Kajobe v Mogo Loans SMC Limited (Miscellaneous Application 618 of 2024) [2024] UGCommC 306 (17 September 2024)

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) MISC. APPLICATION N0.618 OF 2024 (ARISING OUT OF CIVIL SUIT NO.585 OF 2021)** 10 **DOREEN KAJOBE KASAMI :::::::::::::::::::::::::::::::::::::::::: APPLICANT VERSUS MOGO LOANS SMC LIMITED :::::::::::::::::::::::::::::::::::::::: RESPONDENT BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA**

# **RULING**

# 15 Introduction

This application was brought by way of Chamber Summons under **Section 98 of the Civil Procedure Act** and **Order 6 rules 19 and 31 of the Civil Procedure Rules SI 71-1**, seeking orders that:

- 1. The plaint in Civil Suit No.585 of 2021 be amended by providing 20 further and better particulars of fraud. - 2. Costs of this application be in the cause.

# Background

The background of this application is contained in the Applicant's affidavit 25 in support of the application, and is summarized below:

1. That the Applicant filed a suit against the Respondent for fraud and breach of transparency in a contract, that was executed between the parties.

- 5 2. That the Applicant, after perusing the documents filed in Court, by her previous lawyers realized that, some of the facts regarding the Respondent's fraud were not included in the plaint. - 10 3. That making the amendment to provide the particulars of fraud will help resolve the dispute between the parties. - 4. That the amendment will not occasion any injustice to the 15 Respondent since the matter is yet to commence for trial on its merits.

In reply, the Respondent through its Legal and Compliance Manager Ms. Nassimbwa Ketra, opposed the application contending that:

- 1. From 14th September, 2021 when Civil Suit No.585 of 2021 was filed, - 20 the Applicant took no further steps to proceed with the case. - 2. The Civil Suit from which this application arises abated and the intended application cannot salvage or revive the same. - 25

- 3. The Respondent will be prejudiced, by the intended amendment as the same seeks to introduce a new cause of action. - 4. The application is brought malafide and with the intention to mislead the Court since the suit abated. - 35 - 5. The Applicant does not disclose plausible grounds to warrant the amendment of the plaint in Civil Suit No.585 of 2021.

### 5 Representation

The Applicant was represented by **M/s Kabuusu-Muhumuza & Co. Advocates,** while the Respondent was represented by **M/s KGN Advocates.**

Both parties were directed to file their written submissions which they did, 10 and the same have been considered by the Court.

# Issues for Determination

Following **Order 15 rule 5(1) of the Civil Procedure Rules** and the case of *Oriental Insurance Brokers Ltd Vs Transocean (U) Limited SCCA No.55 of 1995,* this Court rephrased the issues to read as follows:

- 15 1. Whether the Applicant should be granted leave to amend the plaint in Civil Suit No.585 of 2021? - 2. What remedies are available to the parties?

In his submissions, Counsel for the Respondent raised the following 20 preliminary objections:

- i. That the Respondent was served with the application out of time. - ii. That the main suit from which this application arises, abated.

# **Order 6 rule 28 of the Civil Procedure Rules** stipulates that:

25 "*Any party shall be entitled to raise by his or her pleadings any point of law, and any point so raised shall be disposed of by the Court at or after the hearing; except that by consent of the parties, or by order of the Court on the application of either party, a point of law may be set down for hearing and disposed of at any time before the hearing."*

5 It is now trite that where there is a preliminary objection capable of disposing of the matter in issue, it is judicious to determine the objection before embarking on the merits of the case. (See: *Uganda Telecom Limited Vs ZTE Corporation SCCA No.03 of 2017*).

Given the above, I shall proceed with the consideration of the preliminary 10 objections so raised.

(i) Whether the Respondent was served with the application out of time?

# Respondent's submissions

Counsel for the Respondent submitted that the application was signed and 15 sealed on 3rd April, 2024 but was served on 24th May, 2024 close to two months after issuance of the Chamber Summons which is in contravention with **Order 5 rule 1(2) and (5) of the Civil Procedure Rules** that provides that service of summons shall be effected within 21 days from the date of their issuance by Court. That in the case of *Nyanzi Muhammad Vs* 20 *Nassolo Harriet and 2 Others HCMA No.14 of 2021,* it was held that the timelines that apply to service of summons in an ordinary plaint also apply to applications.

