Vs EA Cargo Handling Services Ltd [1974] EA 75, Shah Vs Mbogo [1967]* - 10 *EA 116 and Banco Arabe Espanol Vs Bank of Uganda [1999] 2 EA 22* on just cause and Court's need to act in the interest of justice. In conclusion, Counsel prayed to Court to find that the Applicant's constraints to afford legal instruction fees and his mother's illness are good and sufficient cause for setting aside the decree in *Civil Suit No. 1396 of* 15 *2024*.

#### Respondent's submissions

Counsel for the Respondent first relied on **Order 36 rule 11** and **Order 3 rule 4 of the Civil Procedure Rules** and submitted that the Applicant was duly served with the summons in a summary suit on 22nd November, 20 2024 through his Advocate, a fact that is not disputed by the Applicant.

Counsel further contended that good cause was defined in the case of *Pinnacle Projects Vs Business in Motion Consultants HCMA No. 362 of 2010* as legally sufficient. That in the case at hand, the Applicant avers that he failed to comply with the summons in *Civil Suit No. 1396 of 2024* 25 because he was in Kabale nursing his ill and aging mother and that he could not afford instruction fees at the time. That the averment that he could not instruct his lawyers as is required under **Regulation 2(1) of the Advocates (Professional Conduct) Regulations** is out of context since under paragraph 5 of his affidavit in support, the Applicant stated that he 30 instructed his lawyers to receive the Court documents on his behalf.

- 5 Further, that the Applicant's failure to pay his lawyer's fees so as to secure their representation cannot be the reason for this Court to exercise its discretion to set aside the default judgment therein. That the Applicant had an obligation to comply with the summons and failure to do so cannot be a reason to set aside the default judgment. - 10 Applicant's submissions in rejoinder

Counsel for Applicant reiterated his previous submissions and further contended that there is no evidence nor a letter of instructions showing that the Applicant had instructed his Counsel to act on the summons and that therefore, there was no effective service as per the case of *Geoffrey*

# 15 *Gatete & Another Vs William Kyobe SCCA No. 7 of 2005*.

# Analysis and Determination

I have carefully considered the law, authorities, evidence on Court record and the written submissions by both Counsel.

In the case of *Geoffrey Gatete & Another Vs William Kyobe (supra),* the 20 Supreme Court explained that:

> *"O.36 r.11, gives the Court very wide discretion to grant leave if is satisfied – either that service of the summons was not effective or that there is any other good cause. In either case, however, the Court should grant leave only if it seems to it reasonable to do so."*

25 In the instant matter, the Applicant seeks to set aside the default judgment and decree in *Civil Suit No. 1396 of 2024* on grounds that the Applicant delayed to formally instruct its lawyers to file an application for leave to appear and defend the main suit due to financial constraints. In reply, the

5 Respondent contended that since the Applicant does not deny the fact that he was duly served, then the application lacks merit.

According to the Court record, the Respondent filed *Civil Suit No. 1396 of 2024* seeking to recover UGX 94,500,000/=. Summons in a summary suit on plaint were duly issued and served onto the Applicant, and this 10 fact is not disputed. The ten (10) days within which the Applicant ought to have filed an application for leave to appear and defend lapsed and on 4th December, 2024, the Respondent sought for and was granted a default judgment.

It is now trite that failure of a client/Applicant to instruct their Counsel 15 on time is no ground for setting aside a judgment or decree. However, in the instant case, the Applicant contends, that his failure to instruct his Counsel was due to financial constraints. In the case of *Essaji Vs Solanki [1968] EA 218* cited with approval in the case of *Banco Arabe Espanol Vs Bank of Uganda (supra)*, it was held that:

20 *"The administration of justice should normally require that the substance of all disputes should be investigated and decided on their merits, and that errors, lapses should not necessarily debar a litigant from the pursuit of his right."*

In the matter at hand, the Applicant does not deny the fact that he failed 25 to comply with the set timelines in the summons in a summary suit on plaint however, he contends that his delay was due to financial constraints to obtain legal fees so as to instruct his lawyers to represent him. In light of the above authorities and the circumstances of this case, the Applicant's failure to comply with the timelines due to financial constraints is good 5 cause to warrant the setting aside of the default judgment and decree that were obtained by the Respondent.

Therefore, in the interest of administering substantive justice pursuant to **Article 126(2)(e) of the Constitution of the Republic of Uganda, 1995,** the default judgment and decree in *Civil Suit No. 1396 of 2024* are 10 hereby set aside.

In the premises, issue No. 1 is answered in the affirmative.

