Photo Focus (U) Ltd v Group Four Security Ltd (CIVIL APPEAL NO. 30 OF 2000) [2000] UGCA 48 (27 October 2000)

Full Case Text

## THE REPUBLIC OF UGANDA IN THE GOURT OF APPEAL OF UGANDA HOLDEN AT K,AMPALA

CORAM: HON. G. M. OKELLO, JA. HON. S. G. ENGWAU, JA. HON. C. N. B KITUMBA, JA.

#### CIVIL APPEAL NO. 30 OF 2OOO

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> PHOTO FOCUS (U)LTD APPELLANT VERSUS

### GROUP FOUR SECURITY LTD RESPONOENT

(Appeal from a ruling of the High Court of Uganda at Kampala (Ag Lady Justice Okello) dated 1 1 2 2000 in HCCS No. 754 of 1997)

### JUDGMENT OF S. G ENGWAU. JA.

2(\ This is an appeal against the ruling of the High Court at Kampala (okello Ag J) dated 11.2.2000 in civil suit No. 754 of 1997.

By way of summary procedure under Order 33 rules 2 and 3 of the Civil Procedure Rule, the respondent filed suit against the appellant to recover a sum of U. Shs.9, 425,247 as being an outstanding debt arising from guard services rendered by the respondent to the appellant from 18.01.96 to 10.07.96. To the plaint was attached an annexture marked "A" indicating the sum of money in dispute and an affidavit in support of the plaint was sworn by the General Manager of the respondent company.

2(l

l0 On 17.11.97, the appellant applied to the High Court, Seeking unconditional leave to appear and defend the suit. There were two grounds of the application. The first ground was that the appellant was not indebted to the respondent in the sum claimed or at all. The second ground was that the appellant intended to counter claim against the respondent for the value of goods stolen which value was greater than the claim of the respondent, once leave to appear and defend was granted.

ln her ruling delivered on 11.2.2000, the learned trail judge dismlssed the application and entered a summary judgement in the main suit in favour of the respondent. She also awarded costs in both the main suit and the application to the respondent, hence this appeal.

There are three grounds of appeal, namely.

#### " The learned trail judge misdirected herself in finding that the Appellant's 1

defence was evasive, ambiguous and vague.

2. The learned trialjudge misdirected herself in finding that the Appellant had admitted to the claim of the Respondent.

# 3. The learned trialjudge erred in law in finding that no genuine defence emerged."

Mr. Didas Nkuruziza, learned Counsel for the appellant, submitted in the first ground that the learned trial judge misdirected herself in finding that the appellant's defence was evasive, ambiguous and vague. His contention is that this finding was a misdirection which led to a wrong and unjustified conclusion by the learned trial judge. ln his view, the principle ground on which the application was premised was that the appellant was not indebted to the respondent in the sum claimed or at all. This principle ground in support of the application, according to Counsel, was not in any way challenged, Counsel for the respondent having canvassed only the second ground of the application in respect of intended counter claim.

Mr. lbale Moses, learned Counsel for the respondent, responded on this ground that the appellant's defence of counter claim was evasive and vague because it failed to state with sufficient particularity the nature and value of goods alleged to have been stolen and by how much their value in the counter claim would be higher than the respondent's claim. According to Counsel that failure rendered the appellant's defence suspect and a total concoction and raised no triable issue to justify granting it leave to appear and defend the suit.

I have no doubt in my mind from the above submissions that Counsel for the respondent never challenged the appellant's defence when it denied being indebted to the respondent in the sum claimed or at all. With all due respect, this clear and unequivocal denial was found without consideration by the learned trial judge to be evasive, ambiguous and vague. I find difficulty in following the justification for this conclusion. ln its first ground of the application it was clear that the appellant denied being indebted to the respondent in a manner alleged by the respondent in the plaint This was a perfectly proper defence to raise against the respondent's claim in which leave to appear and defend ought to have been granted since a denial is a sufficient defence which raises a triable issue fit for trial

by the trial court. lt was not incumbent upon the appellant at that stage to show how it is not indebted to the respondent because to do so would have shifted the burden of proof upon it prematurely. The burden of proof, in my view, was upon the respondent to show how it arrived at the figure being claimed. Annexture marked "A" is not helpful in this regard. ln my view, the suit should not have been entertained under summary procedure.

