Mubiru v P&A Credit Investments Limited (Miscellaneous Application 746 of 2025) [2025] UGCommC 59 (15 April 2025)

# **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL COURT DIVISION) MISCELLANEOUS APPLICATION NO. 746 OF 2025 (ARISING FROM OF CIVIL SUIT NO. 1213 OF 2024)**

**MUBIRU SHAFIQUE::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANT**

#### **VERSUS**

**P&A CREDIT INVESTMENTS LIMITED::::::::::::::::::::::: RESPONDENT**

#### **Before: Hon. Lady Justice Dr. Ginamia Melody Ngwatu**

#### **RULING**

The applicant filed this application by way of notice of motion under section 98 of the Civil Procedure Act; Order 36 Rule 11 and Order 52 Rules 1 and 3 of the Civil Procedure Rules Sl-71- 1, as amended. The application seeks orders that the:

- 1. default judgment in *Civil Suit No. 1213 of 2024 P & A Credit Investments Limited* entered on l7th February 2025 by this Honorable Court be set aside; - 2. execution of the decree and orders in *Civil Suit No. 1213 of 2024* be stayed; - 3. applicant be granted unconditional leave to appear and *Civil Suit No. 1213 of 2024*; and, - 4. costs of the application be provided for.

The application is supported by an affidavit sworn by Mr. Mubiru Shafique, the applicant. The grounds supporting the application are mainly that:

- 1. the applicant was served court process on 28th October 2024 through WhatsApp, upon which he took reasonable steps to have the summary suit against him defended; - 2. a default judgment was subsequently entered following the failure by his counsel M/s G. W Bwanika to file an application for leave to appear and defence *Civil Suit NO. 1213/2024;* - 3. the applicant has a good cause to have the decree in *Civil Suit No. 1213/2024* set aside; - 4. the mistake by the applicant's former counsel, M/s G. W Bwanika and Co. Advocates, in not filing his application for leave to appear and defend should not be attributed to the applicant; and - 5. the applicant should, therefore, be afforded an opportunity to present his defence.

The respondent filed an affidavit in reply opposing the application in which he contended, among others, that the:

- 1. applicant was served with court process but failed to take the necessary steps to file his defence; - 2. applicant cannot plead 'mistake of advocate' as he is guilty of failure to follow-up his case with his alleged counsel; and simply abandoned his case and did not follow up on it; - 3. applicant did not provide any proof of followup with his lawyers save for receipt of acknowledgment of alleged part payment of legal fees, which is not sufficient to discharge the applicant's duties and obligations to comply with court summons; - 4. busy schedule of the applicant's alleged former lawyers or their negligence should not be vested on the respondent nor used to deny the respondent from enjoying the fruits of litigation; - 5. the applicant had ten days within which to seek leave of court to file his defence and the days expired without the applicant or his lawyers taking any steps to comply with the summons.

## **Representation at the hearing**

The applicant was represented by Mr. Kuteesa Job and Mr. Nsubuga Martin of M/s Semwanga, Muwazi and Co. Advocates; while the respondent was represented by Mr. Rutaro Robert of M/s Elgon Advocates. The hearing proceeded by way of oral submissions. The affidavit in support of the application and the affidavit in reply to the application were admitted as part of the submissions and considered in the determination of this application.

#### **Issue for determination**

This application raises one main issue for determination to wit, whether the application raises good or sufficient cause to warrant the setting aside of the default judgment and decree entered in *Civil Suit No. 1213/2024 P&A Credit Investments Limited* against the applicant.

#### **Applicant's submissions**

Submitting in support of the application seeking to set aside the default judgment issued in *Civil Suit 1214/2024* on 17th February 2025, counsel for the applicant relied on Order 36 rule 11 of the Civil Procedure Rules and submitted that the matter for determination before court is whether the applicant had "good cause" to set aside the decree.

Counsel for the applicant submitted that the applicant exercised reasonable and good cause to have the summary suit defended as he had given his former lawyers, G. W Bwanika & Co. Advocates, instructions and paid them a deposit. Counsel further relied on annexture A to the affidavit in support of the application as proof that G. W Bwanika received the said deposit; and submitted that the applicant further made a follow-up with his former lawyers on 30th December 2024 and was assured that everything was going well.

Counsel for the applicant further submitted that the applicant had good cause to warrant the setting aside of the default judgment and a grant of unconditional leave to appear and defend the civil suit. Counsel for the applicant cited the case of *Kanakulya Joseph versus Africa Polysack Industries Limited, MA No. 215/2011*, in which Justice Irene Mulyagonja Kakooza (as she then was) granted leave to defend because the facts showed that the amount owed was not clearly defined and prima facie proved on the pleadings so as to entitle the Respondent to summary judgment.

