Acali v Nile Bank Limited (Civil Suit 187 of 1993) [1994] UGHC 60 (13 April 1994)

Full Case Text

## THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

## CIVIL SUIT NO. 187 OF 1993

ACALI K. MANZI APPLICANT/JUDGMENT DEBTOR. VERSUS

NILE BANK LTD. ..................... RESPONDENT/DECREE HOLDER. BEFORE:- The Honourable Mr. Justice J. W. N. Tsekooko

## ORDER

The respondent/decree holder instituted a suit against the applicant/judgment debtor under Order 33 of Civil Procedure Rules by way of Summary Procedure. The applicant filed Notice of Motion under 0.33 Rules 3 and 4 seeking leave to defend the suit. On 22nd September, 1993 the applicant was absent when his application came up for hearing before me. Mr. Butagira learned counsel for the plaintiff moved court to dismiss the motion and asked for judgment to be entered for the plaintiff which was done.

The applicant has now instituted motion seeking for orders that (i) exparte judgment be set aside (2) unconditional leave to appear and defend the suit $(3)$ costs to be in the cause.

The grounds in support of the application are set out in the applicant's affidavit sworn on 1st November, 1993. The relevant paragraphs state as follows:-

- $113.$ That when the judgment against me was passed I was absent from court. - That this was due to malaria and hypertensive $4.$ ailment which I contracted a day before the hearing date. - That there is a medical evidence which recomme- $5.$ nded bed rest and abstinence from strenous activity for at least two weeks (copy attached). - That I duly notified the Deputy Chief Registrar 6. in writing of my inability to attend court. - That I have a good defence to the plaintiff's $7.$ suit and I am bound to succeed.

$\ldots \ldots \ldots \ldots /2$

8. That I swear this affidavit in support of my application to have the exparte judgment entered against me set aside and for unconditional leave to appear and defend the suit."

$\mathsf{Z}$

Mr. Matovu appeared for the applicant whilst Mr. Butagira appeared for the respondent.

Learned counsel for the applicant submitted that applicant has sufficient reason for his absence as he was sick and had informed Registrar by letter. That the registrar should have informed court about sickness of the applicant. He submitted that Nr. Butagira, counsel for the respondent had knowledge of the sickness of the applicant in as much as there is no affidavit to contradict that of the applicant. To this Mr. Butagira denied having had a copy of the said letter asking for adjournment. Besides, he contended, mere writing of a letter to the registrar is not proper for adjournment and that the letter could have been ignored. He further submitted that in any case the application was considered and dismissed on merits.

Order 33 has no provision regarding what happens in the absence of the applicant on the day when the application is to be heard. For ordinary suits adjournment is considered under 0.15 Rule 1 of Civil Procedure Rules. Under this law adjournment is granted where there is sufficient cause. Otherwise the hearing would proceed as provided for under 0.9 Rule 17 (1) (a) of Civil Procedure Rules. However under 0.48 Rule 5 "the hearing of any motion or application may from time to time be adjourned upon such terms the court shall think fit". This rule 5 thus gives court discretion to adjourn a motion on terms it thinks fit.

I know if there is no contrary affidavit, it may mean that applicant's affidavit is uncontradicted. But this does not preclude scrutiny of the affidavit or annextures.

. . . . . . . . /3

If there had been proper applica-tion on 22nd September, 1993, I c-.uld have had to consider the application,. There was no application before me for adjournment. I am certain that t-bc applicant's letter was not drawn to my attention in wb . *-..is* case I could have considered whether such letter cons ■:. tuted an application., I may observe that the letter- w^s apparently written on 20th September, 1993 on which date applicant appears to have visited his doctor who advised his rest on same day (20/9/93)• Date of receipt 61 letter was changed from 20th September, 1993 to 21st Shptcmber, 1993 which was not explained. That raiseas dcab^s®

Hr. Butagira told court.. Mr., Matovu did not dispute the information, that: th" applicant is a lawyer. The applicant's letter of /J)-J. September, 1993 is couched in a lawyer's language Mr. Matovu stated however that the applicant u i.qt a practising advocate so he would not- knov. -,v -ethe.? or not applications to court should not be made by l.e ;;tera I think it is now accepted that application for? Adjournment by letter is not normally acceptable.

