Mugona and Another v Muhereza (Miscellaneous Application 19 of 2023; Miscellaneous Application 317 of 2023) [2024] UGHCCD 145 (6 September 2024)

# **THE REPUBLIC OF UGANDA**

# **IN THE HIGH COURT OF UGANDA AT KAMPALA**

#### **(CIVIL DIVISION)**

#### **MISC. APPLICATION NO. 19 & 0317 OF 2023**

# **(ARISING OUT OF CIVIL SUIT NO. 382 OF 2018)**

# **1. MUGONA JOHN**

**2. RUTENTA JOSELYNE::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANTS**

# **VERSUS**

**MUHEREZA YASON::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT**

### **BEFORE: HON. JUSTICE SSEKAANA MUSA**

# *RULING*

The applicants filed two separate applications to set aside the ex-parte judgment and decree issued by this court in Civil Suit No. 382 of 2018. The application is brought by way of Notice of Motion under Order 9 rule 27 and Order 52 rules 1 and 3 of the Civil Procedure Rules S. I 71-1. The applicant is seeking for orders that;

- *1. The ex-parte judgment entered in Civil Suit No. 382 of 2018 be set aside.* - *2. That the Applicants be allowed to file their respective defences in Civil Suit No. 382 of 2018 and the suit be heard interparty.* - *3. Costs of this application be provided for.*

The two applications were brought on grounds set out in the affidavits of the applicants which shall be read and relied upon but briefly,

1. The 1st applicant was not served with pleadings, summons or hearing notices in the said suit and as a result an ex parte Judgment was issued against him without being heard.

- 2. That the applicant was made aware of the existence and proceedings of the said suit on 1st July when he held a meeting with the respondent. - 3. That the applicant made a search at court and found out that the affidavit of service on court record states that a hearing notice in the said suit had been served on Rutenta Joselyne. - 4. The said Rutenta Joselyne had no instructions to represent the applicant to receive any documents on his behalf and she did not inform the applicant about the summons or existence of the suit. - 5. That the applicant subsequently after writing a letter to court, filed an application for enlargement of time to file his defence and for leave to appear and answer to the suit on 21st July 2022. - 6. That I have a good defence to Civil Suit No. 382 of 2018 as all the engagements the applicant had with the reduced to writing. The suit has outrageous allegations and exaggerations.

The 2nd applicant filed an affidavit in support contending that;

- 1. That the 2nd applicant was not served with the summons to file a defence and that she only heard about this case after receiving a phone call from a person calling himself a Court Process Server who only had in his possession a hearing notice and not the summons requiring her to file a defence. - 2. That the 2nd applicant thought that the pending case was against the 1st defendant in which she was a director/shareholder and did not know the suit was filed against her in her personal capacity. - 3. That the applicant has a good defence to the main suit as she had exited the company prior to the agreements and arrangements in issue and it is only just that she is accorded an opportunity to defend the same.

The respondent *Muhereza Yason* filed an affidavit in reply opposing the application wherein he contended;

- 1. That sometime in 2016, he entered into a sale agreement with J & J Trading Company Limited and acting through its directors and or shareholders, the 2 nd respondent one Mugona John and the 3rd defendant (now 2nd applicant) for sale of land comprised in Block 243 Plot 1403 situate at Kyadondo. - 2. The 1st applicant was duly served with the summons to file a defence which he declined and was later contacted by the court process server of court via his mobile number and further declined. - 3. That the 2 nd applicant actively participated in the sale negotiations and they agreed to sale the land at and property at 300,000,000/= and the 2nd applicant who is spouse of the 1st applicant insisted that if she was to sign the sale agreement she wanted 50,000,000/= on top of the initial offer of 300,000,000/= for herself. - 4. That the respondent was forced to add the 50,000,000/= and the sale was concluded at 350,000,000/=. She accordingly signed the agreement in person. - 5. That the 2nd applicant was duly served more than three times and on all occasions she refused to acknowledge receipt of the court documents. - 6. That the 2nd respondent was served with the summons to file a defence on 8 th October 2018 at her place of work at Barclays Bank Kampala Road Branch and she read through and stated that she needed to consult her lawyers first. - 7. That the court directed that the service be repeated since it was not satisfied through the court process server. On 3rd December 2018 through a court process server called Hope Ayesiga went to serve in company of the respondent and she was duly served and refused to acknowledge service. - 8. That on 23rd day of February 2022 through a court process server called Byamugisha Josephat served a hearing notice who contacted the 2nd applicant at her place of work which was now at ABSA Bank Ntinda Branch. She was duly served and a Photograph was taken while she was reading through the contents of the court papers.

The 1 st applicant was represented by *Samson Natamba and and Nankya Angella for the 2nd applicant* while *Phiona Orikiriza for Dr Benson Tusasirwe* represented the respondent.