As regards the second ground of the application in respect of counter claim, leave to appear and defend on ground of counter claim is only justified when it arises out of the same subject matter of the action and it must be shown that the amount exceeds the amount of the plaintiffs claim ln the instant case, the applicant's affidavit did not state the value of the counter claim nor did it state the by how much it exceeded the respondent's claim. ln that regard, this ground of the application lacked sufficient particularity which rendered it evasive, ambiguous and vague. The learned trial judge ought to have rejected the application on that ground as she did.

On ground 2, the appellant's complaint is that it had clearly stated that it was not indebted to the respondent in the sum claimed or at all. Mr. Nkuruziza

for the appellant contended that it was misdirection on the part of the learned trial judge to hold that the appellant had admitted the respondent's claim.

ln reply, Mr. lbale submitted that as the appellant's affidavit in support of its application neither disputed the fact that guard services were rendered nor that the services were paid for in full or any part thereof, the only possible conclusion would be that the appellant admitted liability.

On this point, the learned trialjudge had this to say: -

" I find the defendant's arguments in the application to be evasive, ambiguous and vague. For instant, the appellant's Counsel argued that: the appellant denied that it is indebted in the amount claimed by the respondent.

Further it was submitted for the applicant that: ...... if granted leave ...... the applicant intends to counter - claim from the respondent for value of property stolen from the applicant's premises while the respondent was supposed to be providing security and guard services.

These arguments show that other than the alleged counter claim, the claim of the respondent in the main suit is not denied."

l0 20 With all due respect to the learned trial judge, since there were two grounds for the application, the first ground was clearly a denial of indebtedness and the second ground was in relation to a counter -claim. I find great difficulty in finding an admission by the appellant of the respondent's claim. ln my view, the learned trial judge erred when she held that the appellant had admitted the respondent's claim. The second ground of the application was evasive, ambiguous and vague as it did not state sufficient particularity of the amount of counter - claim and by what amount it exceeded the respondent's claim and whether or not the intended counter - claim arose from the same subject matter of the action How the first ground of the application or the second one could therefore amount to an admission is, with due respect to the trial judge, a mystery which caused a miscarriage of justice to the appellant.

With regards to ground 3, Mr. Nkurunziza raised two main points. First, he argued that it is not a requirement of law that in its application, the appellant

ought to have shown that there was a genuine defence. Learned Counsel in support of his argument relied on Maluku lnterqlobal Trade Ao encv Limited V. Bank of Uqanda (1985 HCB 65 where it was held inter alia that the defendant is not bound to show a good defend 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 should not enter upon the trial of the issues disclosed at this stage. ln Counsel's view, the learned trial judge misapplied the principles of law in arising in her finding on this point.

Secondly, Mr. Nkurunziza submitted that the learned trial judge was wrong to find that no genuine defence had emerged when none had been argued. He argued that since it is not a requirement of law that a genuine defence be shown so that leave to appear and defence is granted it is not fatal that such genuine defence was not shown. For this proposition, Counsel relied on

20 Abubaker Kato Kasule V. Tomson Muhwezi 11992 - 19931 HCB 212. Learned Counsel submitted that what was shown was a triable issue of law or fact and it was not for the learned trial judge therefore to surmise as to the genuineness or not of the defence especially when the merits of the defence had not been argued.

ln response, Mr. lbale submitted that failure to show that the guard services which were rendered by the respondent to the appellant were paid for by the appellant and also failure to state sufficient particularity of the alleged counter calm, the appellant had failed to establish a genuine defence on the basis of which leave to appear and defend would be granted. lt was Counsel's argument that general or vague statements denying liability would not suffice.