Issue No. 2: Whether the application raises grounds for leave to appear and defend *Civil Suit No. 1396 of 2024*?

### Applicant's submissions

- 15 Counsel for the Applicant relied on **Order 36 rule 4 of the Civil Procedure Rules** and the cases of *M. M. K Engineering Vs Man Trust Uganda Ltd HCMA No. 128 of 2012, Bhaker Kotecha Vs Adam Muhammed [2002] 1 EA 112, UMEME Limited Vs Justice Singh Choudry HCMA No. 736 of 2021* and *Maluku Interglobal Trade Agency Ltd Vs Bank of Uganda* - 20 *[1985] HCB 65* to submit that before leave to appear and defend can be granted, the Applicant must show that there is a bonafide triable issue of law or fact.

Counsel contended that in the matter at hand, the Applicant and the Respondent agreed that the Respondent supplies rice worth UGX 25 184,500,000/= to the Applicant for a one Mathius Ssewanyana t/a Matel Agency in Kyebando. That the Applicant made a prior deposit of UGX 90,000,000/= but the Respondent never supplied the rice as alleged. That since the Respondent had not supplied the rice, the Applicant went on to refuse to approve the payment vide the issued cheques. Also, that the

- 5 demand notice indicated that the outstanding amount was UGX 90,000,000/= but that in the plaint, the Respondent seeks to recover UGX 94,500,000/=, an inconsistency that depicts the Respondent's intent to defraud the Applicant. That therefore, all the above raise issues that require Court's examination to ascertain whether the Respondent actually - 10 delivered the rice, the performance of the contractual obligations between the parties as well as inquire into the allegations of fraud and unjust enrichment on the part of the Respondent.

#### Respondent's submissions

Counsel for the Respondent submitted that the Applicant issued three 15 cheques that were dishonored. That under **Order 36 rule 2(a)(i) of the Civil Procedure Rules**, a dishonored cheque is one of the grounds for instituting a summary suit. That in the case *Maluku Interglobal Trade Agency Lt Vs Bank of Uganda (supra)*, Court emphasized that the Applicant seeking leave to appear and defend must show that there is a 20 bonafide triable issue of law or fact or a reasonable ground for defence.

Counsel contended that according to annexures **"D"** and **"E"** attached to the affidavit in reply, the Respondent issued the said invoices on 16th and 28th May, 2024 for UGX 96,000,000/= which resulted into the Applicant issuing two cheques dated 10th and 12th July, 2024 which was sometime

25 after the supply had been made.

That in the case of *Jonel Limited Vs Kiboko Enterprises Limited HCMA No. 27 of 2016* Court held that where a cheque has been dishonored and a notice of dishonor is served onto the Applicant, the Respondent is entitled to a summary judgment. That in the instant case, a notice of dishonor of the three cheques was duly served upon the Applicant on 12th 30

- 5 November, 2024 as per annexure **"J"** attached to the affidavit in reply and as such, the Applicant is not entitled to leave to appear and defend. In conclusion, Counsel submitted that in the event that this Court is inclined to set aside the default judgment, the Applicant should be granted conditional leave wherein he deposits 50% of the outstanding sum within - 10 30 days from the date of the Ruling.

# Applicant's submissions in rejoinder

In rejoinder, Counsel for the Applicant reiterated his previous submissions and further submitted that the alleged invoices were never issued to him and neither did he sign on them as the recipient is a one Robert who is 15 unknown to the Applicant. That this Court ought to examine the cause of action in the main suit, particularly the triable issues that arise on the face of it such as; whether the Respondent supplied the consignment and whether any sums are owed by the Applicant to the Respondent.

## Analysis and Determination

- 20 **Order 36 rule 3(1) of the Civil Procedure Rules**, provides that a Defendant served with summons, issued upon the filing of a specially endorsed plaint and affidavit under rule 2 of this Order endorsed "summary procedure", shall not appear and defend the suit except upon applying for, and obtaining leave from Court. - 25 For leave to appear and defend a summary suit to be granted, an Applicant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law. (See: *Maluku Interglobal Trade Agency Ltd Vs Bank of Uganda (supra)*. As defined in the case of *Jamil Ssenyonjo Vs Jonathan Bunjo HCCS No. 180 of 2012*, a triable issue is one that only arises when 30 a material proposition of law or fact is affirmed by one party and denied

- 5 by the other. Therefore, it is capable of being resolved through a legal trial, which is a matter that is subject or liable to judicial examination in Court. A defence raised by the Applicant should not be averred in a manner that appears to be needlessly bald, vague or sketchy. A triable issue must be differentiated from mere denial. Therefore, the defence raised must not be - 10 a sham intended to delay the Plaintiff from recovery of his/her money. If the defence is based upon facts, in the sense that material facts alleged by the Plaintiff in the plaint are disputed or new facts are alleged constituting a defence, the Court does not attempt to decide these issues or to determine whether or not there is a balance of probabilities in favour of 15 the one party or the other. In essence, the Plaintiff is barred from obtaining summary judgment where the Applicant raises a good defence.