Counsel for the applicant relied on various cases including *Patrick Kato versus Dirk Ten Brink MA 791/2023* and *Ajun Singh versus Mohindra Kumar AIR 1964, 993 Supreme Court of India* for the definition of what amounts to good cause. Counsel submitted that in these decisions, the only difference between good cause and sufficient cause is that the requirement of a good cause is complied with on a lesser degree of proof than that of sufficient cause. Counsel maintained that the applicant exercised due diligence after having been served with court process on 28th October 2024, when he gave instructions to G. W. Bwanika to file his application.

Counsel for the applicant argued that the applicant had shown good cause and that the mistake or negligence of the applicant's former counsel should not be visited on him since he did all that was within his powers to have the matter defended. Counsel relied on the case of *Edrisa Kanonya & Another versus Asuman Nsubuga & 3 Others MA 373/2022,* where the same principle was stated.

Counsel further submitted that under paragraphs 17, 18, and 20 of the affidavit in support of the application, the applicant disputes the amount claimed in the summary suit which can only be addressed if the applicant is granted unconditional leave to appear and defend *Civil Suit No. 1213/2024*.

The second counsel for the applicant reiterated that there was disagreement between the applicant and the respondent on the money owed; and that there being a point of law, it could only be decided if the applicant was granted leave to file a defence and defend *Civil Suit No.* *1213/2024*. Counsel further prayed that court exercises its discretion as provided under Order 36 rule 11 to set aside the default judgment to stay execution of the decree and the orders therein; and to grant the applicant unconditional leave to appear and defend *Civil Suit No. 1213/2024*.

### **Submissions for the respondent**:

Counsel for the respondent submitted that the application was hinged on mistake of the applicant's former counsel. Counsel for the respondent pointed out that the applicant did not dispute service and acknowledged that he was served with court process on 28th October 2024. The applicant, therefore, had ten days within which to seek leave of court. Counsel referred to Annexture 'A' of the affidavit in support of the application, a photocopy of a receipt dated 7th November issued by G. W Bwanika & Co. Advocates to Mubiru Shafique.

Counsel for the respondent contended that neither court nor counsel had seen the original copy of the receipt; it was not clear what instructions the applicant gave to G. W Bwanika & Co. Advocates as the document only mentioned legal fees; of which, Uganda shillings one million five hundred thousand was paid and there was a balance of Uganda shillings three million five hundred thousand. Counsel for the respondent further contended that the applicant was guilty of inordinate delay and had failed to demonstrate having taken any necessary steps to follow up on his instructions with the advocate or execution of the said instructions. Consequently, the applicant could not be permitted to rely on mistake of counsel.

Counsel for the respondent further submitted that the Applicant's remedy in the circumstances is to sue for his counsel negligence and that to reopen the case would not only be unjust but would also unduly inconvenience the respondent who act diligently. Counsel for the respondent relied on the case of *Captain Philip Ongom versus Catherine Nyero Owota Civil Appeal No. 14/2021* to reiterate that if anyone is to suffer for the negligence or defaults of the lawyers, it is their client and not the opposing party.

Counsel submitted that the applicant was guilty of inordinate delay and also acted with gross negligence when he did not instruct counsel in time having been served on 28th October 2024 with court process and instructed counsel on 7th November 2024; and if he did instruct his counsel, he failed to followup with his counsel to see how his case was progressing. It was not in dispute that the applicant borrowed money from and executed two loan agreements with the respondent. Counsel prayed that court finds no merit in the application and dismisses it with costs to the respondent.

## **Applicant's submission in rejoinder**

In rejoinder, counsel for the applicant while citing *Isse Shecknor Robbo & Another Vs MMM Agro Dealers ltd HCCMA 514/2014*, submitted that the applicant is required to show by affidavit

that there is a bonafide triable issue of fact or law and in such an instance the defendant would be allowed to defend unconditionally; and that the applicant does have a viable defence which the court ought to investigate. Counsel reiterated that the applicant did all that he reasonably could be required of him legally, owing to his limited knowledge of the law and its processes. He prayed that court finds the applicant worthy of the grant of the application and all orders sought therein.

## *Resolution by the Court*

I have analysed this application and taken into account the submissions made by both parties.

Order 36 rule 11 of the Civil Procedure Rules lays down the procedure for setting aside a decree and empowers court to do so if:

*"…it is satisfied that the service of the summons was not effective, or for any other good cause, which shall be recorded, set aside the decree, and if necessary stay or set aside execution, and may give leave to the defendant to appear to the summons and to defend the suit, if it seems reasonable to the court so to do, and on such terms as the court thinks fit."*

Order 9 rule 27 of the Civil Procedure Rules, on the other hand, is to the effect that in instances where a decree is passed *ex parte* against a defendant, such defendant may apply to the court by which the decree was passed for an order to have the decree set aside. The rule further provides that the applicant should satisfy the court that he or she was prevented by sufficient cause from appearing when the suit was called for hearing.

Section 98 of the Civil Procedure Act cap 282 provides that:

*"Nothing in this Act shall be deemed to limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent the abuse of the process of court."*

Under the foregoing provision, it is clear that Court is clothed with the power and discretion to set aside a decree passed *ex parte* against a defendant if "good" or sufficient cause" is demonstrated.

