Mukaburura Foundation Investments Ltd v Southern Investments Ltd (HCT-00-CC-MA 702 of 2005) [2005] UGCommC 67 (27 November 2005)

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{\b\f36\fs28\insrsid15754698 \par }\pard \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8679553 {\b\f36\fs28\insrsid8679553 THE REPUBLIC OF UGANDA}{\b\f36\fs28\insrsid1136281 \par }{\b\f36\fs28\insrsid8679553 \par IN THE HIGH COURT OF UGANDA AT KAMPALA \par (COMMERCIAL }{\b\f36\fs28\insrsid4287093 COURT }{\b\f36\fs28\insrsid8679553 DIVISION) \par \par }{\b\f36\fs28\insrsid4287093 HCT-00-CC-MA-0}{\b\f36\fs28\insrsid8679553 702 OF 2005 \par (Arising from }{\b\f36\fs28\insrsid4287093 HCT-00-CC-MA-0}{\b\f36\fs28\insrsid8679553 105}{\b\f36\fs28\insrsid4287093 -}{\b\f36\fs28\insrsid8679553 2004 and }{\b\f36\fs28\insrsid4287093 HCT-00-CC-CS-00}{\b\f36\fs28\insrsid8679553 79}{ \b\f36\fs28\insrsid4287093 -}{\b\f36\fs28\insrsid8679553 2004) \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8679553 {\b\f36\fs28\insrsid8679553 \par \par MUKABU}{\b\f36\fs28\insrsid10908627 RU}{\b\f36\fs28\insrsid8679553 RA FOUNDATION \par INVESTMENTS LTD ::::::::::::::::::::::::::::::: APPLICANT \par \par }\pard \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8679553 {\b\f36\fs28\insrsid8679553 VERSUS \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8679553 {\b\f36\fs28\insrsid8679553 \par SOUTHERN INVESTMENTS LIMITED ::::::::::::: RESPONDENT \par \par \par BEFORE: }{\b\f36\fs28\ul\insrsid8679553\charrsid7288572 THE HONOURABLE MR. JUSTICE YOROKAMU BAMWINE}{\b\f36\fs28\insrsid8679553 \par \par }{\b\f36\fs28\ul\insrsid8679553\charrsid2962700 R U L I N G: \par }{\b\f36\fs28\insrsid8353531 \par }\pard \qj \li0\ri0\sl480\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8353531 {\f36\insrsid8353531 This is an application under 0.40 r 2, 0.48 rr. 1 and 3 of the Civil Procedure Rul es and S. 98 of the Civil Procedure Act. It is for the orders that the Applicant be granted leave to appeal against the order of this Court (per M. S. Arach \endash Amoko, J) dated 9/11/2004 and that costs of the application be provided for. \par \par From the evidence, the Applicant had}{\f36\insrsid2962700 undisclosed business dealings with the Respondent. In a letter dated 7/3/2001 addressed to Standard Chartered Bank}{\f36\insrsid10908627 ,}{\f36\insrsid2962700 Kampala, the Applicant authorized the said bank to \'93irrevocably and unconditionally debit our Account NR 32\endash 9-04-33229-00 -1 held with your bank by US $118,800 (one hundred eighteen thousand and eight hundred US Dollars) only, and transfer the said amount to the following account without any further notice:}{\f36\insrsid8353531 \par }{\f36\insrsid2962700 Bank: Tropical Africa Bank Ltd Kampala \endash Uganda. \par Beneficiary: Mukaburura Foundation Investments Ltd. \par Account NR: 2122999847 \par \par Best regards, \par \par Habib Kagimu\tab \tab \tab \tab \tab MUYANJA MBABALI \par CHAIRMAN\tab \tab \tab \tab \tab \tab EXECUTIVE DIRECTOR\'94 \par }{\f36\insrsid7355200 \par It is claimed by the Applicant that upon presentation of the same to the bank, it was dishonoured. The Applicant su ed the Respondent under 0.33 of the Civil Procedure Rules to recover the amount stated in the above instructions. The Respondent applied for leave to appear and defend wherein it sought to adduce evidence to prove that the transfer of funds was condition al. The learned Trial Judge, inter alia, }{\f36\insrsid10908627 considered the affidavit}{\f36\insrsid7355200 evidence and proceeded to grant leave to appear and defend. The Applicant wants to appeal against that order. \par \par From the records also, following the grant of the said leave to the Respondent, the Applicant felt aggrieved}{\f36\insrsid685925 by the decision of the Court and appealed}{\f36\insrsid10434255 to the Court of Appeal. In the Court of Appeal, counsel for the Respondent successfully challenged the competence of the Appeal which had been filed without leave being sought and/or granted. The Appeal was dismissed on account of that. Applicant now seeks to start the process all over again. Hence this application}{\f36\insrsid4415611 . }{\f36\insrsid12673466 The Respondent has raised two major grounds in opposition of this application:}{\f36\insrsid7355200 \par }{\f36\insrsid12673466 1.\tab That there are no grounds meriting serious consideration by the Court of Appeal. \par }{\f36\insrsid6829860 2.\tab }{\f36\insrsid4415611 That the Appeal was dismissed and not struck out. Therefore, no Appeal can \tab \par \tab again lie to that Court on the same facts and circumstances.}{\f36\insrsid12673466 \par }{\f36\insrsid4415611 \par I will start with the second ground. Under Rule 93 (4) of the Co urt of Appeal Rules, 1996, if all the parties to the Appeal do not consent to the withdrawal of the Appeal, the Appeal shall stand dismissed with costs. It does not state the effect of such a dismissal. Be that as it may, under Rule 81 thereof, a person

