[2025] UGHC 540

# **THE REPUBLIC OF UGANDA**

### **IN THE HIGH COURT OF UGANDA AT FORT PORTAL**

### **HCT-01-CV-MA-0119-2024**

### **(ARISING OUT OF HCT-01-CV-CS-0072-2024)**

**PEARL DAIRY FARMS LIMITED :::::::::::::::::::::::::::::: APPLICANT**

## **VERSUS**

### **ZHUANG SHAOLONG T/A**

**GOOD HOME SUPERMARKET ::::::::::::::::::::::::::::::: RESPONDENT BEFORE: HON. JUSTICE VINCENT WAGONA RULING**

#### **Background:**

1. This Application arises from a summary suit, HCT-01-CV-CS-0072-2024, filed by the Respondent, *Zhuang Shaolong T/A Good Home Supermarket*, against the Applicant, *Pearl Dairy Farms Limited*. The Respondent's suit, initiated on 3 rd December 2024, seeks recovery of UGX 80,941,800/= for allegedly undelivered milk products. The Plaint details a series of transactions between 23rd June 2024, and 12 th September 2024, where the Respondent purportedly made payments for various quantities of milk and powdered milk, but allegedly received incomplete deliveries or no deliveries at all for certain consignments.


2. Specifically, the Respondent claims that on 23rd June 2024, UGX 7,720,000/= was paid for 400 cartons of milk, with only 360 delivered. On 30th June 2024, UGX 27,900,000/= was paid for 220 cartons, but only 138 were delivered. On 13th July 2024, UGX 12,000,000/- was paid for 550 cartons, with only 403 boxes delivered. On 21st July 2024, UGX 26,700,000/- was paid for 165 cartons of powdered milk, but only 147 were delivered. While all cartons were reportedly delivered for a payment of UGX 22,330,000/- on 2 nd August 2024, for 250g and 900g cartons of milk, the Respondent alleges that no deliveries were made for a payment of UGX 15,440,000/- on 29th August 2024, for 940 cartons of 125ml milk. Furthermore, on 2 nd September 2024, UGX 1,320,000/ was paid for 5 boxes of milk, which were delivered at a higher cost. Finally, on 12th September 2024, UGX 12,000,000/- was paid for 56 boxes of milk, but only 20 boxes were delivered. The Respondent asserts that despite repeated requests, the Applicant has failed to deliver the outstanding milk products, hence the lawsuit.

## **The Current Application**:

3. *Pearl Dairy Farms Limited*, the Applicant in this matter, has filed this Application by Notice of Motion under the provisions of Section 37 of the Judicature Act, Cap. 13, Section 98 of the Civil Procedure Act, Cap. 282, Order 38 Rules 1 and 2, and Order 52 Rules 1 and 3 of the Civil Procedure Rules. The primary reliefs sought are that:


- **(1) The Applicant be granted unconditional leave to appear and defend Civil Suit No. 72 of 2024.** - **(2)Costs of this Application be provided for.**

#### **Grounds of the Application:**

- 4. The Applicant's request for leave to defend is robustly supported by an affidavit sworn by *Ms. Doreen Amumpiire*, the Applicant's Legal Assistant, which lays out a compelling narrative challenging the very foundation of the Respondent's summary suit. The Applicant firmly denies ever entering into any agreement or contract, whether formal or informal, with the Respondent for the supply of dairy products, asserting that no such gentleman's agreement or contractual obligation ever existed between them. Consequently, the Applicant explicitly states that the Respondent never made any payments to them for the alleged supply of dairy products, and therefore, the Applicant never received any money from the Respondent for such purposes. Furthermore, the Applicant emphatically denies issuing the proforma invoice attached to the specially endorsed plaint and supporting affidavit, claiming these documents are outright forgeries. - 5. The Applicant maintains that it has never received any money from the Respondent or any of its customers for which it failed to supply or deliver dairy products, and thus, it is not indebted to the Respondent in any amount whatsoever. These claims, the Applicant contends, are not only baseless but


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also fraudulent and extortionate. The Applicant is confident that it possesses a strong, bona fide, and meritorious defense to the Respondent's suit, intending to raise several crucial and bona fide triable issues of both law and fact, including fundamental questions such as whether the Respondent is lawfully conducting business in Uganda, whether the Respondent even possesses a valid cause of action against the Applicant, whether any legally binding agreement truly exists between the parties, whether the Applicant is indeed indebted as alleged, and what appropriate remedies, if any, are available.

