[2021] UGCA 234

## THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

# **CIVIL APPEAL NO. 104 OF 2013**

(Appeal from the Judgment of the Hon. Mr. Justice Masalu W. Musene in High Court Miscellaneous Application No. 0172 of 2013 (arising from Civil Suit No. 114 5 of 2013), dated 23^rd May, 2013)

MARY ANKWATSA :::::::::::::::::::::::::::::::::::

#### **VERSUS**

ADE MUSANA :::::::::::::::::::::::::::::::::::

CORAM:

HON. MR. JUSTICE GEOFFREY KIRYABWIRE, J. A.

HON. LADY JUSTICE MONICA MUGENYI, J. A.

HON. MR. JUSTICE REMMY KASULE, Ag. J. A.

# JUDGMENT OF HON. MR. JUSTICE GEOFFREY KIRYABWIRE, J. A.

#### **INTRODUCTION**

This is a first Appeal. The Respondent's cause of action in the High Court was for recovery of a sum of Ug. shs. 112,240,000/= (one hundred twelve million two hundred forty thousand shillings) from the Appellant. The Respondent had

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instituted a summary suit against the Appellant. 'lhe Appellant applied for leave to appear and defend the suit. The Application was partially successful. The trial ]udge entered judgment in favour of the Respondent for the sum of Ug. shs. 91,000,000/= fninety one miilion shiilings) to be paid by the Appelranr. However, the trial fudge allowed the Appellant to file a defence in respect of the claim of Ug. shs. 21',240,000/= (twenty one million two hundred forty thousand shillings) which is the residue of the Respondent,s claim.

## BACKGROUNT)

I

On 12tl' March, 2013, the Respondent instituted a summary suit against the Appellant for the recovery of Ug. shs. L1.z,z40,oo0/= (one hundred twerve million two hundred forty thousand shillings) and costs at the High Court (Commercial Division) vide Civil Suit No. 1 L4 of 201,3. As required by law, the Appellant filed an Application for unconditional leave to appear and defend the suit vide Miscellaneous Application No. 172 of 201,3. 10

The Appellant, in support of her Application, contenrled that she was not indebted to the Respondent to a tune of ug. shs. r. ],z,z4o,00o /=. That the only money she was aware of was a sum of Ug. shs. 91,000,000/= which the Respondent had contributed as capital for the company M/s Lasting Solutions Consult Ltd, which was owned by both the Appellant and the Respondent. The Appellant admitted that she had signed an undertaking to refund the Respondent's contribution in response to the Respondent's repeated demands for a refund. The Appellant further submitted that in compliance with the undertaking the Respondent had so far received a substantial amount of refund to the tune of Ug. shs. 7\,000,000/=. Regarding the balance of Ug. shs. 15 20


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2L,240,000/=, the Appellant denied being inclebted to the Responclent in respect of this arnount.

The Respondent filed a reply to the Application in which she relied on the fact that the Appellant had admitted to having received a sum of Ug. shs. 91,000,000/= and had signed an undertaking to refund the same. Howevel the Respondent denied ever having received ug. shs. 71,000,00 o /= asa refund. The Respondent fttrther submitted that the balance of Ug. shs. 21,240,000/= ⁶¹⁴ been given to the Appellant on 29tr, June, 2012 for purposes of boosting the Appellant's printing business.

The trial Judge found that there was no evidence to prove that the Respondenf Musana Ade had acknowledged receipt ug. Shs. Tr,ooo,o0o/= being part of the Ug' shs. 91,000,000/= allegedly. Therefore, in the absence of such evidence, such an evasive denial could not stand. That the Appellant had no clefence to the claim of Ug. shs.91,000,000/=. Accordingly, the trial fudge entered judgment in favour of the Respondent for the recovery of Ug. shs. 91,000,000 to be paid by the Appellant. 10 15

In respect of the additional amount of Ug. shs. 21,,240,a00/=, the trial fudge found that the Respondent had not adduced clear evidence to prove that this amount was owed to her by the Appellant. The trial Judge allowed the Appellant to file a defence in respect of this additional amount.

