Oleru v Bolt Finance Company Limited (Miscellaneous Application 16 of 2023) [2024] UGHC 968 (3 October 2024)

#### THE REPUBLIC OF UGANDA

## IN THE HIGH COURT OF UGANDA AT ARUA

#### **MISCELLANEOUS APPLICATION NO. 016 OF 2023**

## (Arising from Civil Suit No. 008 of 2023)

## OLERU GLORIA ....................................

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#### **VERSUS**

# BOLT FINANCES COMPANY LIMITED....................................

## **BEFORE: HON. JUSTICE COLLINS ACELLAM**

#### **RULING**

#### **Introduction and Background**

15 The Applicant brought this application under Order 36 Rules 4 and Order 52 Rules 1&3 of the Civil Procedure Rules, Section 98 of the Civil Procedure Act and Section of 33 of the Judicature Act seeking for orders that this court grants unconditional leave to appear and defend Civil Suit No. 008 of 2023 and costs of this Application be provided for.

The Application was supported by the affidavit of the Applicant, OLERU GLORIA.

- 20 The Background of this application is that the Respondent filed a summary suit vide Civil Suit NO. 008 of 2023 against the Applicant for recovery of UGX 59,645,100/= interests at 25% and the costs of the suit. That the Applicant is an employee of the Respondent serving as supervisor of Kubala Branch in Terego District. That during the course of her employment, the Applicant used to disburse loans to different groups in her jurisdiction as her core duty assigned to her by - 25 the Respondent. It is alleged that from 18th September 2022 to 22nd September 2022, the Respondent's senior manager, Accountant, and Data entry officer visited the branch with a purpose of investigating corruption and financial irregularity of the branch as their core duty of reconciliation of accounts of each branch monthly. It is further alleged that the said teams upon reconciliation of the financial data of that branch found that the defendant had disbursed some - loans worth 68, 350,000/ $=$ UGX to 223 fictitious and none existing borrowers at 25% interest 30 and that the team established that the Applicant in her fraudulent ways recovered some part of the loans she disbursed to the fictious and none existing borrowers worth 29, 833,400/= leaving a balance of 55,604,100/=. That further the said team found out that the Applicant had also taken and used cash money of UGX 4,041,000/= that was meant to be realization money to be - in the office as office funds without authorization and permission of the supervisor. That the 35 Applicant accepted this loss to the Respondent and accepted to make good and expressed this in writing.

In response to that Summary suit, the Applicant has filed this application for unconditional leave to appear and defend this suit.

- The grounds of this application as disclosed in the Notice of Motion are as follows; 40 - 1. That the Applicant has a bonafide defence to this suit.

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- 2. That it is in the interest of justice that this Application is granted. - 3. That it will be just and equitable to afford the Applicant/ Defendant an opportunity to defend herself in the suit.

The Applicant raised the following triable issues in her written submissions;

- 1. Whether the Application raises bonafide triable issues of fact or law in order to be granted unconditional leave to appear and defend Civil Suit No.116 of 2022? - 2. Whether the Applicant has a plausible and meritorious defence?

## **Representation and Hearing**

The Applicant was represented Counsel Bayo Diana of M/s Legal Aid Project of Uganda Law Society - Arua while the Respondent was represented by Counsel Onecan Ronald of M/s Oketcha Baranyanga & Co. Advocates.

The Parties filed their written submissions which I have perused and considered in this ruling.

#### Determination.

I have read the Pleadings of both parties, affidavit evidence and their written submissions I have read and advised myself on the authorities relied on by both parties. I have considered them in making this ruling.

Whether the Application raises bonafide triable issues of fact or law in order to be granted unconditional leave to appear and defend Civil Suit No.116 of 2022?

The Plaintiff in a summary suit is entitled to summary judgement on liability if there is no issue which can be truly disputed and no other reason why trial should fail.

#### See Golden Leaves Uganda Ltd & 2 others vs Ismail Dabule Miscellaneous Application No. 25 49 of 2020

The foundation of Applications for leave to appear and defend is premised under Order 36 Rule 3 &4 of the Civil Procedure Rules which provides that upon the filing of an endorsed plaint and consequent service on the defendant, the defendant shall not appear and defend the suit except upon applying for and obtaining leave to appear and defend from court.

Order 36 Rule 4 of the Civil Procedure Rules further provides that the application for leave to appear and defend the suit shall be supported by an affidavit which shall state whether the defence alleged goes to the whole or to part only and if so to what part of the Plaintiff's claim.