Counsel further submitted that the service of the application outside the stipulated time, and without leave of Court having been obtained to do so, 25 renders the application incompetent and the same, ought to be struck out with costs.

In his rejoinder, Counsel for the Applicant addressed the preliminary objections and submitted that a closer look at the application indicates that the application was filed and signed on 3rd April, 2024 but was never

5 given a date until 24th May, 2024 to which a physical copy was served onto the Respondent. Counsel for the Applicant then relied on the case of *Visare Uganda Limited Vs Festus Katerega t/a Quickway Auctioneers & 3 Others HCMA No.2855 of 2023* wherein, the Court held that service of Court process through the Court's electronic system is effective and 10 submitted that the Respondent was served in time as per **Order 5 rule 1(2) and (5) of the Civil Procedure Rules.** Counsel further submitted that the Respondent has an operational ECCMIS account that notifies them of any filed pleadings.

#### Analysis and Determination

#### 15 **Order 5 rule 1(2) of the Civil Procedure Rules** stipulates that:

*"Service of summons issued under subrule (1) of this rule shall be effected within twenty-one days from the date of issue; except that the time may be extended on application to the Court, made within fifteen days after the expiration of the twenty-one days, showing sufficient* 20 *reasons for the extension."*

**Rule 3** of the above Order stipulates that where summons have been issued and not served within 21 days, and no application for extension of the summons under subrule (2), or the application for extension of time has been dismissed, the suit shall be dismissed without notice. The basis 25 of this legal requirement is to curtail delays and ensure that the opposite party knows of the existence of the case against him or her.

To that, as held in several decisions including the case of *Nyanzi Muhammad Vs Nassolo Harriet and 2 Others (supra),* cited by Counsel for the Respondent, to which I agree with, the timelines that apply to the

5 service of summons in an ordinary plaint also apply to the service of applications.

I have perused the Court record and observed that, indeed the Chamber Summons in respect of this application were signed and sealed on 3rd April, 2024 however, no date was allocated by the Learned Registrar. The

10 first hearing notice was issued on 22nd May, 2024 wherein, the matter was fixed for hearing.

Though there is no affidavit of service on record to prove when the application was served unto the Respondent, the Respondent avers that the Company was served on 24th May, 2024 to which the Applicant 15 concedes.

Considering **Order 5 rule 1 of the Civil Procedure Rules**, which stipulates that, when a suit has been duly instituted, summons may be issued to the Defendant requiring him or her to file a defence within the time specified in the summons; or ordering him or her to appear and 20 answer the claim on a day to be specified in the summons; the nature of

Chamber Summons is that, they are issued with an order directing a given party to appear before Court on a specified date and time.

In the instant case, though the Learned Registrar signed the application on 3rd April, 2024, no date for the hearing had been fixed. The date was 25 fixed on 22nd May, 2024 and the summons were served on the Respondent on 24th May, 2024. In the premises, I find no delays to have occasioned in the service, since the application was served to the Respondent a day after the issuance of a hearing date.

Therefore, this preliminary objection is overruled.

# 5 (ii) Whether the main suit from which this application arises, abated?

Counsel for the Respondent further objected to the application averring that the suit being sought to be amended by this application abated in 2022 after the failure of the Applicant to take out summons for directions as provided under **Order XIA rule 1(2) and (6) of the Civil Procedure** 10 **Rules.** That, given that **Misc. Application No.173 of 2022** was dismissed on 8th December, 2022, the Applicant ought to have extracted the summons for directions in the suit immediately after, which they did not. Counsel further contended that the Applicant has not taken any steps to have the matter heard for two years and that this application is intended 15 to salvage a suit that no longer exists in law since it abated.

In rejoinder, Counsel for the Applicant invited the Court to administer substantive justice in accordance with **Article 126(2)(e) of the Constitution of the Republic of Uganda**, since the Applicant is willing to prosecute her matter after being granted a chance to amend her pleadings.

