Moyo District Staff SACCO Limited v Latigo (Civil Suit 41 of 2019) [2024] UGHC 999 (4 October 2024)

Full Case Text

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF ARUA AT ARUA CIVIL SUIT NO.041 OF 2019

# MOYO DISTRICT STAFF SACCO LTD================PLAINTIFF

**VERSUS**

LATIGO COLLINS==============================DEFENDANT

### JUDGMENT

# BEFORE: HON. JUSTICE COLLINS ACELLAM.

#### **Background** 15

$\mathsf{S}$

The Plaintiff filed a summary suit against the Defendant for the recovery of the Ugx. 53,530,000/= arising out of failure to pay a loan facility agreement. It is said that the Defendant, a member of the Moyo District Staff SACCO Ltd applied for a loan facility of Uganda Shillings 30,000,000/=. The loan was approved and disbursed to the Defendant on the 20th day of October 2018 to be paid in

- full on the 20th day of April 2019. That the Plaintiff realized after the due date of the loan repayment, 20 that the Defendant had a principle outstanding balance of 50,000,000/=. That after the loan due date, the outstanding principal loan attracted a penalty which upon computation in accordance with the loan agreement, amounted to 3,030,000/= together with an interest on the loan balance of Ugx 500,000/= giving a total of 53,530,000/=. Several informal and formal reminders were made to the - 25 Defendant but no efforts were made by the Defendant to pay the total loan balance. Aggrieved, the Plaintiff filed a summary suit against the Defendant for the recovery of the Ugx. 53,530,000/=.

# **Representation**

The Plaintiff is represented by M/S Kodili & Co. Advocates whereas the Defendant is represented by M/S KGN Advocates.

It is noteworthy that the Defendant through a notice of motion supported by an affidavit made an 30 application for leave to appear and defend the suit on the 20th day of January 2020. He was granted

leave to appear and defendant, however he never served the Respondents/ Plaintiffs and he also $\mathsf{S}$ never applied for extension of time within which to serve the court process. A ruling was entered against the Defendant on the 20th of June 2022, dismissing the said notice of motion under Section 17(2) of the Judicature Act and also an order that the file be closed.

Issues.

#### Whether the Plaintiff is entitled to a default judgment against the Defendant? 10

### Determination.

It is trite law that in civil cases the burden of proof lies with the one that alleges a fact to prove that fact and, in this case the plaintiff is to prove her claim against the Defendant. In the case of Bank of Africa Uganda Limited v Ssuna Fred HCCS No. 1036 of 2023, Court stated that to decide in

one's favor, the court must be satisfied that the Plaintiff has furnished evidence whose level of probity 15 is such that a reasonable man, might hold that the more probable conclusion is that for which the Plaintiff contends, since the standard of proof is on the balance of probabilities/ preponderance of evidence. See S.101 of the Evidence Act, cap 8

The position of the law is that a default judgment is entered where there is proof of service and the Defendant has not filed a defense within the prescribed time. See the case of Concern Worldwide 20 v Mukasa Kugonza HC Civil Revision No. 1 of 2013

### Whether there is proof of service.

Service is proved by an affidavit of service or by endorsement of acknowledgment of service on summons by the Defendant or Defendant's Counsel.

- In the instant case, a one Ronald Tuckachungurwa an advocate at M/S Kodili & Co. Advocates 25 swore an affidavit of service on the 1st day of March 2020 and filed it in this Court on the 16th day of March 2020 as proof of service. In that affidavit, the deponent states that he received copies of summons and a plaint in civil suit No. 041 of 2019 on the 20th day of December 2019 to be served on the defendant, on the 21st day of December, he called the defendant on phone and introduced - himself and the purpose of his call, the defendant then told him to serve his lawyers, M/S Okurut -30 Magara Associated Advocates. The he proceeded that same day to the said law firm, met the receptionist to whom he introduced himself and the purpose of his visit, he handed over the

$\mathsf{S}$ summons and plaint her, she perused and advised he enters the next room where he met a gentleman called Robert Magara, the lawyer to the defendant, he perused the summons and plaint and went ahead to append his signature and date.

Order 19 rule 3 (1) of the Civil Procedure Rules SI 282-1 envisages that Affidavits shall be confined to such facts as the Deponent is able of his or her own knowledge to prove, except on interlocutory

applications, on which statements of his or her belief may be admitted, provided that the grounds 10 thereof are stated."

Therefore, an affidavit should contain evidence as known to the deponent and should contain accurate facts. See the persuasive dicta by the Supreme Court of India in **Re Suo Moto Proceedings** (2005) 5 SCC 289 "...sanctity of affidavits has to be preserved and protected by discouraging of

15 irresponsible statements without regard to accuracy."