The Appellant, being dissatisfied with the judgment of the trialJudge in respect of the Ug. shs. 91,000,0 O0 /= (ninety one million shillings), filed this Appeal.

## GROUNDS OF APPEAT

The Appellant raised three grounds of Appeal. Namely;


- 1. The learned trial Judge erred in law and fact when he entered a summary judgment for the Respondent on disputed facts. - 2. The learned trialfudge failed to properly evaluate the evidence on record and thus came to a wrong conclusion. - 3. The learned trial Judge erred in law and fact when he based a judgment on an undertaking that was not Iegally enforceable against the Appellant.

It should be noted that the Memorandum of Appeal refers to plaintiff instead of Respondent and Defendant insteacl of Appellant. This is an embarrassing mocle of pleading at the appellate Ievel and shows a lack of eye for detail. ^I exceptionally shall ignore that misnaming in the interests of substantive justice but caution against such draftmanship.

#### REPRESENTATION

The Appellant was represented by Mr. Herbert Katabalwa whereas the Respondent was represented by Mr. Obed Mwebcsa.

#### DUTY OF THE COURT 15

This is a first Appeal and therefore this Court is charged with the Iegal duty of reappraising the evidence and drawing inferences of fact as provided for under RuIe 30(1)(a) of the fudicature (Court of Appeal Rules) Directions, SI 13- 10' This Court also has the duty to caution itself that it has not seen the witnesses who gave testimony first hand. On the basis of its evaluation, this Court must decide whether to support the decision of the High Court or not as illustrated in the case of Pandya v. R [195718A336 and Kifamunte Henryv. uganda, supreme court criminal Appeal No. 10 of 1997.

# GROUND I

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The learned trial ]udge erred in law and fact when he entered a summary judgment for the Respondent on disputed facts.

# Submissions for the Appellant

5 Counsel for the Appellant submitted that the Respondent's suit filed at the High Court was not clear and obvious to justify a summary judgrnent. That there were two versions about the facts hence the need to ascertain the true facts which could only be done through a full trial. Counsel for the Appellants referred to the case of Industrial and Commercial Development Corporation v. Daber Enterprises Ltd (2000) 1 E. A. 75 to'support this submission. 10

According to Counsel for the Appellant, the disputed facts were as hereunder.

The Respondent, in her Plaint which is on page 5 of the Record of Appeal, alleged that she contributed Ug. shs. 9L,000,000/= to the Appellant,s business and supported her allegation with an undertaking, signed by the Appellant, to refund to the Respondent a surn of Ug. shs. 91,000,000/=. This money was contributed towards the capitalisation of M/s Lasting Solutions Consult Ltd. However, Counsel for the Appellant submitted that the saicl money was given by the Respondent as her contribution towards the share capital of the same Corrrpatty,M/s Lasting Solutions Consults Ltd.'l'he company had been formed by both the Appellant and the Respondent. Counsel for the Appellant made reference to the Appellant's affidavit in support of her Application for leave to appear and defend, to which the Memorandum and Articles of Association of M/s Lasting solutions consults Ltd are attached as Annexures .,A,, and ,,B,,.

In addition to the disputed facts, Counsel for the Appellant refers to the Appellant's affidavit in support of her Application for leave to appear and 5lPage 25

defend, where the Appellant, at paragraph 5 of this Affidavit testifies that the Respondent had received a substantial amount of ug. shs. 7'1,,000,000/= (seventy one million shillings) as a refund in compliance with the undertaking whereby she had agreed to refund the Respondent to the tuhe of Ug. shs. 91,000,000/=.

Counsel for the Appellant further submitted that the Appellant, through her Application, raised doubt as to whether she was personally liable to the Respondent. That some of the questions that ought to have been investigated through a full trial were: -

- 1. Did the Respondent contribute Ug. shs. 9L,000,000/= towards the business of the Appellant? 10 - 2. Was the Ug. shs. 91,000,000/= the Respondent,s contribution towards the share capital of Lasting Solutions Consult Ltd where the parties are subscribers? - 15

- 3. Did the Respondent pay the Appellant ug. shs. 91,000,0 o0/= as found by the trial fudge? - 4. Did the Respondent receive a refund of ug. shs. TL,000,0001=-t

Counsel for the Appellant submitted that the trial Court had an obligation to determine whether the Appellant had shown good cause to be given leave to defend the suit as it was held in the case of Gatete Geoffrey & Anor v. William Kyobe (2007) HCB SS.