# 20 Analysis and Determination

It is now trite that the main purpose of summons for directions is to enable the Court to guide the parties on further steps to be taken, to effectively, prepare for the trial of the case. (See: *Kampala Associated Advocates Vs Katamba Ssemakula HCMA No. 677 of 2021* and *Bamanyisa Maliko* 25 *& 156 Others Vs National Forestry Authority HCCS No.27 of 2020*).

**Order XIA rule 1(2) and (6) of the Civil Procedure Rules** provide that:

*"(2) Where a suit has been instituted by way of a plaint, the Plaintiff shall take out summons for directions within 28 days from the date of* 5 *the last reply or rejoinder referred to in rule 18 (5) of Order VIII of these Rules.*

> *(6) If the Plaintiff does not take out a summons for directions in accordance with subrules (2) or (6), the suit shall abate."*

As per the Court record, the Applicant filed her plaint on 14th September, 10 2021. The Respondent then filed its defence on 5th October, 2021 and a reply to the defence was filed on 7th December, 2021.

On 7th January, 2022 the Applicant's previous lawyers of M/s Mushagara Associated Advocates and Legal Consultants, extracted a duly dated and signed summons for directions and the Learned Registrar allocated 17th 15 February, 2022 as the date for the directions. However, according to the letter dated 25th February, 2022 from the Applicant's previous Counsel, the hearing for the application for directions scheduled for 17th February,

2022 did not take off since all the Registrars were attending a seminar on that day. In the same letter, the Applicant's previous Counsel requested a 20 new hearing date which had never been granted.

On the other hand, **Misc. Application No.173 of 2022** was filed on 14th February, 2022 a month after the summons for directions had been extracted seeking a temporary injunction against the Respondent, his agents or servants from impounding, attaching, selling, transferring, 25 disposing of and or demanding any payment for the suit motor vehicle until determination of the main suit. The said application did not disclose any ground for its institution and on 8th December, 2022, the Learned Registrar dismissed it on the said ground.

In my observation, the delay by the Court to allocate a new hearing date 30 for the application for directions, cannot be attributed to the Applicant, 5 whose previous Counsel had extracted summons for directions signed by the Learned Registrar following **Order XIA rule 1(2) of the Civil Procedure Rules** and a hearing date given for the same.

Furthermore, no Court order is on the record showing that the suit abated nor did Counsel for the Respondent adduce any evidence to that effect. In 10 addition, the matter still reflects as pending in the system.

In the premises, though this is a case of 2021, the Applicant/Plaintiff has shown interest in prosecuting it and, as per **Section 98 of the Civil Procedure Act, Cap.282**, this preliminary objection is also overruled.

I shall now proceed to consider the merits of the application.

15 Issue No. 1: Whether the Applicant should be granted leave to amend the plaint in Civil Suit No.585 of 2021?

## Applicant's submissions

Counsel for the Applicant submitted that **Order 6 rule 19 of the Civil Procedure Rules** accords the Court the discretion to allow an amendment 20 of the pleadings at any stage of the trial as long as it does not prejudice the other party. That in the case of *Gaso Transport Services (Bus) Limited Vs Martin Adala Obene SCCA No.4 of 1994*, the Supreme Court laid down the principles that govern the Court's discretion to grant an application to amend pleadings to include among others that; the 25 amendment should not work as an injustice to the other party, an amendment should be allowed to avoid multiplicity of proceedings and that, any injury which can be compensated by the award of costs is not to be treated as an injustice. Counsel further submitted that as was held in the case of *Edward Kabugo Sentongo Vs Bank of Baroda (U) Limited*

5 *HCMA No.203 of 2007*, an amendment will not be allowed where it will substantially change the cause of action into a different one or will deprive the Defendant of an accrued right where it is made malafide.

Relating the above to the matter at hand, Counsel submitted that the Applicant commenced the proceedings by way of a plaint in an action for 10 fraud however, the previous Counsel omitted crucial aspects of the particulars of fraud as highlighted in the intended amended plaint. Counsel further submitted that the application is made in good faith as it is trite that particulars of fraud should be well spelt out and that it is only fair and just to allow this application since the cause of action has not 15 been altered. Counsel also submitted that since the trial of the main suit has not yet commenced, the Respondent will not be affected by the amendments as they seek to allow the Court to determine the actual controversy between the parties.