The above provisions are premised on the fact that the Plaintiff has failed to establish a prima facie case for summary judgement and thus the summary judgement should not be granted or 35 entered. The Defendant (Applicant) is required to satisfy the court that; "there is an issue or question in dispute which ought to be tried or that there ought for some reason to be a trial."

The settled law is that for an application for leave to appear and defend to be granted, the Applicant has to show that there is a bonafide triable issue of fact or law that will advance in the defence of the suit. In the case of Maluku Interglobal Trade Agency Vs Bank of Uganda (1985)

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*HCB 65* while considering the above rule Court held that;

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"Before leave to appear and defend is granted, the defendant must show by affidavit or otherwise that there is a bonafide triable issue of fact or law. When there is a reasonable ground of defence to the claim, the defendant is entitled to summary judgment. The defendant is not bound to show a good defence on the merits but should satisfy the court that there was an issue or question in dispute which ought to be tried, and the court shall not enter upon the trial of issues disclosed at this stage."

In the case of Bunjo vs KCB (Uganda) Ltd (Misc. Application No. 174 of 2014 while considering the same principal court held that:

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"It is generally accepted that the court should not enter upon a trial on any of the issues raised. However, in the case of Corporate Insurance Co. Ltd Vs Nyali Beach Hotel Ltd (1995 - 1998) EA 7 Court held that leave to appear and defend will not be given merely because there are several allegations of fact or law made in the defendant's affidavit. The allegations are investigated in order to decide whether leave should be given and as a result of the investigation even if a single defence is identified, or found to be bonafide, unconditional leave should be granted to the defendant"

The Applicant does not need to satisfy the court that he is likely to succeed on the issue or 20 question. He/ she merely has to satisfy the court that there is a question or issue which can only be properly determined when there is a proper trial. It is not for the Court hearing to determine or investigate the merits of the issues raised by the Applicant. The Court should only ascertain whether an issue has been raised which should be tried. The duty of the court is to carefully $25$ examine the facts in order to ascertain whether there is truly a triable issue.

The power to give a summary judgement is intended only to apply to cases where there is no reasonable doubt that the plaintiff is entitled to the judgement, and where it is expedient to allow a defendant to defend for mere purposes of delay. The courts should be robust in their approach to applications for leave to appear and defend by carefully scrutinizing defences to ensure that

30 the Respondent/ Plaintiff is not improperly deprived of a judgement in commercial transactions 'where cash flow is the lifeblood to make commerce work'.

See; Habibullah Mohammed Yousuff vs Indian Bank (1999) 2 SLR (R) 880 as relied on in the case of *Golden Leaves Uganda Ltd & 2 others vs Ismail Dabule Miscellaneous Application No.* 49 of 2020

35 If the Applicant raises a triable issue or if there is a good reason why there should be trial, he will be given unconditional leave to defend. If he is not able to show that there is a triable issue or cannot satisfy the court why the case should be tried, then the Plaintiff will be granted a summary judgement.

## See: Rankine Bernadette Adeline Vs Chenet Finance Ltd (2011)3 SLR 756.

In the instant case, relying on various authorities, the Respondent submits that the suit does not 40 raise any triable issues of law or fact, and it is just an attempt to waste court's time and was made in bad faith. Further that the court should not be inclined to grant the order of dismissal of the Application. And the Application should not be granted but rather dismissed with costs to the Respondent because it lacks merit.

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- 5 However, the Applicant submits that there are serious questions of fact and law to be answered as laid down in the Applicant's affidavit sworn by OLERU GLORIA wherein the Applicant states that she disbursed the money to the group members in the course of her work and she can not be held liable for something she did as part of her duty at work and that the groups are existent. Further she stated that in the affidavit in reply on behalf of the Respondent, the General - $10$ Manager Onzia Patricia Winny, deponed on behalf of the Respondent, he states that 63,380,00/= was disbursed to non existent borrowers and in her opinion, there is need to prove whether they exist or not. That the Respondent further averred that there were some fraudulent disbursements yet matters involving fraud need to be specifically pleaded and proven therefore can not be heard summarily. - I agree with the Applicant and in my view, the Applicant has already demonstrated that she has 15 a plausible defence to the claim that is brought under a summary procedure.

These are all bonafide triable issues of law and fact that can not be settled in a summary suit.

I accordingly allow the application for unconditional leave to appear and defend the suit.

The Applicant should file a defence to the suit with 15 days from the date the ruling is delivered.

Costs shall abide the outcome of the main suit. 20

I so order<br>Dated at Arua this .................................... I so order $.2024$


**Collins Acellam** 25

**JUDGE**