Counsel for the Appellant prayed that this Court finds that there were triable issues both of fact and law in this matter which needed to be investigated through a full trial.

²⁵ submissions for the Respondent 6lPag3


Counsel for the Respondent submitted that the trial Judge was right to enter Judgment on the sum of Ug. shs.91,000,000/= as the amount had not been disputed. Counsel for the Respondent referred to the undertaking signed by the Appellant in which she pledged to refund the same amount of money to the Respondent.

Counsel for the Respondent further submitted that the Appellant has no basis of contending that she is not indebted to the Respondent as the Appellant hacl not shown that she had a good defence to the claim and that there was no existing dispute as to the amount claimed. Counsel relied on the case of

Kotecha v. Muhammad (2ooz) E. A. 1 12 to support this submission. 10

Counsel for the Respondent prayed that this Court finds that the Appellant has no defence to the claim of Ug. shs. 91,000,000/= (ninery one million shillings) and that this ground be resolved in the negative.

## Court's findings

The law on summary procedure is governed by Order 36 of the Civit Procedure Rules SI 7L-1. Order 36 rule 3(1) of these Rules entitles ^a Defendan! who has been served with summons in a suit instituted by way of summary procedure, to apply to the Court for leave to appear and defend the suit. Order 36 rule 4 of the Civil Procedure Rules requires the Defendant to support the application with an affidavit stating his or her defence to the Plaintiffs claim. 15 20

In the case of Kotecha v. Mohammed l2OO2l1 EA l!2, this Court specified the factors that ought to be put into consideration while determining an application for leave to appear and defend a suit instituted under summary r procedrlre. This Court held that:

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"... the Defendant is granted leave to appear and defend if he is able to show that he has a good defence on the merit; or that a difficult point of law is involved; or a dispute as to the facts which 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 bonafide defence."*

In addition, in the Supreme Court case of Gatete Geoffrey & Another v. **William Kyobe, Civil Appeal No. 7 of 2005 Mulenga, JSC held:**

" I should stress that in an Application for leave to appear and defend $a$ summary suit, the Court is not required to determine the merits of the suit. The purpose of the Application is not to prove the Applicant's defence to the Suit but to ask for an opportunity to prove it through a trial. What the Court has to determine is whether the Defendant has shown good cause to be given leave to defend ... what the Courts have consistently held to amount to good cause is evidence that the defendant has a triable defence to the suit."

In the instant Appeal, what is at variance is whether the Appellant had shown good cause to be granted leave to appear and defend the suit in the trial Court. A re-evaluation of the evidence in the Record of Appeal reflects that the Appellant did not show good cause to be given leave to appear and defend as she did not adduce evidence to show that she had a triable defence in respect of the Respondent's specific claim for Ug. shs. $91,000,000/=$ .

At page 33 of the Record of Appeal, is the Appellant's written submissions in support of her Application for leave to appear and defend. The Appellant submits that she was engaged in business with Parambot Distillers Ltd and was paid Ug shs. 71,000,000/= (seventy one million shillings) which was all taken


$10$

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$20$

$25$

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by the Respondent as a partial refund for the Ug. shs. $91,000,000/=$ in compliance with the agreement. However, the Appellant did not present any supporting documents to show that the Respondent, had received any payment of the sum of Ug. shs. $71,000,000/=$ .

The trial Judge, in delivering a ruling on the Appellant's Application for leave to $\mathsf{S}$ appear and defend the suit, held;

> "... Mary Ankwatsa does not deny receiving the amount of shs. 91,000,000/=. She does not also deny signing the agreement in acknowledgment of the receipt and undertaking to refund the money to the Respondent, Musana Ade ... but only added that the Respondent had received a substantial amount of refund. However, there is no evidence *where the Respondent, Musana Ade, acknowledged receipt of any part of the Ug. shs.* 91,000,000/=. *Such a general evasive denial not supported by* evidence cannot stand."

