Obulejo v Moyo Cooperative Savings & Credit Society Limited (Miscellaneous Application 31 of 2021) [2024] UGHC 974 (3 October 2024)

Full Case Text

### IN THE HIGH COURT OF UGANDA AT ARUA

## **MISCELLEANOUS APPLICATION NO. 0031 OF 2021** (ARISING OUT OF CIVIL SUIT NO. 002 OF 2019)

OBULEJO SIMON:::::::::::::::::::::::::::::::::::: **VERSUS**

# MOYO COOPERATIVE SAVINGS & CREDIT

SOCIETY LTD:::::::::::::::::::::::::::::::::::: 15

## BEFORE HON. JUSTICE COLLINS ACELLAM

### **RULING**

$20$

### **Brief Introduction**

This is an application brought by way of Notice of Motion under Section 98 of the Civil Procedure Act Cap 71 and Order 36 rules 11 and Order 52 rules 1, 2 and 3 of the Civil Procedure Rules SI 71-1 for orders that;

- An order that judgement and decree entered by the Registrar in the main summary 25 $1.$ suit be set aside. - $2.$ The execution of that decree be stayed. - $3.$ Costs be provided for.

#### 30 Background

It is contended that on 11th March 2019, the Respondent filed Civil Suit No. 0002 of 2019 as a summary suit under Order 36 of the Civil Procedure Rules against the Applicant for recovery of ugx 403,513,750/= only being the loan principle balance, accumulated interest, after the Plaintiff [Respondent] having waived the weekly penalty

35 of ugx 3,500/= during the period of default, against the Applicant; and Amayo Emmanuel & Irama Charles, [all together as the Defendants therein] who were the guarantors of the said loan. Amended summons were also filed on 7th August 2019 and served on the Defendants. The Defendants were duly served with the summary suit and summons [original and amended copies] to apply for leave to appear and defend this suit, 40

an affidavit of service is on record filed on 30th August 2019. None of the Defendants filed any application or appeared in regard to this matter.

Counsel for the Plaintiff filed an application for a default judgement under Order 9 rule 6 and Order 36 rule 3(2) of the Civil Procedure Rules SI 71-1 and a default judgement was entered against the Defendants on 27th September 2019. The Plaintiff filed its Bill of Costs, and it was taxed at ugx 50,221,500/=, having served the Defendants with an affidavit of service on record but did not appear. The Plaintiff proceeded with execution proceedings and was granted an order of sale under Order 22 rule 62 CPR SI 71-1 by this Court on the 17th of December 2019.

The Applicant now brings this application seeking Court to set aside the above judgement and decree entered by the Registrar and execution of that decree stayed.

#### $\mathsf{S}$ Grounds of the Application

The grounds on which this application is based are contained in the affidavit of the Applicant, OBULEJO SIMON, deponed on the 12th of April 2021 where he briefly states that last week when he returned from a business trip, he found a copy of Application No. 0021 of 2021 seeking execution against him in a suit he was not aware of. That when he

- went to Arua Court, he found out about the file. That he found out summons first issued 10 against him on 15th March 2019 for service but these summons were never served on him. amended summons issued on 7th August 2019 for service on him and an affidavit of service alleging he was served on 19th August 2019 which allegation is false. He states that he resides at Bibia Center, about 10 kilometers from Elegu town and he was not in Elegu - that day, he was sick and admitted in Nakasero Hospital from 8th August 2019 for two 15 weeks, that he remained in Kampala for some time, but his situation worsened, and he was referred to Kumi Orthopedic Center where he remained from November up to December 2019. - 20 That when he was discharged, he returned to Bibia where he stays up to now. That he found on record a taxed bill for the suit, but he was not served with any notice of the same. That the amount claimed is excessive and he does not owe the Respondent that. He states that he has a good defence to the suit and justice would require that he is heard on the merits of the suit. - $25$

### Grounds in Opposition

In opposition, the Respondent, vide an affidavit in reply deponed by Madrama Isaac, Senior Loan Officer of the Respondent on 15th April 2021 contends that the Applicant was at all material times aware of the civil suit that was going on in this Court against

him as he was served with the Summons in Summary Suit on Plaint and he acknowledged 30 receipt of the same by endorsing on the control copy, and an affidavit of service was extracted and filed by Counsel for the Respondent. The affidavit is sufficient proof of service of court process. The first summons issued by court on 15th March 2019 were duly served on the Applicant through his Guarantor Evuma Emmanuel because the Applicant 35

could not be located, and an affidavit of service was filed in proof of service.

The amended Summons issued on 7th August 2019 were personally served on the Applicant on 14th August 2019 which he acknowledged by signing on the control copy and an affidavit of service was filed on court record. The medical bill attached by the Applicant is not proof of an admission to the alleged hospital, his allegations are false as he was present at Elegu at the time of service of the Summons. The Applicant was also served with the Taxation Notice, he acknowledged receipt on the control copy. Judgement in Default was entered against him in CS No. 0002 of 2019 and a decree was passed, and the claim is the total of all the awards of Court in the decree.