It is trite that it is not a requirement of law that the applicant must establish a genuine defence before leave to appear and defend could be granted. ln the instant case, the applicant had clearly denied being indebted to the respondent in the sum claimed or at all ln my view, this was a perfectly good and genuine defence for the appellant to raise against the respondent's claim. lt raised a triable issue of law or fact and it was not incumbent upon the appellant at that stage to show how it was not indebted to the respondent.

As regards the defence of counter claim. I would say that it lacked sufficient particularity, as it did not state by how much it would be higher than the respondent's claim. To that extent it was general and vague statement denying liability which does not suffice.

In the result, I would allow this appeal in part with an order that each party bears its own costs.

Dated at Kampala this 27th day of Octoby 2000.

S. G ENGWAU, JUSTICE OF APPEAL.

$10$

$\mathbf{L}$ # THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA HOLDEN AT KAMPALA CIVIL APPEAL NO. 30 OF 2OOO

CORAM: HON. MR. JUSTICE G. M. OKELLO, JA. HON. MR. JUSTICE S. G. ENGWAU, JA. HON. LADY JUSTICE C. N. B. KITUMBA, JA.

PHOTO FOCUS (U) LTD APPELLANT VERSUS GROUP FOUR SECURITY LTD,....,.. RESPONDENT (Appeal from a ruling of the High court of Uganda at Kampala (Ag. Lady Justice okello) dated '11 .2.2000 in HccS No. 754 of '1997)

JUDG MENT OF C. N. B. KITUMBA. JA.

I have had the benefit of reading in draft the judgement of Engwau, JA., and agree with him that the appeal should be allowed.

lwould like to observe that the appellant categorically denied that it owed to the respondent the sum of money claimed or at all. I cannot envisage in what clearer terms other than in such a denial that the appellant would have put its defence. The respondent's pleadings were not sufficient for the suit to proceed by way of Summary Procedure under Order 33 rules 2 and 3 of the Civil Procedure Ru les.

Dated at Kampala this a? 1A day of 0i[}r\_t, 2000

C-^l"L' C..l--^^\-\* C. N. B. Kitumba

Justice of Appeal.

# THE REPTIBLIC OF I,IGANDA IN THE COTIRT OF APPEAL OF TIGANDA HOLDEN AT KAMPALA

#### HON. G.}I. OKELLO, J. A. HON. S. G. ENGWATI, J. A. HON. C. N. B. KITUMBA. JA. COR{NI:

## CIVIL APPEAL NO.30 OF 2OOO

### BET\\ EEN

### PHOTO FOCttS (tl) LTD.: : : : : : : : : : : : : : : : : : : : : : : : :: : : : : : : :APPELLANT

#### ,{ND

#### GROT P FOUR SECT. RITY LTD.:: :: ::: :: :: ::: :: :: ::::::RESPONDENT

(Appeal Jiom u Ruling of the High L1rurt (Ag. l-utl.t' .lustice Okelkt) duted I l/2/2000 ut Kumpula in H(-(.5 Nrt. 75J ol 1997)

#### JLIDGMENT OF G. M. OKELLO. J. A.

This is an appeal against the ruling of the High Court (C. A. Okello, Ag J ) dated l l l2l2000 at Kampala in HCCS No. 754 of 1997

I have read the judgment of Engwau, JA but I do not agree with his concluslon. The background facts which led to this appeal have been adequatel)' set out in his ludgment I shall therefore not repeat them

The memorandum of appeal set three grounds namely,

( l) the learned trial .;udge misdirected herself in finding that the appellant's defence was evasive, ambiguous and vague.

- (2) the learned trial judge misdirected herself in finding that the appellant had admitted the claim ofthe respondent. and - (3) the leamed trial .yudge erred in law in finding that no genuine defence emerged.