Therefore, in the absence of such evidence, I am inclined to agree with the 15 findings of the trial Judge that the Appellant made an evasive denial and did not show evidence that she had a triable defence to the suit in respect of the amount of Ug. shs. $91,000,000/=$ .

In this ground of Appeal, the Appellant also challenges the judgment on grounds that it was entered basing on disputed facts. The Appellant submits that the Ug. $20$ shs. $91,000,000/$ = was the Respondent's contribution to the share capital of M/s Lasting Solutions Consults Ltd, a private company formed by the Appellant and Respondent. Contrary to this argument, Counsel for the Respondent contends that this money was given to the Appellant personally in order to

boost her business. 25

OURT OF APPEAL OF UGANDA CERTIFIED TRUE COP

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According to the Memorandum of Association of M/s Lasting Solutions Consult Ltd which is at page 18 of the Record of Appeal, the share capital of the Company is Ug. shs. 2,000,0007= (two million shillings only). l'here is no evidence on Record to show that the share capital of the company was increased. Therefore, this is not a disputed fact as the Appellant submitted.

This ground of Appeal fails.

## GROUND 2

The learned trial ]udge failed to properly evaluate the evidence on record and thus came to a wrong conclusion.

# ¹⁰ Submissions for the Appellant

Counsel for the Appellant submitted that the trial Judge totally ignored the evidence adduced by the Appellant in regard to the fact that the Appellant and the Respondent were proprietors of a company ,M/s Lasting Solutions Consults Ltd, which had been in existence and had done business. That the trial Judge 1s ignored the evidence which showed that the Respondent had received ^a

- substantial refund to the tune of Ug. shs. 71,000,000/= in compliance with the undertaking. That this money was refunded to the Respondent since she had chosen to pull out of the Company. - Counsel for the Appellant submitted that this evidence had been submitted by 20 way of affidavit and the annexures attached thereto. That the trial Judge made a conclusion before evaluating the evidence on record.

Counsel for the Appellant submitted that this Court, as a first Appellate Court has the duty to reappraise the evidence on Court Record as it was held in the

? ( ^a \_ \_\_{ry; \

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10 lPage case of Banco Arabe Espanol v. Bank of Uganda, Supreme Court Civil Appeal No. B of 1998.

#### Submissions for the Respondent

5 Counsel for the Respondent submitted that the trial Judge properly evaluated the evidence and was right to find that the Respondent's evidence was uncontroverted and unchallenged. That the Appellant admitted that she had received Ug. shs.91,000,000/= from the Respondent and had signed an undertaking to refund the same to the Respondent.

10 Counsel for the Appellant submitted that there was no need for the trial fudge to delve into the operations oi the Company since the Appellant had conceded that the Respondent had given her Ug. shs. 91,000,000/= in order to join the company.

Counsel for the Respondent referred to the case of Abdallah Nabulere & Another v. Uganda (1979) HCB 77 where it was held tha[

"The first Appellate Court has jurisdiction to review the evidence in order to determine whether the conclusion originally reached upon the evidence should stand, but this is a jurisdiction which is always exercised with caution. But it is not enough that the appellate court might have come to a dffirent conclusion. The Appellate Court will only interfere with the findings of fact of a trial Judge if there is no evidence to support ^a particular conclusion. But if the evidence as a whole can reasonably be regarded as justifying the conclusion reached at trial, the view of the trial Judge as to where the credibility /ies rs entitled to the great weight especially where there is conflict of testimony."


11 IPage

refund the money which the Respondent had given to her. On Record, is an undertaking in which the Appellant agreed to refund the Respondent's contribution of Ug. shs. 91,000,000/=. This undertaking was signed by the Appellant who agreed to refund the money in two instalments of 50,000,0 00/= (fifty million shillings) and the balance of 41,000,000f= (forty one millions

shillings). This undertaking was not challenged by tlie Appellant.