Be that as it may, a petvsai oJ? the doctor's letter raises some anomalieso The Dct-tc ' was signed by a Dr-, Stephen Sewanyana for Dr, Kan;--'"e/;!• It is not clear whether the applicant was exa'.'.n^d by Dr. Sewanyana or Dr. Kanyerezi. A doctor w<-» physically attends the patient should plainly indict c ne had examined the patient® In any case the crlor's note did not suggest that walking to court to see,. JJournment was or is strenous workn • The al pl-can \*:r- letter of 20th September, 1993 gives his addres.- as i K^mpulac I thus assume that the applicant lives in Karsp^Lac There :.s nothing on the file to suggest Uw W t. ,, ws not Slivered to court .................. A

building by the applicant himself whether on 20th September, 1993 or on 21st September, 1993. That suggests he was able to travel to court physically on either of those days. The note further indicates the applicant as O/C Roko. I don't wish to speculate but this could be Roko Construction Company (See plaint) for whom the note might have been intended. Para 5 of affidavit when compared doctor's note appear inconsistance about when the with applicant fell sick.

$\overline{4}$

In those circumstances I am not satisfied that the applicant failed to attend court on 22nd September, 1993 whem his application was called for hearing due to sickness or ailment which made it difficult for him to travel..

On 22nd September, 1993, Learned counsel for the respondent had submitted, a submission which he reiterated when I heard this motion, that on 10th February, 1993, the applicant had written a letter admitting liability.

On the said admission, Mr. Matovu submitted that the applicant did not admit any specific sum of money. That the admission was general in response to a letter by auctioneer's letter written before the suit was filed. That the applicant's letter e ould not have been a basis for judgment, That the applicant disputes the exact amount.

That the statement of account annexed to the Shs. 1,161, $\frac{6}{14}$ whereas the plaint refers plaint itself elaimed Shs. $1,008,887/=$ . That even on 15th February, 1994 applicant received another statement reflecting Shs. 2, $69,531/$ = which was consistent with Shs. 1,161,0/1/= appearing in the annexture. Mr. Matovu submisted that the applicant had good cause to oppose the summary wit and that he should therefore be given leave to defend the suit. In response $...$ $...$ $/5$

to submission by Mr. Butagdra that there ware two accounts he submitted in effect that a statement of the other account should have been annexed.

Mr. Matovu informed court that the applicant admits liability of Shs. 2,^69,531/=.

On these other submissions regarding admission of liability Mr. Bu;tagira submitted that the plaintLwas clear and was supported by Andereya Nsenga's affidavit. both That the amount claimed in the plaint refers\* amounts, showed in Annexture "A" to the plaint (Current Account) and to the loan account whose statement of account was not attached to the plaint.

Mr. Butagira further <subr.it>ted that in his affidavit the applicant when seeking lo-.w to defend simply denied liability. He did not admit amount he owed the respondent.

Learned counsel submitted <nd I agree with his submission, that in deciding whether or not to set aside exparte judgment, the court is not lin;' ed to consider sufficient reason for absence but the me^'.;s of the case must be considered: See Departed As:', a? .3 Property Cus'todian Board Vs. Uganda Blanket Manui'^utures Ltd. /1982/ HCB 119. This case was concerned vith applications to set aside under 0.9 Rules (9 and 2-j; of Civil Procedure Rules which /aV§ome slight difference from 0.33 Rule 11.

The present application, was instituted under Rule 11 of O.33» fbe rule reads:

''After the decree the court may, if satisfied that the service of the summons war not effective or for any other good cause, which shall be recorded, set aside the decree and, if necessary staj &lt; set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if i< seems reasonable to the court so to do, and on sue'-, tt //ms as the court thinks fit." ................../6

*5*

The court has discrection under the rule to set aside decree:

> $(a)$ if service of the summons was not effective. This is not the case here.

