Philex Logistics (U) Ltd v HK GTX Int'l Logistics Ltd (H.C.Miscellaneous Application No. 930 of 2020) [2021] UGCommC 63 (3 September 2021)

Full Case Text

## **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [COMMERCIAL DIVISION] M. A No. 930 of 2020 [Arising from Civil Suit No. 775 of 2020] PHILEX LOGISTICS (U) LTD ::::::::::::::::::::::::::::::::::::::::::APPLICANT VERSUS**

**HK GTX INTERNATIONAL LOGISTICS LIMITED:::::::::::RESPONDENT**

## **BEFORE: HON. JUSTICE DUNCAN GASWAGA RULING**

- [1 ] This is a ruling on an application praying for leave to appear and defend **HCCS No. 775 of 2020** and that costs of the application be provided for. - [2] The grounds for this application were detailed in the affidavit of Mugume Phillip (the director of the applicant company) in support of the application and these are that; the applicant has a good defense which raises triable issues; the applicant contests the claim of USD 20,201.61 because the sums quoted in the invoices are disputed as the applicant paid all the invoices issued upon it with the right prices; the applicant is not indebted to the respondent; that it is just and equitable that the application be granted as prayed. - [3] This application raises one issue;

*Whether the applicant satisfies the conditions for the grant of orders forleave to appear and defend Civil Suit No. 775 of 2020.*

[4] It was submitted for the applicant that the law governing applications for leave to appear and defend is Order 36 rule 3 and 4 CPR and that the grounds for the grant of unconditional leave to appear and defend have been enunciated under case law in **Benon Tamusanqe & Timothy Justin Rover Mathew vs Exim Bank(U) Ltd, M. A No. 1213 of 2016** where Billy Kainamura , J, stated that, *''the settled law is that for an application forleave to defend to be granted, the applicants have to show that there is a bonafide triable issue offact orlaw that they will advance in defense of the suit."* He went further to cite **Makula Interglobal Trade Agency vs Bank of Uganda M9851 HCB 65, at 66** while considering the above rule where it was held that;

> *"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 reasonable ground of defence to the claim, the defendant is not entitled to summary judgment. The defendant is not bound to show a good defence on the merits but should satistfy 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 ofissues disclosed at this stage. "*

[5] It was further submitted that the terms on the invoice issued by the respondent to the applicant are not the ones agreed upon as the applicant had duly paid the said monies. That there was a setback due to the pandemic that made the applicant and the beneficiaries of the goods fail to pay. That as per the terms of the body under which they operate, notice ought to have been sent to World Custom Alliance if there were any sums due. That as such, this application raises triable issues which can only be determined by calling evidence.

- [6] It was submitted for the respondent, that other than sweeping statements and allegations, the applicant had not presented any evidence on the particular invoices he intended to rely on which raises questions as to whether the applicant has actually presented any defense. That the applicant further intends to blindfold the court by presenting an unclear bank statement which is neither legible nor visible. That the applicant's intention to issue a third party notice after claiming that they paid all sums due to the respondent speaks to dishonesty of the applicant and as such negates the possibility of a bonafide defense. See **Abubaker Kato Kasule Vs Tomson Muhwezi M 992-19931 HCB 212.** Further that the applicant shows no payment proof to Eco Bank as alleged and that its being banned from the World Custom Alliance is indicative of its international character of bad faith and unfair business relations with other clients and as such this application is seemingly a way to evade justice and a way to evade payment of the respondent's money. The respondent prayed that the suit be dismissed with costs but in the alternative if granted, the applicant be granted USD 20,201.61 in this court. - [7] In a rejoinder thereof, the applicant reiterated its earlier position and further stated that it is the respondent that had provided the bank details for payment and could now not be seen distancing themselves from the same. That if there are any monies due, the same would require reconciliation of accounts and issuance of third party notices which is indeed a sign of transparency on the part of the applicant. That prior to the ban by the World Custom Alliance, the applicant had paid contributions to the body which can well be able to cater for the

*(10 oO/* 3 *L*

respondent and as such a third party notice ought to have been issued to the World Custom Alliance.

- [8] The court of Appeal in the case of **Kotecha Vs. Mohammed [2002] 1 EA 112** stated thus; *"the defendant is granted leave to appear and defend if he is able to show that he has a good defence on the merit: or that a difficult point of law is involved: or a dispute as to the facts which ought to be tried: or a real dispute as to the amount claimed which reguires taking an account to determine: or any other circumstances showing reasonable grounds of a bona fide defence."* - [9] The applicant contends that it made payment on all the invoices that were presented to it by the respondent whereas the respondent contends that payment was never effected by the applicant. This in itself constitutes a dispute and as such discloses a triable issue which can only be ably resolved in a full trial. - [10] This therefore merits further consideration by this court by way of hearing the main suit. See **Corporate Insurance Co. Ltd Vs Nyali Beach Hotel Ltd [1995-19981 EA** where the Court of Appeal of Kenya ruled 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 orderto decide whether leave should be given. As a result of the investigation even ifa single defence is identified, or found to be bonafide, unconditional leave should be granted to the defendant."*

[11] For the applicant's case to be convincing at least he ought to have presented some evidence of the actual invoinces he intends to rely on or concrete evidence of payment. In its own pleading i.e paragraphs 4

and 7 of the affidavit in reply, the applicant presents a very vague and unclear picture regarding the payment of the outstanding claim. This, after contesting the terms in the invoice as not being the ones agreed upon (para 2), then claiming to be a mere agent of the respondent but without any proof thereof (para 8) and causes more confusion by intending to issue a third party notice which never materializes. The applicant also denies any indebtedness to the respondent but presents no evidence or proof of having fully settled its invoices. Moreover, all these assertions were raised in the same affidavit which I find to be tainted with falsehoods and contradictions.

[12] The grounds advanced by the applicant cannot therefore be said to have raised any real or bonafide or triable issue worth entertaining by Court. The grounds are actually mere allegations, sweeping statements and or a sham incapable of constituting a plausible defense. **See Abubaker Kato Kasule Vs Tomson Muhwezi [1992- 1993] HCB 212.** The application is calculated and aimed at evading Justice and payment of the respondent's money. It lacks merit and is accordingly dismissed.

## **I so order**

## **Dated, signed and delivered at Kampala this 3rd Day of September 2021**

**Duncan Gas^dga JUDGE**