The appellant proposed to ask this court to allow the appeal, set aside the ruling and ludgment of the High Court and grant the appellant unconditional leave to appear and defend the suit. Counsel for both parties filed written submissions.

On ground I above. Mr. Didas Nkurunziza, counsel for the appellant complained against the finding of the learned trial ludge that the appellant's defence was evasive, ambiguous and vague In his view, that finding was a misdirectron which led to a wrong and unlustified conclusion as counsel for appellant's argument on this ground was not challenged, counsel for the respondent having canvassed only ground 2.

On the other hand, Mr. Moses Ibale, learned counsel for the respondent submitted on this ground that the appellant's defence of counter-claim was evasive and vague in that it failed to state with sufficient particularity the nature and value of the goods allegedlv stolen and by how much the counter claim was higher than the respondent's claim In counsel's view that failure rendered the appellant's defence suspect and a total concoction. He submitted that the appellant failed to raise a triable issue tolustifo ganting him leave to appear and defend the suit.

The argument of counsel for the respondent before the High Court went as follows:-

"it was held in the case of Maluku referred to by my colleague Odoki J. as he then was that before leave to appear and defend is granted, defendant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law. The affidavit on record deponed by NI. Amid on7llll97 doesn't disclose any bona fide triable issue be it of fact or law. It was further held that the defence should be stated with sufficient particularity to appear genuine general or vague statement denying liabilir"v" won't suffice Mr. .{mid's affidavit alleges that goods were stolen from his proper(v and that the value of the goods is more than what is claimed by the res po n den t/p I a i n ti ff.

However the value of these goods allegedly stolen seems to be unknown to the applicant/defendant. There is no evidence on record that the alleged theft was ever reported to police or brought to the attention of the respondent/plaintiff. Further more, the applicant doesn't have attached to (sic) an intended Written Statement of Defence. In the case of L'CB Vs Mukome Aeencies ll982l HCB 22 it was held that an application for leave to appear and defend should be accompanied by an intended \!'ritten Statement of Defence. The rationale for that requirement is to enable trial judge or Magistrate to make up her/his mind whether to refuse or grant application on the basis of pleadings in WSD and the plaint. W'hat is in place is a sham. There is no

defence to the suit. In the premises' we pray that the application be dismissed with costs and judgement be entered as prayed.'

Clearly, counsel for the respondent argued both grounds of that application together. He did not canvass only ground 2. The points that can be deduced fiom his submission are:-

- (l) that applicant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law' - (2\ that the defence should be stated with sufficient particularitv to appear genuine as general or vague statement denying liabili\$ would not suffice. - (3) He critised the affidavit sworn by Amid on 7llll97 in support of the application for being insufficient as it did not disclose any bona fide triable issue either of fact or of law. Further that it was lacking in particulari(v.

Iagree with the test set out in Maluku Intetslobal Trade Aeencv Ltd Vs Bank o panda tt985t HCB 65 that "the defence must be stated with f sufficient particularity to appear genuine General or vague statements denying liability will not suffice." Though this is a High Court decision, it is a sound decision and I respect rt The question is, does the appellant's defence that -'the defendant/applicant is not indebted in the sum claimed or at all" pass the above test? My answer is that it does not because it is lacking in particularity. The affidavit of the appellant's

Managing Director should have contained sufficient particularity to show why the appellant denies indebtedness to the respondent. For instance, if the appellant intended to challenge the plaint because ofthe failure ofthe respondent to aftach to the plaint a copy of the agreement, the affidavit should have contained denial that there was no such agreement. That is not shifting the burden ofproofto the appellant to prove its defence It is merelv raising not only a clear triable issue but also coating it with sufficient particularitv to make the defence appear genuine. To merely assert a general, evasive and vague denial as shown above is insufficient. That insufficiency rendered that defence general, ambiguous, vague and evasive This ground would therefore fail.

with regards to ground 2, the appellant assailed the learned trial .ludge's finding that the appellant had admined the claim of the respondent. According to Mr. Nkurunziza. that is a misdirection on the part of the trial judge as the appellant had clearly stated that it was not indebted to the respondent.