on whom a notice of Appeal has been served may at any time, either before or after the institution of the Appeal, apply to the Court to strike out the notice or the Appeal as the case may be, on the ground that no Appeal lies or that some essential step i n the proceedings has not been taken or has not been taken within the prescribed time. The Rule does not state that such }{\f36\insrsid10908627 challenge can}{\f36\insrsid4415611 }{\f36\insrsid10908627 also }{\f36\insrsid4415611 be }{ \f36\insrsid10908627 made}{\f36\insrsid4415611 in the lower Court, this Court. }{\f36\insrsid10908627 I would leave it to}{\f36\insrsid4415611 the Appellate Court }{\f36\insrsid10908627 itself }{\f36\insrsid4415611 to determine the competence of the Appeal}{\f36\insrsid10908627 before it}{\f36\insrsid4415611 .}{\f36\insrsid10820193 This ground }{\f36\insrsid10908627 in my view lacks}{\f36\insrsid10820193 merit. I would disallow it and I do so.}{\f36\insrsid4415611 \par }{\f36\insrsid10820193 \par As regards the second ground, Mr. Karugire\rquote s argument is this: that the Applicant filed a suit to enforce the said payment instructions; and that the Responden t applied for leave to appear and defend. The application was based on two major grounds: \par 1.\tab That it did not receive any consideration for issuance of the payment }{\f36\insrsid10908627 \tab }{\f36\insrsid10820193 instruction}{\f36\insrsid10908627 s}{\f36\insrsid10820193 . \par }{\f36\insrsid8718365 2.\tab There was no evidence that the instructions had }{\f36\insrsid10908627 actually }{\f36\insrsid8718365 been presented and \tab dishonoured. \par \par Mr. Karugire\rquote s point is that the trial Judge accepted the 2 grounds and granted leave to the Respondent to defend the suit.}{\f36\insrsid10908627 That her decision will not cause any prejudice to the Applicant.}{\f36\insrsid8718365 \par \par Mr. Babigumira does not agree. His argument is that by allowing the Respondent to advance its reasons for seeking leave to appear and defend, the Judge admitted evidence to prove lack of consideration and non-presentation of the instructions to the Bank, which evidence she should not have considered a t all. Hence his conviction that the Applicant}{\f36\insrsid6951463 has grounds of Appeal which merit serious consideration by the Court of Appeal.}{\f36\insrsid8718365 \par }{\f36\insrsid15691226 \par I have addressed my mind to the able arguments of both counsel. The law as understood by this Court is that before leave to app ear and defend is granted, the Defendant/Applicant must show by affidavit or otherwise that there is a bonafide triable issue of fact or law. Where there is a reasonable ground of defence to the claim, the Respondent/Plaintiff is not entitled to summary Judgment. \par }{\f36\insrsid10908627 \par }{\f36\insrsid7811505 That much was stated by the learned Trial Judge in her Ruling. The Defendant is not expected to show a good defence on the merits but should satisfy the Court that there is an issue or question in dispute which ought to be tried and the Court sh ould not enter upon the trial of the issues disclosed at this stage. As to whether such decision, once made by Court, to grant leave is appealable or not, the law was well stated in }{\f36\ul\insrsid7811505 Sango Bay Estates Ltd & Others \endash Vs- Dresdner Bank [1971] EA 17.}{\f36\insrsid5054456 Simply p ut, leave to appeal from an order in civil proceedings will normally be granted where prima facie it appears that there are grounds of appeal which merit serious judicial consideration. However, where the order from which it is sought to appeal was made in the exercise of a judicial discretion, a rather stronger case will have to be made out.