Counsel for the Respondent in conclusion prays that this application is dismissed with costs, but should Court grant this application, the applicant should be required to deposit security for costs before he is allowed to file his defence.

50 There is no Rejoinder filed on record.

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#### $\mathsf{S}$ Representation

During the hearing, the Applicant was represented by M/S Ladwar, Oneka & Co. Advocates whereas the Respondent was represented by M/S Odama & Co. Advocates.

Before I proceed to the merits of this application, I want to note that I have perused through the application and all their supporting documents or affidavits and affidavit 10 in reply, there are no submissions by Counsel for the Applicant, but Counsel for the Respondent filed their submissions, which I have duly put into consideration to come up with this Ruling. There were no rejoinder on record. I shall now proceed to enlist the issue in contention.

Consideration of Court. Order 36 rule 3 CPR states that; Judgment in default of application for leave to defend.

(1) Upon the filing of an endorsed plaint and an affidavit as is provided in rule 2 $20$ of this Order, the court shall cause to be served upon the defendant a summons in Form 4 of Appendix A of these Rules, or in such other form as may be prescribed, and the defendant shall not appear and defend the suit except upon applying for and obtaining leave from the court.

(2) 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 of the 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.

In the case of Post Bank (U) Ltd VS Abdu Ssozi SCCA No. 08 of 2015, Court stated that;

Order 36 was enacted to facilitate the expeditious disposal of cases involving debts and contracts of a commercial nature to prevent defendants from presenting frivolous or vexatious defences in order to unreasonably prolong litigation. Apart from assisting the courts in disposing of cases expeditiously, Order 36 also helps the economy by removing unnecessary obstructions in financial or commercial dealings. Defendants in cases which fall under Order 36 are protected by being given the right to apply to court for leave to appear and defend the suit. When the court receives their application and is satisfied by the defendant's affidavit that the defendant has raised a genuine triable and not a sham or frivolous issue, it will grant the defendant leave to appear and defend the suit. (Order 36 rule 4).

If the court is not satisfied that the defendant has raised a triable issue, it will refuse to grant leave to appear and defend the suit, and the plaintiff will be entitled to a decree in the amount claimed in the plaint with interest, if any. (Order 36 rule 5) If the defendant fails to apply for leave to appear and defend

# in the time prescribed (which is 10 days), the plaintiff is entitled to a decree for an amount claimed in the plaint with interest, if any. (Order 36 rule 3(2)."

In the instant case, the Defendants / Applicant herein failed to apply for leave to appear and defend the suit, therefore, the Respondent was entitled to a default judgment and a decree for the amount claimed in the plaint with interest claimed.

Order 36 Rule 11 is on setting aside the decree. It provides as follows:

After the decree the court may, if 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.'

In the case of Geoffrey Gatete & Another vs. William Kyobe, SCCA No. 7 of 2005, the 20 Supreme Court explained reasons for setting aside the decree under Order 36 rule 11 by stating that "... Apart from ineffective Service of summons, what the courts have consistently held to amount to good cause is evidence that the defendant has a triable defence to the suit"

In the instant case, the Applicant in his affidavit in support of the application under paragraph 11 states that the amount claimed by the Respondent is excessive and that is not what he owes. The Applicant however does not guide this Court with proof on how much he owes, and when / how he intends to clear it. This therefore does not stand out as a triable defence to the suit which would warrant the Applicant being given a chance

30 to defend the suit and setting aside of the decree to hear the matter on its merits, as the Respondent provided proof on how the claim arose and the amount owed in the plaint.

I shall now deal with the issue of service and its effectiveness. Order 5 rule 16 of the CPR provides for an Affidavit of service and states as follows; 35

'The serving officer shall, in all cases in which the summons has been served under rule 14 of this Order, make or annex or cause to be annexed to the original summons an affidavit of service stating the time when and the manner in which the summons was served, and the name and address of the person, if any, identifying the person served and witnessing the delivery or tender of the summons.'

In the instant case, Counsel for the Respondent duly extracted and filed affidavits of service for all the pleadings in this matter. The affidavits have the original summons / hearing notices annexed to them and these bear witness of the service of the summons. The Applicant herein has not presented this Court with any evidence to prove that the contents of all these affidavits of service are false as he alleges.

I therefore respectfully agree with Counsel for the Respondent that the Applicant was effectively served with the summons in this matter and all the other pleadings regarding 50 the same. This application does not satisfy the pre-requisites for the grant of the orders sought.

$M\Delta$

$\mathsf{S}$

For all the above reasons, I therefore dismiss this application with costs to the $\mathsf{S}$ Respondent.

I so order. $10 \\$ .......... . . . . . . . . . . . . . . Collins Acellam JUDGE $3|10|24$