Chamil International Limited and Another v Barongo (Miscellaneous Application 3 of 2023) [2024] UGHC 875 (26 July 2024)

Full Case Text

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT HOIMA MISC. APPLICATION NO. 03 OF 2023 AND MISC. APPLICATION NO.13 OF 2023 (Arising from Civil Suit No. 03 of 2023)

#### 1. CHAMIL INTERNATIONAL LTD 2. KAGGWA MILTON ::::::::::::::::::::::::::::::::::::

#### **VERSUS**

#### SULAIMAN BARONGO :::::::::::::::::::::::::::::::::::

Before: Hon. Justice Byaruhanga Jesse Rugyema

### **RULING**

### **Introduction**

- $[1]$ These 2 Applications were among files that survived the fire that gutted Hoima High Court Civil Registry on the early morning of 21st October, 2023. The **Misc. Application No.003 of 2023** was brought under **0.36 rr.3 & 4** and **0.52 CPR** for orders that: - 1. The Applicants be granted unconditional leave to appear and defend C. S No.003 of 2023 where they are defendants. - 2. Costs of the Application.

### **Back ground**

[2] The Respondent/plaintiff filed a specially endorsed plaint under **0.36 rr.1 & 2 CPR** against the Applicants/defendants for recovery of a balance of $Ugx$ 90,000,000/= allegedly arising from a friendly loan offered bv the $2nd$ Respondent/plaintiff the to Applicants/defendants amounting **Ugx 130,000,000/=.**

- [3] The Applicants filed the present Application No.003 of 2023 seeking orders for unconditional leave to appear and defend the suit. The Application is supported by grounds set out in the affidavit deposed by Kaggwa Milton, the 2nd Applicant which briefly are as follows: - 1. That the $2^{nd}$ Applicant borrowed Ugx. 33,000,000/= and not Ugx $130,000,000/$ = as alleged by the Respondent. - 2. That the Applicants discharged their obligation and paid the total sum of money in two installments i.e. Ugx. $8,000,000/$ = in cash and Ugx. 40,000,000/= by bank to **Account No. 8020015229** belonging to the Respondent. - 3. That the Applicants have a good and reasonable defence to the claim set out by the Respondent for he has audio evidence between his son and the Respondent where the Respondent confirms to had advanced to the $2^{nd}$ Applicant Ugx. 33,000,000/ $=$ . - 4. That there is a real dispute as to the money advanced to the Applicants which can only be settled by court through a full hearing of the case. - 5. That it is just and equitable that the Application be granted. - The Application is opposed by the Respondent, **Sulaiman Barongo** $[4]$ as per his affidavit in reply on record. Briefly, the grounds are as follows: - 1. That the Application is without merit for it does not disclose a plausible defence to warrant leave of court and thus ought to be dismissed with costs.

- 2. That the allegations perpetrated by the Applicants that the $2^{nd}$ Applicant was only advanced Ugx 33,000,000/= is not true and is without proof. - 3. The Respondent only acknowledges $Ugx$ 40,000,000/= which was paid into his account. - 4. That the Respondent has audio evidence of the $2^{nd}$ Applicant offering him alternative payment option inform of a plot of land at Nankulabye town and that the evidence attached does not disclose any defence.

## **Counsel legal representation**

- The Applicants were represented by the firm of **Pentagon** $[5]$ **Advocates, Kampala** while the Respondent was represented by M/s Aequitas Advocates, Kampala. Both counsel filed their respective submissions for consideration of this court in the determination of the Application. - The Applicants brought this Application under **0.36 rr.3 & 4** to [6] be granted unconditional leave to appear and defend C. S No.003 of 2023 where they are defendants. However, I note that as counsel for the Respondent claimed, the $1^{st}$ Applicant's affidavit is missing because the $2^{nd}$ Applicant deposed an affidavit in support of the Application in his capacity as the $2^{nd}$ defendant and not as an entity of the $1^{st}$ Applicant. However, a look at the proposed WSD of the Applicants attached to the $2^{nd}$ Applicant's affidavit, it appears pretty clear that the defence of the $2^{nd}$ same defence of the defendant/ Applicant is the $1^{st}$ Applicant/defendant and/or applies to both of them. Therefore, this court will proceed under S.98 CPA and save the entire M. A. No.003 of 2023 on the basis of the $2^{nd}$ Applicant's affidavit in

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support whose contents squarely form the $1^{st}$ Applicant's defence. In the premises, this could will proceed to determine the merits of M. A No.003 of 2023.

