[2013] UGHC 256

# IN THE REPUBLIC OF UGANDA IN THE HIGH COURT O F UGANDA AT KAMPALA COMMERCIAL COURT DIVISION HCT-00-CC-MA-0787-2012 Arising out of HCT-00-CC-CS-0538-2012

JUNGO JOHN LUCKY FRIENDS TRADING AND CONSTRUCTION CO. LTD J APPLICANT

### VERSUS

C& M MILLERS & SUPPLIERS LTD RESPONDENTS/PLAINTIFF RESPONDENT

#### BEFORE: HON MR. JUSTICE M. W. MUSENE

#### RULING:

This was an application under 0.36 r4 and S 98 of the Civil Procedure Act for the Order that

(a)The applicants be given leave to appear and defend the suit.

(b)That the cost of the application be provided for.

The applicants/Defendants were Jungo John and Lucky Friends Trading and Construction Co. Ltd represented by Mohamed Imran. The Respondent C & M Millers and Supplies was represented by Mr. Kawuma Issa.

This application arises out of ^a summary suit that was filed in this court where the plaintiff/respondent was claiming from the applicants/defendants i

annii^ ^x 34,000, interest and costs of the suit it being a sum that the PPP',Cants borrowed fromtherespondent/p|aintiff

^P t'°ⁿ was suPPorted by an affidavit of the ¹sl applicant who is aiso a director of the ond >• . " ne ^aPP\*,cant where at para ³ the ¹st applicant states entered into a contract with the respondent/plaintiff on the 28th ber 2008 to supply 50,000 bags of white maize grain at a price of 2,000,000 (two million dollars) with the 2nd applicant/defendant herein he is a director. He further went on to state that the said contract was executed by way and issue of letters of credit arranged by the 2nd defendant through its bank (KCB Bank) Juba Branch Southern Sudan and was wholly paid by the plaintiff.

In the sixth paragraph he contends that "upon having agreed to pay USD200,000 only the respondent/plaintiff could not raise the said amount at once, and even after the contract period had long expired, there was an agreement within the applicants/defendants bank through the plaintiff's agent ^a one Ms Cissy Nanono there was an agreement that the plaintiff pays for quarterly issuance of letters of credit to enable the plaintiff supply the maize consignment of 50,000 bags into a four quarterly basis, thus payment of USD 24,000 dollars meant for one quarter of 12.500 bags".

In paragraph (7) the 1st applicant states that the plaintiff/respondent later on demanded a guarantee from the defendant/applicants as an assurance that on payment of the USD25,000 dollars for letter of credit, the respondent Xgo ahead and perform the contract and be paid. In the event of non-

. ' the resP°ncient would receive the money the plaintiff/respondent as deposited with KCB, thus KCB Bank cheque no 000013.

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luded by stating that after signing the contract and amidst demand to supply and having been given a guarantee by the applicants he only supplied 4600 bags of maize out the 50,000 bags as per agreement.

The applicant in conclusion denied ever borrowing money from the respondent and that the cheque mentioned above was a guarantee and assurance that the respondent could recover the money paid into the bank for the letter of credit by K. C. B. Bank (LTD).

The respondent on the other hand submitted that the applicant should not be given leave to appear to defend as there is no triable issue mentioned in the above application.

The Respondent averred that the total sum owed was USD 34,000 and had nothing to do with the contract of 28th November, 2008 as the issues concerning the contract were concluded in March 2009 and the respondent were fully paid for the supply.

In para 5 of the affidavit the respondent affirms that the subject matter before the court is concerning 24,000 USD which was given to the applicant as a loan and a cheque was issued in the names of the 2nd applicant as receipt, however, the cheque bounced when it was deposited.

The respondent also in para 6 contended that the guarantee agreed upon were letters of credit and not cheques of 24,000 USD cannot guarantee the supply which was USD 5000,000 which was paid to the respondent.

## At para ¹ o, the m

resoondPHf sP°ndent states that on the 20th day of March, 2009, the p naent sent to the 1st ^a thA applicant another sum of USD 10,000. The on ine 30th day of March payment of ' ^U Z' the resPondent made a formal demand for ^O Its money though the amount stated was USD 30,000 but the correct amount was USD34,000

The law applicable in such situations is well settled. An application of Leave to Appear and defend is only granted when there are triable issues. This was fortified in Maluku, Interglobal Trade Agency Ltd VS Bank of Uganda (1983) HCB where Justice Odoki (as he then was) set out some facts that need to be taken into account when considering an application under Order 36 rule 4 of the CPR 71 -1.

1) The defendant is required to show by affidavit or otherwise that there is a bonafide triable issue of fact of law. He went on to state that the defendant does not need to show a good defence on merit but should be able to satisfy Court that there is an issue or a question in dispute which the court ought to try and the court should not enter upon the trial of the issue or issues disclosed.

2) The court is required to study the defence raised and ascertain whether it raises a real issue and not a sham one in the sense that of the fact alleged by the defence where established there would be a plausible defence.

While the bearing the above principles in mind, ^I do find that there are triable issues that have been raised in this application.

. US be'ng Whether the claim of 34,000 USD is money due in a contract of sale of mai? e or m°ney due from a loan agreement between the p es. whereas the plaintiffs states that it was a loan, the defendant was contending that th^ro was no loan agreement but a contract of supply for Court needs to determine whether sum claimed arose from the contract of the supply of maize from the loan.

The applicant denied ever borrowing money from the respondent and that the cheque mentioned above was a guarantee and assurance that the respondent could recover the money paid into the bank for the letter of credit by K. C. B. Bank (LTD).

The Respondent averred that the total sum owed was USD 34,000 and it had nothing to do with the contract of 28th November, 2008 as the issues concerning the contract were concluded in March 2009 and the respondent was fully paid for the supply maize.

Secondly, the amount owed is also in dispute as the applicant states that the amount in dispute is the 24,000 USD while the respondent is claiming that the total amount owed is 34,000 USD, as 24,000 USD was paid by cheque 10,000 USD was sent by telegraphic transfer to KCB in Sudan,

in the circumstances it is the finding of this court that the application discloses, a potentia! defence which should be inquired into by the court during fully fledged hearing of the case on the ments.

This application is accordingly allowed and the app ' ts are hereby granted unconditional leave to appear and defend.

Costs in the cause.

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Court Judge

29th April, 2013