When the application came for hearing, the following issues were raised for determination;

- *1. Whether there is sufficient cause to set aside the judgment and Decree against the Applicant?* - *2. What remedies are the parties entitled to?*

Both applicants filed separate written submissions and the respondent responded to them and i considered the same.

# *Determination*

*Whether there is sufficient cause to set aside the judgment and Decree against the Applicants?*

The applicant's counsel submitted that he had made the application to set aside the ex-parte decree under *0.9 r. 27 of the Civil Procedure Rules* which provides that: *in any case in which a decree is passed ex-parte against a defendant, he or she may apply to court by which the decree was passed for an order to set aside; and if he or she satisfies court that ... he or she was prevented by sufficient cause from appearing when the suit came up for hearing. The court shall make an order setting aside the decree as against him or her upon such terms as to costs, payment into court, or otherwise as it thinks fit, and shall appoint the date for processing with the suit.*

The 1st applicant contended that he was never served and that he never instructed his wife to receive summons on his behalf. Therefore, in absence of any proof of service of summons or the hearing notice, there was no effective service on the 1st applicant.

Counsel for the 1st applicant contended that ex parte judgments can be set aside by court for failure to follow requirements of the law, for just cause or in the interest of justice.

The 2nd applicant's counsel submitted that she was never served with summons although she does not seem to deny service of hearing notices and his view issuance and service of summons goes to the jurisdiction of the court.

The 2nd applicant contends that she has a defence to the claim since she had ceased being a shareholder and director of the company and was not privy to the agreement entered between the plaintiff and the 1st defendant.

The respondent's counsel submitted that both applicants were duly served with the summons and there are two affidavits of service on record and later the 2nd applicant was served with a hearing notice and a photograph was taken of her reading/perusing the court documents.

The respondent contended that there is proof of service on the applicants by two different process servers atleast contending that they declined service and this was the basis for the exercise of discretion for the court to proceed exparte.

# *Analysis*

In applications like this one, it has been established that, the applicant has to satisfy the court that there is good cause or sufficient reason why the judgment should be set aside. Litigation depends for its efficacy on its progression towards the resolution of the dispute. Although sanctions (such a judgment in default) or ex parte judgment may be imposed to achieve this purpose, they are not absolute.

An ex parte or default judgment is set aside on the basis of irregularity although the court may consider the merits of the case depending on the circumstances of the case. The question of whether non-compliance with procedure will affect a party's substantive rights must depend on the nature of the impropriety and the attitude of the defaulting party. *Abdul Gaffer bin Fathil v Chua Kwang Yong [1994] 3 SLR (R) 1056*

On the court record there three affidavits of service which show the proof of service or efforts made to effect service on the applicants in this matter. The affidavit of service by Kabangira Richard a process server attached to the plaintiff's chambers deposed as follows;

- *That on 11th October 2018, together with a plaintiff, I proceeded to the work place of the 2nd defendant known as J and J Supermarket located at Bweyogerere Opposite Mandela National Stadium.* - *That I found 10 people among whom the plaintiff identified for the 2nd defendant to who I introduced myself and purpose of my visit. He introduced himself to me as a Mugona John.* - *That I tendered two copies of the said court documents to him…and he received the same and declined to acknowledge receipt saying he wanted to first consult with his lawyers.* - *That I proceeded to Barclays Bank Kampala Road were the 3rd defendant is employed and tendered copies of the court documents to her and she informed me she wanted to first contact her lawyers.*

The respondent's counsel applied for interlocutory/default judgment. The Assistant Registrar declined to sign and directed as follows; *"Let our process server Ms Hope be the one to effect service."*

Indeed, as directed by court Ms Hope tried or effected service and swore an affidavit stating as follows;

- *That on 3rd December 2018, she received summons and was given the defendants mobile telephone numbers 0703887304 & 0758771991 by the plaintiff to contact them and find out how they could be found to effect service.* - *That on calling the above numbers they both accepted that they know the plaintiff but they declined to accept service claiming that they have no business with him. I tried to explain each and everything contained in the plaint but they told me not to waste my time as they were not willing to accept service.*

The Deputy Registrar of this court was satisfied with the service attempts and deemed them effective and signed the default judgment on 22nd January 2019.

When this matter came up for hearing on 15th February 2022, this court made the following directive;

*"This court notes that the defendants have never filed any defence. But for avoidance of doubt and to avoid applications to set aside an ex parte* *judgment, this court directs that the defendants are served through any available means. An affidavit of service should be filed."*

The plaintiff's counsel through his process server;

- "*Byamugisha Josephat served the 3rd defendant after calling her on her mobile number-0758771991 and directing him too her place of work in Ntinda.* - *That he went to Absa Bank Ntinda Branch and was led to the Manager's Office and he found a lady and she confirmed that she was the 3rd defendant.* - *That he handed the hearing notice and he took a picture of her receiving and reading through the said hearing notices as proof of service. A photograph was attached."*

It is clear that several efforts were made to make sure the applicants attend court and or are made aware of the existing suit in court. They have not availed any sufficient reason for not filing a defence apart from making evasive denials. The 1st applicant contacted the respondent with his counsel with a view of exploring a settlement, this clearly shows that he was aware of the existence of the suit but was only playing mind games.