6. To underscore the substance of its defense, the Applicant has appended a draft Written Statement of Defence to this application, arguing that the Respondent's suit is misconceived, frivolous, vexatious, and barred by law, and therefore, it is just and equitable that the Applicant be granted unconditional leave to appear and defend the suit.

#### **Reply by the Respondent**:

7. Despite due service of the Application, the Respondent failed to file an Affidavit in Reply. An Affidavit of Service, deponed by *Agaba Clinton*, a certified process server attached to *M/s Gem Advocates*, confirms that the Respondent was properly served with the Application on 13th February 2025, through its advocates, *M/s Joshua Musinguzi Associated Advocates*. This Court is satisfied that effective and proper service was effected upon the Respondent, who nevertheless chose not to oppose the Application.


## **Representation and Hearing:**

8. *Ms. Baguma Dinah* appeared on brief for *Mr. Derrick Bazekuketta*, representing the Applicant. Learned Counsel for the Applicant submitted written submissions for the Court's consideration, which have been thoroughly reviewed in the preparation of this Ruling.

## **Issue for Determination:**

**9.** The sole issue before this Court for determination is: **Whether the Applicant should be granted unconditional leave to appear and defend Civil Suit No. 72 of 2024.**

# **CONSIDERATION BY COURT:**

10.**Order 36** of the **Civil Procedure Rules (CPR)** provides for summary procedure, a mechanism designed to expedite the recovery of debts or liquidated demands where there is no genuine dispute regarding the claim. The underlying rationale is to prevent unnecessary delays and frivolous defenses in cases where the defendant clearly owes the money. As was succinctly articulated in **Home & Overseas Trading Co. Ltd. vs. Standard Bank (Uganda) Ltd. [1967] EA 87**, the purpose of Order 36 is "to enable a plaintiff to obtain a quick judgment where there is no real defence to the action." Similarly, in **Maluku Interglobal Agencies vs. Bank of Uganda [1985] HCB 65**, it was held that the procedure is intended to allow for swift judgment


in cases of clear indebtedness, avoiding the protraction of litigation when there is no substantial dispute.

- 11. However, while designed for expediency, the summary procedure is not intended to shut out a defendant who has a plausible defense or raises bona fide triable issues. This is precisely where the concept of "leave to appear and defend" becomes crucial. **Order 36 rule 3(1)** of the CPR stipulates that upon an application for summary judgment, *"the defendant may apply for leave to appear and defend the suit on such terms as to security or otherwise as the court may think fit."* The overarching principle guiding the court's discretion in granting leave is whether the defendant has demonstrated that there is a genuine dispute worthy of a full trial. This does not require the defendant to prove their defense conclusively at this preliminary stage; rather, they must show that their defense is not a sham or merely intended to delay justice. - 12. The seminal case of **Zola and Another vs. Ralli Brothers Ltd. [1969] EA 691** provides authoritative guidance on the principles governing the grant of leave to appear and defend. The East African Court of Appeal held that leave should be granted unless it is clear that there is no defense whatsoever. The court further elaborated that a defendant is not bound to show a defense that must succeed, but rather a defense that is arguable and raises a triable issue. This was reiterated in **Begumisa vs. East African Development Bank [2004]**


**2 EA 153**, where it was emphasized that the court's role is not to try the case on affidavits, but to ascertain whether a triable issue exists.