$\epsilon$

- or for any other good cause. $(h)$ - (c) And if it seems reasonable to court so to do, i.e. to grant leave to defend.

Principles applicable when application is made under Rule 11 were set out in the cocce of Mbogo & Another Vs. Shah /19657 EA 93.

With regard to this case I shall construe the expression "for any other good cause" to mean that if I am satisfied that the applicant has a defence to the whole of the claim or part thereof, I don't see any other reasonable construction to be placed on that expression.

On 22nd September, 1993, the materials before me were:

- the plaint and accommanying affidavit plus $(1)$ Annexture " $\Lambda$ " for the respondent. - On the part of the applicant there was the $(2)$ Notice of Motion with accompanying affidavit. - $(3)$ There was then the respondents' affidavit in reply to which was attached a letter dated 10th February 1993 written to the respondent by the applicant, slightly over a month prior to the filing of the suit.

The plaint and the afficavit showed that the respondent claimed Shs. 11,008,887/= as a debt arising from a loan granted to the defendant. In paragraph 3 of the plaint: was stated, inter guia, that a copy of the current state of the defendant's account (in red) is now shown and marked annexture $"A"$ ).

As submitted by Mr. Matoru the annexture "A" shows that as on 16th March, 1993 Account 107 CO 16187001 reflected Shs. 1,161,071/= as being " $OR$ " which normally denotes overdrawn or in debt.

Mr. Butagira says that in fact Shs. 11,008,887/= is the total of two accounts and that the account I have . . . . . . . . . / ? just quoted to which annexture "A" relates is in effect a normal account. That there is a loan account which presumably shows a larger amount owed by the applicant to the respondent. No explanation was offered why the loan account statement was not annexed. Affidavit accompanying the plaint stated in para 3 thereof "That the said sum (Shs. 11,008,887/ $\neq$ ) together with interest has been demanded from the defendant who has neglected and/or refused to pay the said sum to the plaintiff Bank".

In his Notice of Motion the applicant gave two grounds. Ground 1 stated, inter alia,

- $(a)$ that the applicant/defendant has never at any givan time borrowed the sum of Ug. Shs. 11,008,887/= from the respondent/plaintiff. - that the claim by the respondent/plaintiff $(b)$ as contained in the plaint herein is false"

These grounds were virtually repeated in paragraphs 3 and 4 of the affidavit attached to that Notice of Motion.

Thus at that stage the applicant denied the whole claim as being false.

In response to the affinavit and Notice of Motion filed by the applicant, the respondent filed affidavit in reply sworn by Andrew Nsenga who is Director of Credit of the respondent. That afligavit challenged the applicant's denial and had applicant's letter dated 10th February, 1993 attached to show that the applicant was in fact indebted to the respondent. This is he letter to which both counsel referred during thei submissions. There is no denial that the letter was written by the applicant. Rather it was stated that it was written prior to the institution of the suit aft: auctioneers had threatened to auction applicant's property.

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The letter is relevant and I should reproduce its contents.

"Mr. Acali Manzi P. O. Box $1365$ Канраід.

10th February, 1993.

The General Manager Nile Bank Ltd. Spear House KAMPALA

Dear Sir,

## RE: MY INDEBTEDNESS WITH NILE BANK LTD.

I have received a notice from M/S Victoria General Auctioneers of the intended sale of the land I mortgaged to your Bank.

First of all, let me state that I am sorry I have not been able to service my loan with your Bank. As explained to you verbally a couple of times I have been making serious attempts to meet my obligations to your Bank by looking for possible purchasers of the same said land. I did over the last quarter of last year get a couple of really interested purchasers but the problem was always that they could never mobilize the funds when it came to payment..

I would like to inform you now that presently $I$ have two serious interested buyers whom I am sure will be able to buy the land in question and thereby enable me to repay the loan to the bank.