- Under **O.36** r. 4 **CPR**, unconditional leave to appear and defend a $[7]$ 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 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. The applicant ought to demonstrate to court that there are issues or questions of fact or law in dispute which ought to be tried. The procedure is therefore meant to ensure that a defendant with a triable issue is not shut out but given an opportunity to present his side of the case, See M. M. K Engineering Vs Man trust Uganda Ltd H. C. Misc. Application No. 128 of 2012 and Maluku Interglobal Trade Agency Vs Bank of Uganda [1985] HCB 65. - Therefore, in the first instance, in an application for leave to $[8]$ appear and defend a summary suit, there must be sufficient disclosure by the applicant, of the nature and grounds of his or her defence and the facts upon which it is founded. 2ndly, the defence so disclosed must be both bona fide and good in law. When court is satisfied with the above, the court then is bound to grant unconditional leave. Where court is in doubt whether the proposed defence is being made in good faith, the court may grant conditional leave, say by ordering the defendant to deposit money in court before leave is granted, See Children of Africa vs Sarick Construction Ltd H. C Miscellaneous Application No. 134 of 2016.

In the present case, the respondent's claim against the Applicants $[9]$ is for recovery of a sum of Ugx. $90,000,000/=$ and costs of the suit arising from a friendly soft loan facility of Ugx. $130,000,000/$ =. As per the specially endorsed plaint, the parties verbally agreed that the loan facility would be paid within a period of six months.

**博利利斯**

- The $2nd$ applicant denies the Respondent's claim. In his affidavit $[10]$ in support and the proposed joint written statement of defence attached. The $2^{\rm nd}$ Applicant claims he borrowed **Ugx.** 33,000,000/= from the Respondent and that he has refunded a total sum of $Ugx.$ 48,000,000/=. However, on the other hand, the Respondent in affidavit in reply acknowledges receipt of only **Ugx** $40,000,000/$ = from the Applicants/defendants and therefore, claims from them a total sum of $Ugx 90,000,000/=$ as the balance due. - [11] This court notes that there was not any written agreement between the parties regarding the alleged friendly loan which was verbal as per the summary plaint on record. I therefore find that in this case, court will have to inquire into the disputed total sum borrowed, partly paid and the balance due i.e, there is need to ascertain the exact amount that the Respondent advanced to the Applicants, (whether it was $Ugx$ 33,000,000/= as alleged by the Applicant or $Ugx$ 130,000,000/= as claimed by the $2nd$ Respondent), partly paid sum (whether it is $Ugx 40,000,000/= as$ alleged by the Respondent or $Ugx$ 48,000,000/= as claimed by the Applicants) and then lastly, the balance due as would be arrived at from the foregoing determination. The Judgment under this **O. 36 CPR** can only be properly made in cases in which there are no substantial disputes as to the facts or law.

- [12] From the foregoing, I find that the Application has disclosed triable issues which can sufficiently justify the grant of leave to appear and defend the main suit. In the circumstances, this application has merit and therefore is hereby allowed. - [13] The 1st Applicant company filed **Misc. Application No. 13 of 2023** seeking extension of time within which to file an application seeking leave to appear and defend. However, in view of the fact that this court has found grounds to grant the 2 Applicants' unconditional leave to appear and defend the main suit, **C. S No.03 of 2023** of which the $1^{st}$ Applicant is a defendant, then, the $1^{st}$ Applicant's M. A No.13 of 2023 stands superfluous serving no purpose because it would be found seeking an order that is conveniently covered by the present application. - [14] In the premises, this court makes the following orders; - 1. The $1^{st}$ & $2^{nd}$ Applicants are granted unconditional leave to appear and defend Civil Summary Suit No. 003 of 2023. - 2. The Applicants/Defendants are given **15 days** to file their joint written statement of defence from the date of delivery of this ruling. - 3. The costs shall abide the outcome in the main suit.

Dated this 26th day of July, 2024.

Byaruhanga Jesse Rugyema Judge