Counsel for the Appellant submitted that the trial Judge did not evaluate the evidence which showed that the Respondent had received a substantial amount of Ug. shs. 71,000,000 (seventy one million shillings) as a partial refund for the

- Ug. shs.91,000,000/=. However, as earlier noted, the trial fudge considered this averment while delivering the Ruling, and held that the Appellant did not present any evidence to show that the Respondent acknowledged receipt of this money. Indeed, there is no such evidence to prove this fact in the Record of Appeal. 10 - ¹⁵ I do not find any merit in this ground as well and it fails too

#### GROUND 3

The learned trial Judge erred in law and fact when he based a judgment on an undertaking that was not legally enforceable against the Appellant.

#### Subrnissions for the Appellant

2A Counsel for the Appellant submitted that the Appellant's undertaking to refund Ug. shs. 91,000,000/= to the Respondent purportedly created a contractual relationship between the parties but such a contract is void as it lacked consideration from the Respondent to the Appellant. That in law, such ^a contract is not enforceable against the Appellant. Counsel relied on Section

( oe( Eaib{!t.&4r]

13 IPage

20(1) of the Contracts Act, ZOLO and the cases of Dunlop Pneumatic Tyre Company Limited v. Selfridge and Company Limited (1915) A. C 847, Macfayv. UnitedAfrica Ltd (1961) 3 ALLER 1169 to support this submission.

Counsel for the Appellant referred this Court to the case of Souza Figuerido & Co. Ltd v. Moorings Hotel ttd (1959) E. A. 425 where it was held thaq

> "lt does not follow that because a Defendant offers to pay a sum by instalment, he has no legal defence to an action for recovery of that sum."

Counsel for the Appellant prayed that this Court finds that there were triable issues both of fact and law which needed to be investigated through a full trial.

#### Submissions for the Respondent 10

Counsel for the Respondent submitted that the Appellant is estopped from arguing that the undertaking to pay the money in question was not legally enforceable, as the Appellant did not raise this issue in the High Court. That this ground is an afterthought.

- Counsel for the Respondent further submitted that the undertaking is valid as it clearly relates to the intention of the parties, which intention was to ensure that the Respondent gets a refund of the money which she had personally given to the Appellant for business purposes. The Appellant agreed to give the Respondent a refund. 15 - Counsel for the Appellant submitted that the Respondent's consideration for the undertaking was the Ug. shs. 9L,000,000/= which she had given to the Appellant for which she sought a refund. 20

It was further submitted for the Respondent that the Ug. shs. 91,000,000 was not part of the Company's share capital as the Share capital indicated in the ¹⁴lPage '-\*'n

It!ar

\$

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Company's memorattdum and Articles of Association was Ug. shs. 2,000,000/= ftwo million shillings only). That therefore the undertaking was signed with an intention of refunding money which the Respondent had personally given to the Appellant to boost the business.

5 Court's findings

> Section 10(1) of the Contracts Act, 2OlO defines a contract as an agreement made with free consent of parties with capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally bound.

- 10 Counsel for the Appellant submitted that although the Appellant's undertaking to refund to the Respondent her contribution of Ug. shs.91,000,000/= purportedly creates a contractual relationship between the parties, the same is void because the Respondent did not give any consideration. However, this Court takes cognisance of l"tre fact that the Appellant never denied signing the undertaking in question and neither did she allege that she had been forced to - 15 sign the same. On the contrary, the Appellant, in paragraphs 4 and 5 of her Affidavit in support of the Application fbr leave to appear and dcfcnd the suit filed in the trial Court, admits having knowledge of the sum of Ug. shs. 91,000,000/= which she owed the Respondent and had even promised to pay back through an undertaking which she signed. - 20 Section 20(1Xb) of the Contracts Act, 2O1O provides that a contract is void except where the agreement is a promise to compensate, wholly or in part, ^a person who has already voluntarily done something for the promisor.

