[2025] UGCommC 98

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL COURT DIVISION) MISCELLANEOUS APPLICATION NO. 2036 OF 2024 (ARISING OUT OF CIVIL SUIT NO. 0997 OF 2024)**

# **1. KASAIJA RONALD WILFRED 2. BIGIRWENKYA MICHAEL 3. MICRONA HOLDINGS::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::APPLICANTS**

## **VERSUS**

15 **EQUITY BANK (U) LIMITED::::::::::::::::::::::::::::::::::::::::::::::::::::::::RESPONDENT**

## **Before: Hon. Lady Justice Dr. Ginamia Melody Ngwatu**

# **RULING**

- 20 The applicants brought this application under section 98 of the Civil Procedure Act, Order 36 Rules 3 and 4 of the Civil Procedure Rules S. I. 7l-1. The applicants seek orders that they be granted unconditional leave to appear and defend *Civil Suit No. 0997 of 2024 Equity Bank (U) Limited vs Kasaija Ronald Wilfred & 2 Others.* - 25 The brief background to this application is that the respondent filed a summary suit before this court seeking recovery of UGX 175,401,822.44 (Uganda shillings one hundred and seventy-five million four hundred and one thousand, eight hundred and twenty-two shillings and forty-four cents) being the amount owed stemming from an unsecured loan facility that was extended to the applicants; and costs of the suit. The 1 st and 2 nd applicants were sued in their capacities as directors and guarantors to the 3 rd 30 applicant. This application was subsequently brought by the - applicants/defendants in *Civil Suit No. 0997 of 2024* to be granted leave to appear and defend the said suit.

## **Representation at the hearing**

35 The applicant was represented by Mr. David Kagoro Byaruhanga of Mugarura Kwarisiima & Co. Advocates. The respondent was not represented and the hearing proceeded *exparte* upon a grant of an application for the same by the applicant pursuant to Order 9 rule 20 (1) of the Civil Procedure Rules.

## 40 **Issues for determination**

5 The issue for determination is whether the applicants have disclosed a triable issue of fact or law thereby entitling them to a grant of leave to appear and defend *Civil Suit No. 0997 of 2024*.

#### **Submissions**

At the hearing of this application, counsel for the applicant proceeded by way of oral 10 submissions which shall be taken into consideration, alongside the pleadings that were filed, in the determination of this application.

#### **Submissions of Counsel for the Applicant**

The applicant's counsel submitted that the applicants/defendants were served by the respondents with a summary suit seeking recovery of a total sum of Uganda shillings 175,401,822.44. That

- 15 the applicants contest the amount indicated in the summary suit based on the fact that he had already deposited one installment amounting to Ugx 64,996,799 which was deducted from its account by the respondent on 27th December 2023. Counsel for the applicant contended that the outstanding balance owed by the applicants by the end of December 2023 was Ugx 123,100,738. Counsel for the applicant acknowledged that the applicants obtained an unsecured loan of Ugx - 20 150 000,000 and does not dispute the fact that the said loan was borrowed from Equity Bank (U) Ltd. That the applicants faced a number of challenges six months into business, some of which include: delay in payment for partial works for the contract by Kikuube District Local Government. That the said challenges were brought to the attention of the respondent through a verbal request to the Relationship Officer at Equity Bank Bullisa Branch, to have the loan re- - 25 scheduled. Counsel for the application added that there was no indication that the respondent had agreed despite the several interactions with the Bank Relationship Officer.

Counsel for the applicants further submitted that the applicants were subsequently, on 19th September 2024 served with summons in summary suit for recovery of Ugx 175,401,822.44 30 since by September 2024, the applicants had defaulted by two installments. That the applicants issued instructions to their lawyer for the filing of an application for leave to appear and defend *Civil Suit No. 0997 of 2024*; which was filed through ECCMIS on 4th October 2024.

Counsel for the applicants concluded by reiterating that the applicants do not agree with the total 35 sum demanded and prayed that they be granted leave to appear and defend *Civil Suit No. 0997/2024*.

#### **Determination**

40 Order 36 rules 3 and 4 of the Civil Procedure Rules SI 71-1, as amended, provide for the filing of applications for leave to appear and defend. Order 36 rule 3(1) of the Civil Procedure Rules


5 provides that upon the filing of an endorsed plaint and service of the same on the defendant, a defendant then can only appear and defend the suit after applying for and obtaining leave from court. Order 36 rule 4 of the Civil Procedure Rules, as amended further provides that the application for leave to appear and defend the suit shall be supported by affidavit which shall state whether the defence alleged goes to the whole or to part only, and if so, to what part of the 10 plaintiff's claim.

For an applicant to be granted leave to appear and defend a suit, the applicant must show that there is a *bona fide* triable issue of fact or law that he/she will advance in defence of the suit. This principle was stated in the case of *Maluku Interglobal Trade Agency vs Bank of Uganda [1985] HCB* 65, at 66 where court stated that:

*"Before leave to appear and defend is granted, the defendant must show by affidavit or otherwise that there is a bonafide triable issue of fact or law. When there is a reasonable ground of defence to the claim, the defendant is not entitled to summary judgment. The defendant is not bound to show a good defence on the* 20 *merits but should satisfy the court that there was an issue or question in dispute which ought to be tried and the court shall not enter upon the trial of issues disclosed at this stage."*

The application before this court raises a dispute in regard to the total sum that is due to be 25 recovered by the respondent from the plaintiff. The applicants do not deny the existence of an unsecured loan facility that they obtained from the respondent worth Ugx 150,000,000. The applicants, however, dispute that Ugx 175,401,822.44 is owed to the respondent considering that the respondent had already deducted Ugx 64,996,799 from the applicants' bank account Account No. l040200864108 held at Equity Bank (U) Limited on 27th December 2024. The applicants 30 also contend that the amount demanded by Equity Bank (U) Limited is outrageous and includes unconscionable interest and penalties which the applicants did not agree to while signing the loan agreement.

In light of the oral submissions by counsel for the applicants, and upon consideration of the 35 averments contained in the notice of motion and the supporting affidavit, I find that there are grounds disclosed that entitle the applicant to the relief sought. This is in line with Order 36 rule (4) and (8) of the Civil Procedure Rules, which provide that unconditional leave to appear and defend a summary suit will be granted where the applicant shows that he or she has a good defence on the merits; or that a difficult point of law is involved; or that there is a dispute which 40 ought to be tried, or a real dispute as to the amount claimed which requires taking an account to determine or any other circumstances showing reasonable grounds of a bona fide defence (see *Makula Inter global Trade Agency v. Bank of Uganda [1985] HCB 65*). The applicants have demonstrated that it has a possible defence to the suit concerning the disagreement on the 5 amount that the respondent seeks to recover from them. This disagreement can only be determined if the applicants are given an opportunity to appear and defend themselves.

This application is, therefore, determined as follows:

- 1. The applicant is granted leave to appear and defend *Civil Suit No. 0997 of 2024*. - 10 2. The applicant shall file their defence and serve it on the respondent/plaintiff within fourteen days from the date of this ruling. - 3. The costs of this application will abide the results of the suit. - 15 I so order.

*Dr. Ginamia Melody Ngwatu Ag. Judge 23* 20 *rd May 2025*

*Ruling delivered via ECCMIS*