In conclusion, Counsel for the Applicant submitted that this Court has the 20 discretion and power to allow any amendment sought on such terms as may be just. Counsel then prayed that the Applicant be allowed to amend her plaint.

## Respondent's submissions

Counsel for the Respondent re-echoed the provision of **Order 6 rule 19 of**

25 **the Civil Procedure Rules** and contended that the particulars being sought to be included were already pleaded and that this application was filed three (3) years after the filing of the main suit which imputes inordinate delay. Counsel further submitted that in the case of *Zaverio Ndabahwereze Byabagambi Vs MTN (U) Limited and 2 Others HCMA* 30 *No. 94 of 2023* **Hon. Justice Vincent Wagona,** while dismissing an

- 5 application which had been filed with inordinate delay for the amendment of a plaint, relied on the case of *Gaso Transport Services (Bus) Limited Vs Martin Adala Obene (supra),* in which the Supreme Court held that an amendment which is malafide should not be allowed. - In conclusion, Counsel for the Respondent submitted that the instant 10 application is brought with inordinate delay and allowing it would cause prejudice to the Respondent in defending a suit which has long abated. Counsel then prayed to the Court to dismiss the application with costs to the Respondent.

#### Analysis and Determination

## 15 **Order 6 rule 19 of the Civil Procedure Rules** stipulates that:

"*The Court may, at any stage of the proceedings, allow either party to alter or amend his or her pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in* 20 *controversy between the parties*."

The above provision explicitly vests this Court with discretionary power to allow the amendment of pleadings at any stage of the proceedings to determine the real issues in controversy between the parties.

To guide the Court in the exercise of the above discretion, it was held in

25 the case of *Eastern Bakery Vs Castelino [1958] 1 E. A 461* that the powers of amendment should not be used to substitute one cause of action for another or change an action into another of a substantially different character.

- 5 The principles that govern the amendment of pleadings were laid out in the case of *Gaso Transport Services (Bus) Ltd Vs Martin Adala Obene (supra)* and these include: - i) The amendment should not work as an injustice on the other side.

- ii) Multiplicity of proceedings should be avoided so far as possible 10 and all amendments which avoid such multiplicities should be allowed. - iii) An application which is malafide should not be granted. - iv) No amendment should be allowed where it is expressly, or impliedly prohibited by any law.

Further, in the case of *Tororo Cement Co. Ltd Vs Frokina International Ltd SCCA No. 2 of 2001*, the Supreme Court held that:

20 *"… where a plaint discloses a cause of action but is deficient in particulars, the plaint can be amended so as to include the particulars …"*

It is also trite law that fraud must be specifically pleaded and the particulars of the alleged fraud must be stated on the face of the pleadings.

25 (See: *Kampala Bottlers Ltd Vs Damanico (U) Ltd SCCA No. 22 of 1992*).

As held by **Odoki, J. S. C**, in *Fam International Limited and Another Vs Mohamed Hamid El-Fatih, SCCA No.16 of 1993*, fraud is a serious matter and the party against whom it is alleged should be afforded sufficient notice to enable him answer the allegations.

30 In the instant case, the Applicant seeks to amend the plaint in **Civil Suit No.585 of 2021** to provide more and better particulars of fraud that were

5 not included by her previous Counsel contending that it will help to resolve the dispute between the parties. In reply, the Respondent argues that the particulars sought to be added were pleaded.

As per the Court record, the Applicant in the original plaint in **Civil Suit No.585 of 2021**, pleaded fraud with particulars therein. The proposed 10 amendments of particulars of fraud as contained in paragraphs (i-iv) of annexure "**A**", the draft amended plaint attached to the affidavit in support, include; the Defendant's act of crediting SBT's account to a third party on 22nd January, 2020 before executing an asset loan financing Agreement with the Plaintiff, the Defendant's act of agreeing with the 15 Plaintiff to a twenty-four months term payment period and later presenting a forty-eight months payment schedule in a written Agreement without notifying the Plaintiff, the Defendant's act of inducing the Plaintiff to sign an Agreement whose terms were totally different from what had been agreed upon by the parties and the Defendant's act of inducing the Plaintiff 20 to sign an Agreement with compound interest.