In the Instant Appeal, the Appellant, admits that she had received Ug. shs. 91,000,000/= from the Respondent, prior to the undertaking. As Counsel for

the Respondent rightly submitted, the ,undertaking clearly relates to the ²⁵ 15 lPage


intention of the parties which was to refund money which the Respondent had personally paid to the Appellant to be put in the business being conducted under Lasting Solutions Consults Ltd.

Therefore, the undertaking is valid for reasons that the Appellant signed it as ^a promise to refund to the Respondent a sum of Ug. shs. 91,000,000/=. This points to the intentions of the parties at the time of signing this undertaking and it is also proof that the Appellant signed it in an endeavour to compensate the Respondent. The undertaking is legally enforceable against the Appellant. 5

- AII in all I find that the Appellant is trying to renege from a fairly straight forward contractual obligation. It is the duty of courts to enforce contractual obligations in order to ensure that business and commerce thrive. That is how the courts assist in building a sustainable national economy. That is also why there is a summary procedure under the Civil Procedure Rules to enforce obligations like this one to which a defendant does not have a plausible defence. 10 - This ground must also fail. 15

#### Final Result

In the final result, I dismiss this Appeal with costs here and in the lower Court. The fudgment and orders of the trial court are hereby upheld.

## 20 It is so Ordered

[""o q 15 lPage aa

Dated at Kampala this ....... $\frac{1}{2}$ day of ...................................

.<br>gjelo j . . . . . . . . . . . . . . . . . . .

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HON. MR. JUSTICE GEOFFREY KIRYABWIRE, J. A.


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THE REPUBLIC OF UGAIYDA

## THE COURT OF APPEAL OF UGANDA AT I(AMPALA

#### CORAM: KIRYABWIRE AND MUGENYI, JJA AND KASULE, AG. JA

#### CIVIL APPEAL NO. 104 OF 2013

#### BETWEEN

MARY ANKWATSA APPELLANT

AND

f --\

ADE MUSANA ..r.... RESPONDENT

(Appeal from the Judgment of the High Court of Uganda (Musene, J) in Miscellaneous Application No. 172 of 20'|.3, arising from Civil Suit No. 1 14 of 20131

I

## **JUDGMENT OF MONICA K. MUGENYI, JA**

I have had the benefit of reading in draft the lead Judgment of Hon. Justice Geoffrey Kiryabwire, JA in this Appeal. I agree with the decision arrived at and the orders therein, and have nothing useful to add.

Dated and delivered at Kampala this $\mathcal{L}$ day of $\mathcal{L}$ day......., 2021.

NU ngem

Hon. Lady Justice Monica K. Mugenyi **JUSTICE OF APPEAL**

APPEAL OF UGANDA TIFIED TRUE COPY $\mathfrak{o} \mathfrak{o}$

Civil Appeal No. 104 of 2013

#### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

## CIVIL APPEAL NO. 104 OF 2013

(Appeal from the Judgment of the High Court of Uganda (Masalu-Musene, J.) dated 23^rd May, 2013 in High Court Miscellaneous Application No. 172 of 2013 (arising from HCCS No. 114 of $2013)$

#### 15 **Mary Ankwatsa :::::::::::::::::::::::::::::::::::** Versus

<table>

Ade Musana :::::::::::::::::::::::::::::::::::

| | Coram: | Hon. Mr. Justice Geoffrey Kiryabwire, JA | |----|--------|------------------------------------------| | 20 | | Hon. Lady Justice Monica Mugenyi, JA | | | | Hon. Mr. Justice Remmy Kasule, Ag JA |

# Judgment of Remmy Kasule, Ag. JA

I have had the benefit of going through the lead Judgment of my brother, Hon. Mr. Justice Geoffrey Kiryabwire, JA. $25$

I am satisfied with the analysis of the facts, the application of the appropriate law to those facts, the conclusions he has reached and the final decision to have the appeal dismissed with costs to the Respondent of this Court and those in the Court below.

There is nothing useful I can add. 30

Dated and signed at Kampala this **20^th day** of **July**, **2021**.

Company C

**Remmy Kasule** Ag. Justice of Appeal 35 $OF_11G$ IBUE COOPI $\mathbf{1}$

$\mathsf{S}$

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