In response, Mr. Ibale submitted that srnce the appellant's affidavit in support ofhis application did not dispute the fact that guard services were rendered nor that the said services were ever paid for at all or any part thereof, the only possible conclusion would be that the appellant admitted liability.

The tnal judge dealt with this polnt as follows:-

"l find the defendant's argument in the application to be evasive and ambiguous,, and vague. For instance the

applicant's counsel argued that 'the applicant denies that it is indebted in the amount claimed by the respondent.'

Further it was submitted that for the applicant that 'if granted leave...the applicant intends to counter-claim from the respondent for value of property stolen from the applicant's premises while the respondent was supposed to be providing securiry" and guard services.' These arguments show that other than the alleged counter-claim, the claim of the respondent in the main suit is not denied."

The trial judge gave reasons fbr her said conclusion The reasons narrowed down to lack of particularity which resulted into failure to show a genuine defence. The affidavit of the appellant's Managing Director sworn on 17 -l I -9'7 does not contain sufficient particulars as to why the appellant denies indebtedness to the respondent. It remained hanging whether the guard services were not rendered or if they were, whether they had been fully paid for. This affidavit should have contained facts that would clear out those doubts to make the denial appear genuine. In the absence of those facts, it was justified for the trial ludge to conclude that the appellant admitted the indebtedness, as the denial was vague.

As for the det'ence of counter-claim. holding No.4 in Maluku Interelobal Trade Asencl, bupra) on which Mr. Nliurunziza relied does not on the facts of thrs case help his case The applicant's affidavit did not state the value of the intended counter claim to show that it exceeds the respondent's claim Leave to defend is only justified on ground of counter-claim if it arises out ofthe same subject matter of the action and

exceeds the amount of the plaintifls claim It was not shown here that the counter<laim exceeds the respondent's claim. This ground too would fail.

On ground 3, the appellant's complaint is that the trial .yudge erred in law in finding that no "genuine defence emerged" when that is not a requirement of law. Citing Maluku Interslobal A ncI' Limited uDra Mr. Nkurunziza submrfted that it is not a requirement of law that an applicant ought to show a genuine defence to succeed in his application for leave to appear and defend. In counsel's view all that an applicant needs to show is that there is a tnable issue.

Mr. Ibale on the other hand contended that failure of the appellant to give sufficient particulars showing how it was not indebted to the respondent when the guard services were rendered to it and to show that the alleged counter-claim is higher than the amount claimed by the respondent amounted to appellant's failure to establish a genuine defence.

The trial .judge dealt with the point in this wav:-

"Nevertheless the applicant should show that a genuine defence exists for consideration when leave is granted. No genuine defence has emerged this for."

Holding No 2 is Maluku Interglobal Agency Limited (supra) is that:-

"The defence must be stated with sufficient particularity to appear genuine. General or !'ague statement denying liabiliQ will not suffice." lerl tn udded husis

It is clear therefore that it is not a requirement of law that applicant must establish a genuine defence. All that is required of him/her is that his/her defence must contain sufficient particulars to appear genuine. As shown above, the defences raised here did not contain sufficient particulars. They were merely general statements denying liability, which do not suffice.

In the result, I would dismiss the appeal with costs in favour of the respondent. However, as Engwau, JA and Kitumba, JA hold that the appeal be allowed, the appeal is by majority decision allowed with costs as suggester by Engineers of the appellant. The appellant is granted unconditional leave to appear and defend the suit.

Dated at Kampala this $\sqrt{77}$ day of October, 2000.

OKELLO,

**JUSTICE OF APPEAL.**