My request therefore is to beg your indulgence to restrain the Auctioneers from advertising and auctioning the land I mortgaged to your Bank for a period of two months until 30th April, 1993. I hope to have repaid the loan in full then, however if by that time I have not settled my obligations to the bank, you can sell the land in question by auction.

$\ldots \ldots \ldots / 9$

I beg your indulgence to give me just one chance to enable me resolve this matter.

Yours faithfully

Acali Manzi "

The contents of this letter show that the Notice of Motion and accompanying affidavit filed by the applicant seeking leave to defend were totally misleading to the court in so far as both claimed that the applicant had a good and...genuine defence to the whole of the claim. I don't believe that it matters an iota that this letter had been written prior to the institution of the suit or that it was simply written in response to a threat to auction land by auctioneers.

As I indicated in my order when I considered the application to dismiss\* Notice of Motion on 22nd September, 1993» I took the contents of ;his letter into account in passing the decree. It ie true that the letter does not mention any specific amount owed, but I doubt that that mattered since the respondent had indicated in the plaint and its affidavit the amount demanded.

In the current application with which I am now concerned, the Notice of Motion states:

''Further take notice that this application is based on the ground that exparte judgment was entered against the defendant/applicant when he was absent from court due to illness and on other attach d which shall be read and relied upon at the hearing >f this application". I have of course reproduced the contents of the attached affidavit. As can be seen from that a .fidavit, paras. to 5 and even 6 talk of sickness wh ' h I have disposed of. Paragraph 7 merely asseis rather baldly, that "1 have a good defence to the plaintiff's suit >nd I am bound to succeed". ...........

That alleged good defence was not set out. It has been repeatedly said that when applicants apply for leave to defend (or indeed even when applying to have decree passed in summary suit set aside) the applicant would do well to attach a draft Written Statement of Defence showing such defence. See UCB Vs. Mukome Agencies /19827 HCB 22.

$10$

In this application the applicant neither denied the liability admitted in his letter of 10th February, 1993 whatever the amount admitted. Mr. Matovu stated from the bar that the applicant admits Shs. 2,469,531/= which was of course not set out in aither the Notice of Motion dismissed on 22nd September, 1993 or the current one.

I may also refer to an affidavit sworn on 14th January, 1994 by the applicant in respect of intended application for stay of execution which was given up because I had accepted to hear the current Notice of Motion.

I think I am entitled to refer to the affidavit as it on the record. It is a pleading.

Paragraph 9 thereof reads:

"That I have been willing to settle the sum owing but I have never agreed with the plaintiff as to how much I owe because of the contradictory figures appearing in the plaint and on the bank statements sent to me by the plaintiff."

No such bank statements were attached other than the figure stated by Mr. Matovu from the bar. The applicant has chosen not to mention what he considers his liability to be.

In all these circumstanges is there, "any other good cause" shown to justify setting aside the decree and or granting of unconditional leave to defend?

$\cdots \cdots \cdots \cdots / 11$

I think not. I think that though the respondent showed contradiction between the plaint and annexture thereto\*,; the claim is clear and the applicant knows it. ♦\*\* It was upon him to show how much he admits and how mu>h he disputes and why he disputes that other amount. The applicant's applications and affidavits considered along •side his letter of 12th February, 1995 show conclusively-, in my considered view, that his evidence cannot be true- / The foots, disclosed. ^annp-t. reasonably be argued to be a defence to the claim against the applicant.

Bearing in mind all that I have discussed above, I an fully satisfied that there is no good Cause to justfy setting aside the decree. It seems to me unreasonable to set the decree aside and or to grant leave to defend. The application is rejected. I dismiss it. I award i the costs to the respondents .» a

/' J. w \*\* TSEKOOKO b

J U D G E

13/4/199^ at 8.56 a.m. Applicant present. Butagira for respondent. Ssensonga court clerk. Ruling delivered.

4 . J. WvNyTSEKOOKG C

JUDGE