- 13. Several grounds have been established by case law upon which leave to appear and defend is typically granted. For instance, leave is often granted where a bona fide triable issue of fact or law is disclosed, meaning the defendant must demonstrate a genuine issue requiring investigation at a full trial, not necessarily proving the defense but showing it's not frivolous. Another common ground is where the claim is not for a liquidated demand, as summary procedure applies strictly to liquidated demands. Furthermore, if there is a dispute as to the exact amount claimed, even if liability is admitted in part, leave may be granted. Serious allegations such as fraud, misrepresentation, or illegality inherently raise complex factual and legal issues necessitating a full trial, thus warranting leave. Additionally, if the defendant can show a plausible counterclaim that might offset the plaintiff's claim, this can be a ground for granting leave. Lastly, where there are serious doubts about the plaintiff's cause of action, perhaps concerning the validity or completeness of the plaintiff's case as presented in the specially endorsed plaint, leave may be granted. - 14. The term "unconditional leave" implies that the defendant is not required to furnish security or meet any other conditions before being allowed to defend the suit. This is typically granted when the defendant has raised a strong prima

 facie defense that does not appear to be a mere delaying tactic. Conversely, "conditional leave" may be imposed where the court has some doubts about the defense but still believes it warrants a trial, and thus may require the defendant to deposit security or fulfill other conditions to ensure the plaintiff is not unduly prejudiced.

- 13. Turning to the present application, the Applicant, *Pearl Dairy Farms Limited*, has advanced a robust set of grounds in its supporting affidavit, which, if proven, would entirely dismantle the Respondent's summary suit. The Applicant's core contention is a fundamental denial of any contractual relationship with the Respondent and the alleged transactions. - 14. The Applicant unequivocally states that it *"has never entered into any gentleman's agreement or contract with the Respondent for the supply of dairy products,"* did not receive any payments, and did not fail to supply products to the Respondent or its customers. This is a direct and absolute denial of the very premise of the Respondent's claim. The Respondent's suit is based on alleged payments and undelivered goods, implying a contractual relationship. The Applicant's denial squarely places the existence of a contract, the payments, and the alleged failure to deliver in dispute. This raises fundamental triable issues of fact that cannot be resolved without a full trial. This aligns with the principle established in **Uganda Commercial Bank vs. Yorkshire Insurance Co. Ltd. [1983] HCB 71**, where it was held that if the defendant's


affidavit discloses a bona fide dispute as to facts that would constitute a defense, leave to defend should be granted.

- 15. The Applicant specifically alleges that the proforma invoice attached to the specially endorsed plaint and supporting affidavit is **"forged"** and was not issued by the Applicant. This is a very serious accusation that goes to the heart of the documentary evidence relied upon by the Respondent. An allegation of forgery is not a trivial matter; it demands thorough investigation through discovery, cross-examination, and potentially expert evidence. Such an allegation, if true, would render the entire basis of the Respondent's claim fraudulent. This undoubtedly constitutes a bona fide triable issue that necessitates a full hearing. The courts have consistently held that where there is an allegation of fraud or forgery, leave to defend should be granted as a matter of course because these issues are inherently complex and require detailed examination. See for instance, **Patel vs. Metro Cash & Carry Ltd. [2001] 1 EA 188**, where it was noted that allegations of fraud invariably raise triable issues. - 16. The Applicant's assertion that the claims are **"fraudulent and extortionate"** further reinforces the need for a full trial. While this is an overarching claim, it encapsulates the specific allegations of non-existent contracts and forged documents. Allegations of fraud, by their very nature, are not suitable for determination through summary procedure. They involve questions of intent,


deception, and misrepresentation, which require a detailed examination of evidence and the credibility of witnesses.