Indeed, his counsel decided to write to court a letter dated 5th July 2022 instead of applying to set aside ex parte proceedings. The 1st applicant does not deny the telephone contact used by the court process server but is technically contending that the process server never verified the contacts given or knew the voices of the people she called. I find this quite outrageous for the applicant to expect the court process server to know his voice as proof of service.

The applicants are both husband and wife and or spouses who both duly signed the agreement in that capacity although the agreement was in the names of J&J Trading Company Limited. They do not deny staying together and at all material times when efforts were made to effect service on them, they were presumed to be staying together or to be in the know of each other's whereabouts. The 2nd applicant does not explain why she never informed her husband about the case when she was served with a hearing notices. He flimsy defence was that she thought the case was about the 1st defendant only and yet the hearing notices clearly indicated the 3 defendants.

They have just tried to hoodwink court by filing separate applications for setting aside as individuals and they both seem not to defend the 1st defendant-J&J Trading Company Limited. The 1st applicant is still in ownership of the 1st defendant: J & J Trading Company Limited but does not put any defence of non-service of summons on the company. It would appear they agree that the company was properly served but themselves were not served.

This court was justified to proceed with the hearing since the applicants were duly served and opted not to file a defence or make appearance in court to make any objections if any. The suit proceeded as if such party had filed a defence. The position is that, however irregular the summons or the service of it may be, it should not be disregarded by the defendant. What a defendant who has been served with irregular summons or has been wrongly served with summons has to do under the circumstances is to apply to the court to have it set aside or in the alternative, enter condition appearance to the action and thereafter move the court to have the summons or service of the summons set aside as being irregular or for wrong service.

The courts have attempted to lay down the principles upon which discretion may be exercised to set aside an ex-parte judgment and some of the circumstances that may amount to sufficient cause. In the case of *Rosette Kizito v Administrator General & Others, SCCA No. 9 of 1986*, "*sufficient reason (cause) relates to some inability or failure of the Applicant to take a particular step in time*."

The applicants contend that the sufficient cause for setting aside the ex parte judgement is premised on the fact that they were not served with summons to file a defence or simply put they were not made aware of the existence of the suit.

The application to set aside an ex parte judgment cannot succeed if no good or substantial reasons are given to justify setting it aside. See *Twiga Chemical v Bamusedde [2005] 2 EA 325; Shah v Mbogo [1967] EA 116*

The applicants have not set out any sufficient cause for non-appearance or for failure to file a defence in this matter. The evidence adduced is not satisfactory to set aside the judgment which was given upon full trial and evidence on record.

The default judgment is a primary mechanism in this context as it obliges the defendant to respond to the plaintiff's claim by way of filing a defence and avoids wastage of the court's and parties' resources by bringing uncontested proceedings to a conclusion. The court must consider whether setting aside the default judgment would be in the interest of justice and that the defendant has some basis for defending the claim.

It is the duty of the court to in an application to set aside the default judgment to determine whether any useful purpose would be served if there were no possible defence to the action. The defence would guide the court on real prospect of success and it would mean that such a defence has some validity as opposed to being fanciful and unrealistic.

The court is expected to determine whether the applicant will succeed at trial. In absence of any possible defences raised in the application the court should not merely endorse a statement made by the applicants in their application *"the applicants have a plausible defence"*.

The court should arrive at a reasoned assessment of the justice of the case and also form a provisional view of the probable outcome if judgment were to be set aside and the defence developed. It is not sufficient to raise an 'arguable defence' for the defence must carry some degree of conviction. Therefore, according to the court, the applicant must establish more than a defence or issue which should be adjudicated: he must raise a defence which is likely to succeed at trial. See *Alpine Bulk Transport Inc v Saudi Eagle Shipping Co Inc [1986]2 Lloyd's Rep 221*

This court has put significance on the conduct of the applicants to this application and the rule enables the court to take into account the defendants conduct as a feature to be considered. The applicants were served severally but deliberately ignored the summons or notice of the trial.

The 2nd respondent received the hearing notices and allegedly refused to take action and or refused to notify the 1st applicant of the proceedings due for hearing. It is inconceivable that a person of the 2nd applicant's caliber (Manager of a Bank) could behave in such a manner when she is duly served.

The conduct coupled with the merits of the defence, has justified the courts decline to setting aside the ex parte judgment this matter. The applicants took a gamble or risk when they conducted themselves irresponsibly or unfairly or in a manner which disregards the interests of the administration of justice when they refused service and failed to file a defence.

The two applications are dismissed with costs to the respondent.

I so Order.

*Ssekaana Musa Judge 06thSeptember 2024*