> Upon perusal of the affidavit, the contents of the affidavit however contain inconsistencies and on the face of it appear to have falsehood. Paragraph 10 of the affidavit of service reads as follows:

> "That I return said summons full received and signed by the 2nd Defendant but rejected by the 1st Defendant. (Find attached hereto a copy of the said summons marked annexure "A")

20 Now it is important to note that the Plaint indicates only one Defendant yet the deponent in the affidavit of service makes reference to two Defendants. I am left to draw a conclusion that either the said deponent of the affidavit of service is telling lies or just copied and pasted the contents of another affidavit of service. Such affidavit of service is liable to be struck out. An affidavit with a deliberate falsehood, however minor it may be, negates the credibility of the entire affidavit and 25 cannot be left to stand.

However, in the case of Besigye Kiiza v Museveni Yoweri Kaguta and Another ((Election Petition No.1 of 2001) [2001] UGSC 3 (21 April 2001) in the lead judgment by Odoki JSC, he guided that where an affidavit contains falsehoods, it does not invalidate the same but the offending parts can be served and the rest of the content can be relied upon.

In Rutuku Francis & 5 others v Eliphas Ndamagye, Court of Appeal Civil Appeal No. 111 of 30 2017, Barishaki Cheborion JCA observed that whereas the position in Besigye Kiiza v Museveni (Supra) was to the effect that you can server the offending parts, where the said contents were served and the remaining parts are incapable of supporting the application, the affidavit collapses.

#### $5$ I therefore sever paragraph 10 from the affidavit of service and I ignore that evidence.

The requirement that the Defendant has not filed a defense within the prescribed time.

Order 36 rule 3(1) of the Civil Procedure Rules SI 282-1 provides that upon the filing of an endorsed plaint an affidavit provided in rule 2 of the order, the court shall cause to be served upon the defendant a summons in form 4 of the Appendix A of theses Rule, or in such other form as may

10 be prescribed, and the Defendant shall not appear and defend the suit except upon application for and obtaining leave from court.

In addition, Order 36 rule 3(2) of the Civil Procedure Rules SI 282-1 is to the effect that in default of the application by the defendant or by any of the Defendants (if more than one) within the period fixed by the summons served upon him or her, the Plaintiff shall be entitled to a decree for an amount not exceeding the sum claimed in the plaint, together with interest, if any or for the recovery

15 of land (with or without mesne profits), as the case may be, and costs against the Defendant or such of the Defendants as have failed to apply for leave to appear and defend the suit.

It is on record that the Defendant filed a notice of motion on the 20th day of January 2020, seeking for orders that the Applicant be given unconditional leave to appear and defend Civil Suit No. 041

of 2019 and costs of the suit be in the cause. However, on the 20th day of June 2022, this application 20 was dismissed as since he filed the said application, the Applicant had never served the Respondents and neither had he ever applied to the court for extension of time within which to serve the court process. I cited section 17 (2) of the Judicature Act Cap 16 which reads:

That with regard to its procedures and these of the magistrates' courts, the High Court shall exercise 25 its inherent powers to prevent abuse of process of court by curtailing delays including the power to limit and stay delayed prosecutions as may be necessary for achieving the ends of justice.

Therefore, the Defendant having been effectively served with the summons and having failed to file a defense within the prescribed time, the Plaintiff is entitled to a default judgment.

The Plaintiff is not absolved of the burden of proving his or her case, he must ensure that court sets down the suit for formal proof. In the case of Peter Jogo v Registered Trustees of the Church of 30 the Province of Uganda CA No. 0016 of 2017, court held that

"default judgment is not based on any evidence or admission but rather the defendant's failure $\mathsf{S}$ to file a defense within the prescribed time........default judgment is based on a mere rebuttable presumption that the suit is meritious and the Defendant has no evidence to it. It does not absolve the Plaintiff of the burden of proving his or her case".

The burden is always on the plaintiff to prove his or her case on the balance of probabilities even if the case is heard on formal proof. (See Karugi and another v Kabiya and 3 others [1987] KLR 347).

Basing on the above analysis, I therefore make the following orders:

- 1) The default judgment is therefore entered against the Defendant for the recovery of a liquidated sum of 53,530,000/= arising out of failure to repay a loan facility. - 2) Interest on (1) at a rate of 17% p.a from the date of Judgement until payment in full. - Costs of the suit $3)$

I so order. Ocfober $\mathcal{L}_{\text{max}}$ ..2024 Delivered this..

COLI

**JUDGE** 20