17. The Applicant explicitly outlines several bona fide triable issues of law and fact. These include fundamental questions such as whether the Respondent is lawfully carrying on business in Uganda, a preliminary legal issue that could potentially affect the Respondent's standing to bring the suit. Another critical issue is whether the Respondent has a cause of action against the Applicant, which delves into the essential legal requirement for a plaintiff to demonstrate an infringed legal right. Given the Applicant's strong denial of any contractual relationship and alleged payments, this is a legitimate and substantial triable issue. Furthermore, the question of whether there is a valid legally binding agreement between the Applicant and the Respondent constitutes a crucial factual and legal inquiry directly arising from the Applicant's denial of a contract, as the existence and terms of any such agreement are central to the Respondent's claim. The ultimate factual dispute concerns whether the Applicant is indebted to the Respondent as alleged or at all, which addresses the entire quantum of the claim and any potential liability. Lastly, the determination of what remedies are available to the parties naturally follows if the preceding issues are resolved in favor of either party, and its resolution demands a comprehensive understanding of all facts and applicable law.


- 18. The presentation of a draft Written Statement of Defence alongside the Application further solidifies the Applicant's position that it has a substantive defense. The draft defense elaborates on these grounds, providing further particulars of the Applicant's denial of the claims. This is in line with the guidance in **Kotecha vs. Mohammed [2002] 1 EA 112**, where the court emphasized the importance of examining the proposed defense to determine if it raises a genuine issue. - 19. Significantly, the Respondent did not file an Affidavit in Reply to this Application. This non-response, despite proper service, is a critical factor. The Applicant's affidavit contains serious allegations, including forgery and a complete denial of the contractual relationship and payments. The Respondent's silence effectively leaves the applicant's grounds based on these serious allegations unchallenged on the record. While the burden of proof for showing a triable issue lies with the Applicant seeking leave, the Respondent's failure to controvert the Applicant's assertions strengthens the Applicant's claim that there are genuine disputes that warrant a full trial. In essence, the Applicant's version of events, including the allegations of forgery and lack of contractual relationship, stands unrefuted for the purpose of this application. As held in **Wambuzi vs. Mbale Municipal Council [1986] HCB 47**, where an affidavit in reply is not filed, the facts deposed in the applicant's affidavit are presumed to be true for the purposes of the application.


- 20. Given the comprehensive nature of the Applicant's denials, the serious allegations of forgery, and the clear articulation of numerous bona fide triable issues of both law and fact, it is evident that the Applicant has demonstrated a legitimate and arguable defense that is not a sham. The Respondent's failure to file an affidavit in reply further reinforces the impression that the Applicant's grounds for defense are substantial and warrant thorough judicial scrutiny. To deny the Applicant unconditional leave to appear and defend in these circumstances would amount to denying a party a fair hearing and would be contrary to the principles of natural justice and the established jurisprudence on summary judgments. The issues raised are not merely technicalities but go to the very root of the alleged indebtedness and contractual relationship. The Court cannot, at this stage, resolve the conflicting claims of the parties through affidavit evidence alone. A full trial, with the opportunity for discovery, examination, and cross-examination of witnesses, is imperative to determine the truth of the matters in dispute. - 21. Therefore, based on the foregoing analysis, I find that the Applicant has successfully demonstrated that it has a good, bona fide, and meritorious defense to the Respondent's suit, raising genuine triable issues of law and fact. There is no basis to impose any conditions, as the defense appears to be substantial and not merely a delaying tactic. In light of the above considerations, I hereby make the following orders:


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- **(1)The Applicant is granted unconditional leave to appear and defend HCT-01-CV-CS-0072-2024.** - **(2)The Applicant shall file its Written Statement of Defence to HCT-01-CV-CS-0072-2024 within 15 days from the date of delivery of this Ruling.** - **(3)Costs of this Application shall be in the cause.**

It is so ordered.

**Dated at Fort Portal this 9th day of July 2025**


Vincent Wagona

**High Court Judge**

**FORTPORTAL**

**Ruling delivered on 14th July 2025.**