To my observation, the above particulars are distinct from the ones pleaded in paragraph 5 of the original plaint. The said particulars are also reflected in paragraphs (v- ix) of the draft of the proposed amended plaint. As alleged by Counsel for the Respondent, it is not, true therefore, that the 25 particulars sought to be included were already pleaded. In light of the holding in the case of *Tororo Cement Co. Ltd Vs Frokina International Limited (supra)*, I am therefore convinced that, granting leave to the Applicant to amend the plaint to include particulars of a disclosed cause of action of fraud, will not prejudice the Respondent but aid it to 30 adequately, prepare its case.

5 Further, as rightly submitted by Counsel for the Respondent, the Suit in issue was filed three years ago which would ordinarily amount to an inordinate delay thus rendering the application malafide.

However, **Order 6 rule 19 of the Civil Procedure Rules** does not specify the time limit for filing amendments. This was also upheld in the case

- 10 *Johnson Akol Omunyokol Vs the Attorney General of the Republic of Uganda, Application No. 3 of 2016 (Arising from Reference No.1 of 2015) East African Court of Justice* and the case of *Sarah Nyakato Vs Lin Jeng Liang aka Lin Jeff and 5 Others Misc. Application No. 316 of 2022)*. - 15 In the case of *Johnson Akol Omunyokol Vs the Attorney General of the Republic of Uganda (supra)*, the Court relied on the holding in the case of *Trans-Drakensberg Bank Ltd Vs Combined Engineering (Pty) Limited 1967(3) SA 632 (D)*, that a delay by a litigant in bringing a formal application to amend; itself was not a ground for refusing the amendment 20 unless the Respondent could show prejudice.

Furthermore, the case of *Zaverio Ndabahwereze Byabagambi Vs MTN (U) Limited and 2 Others (supra)* relied upon by Counsel for the Respondent is distinguishable from the case at hand. In that case, the Applicant had been previously granted leave to amend his plaint. He then 25 filed another application seeking further amendments after the suit had been scheduled for hearing, the Joint Scheduling Memorandum generated and witness statements had been filed.

However, the case herein is still in its preliminary stages. As was held in the case of *Eastern Bakery Vs Castelino (supra)*, amendments of 30 pleadings sought before the hearing of the case should be freely allowed

- 5 provided, they do not occasion an injustice to the other party. Counsel for the Respondent reiterated that the grant of the application would cause prejudice to the Respondent in defending a suit which has long abated. As resolved above, Civil Suit No. 585 of 2021 was not abated. In addition, the Respondent has not demonstrated any injustice that it will suffer if the - 10 Court grants this application.

In the premises, having resolved that Civil Suit No. 585 of 2021 did not abate, and given the fact that the application is not malafide, I find that the Respondent will not be prejudiced by the amendments and in the interest of justice and in accordance with **Section 37 of the Judicature**

15 **Act, Cap.16** and **Section 98 of the Civil Procedure Act,** the Applicant is hereby granted leave to amend her plaint as sought.

Issue No. 1 is answered in the affirmative.

# Issue No. 2: What remedies are available to the parties?

Having resolved issue No.1 in the affirmative, the following orders are 20 issued:

1. The Applicant is hereby granted leave to amend the plaint in **High Court Civil Suit No.585 of 2021** by providing further and better particulars of fraud.

- 2. The Applicant shall file and serve the amended plaint to the Respondent within twenty-one (21) days from the date of this Ruling. - 30 3. The Respondent shall file and serve its amended written statement of defence within twenty (20) days after receipt of the amended plaint and a rejoinder to be filed within fourteen (14) days after receipt of the amended written statement of defence.

4. Costs of this application shall be in the cause.

I so order.

Dated, signed and delivered electronically via ECCMIS this **17th** day of 10 **September, 2024**.

Patience T. E. Rubagumya **JUDGE** 17/09/2024 15 8:15am

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