Barclays Bank of Uganda Limited v Ssendagala & Another (Civil Suit 281 of 1992) [1992] UGHC 54 (25 September 1992)

Full Case Text

The Hom. M. Jactice Agonda Altendie.

$-6.222 \pm 16$

## THE REPUBLIC OF UGARDA

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## IN THE HIGH COURT OF UGANDA AT KAMPALA

## CIVIL SUIT RO. 281 OF 1992

BARCLAYS BANK OF UGANDA LTD. ::::::::::::: PLAINTIFF V ER S U S

| 1. JAHES SENDAGALA) <pre>2. JOHN KALEMBA ) :::::::::::::::::</pre> | DLFLNDANT | |-----------------------------------------------------------------------|------------------| | BEFORE: The Honourable Mrs. Justice M. Kireju | | | RULING | |

This is an applic tion brought by the 1st defendant/ applicant by way of Novace of Action under Or.33 r.4 of Civil Procedure Rules, seeking On order to appear and defend the suit.

The respondent/plaintiff's claim in the substative suit is for a liquidated sum of $\frac{1}{2}$ . 129,395/= with interest at the rate of Shs.41% from the date of the decree until payment in full. The respondent company clim to have advanced monies to the M/S Sezibwa Estate Ltd. of P. O. box 16046 Wandereya Kampala which were guaranteed by the defendants as per guarantee attached to the plaint. The ris object claim to have requested the defendants/applicant to pay the sum of 3.17,129,595/= but the defendants have refus d. d/or neglected to pay.

The grounds of this pplication are that the major assets of the Principal namely M/S Sezibua Estates Ltd. were fraudulently or negli, ally auctioned by the servants of the Principal secondly that the monies owed by the defendant/applicant was inflated by the plairwiff/respondent. The application was a plairwiff/respondent. supported by the affid vit depend by James Sendagala dated $17/6/92.$

The applicant in his flidavit averred that owing to financial constraints the princip $\mathbf{1}$ and unable to service the loans given by the plaintiff/respondent and as a result the plaintiff/respondent instructed M/S Nugerya & m tovu advocates to recover the money due to it. $.../2$

That M/S Mugerwa & Notove without informing the applicant or his collegeau, filed a civil buit against the principal under civil

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suit No.365/90 where the principal applied for leave to appear and defend the suit. That before the principal's application for leave to appear and defend/could be head, the plaintiff/respondent's Advocates

instructed M/S Sunrise Auctioneer to auction the principal's major assests namely, a coffee factory on a seven acre peice of land and a tata lorry. That the auctioneers hurriedly and negligently or frandulently auctioned the principal's above mentioned assets at a given away price dermiving the applicant a chance to step in and finacially salvenge the principal. The applicant further averred that the monios advised to the principal was inflated.

Mr. Katamba Nukibi counsel for the applicant in addion to what was stated in the affide vit referred court to the case of Uganda Commercial Bank V. Sultombe Agencies /1982/ HCB 22 where it was held that where a party alleges fraud, it must be given an opportunity to prove it and that it is trite law that a substantive allegation of fraud in an affidavit in opposition raises a triable issu. a titling the defendant to leave to defend the suit.

Mr. Buyondo counted for the respondent/plaintiff submitted that the suit was institut degreest the applicant as a junrantor of the money advanced to the principal. The respondent had right to go after the princi .1 or the guarantor to recover the money adanced and that the respected first exercised its right against the principal whereby some assets belonging to the principal were sold. Counsel furth a mobmitted that if the assets of the principal were sold includently it was up to the phincipal to bring action but the applicant cannot use it as a bosis for this applic them.

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On the second ground th: t m., :y claimed was inflated counsel submitted that the appli - .id not state how much was inflated. Counsel sue-itc thzt the appli^ant/defondant is required to stute wheth- r tj;c defence alleged go-s to the whole or to part of the plaintiffs claim. Counsel submitted that the applicant has failed to I this requirement. Counsel prayed that the application for .v co appear and defend be \ dismissed and a decree I. entered in favour of the plaintiff/ respondent under Or.

After considering th submission by both counsel and after perusing the Notice of Motion and the supporting affidavit, and the plaint with its anrexuur:s the issue to be determined is whether the defendant h-.o good defence and ought to be permitted to appear and dciund the suit. The defendant is not bound to show good dc-i.r-'-o - merits. He must however, satisfy the court tint tn.;. . is ?n issue or question in dispute which ought to be tried, c..oe of Muluku Intorglobal Trade Agency Vs. Bank of Uganda i\dor, The court is not required at this stage to enter up-..a the tial of the issue or issues disclosed. rfhere tiic-xx i . . r.. sonable ground of defence to the claim the pl. intiff ir. .-ntitled to summary judgement. The court has to cocci i t.\_. t if the trial and further investigation resulted in the defe.f. ;it'.; contention being found to be correct the defendant i-oi.ij. ' ho entitled to succeed.

The applicant ir.s ly to satisfy the court ciu t ne has a real defence to the .-.ui- d not that he has a complete answer to the plaintiff's c--.se. Only tho trial judge can go' into the merits, and discover whether v.. c . e is a true one or not.

My efforts to .".ct eivi: 1 suit No. 3&5/9O which was referred to in tnis ' li vion .ore not successful.

However, I have looked at the plaint in this case, the guarantee and the statement of coolunt from the bank. Although the plaintiff claimed that he demanded payment from the . defendants, the demand leaser as not attached to the plaint. It would have been of more saistance to court if the proposed defence was attached to the application and if the alleged inflation of the monies of im & As given in more detail.

However, with all the foregoing in mind I find that the defendant/ applicant has just forward triable issues which cannot be resolved under Or. 33 in a summary marner without giving the defendant a chance to be a rd.

I therefore find that there are triable issues which should justify granting le ve to the defendant to appear and defend the suit. And no injustice will be caused to the plaintiff by allowing this application as non abuilded by the plaintiff/respondent.

Accordingly the definition is given leave to appear and defend the suit. He must file his drience within 14 days from the date hereof and let the case in a bown for hearing on merit. Costs of this application will be in the cuase.

N. KIREJU $J \ U \ D \ G \ E$ $25/9/92$

$25/9/92$

Mr. Katamba - Kukibi - Jos Un. Splicant/defendant

Mr. Y. S. Buyondo - for the respondent/plaintiff Mr. Ohuru - Court Clark. Kuling delivered before the above.

$\mathcal{L}$ $\mathcal{M}$ $\mathcal{L}$ $\mathcal{M}$ $\mathcal{M}$ $\mathcal{M}$ J U D G E $25/9/92$

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