In the instant case, the Applicant disputes being indebted to the Respondent. The assertions of the Applicant are premised on arguments that the Respondent never supplied the goods as agreed and that it was 20 on that basis that even the issued cheques were recalled hence their dishonor. On the other hand, the Respondent contended that he supplied the Applicant with the rice and that the outstanding balance is UGX 94,500,000/= since he had deposited UGX 90,000,000/=.

In evidence, the Respondent adduced an invoice, annexure **"D"** attached 25 to the affidavit in reply, dated 16th May, 2024. However, the Applicant avers that the said invoice was never issued or served unto him and that the proof is that the person who signed as the customer is a one Robert, the Respondent's agent and not the Applicant.

11 The Applicant further contends that since no supply was made, then the 30 Respondent ought to refund the sum of UGX 90,000,000/= that was paid. Also, the Applicant contends that there is a discrepancy in the amount

- 5 being sought. That in the demand notice, the Respondent sought to recover UGX 90,000,000/= yet in the summary suit, he sought to recover UGX 94,500,000/=. The Respondent also adduced annexure **"E"** a receipt dated 28th May, 2024 showing that the Applicant had paid UGX 90,000,000/= and the outstanding balance was UGX 90,000,000/=. - 10 I have noted that the Applicant issued two cheques dated 10th July, 2024 for UGX 40,000,000/= and 12th July, 2024 for UGX 50,000,000/= attached to the affidavit in reply. The Respondent's lawyers according to annexure **"J"** wrote to the Applicant informing him that the two cheques had been dishonoured by the Bank and demanded for payment of the 15 outstanding balance.

The two aforementioned cheques contain the initials of "R/D", meaning "Refer to Drawer", which confirms that the cheques indeed were not honoured by the Bank and were returned unpaid.

However, I have also perused the Applicant's intended Written Statement 20 of Defence and Counterclaim, annexure **"A"** attached to the affidavit in support. Therein, the Applicant raises allegations of fraud, misrepresentation and unjust enrichment.

Accordingly, whereas parts of the Applicant's intended defence are prima facie unsatisfactory, the draft defence raises triable issues warranting 25 determination by Court.

Therefore, issue No. 2 is answered in the affirmative.

5 Issue No.3: What are the available remedies?

### **Order 36 rule 8 of the Civil Procedure Rules** provides that:

*"Leave to appear and defend the suit, may be 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* 10 *think fit."*

Some of the situations where the above provision can be invoked is where the defence is doubtful or less persuasive or barely meets the legal threshold. (See: *Joseph Muyinza Bunoli Vs William Tumusiime HCMA No. 820 of 2023* and *Pamela Anyoti Vs Root Capital Inc. HCMA No.* 15 *844 of 2023).*

Since as stated above the Applicant's defence is doubtful, but raises some triable issues such as allegations of fraud, unjust enrichment, misrepresentation and whether there was actually a supply of the goods to the Applicant; that require adjudication, I find that this is a proper case 20 for the grant of conditional leave to appear and defend.

#### Conclusion

In light of the above, the Applicant's application succeeds and I make the following orders:

- 1. The default judgment and decree in *Civil Suit No. 1396 of 2024* 25 are hereby set aside. - 2. The Applicant is hereby granted leave to appear and defend *Civil Suit No. 1396 of 2024***,** conditional on the satisfaction of the condition in (3) below.

- 5 3. The Applicant shall pay into Court 50% of the sums claimed in the specially endorsed plaint within forty-five (45) days from the date of this Ruling. - 4. The Applicant is ordered to file and serve his Written Statement of Defence within fourteen (14) days from the date of this Ruling. - 10 5. Where the condition in (3) above is not satisfied within the stipulated timeframe, the Applicant's leave to appear and defend in *Civil Suit No. 1396 of 2024* shall be revoked, any pleadings or documents filed struck off the record and a default judgment shall be entered in favour of the Respondent. - 15 6. Costs of this application shall be in the cause.

I so order.

Dated, signed and delivered electronically via ECCMIS this **4th** day of **March, 2025**.

20 Patience T. E. Rubagumya **JUDGE** 4/03/2025 6:45am