For one to raise good or sufficient cause, no negligence or inaction ought to be imputed on the part of the applicant/defendant in a suit. The issue that should now be considered is whether the applicant demonstrates "good" or "sufficient cause" as envisaged under Order 9 rule 27 of the Civil Procedure Rules to enable this court exercise its discretion. This will be guided by the following aspects:

## *Timely filing of the application*

An application of this nature is viewed in a more favourable light if it is brought in time without any undue delay. This application was filed on 8 th April 2025; this was after the applicant had been served with a taxation hearing notice scheduled for 16th April 2025, by the respondent. This is bearing in mind that the applicant had since 28th October 2024, been aware that there was a suit that was filed against. This awareness arose from the moment he was served with court process for *Civil Suit NO. 1213/2024*. Neither the applicant nor his then counsel made any effort to appear in court or followup on the status of the matter. The filing of this application was, therefore, an afterthought since the conduct of the applicant does not exhibit diligence.

## *Existence of good or sufficient cause for non-appearance at court when the matter came up for hearing*

There is no precise definition of what would amount to sufficient cause, good reason or sufficient reason. In *M/S TAD Beer Trading Center (U) Ltd versus Caroline Blackburb Amero MA No. 0571/2024 at page 4*, the phrase "sufficient cause" was defined to mean a factor or reason which occasioned a party's failure to take a necessary step in litigation within the prescribed time; and that what amounts to sufficient cause varies from one case to another. The determination of the meaning and application of the phrase is, therefore, left to judicial discretion and determination basing on the facts and the merits of a particular case for the purpose of ensuring that the ends of justice are met. (see *Kabarole District Local Government Council v Gunn Paper Industries Ltd. HCMA NO. 103 of 2022*)

The applicant pleaded mistake of his former counsel as the basis upon which this application should be granted. A "mistake of counsel" generally connotes errors or omissions made by a lawyer that can negatively impact their client's case. Mistake by counsel is deemed to include: counsel's failure to meet deadlines; the making of procedural errors and giving incorrect legal advice.

In the case of *Banco Arabe Espanol versus Bank of Uganda*, it was held that where a party fails to take a step in litigation as a result of his or her lawyer's negligence or mistake, the Court should ensure that the party is still accommodated in order for the substantive justice of the case to be realized. However, where the party's failure to take the step is also caused by his or her indolence or inadvertence, the court will not be equally as forgiving.<sup>1</sup>

<sup>1</sup> SCCA No. 8 of 1998, page 4

It was noted in *M/S TAD Beer Trading Center (U) Ltd versus Caroline Blackburb Amero MA No. 0571/2024* at page 5*,* that a vigilant litigant should not be penalised for the fault of his counsel on whose actions he has no control; while an indolent litigant does not deserve clemency, even when he later turns up with new advocates. Court further held that even when a litigant changes lawyers who then apply to undo his former lawyer's mistakes, the court should first examine the conduct of that litigant at the time the mistake occurred before deciding that application. Court further observed that if the litigant did not exercise due diligence to followup on his case with his lawyers, a court would be unwilling to undo its proceedings simply to accommodate him.

Citing the case of *Kananura versus Kaijuka SC Civil Reference no. 15 of 2016* Cited in *MA No. 0571/2024* at page 5, the Supreme Court held that it is the duty of a litigant to follow up and inquire from his advocate on the status of his case. It was further held that following up of the applicant's case did not require him to be knowledgeable in court processes.

I am of the considered view that the applicant had an opportunity to be heard and present his defence in *Civil Suit No. 1213/2024*. which sought the payment of Uganda shillings one hundred and twenty-five million two hundred thousand which the applicant had obtained as a loan facility from the respondent. The applicant was served via WhatsApp on 28th October 2024; a fact which is not in dispute.

According to annexture "A" to the affidavit in support of the application, the applicant retained counsel on the 7 th day of November 2024. This was the tenth and final day when he was due to file an application for leave to appear and defend *Civil Suit No. 1213/2024*. The applicant in this matter was fully aware of the case against him as he was served with court process and he went ahead to retain services of counsel albeit on the last day of the filing of his application for leave to appear and defend Civil Suit no. 1213/2024. No application was filed by G. W Bwanika and Co. Advocates limited hence the default judgment.

Further, upon retaining counsel on 7 th November 2024, the applicant took almost two months to followup on the status of his matter with his counsel. The applicant stated in his affidavit in support of the application that he got in touch with his counsel on 30 th December 2024. Any prudent litigant ought to have immediately and consistently sought updates from their counsel upon issuance of instructions to have their application filed and prosecuted.

The applicant ought to have been diligent in following up on the status of his application for leave to appear and defend. Diligence on the part of the applicant would require him to inquire about the progress of the case from either G. W Bwanika & Co. Advocates or from court, considering that court process had directly been served on him.

For the foregoing reasons, this application fails and is hereby dismissed with costs to the respondent.

I so Order.

*Dr. Ginamia Melody Ngwatu Ag. Judge 15th April 2025*