}{\f36\insrsid7811505 \par }{\f36\insrsid5054456 \par There is no doubt in my mind that }{\f36\insrsid10908627 t}{\f36\insrsid5054456 he order which the Applicant seeks to challenge on appeal was made in exercise of a judicial discretion. The Applicant filed a su it under summary procedure. He wants to enforce payment instructions issued by the Respondent. The Respondent does not deny issuance thereof. Its case is that }{\f36\insrsid10908627 both parties knew at the time of its execution that the instruction was subject to occurrence of some future event; that }{\f36\insrsid5054456 there was no consideration for the instructions and that in any case there is no evidence that the }{ \f36\insrsid9076036 instructions}{\f36\insrsid5054456 were }{\f36\insrsid9076036 presented to the bank and }{\f36\insrsid5054456 dishonoured. From the records, the Applicant was deemed a holder for value from the m oment the instructions were issued. Every person whose signature appears on it is prima facie deemed to have become a party thereto for value. However, this is a rebuttable presumption. It can be rebutted by adducing evidence to show that the document was affected by fraud, duress or force and fear or even illegality. There is no way the Respondent can be heard on the matter if it is not allowed to file a defence}{\f36\insrsid1847879 . }{\f36\insrsid5054456 To hold that the Respondent must pay without question when it has raised issues }{\f36\insrsid1847879 relating to the }{\f36\insrsid5054456 enforceability of the instructions would be to condemn it unheard. It would be in contravention of the principles of natural justice that no man can be condemned unheard.}{\f36\insrsid2493003 It is noteworthy that the Applicant is, up to this point in time, reluctant to disclose what business deal it was.}{\f36\insrsid7478613 At its face value, the claim could as well be ex turpi causa; an illegal claim which this Court cannot lend a hand in its enforcement. Therefore, whether or not the instructions were supported by any consideratio n is a triable issue which ought to be investigated and remedied. The Court with competence to do so is this one. If the Court gets it wrong, the Court of Appeal will be there to do the needful. \par \par Besides, this Court has before it the said transfer instructions dated 7}{\f36\super\insrsid7478613\charrsid7478613 th}{\f36\insrsid7478613 March 2001. The copy which the Applicant itself relies on shows no evidence of presentment to the bank or dishonour thereof. In a case of this nature, the cause of action arises when the bill of exchange is dishonoured. In the absence o f any such evidence of dishonour, the Defendant would be entitled to raise the issue of the plaint disclosing no cause of action. Again, the Court with competence to determine that is this one. The Respondent would have no way of challenging such a bill of exchange if it is not allowed to file a defence and defend itself against the suit. \par }{\f36\insrsid13639648 \par In my view, no amount of argument would lead any Court to circumvent these two grounds on appeal. Accordingly, the exception stated in }{\f36\insrsid5003740 S}{\f36\insrsid13639648 pry, V. P\rquote s observation in the S ango Bay case, supra, clearly supports the Respondent\rquote s argument that it ought to be heard in its defence of the suit. Whether the defence would succeed or not would be for another day. The Court exercised a judicial discretion in g}{ \f36\insrsid4737206 ranting leave to the R espondent to appear and defend. The intended appeal therefore lacks any ground that would merit serious judicial consideration. The Applicant stands to lose nothing since any decision of this Court would be open to challenge on appeal. }{ \f36\insrsid13639648 \par }{\f36\insrsid4737206 \par I would accordingly allow Mr. Karugire\rquote s argument on this point and disallow, }{\f36\insrsid1847879 respectfully}{\f36\insrsid4737206 , Mr. Babigumira\rquote s. I do so. \par \par In the result, for reasons stated above, this application fails. It is dismissed with costs to the Respondent}{\f36\insrsid5003740 .}{\f36\insrsid1847879 }{\f36\insrsid4737206 Since the Respondent has already filed a defence in the main suit, the case shall be set down for a scheduling conference}{\f36\insrsid7545213 on 17/2/2006 at 10 a.m}{\f36\insrsid4737206 . It is so ordered}{\f36\insrsid1847879 .}{\f36\insrsid4737206 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid1931029 {\f36\insrsid1931029 \par }{\f36\insrsid4737206 Yorokamu Bamwine \par }{\b\f36\insrsid4737206\charrsid4737206 J U D G E \par }{\f36\insrsid4737206 28/11/2005 \par }}