Seeta General Stores Limited v Crown Beverages Limited (Civil Suit No. 1218 of 2024; Miscellaneous Application No. 2300 of 2024) [2025] UGCommC 165 (12 May 2025)

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) MISCELLANEOUS APPLICATION No. 2300 OF 2024 (ARISING FROM CIVIL SUIT No. 1218 OF 2024)**

#### **SEETA GENERAL STORES LIMITED ] APPLICANT**

**VERSUS**

# 15 **CROWN BEVERAGES LIMITED ] RESPONDENT**

# **Before: Hon. Justice Ocaya Thomas O. R**

#### **RULING.**

# **Introduction:**

This application was brought by way of a Notice of Motion under Order 36 Rules 3 and 4 of the Civil Procedure Rules, seeking the following orders: -

(1) That the Applicant be granted unconditional leave to appear and defend Civil Suit No. 1218 of 2024.

# 25 (2) That the Costs of this application be provided for.

#### **Background:**

The grounds in support of the Application are contained in the affidavit in support deposed by one, Namutebi Juliet, the Applicant Company's Director of Finance, wherein she states that

30 the Applicant is not indebted to the Respondent in the claimed sum of UGX 1,499,098,361/=, or at all. That whereas the Applicant entered into a distributorship agreement with the Respondent for the sale and distribution of the respondent's products, the Applicant at all material times deposited post-dated cheques which were either banked and honored, or the Applicant made cash payments in replacement of the deposited security cheques.

- 5 That on a multitude of occasions during the pendency of the distribution agreements, the Applicant made cash payments to the respondent, but the respondent, without justification or reasons retained the said security post-dated cheques that was cleared and overtime, the Respondent accumulated several of the Applicant's cheques that formed the basis of the claim. And that the Respondent has several omissions of cash and cheque payments made by - 10 the Applicant in its customer statements over time that are reflected in the Applicant's Bank statement as a debit by the Applicant.

Further that, the Respondent has at all material times had grave variations in its claims as the outstanding debt as per the Audit Report dated 18th October 2022, it was stated as UGX 15 1,804,499,494/= by the respondent's letter dated 7th March 2023 it was stated as UGX 1,612,914,600/= by the respondent's letter dated 26th April 2023, it was stated as UGX 1,599,761,007/= and by the respondent's letter dated 15th August 2023 it was stated UGX 1,568,094,393/=.

- 20 That the Respondent on several occasions withheld money due to the Applicant that had accumulated through the Applicant's provision of stock within its areas of distribution at the request of the Respondent that were utilized for promotional activities of the respondent's products without crediting the applicant's customer account and informing the Applicant but merely kept on offsetting money from the accounts contrary to the distribution agreement. - 25 That the Applicant has always expressed dissatisfaction with the alleged indebtedness and requested a forensic audit and reconciliation, but to no avail, and that the variations in the quantum of the debts were made by the Respondent without the applicant's input and to the applicant's detriment. - 30 Further that the Auditors, Victoria Business Consult (U) Limited, was Imposed on the Applicant and under the control of the respondent, and that the auditors only reconciled positions from the applicant's books and did not engage the respondent, and as such, the audit report dated 19th October 2022 was partially complied. That on 15th September 2023, the Applicant upon realization of grave inconsistencies requested for reconciliation of 35 accounts as the Applicant discovered non-credited items amounting to UGX 66,638,300/=

5 and the same was investigated by the respondent's finance team which established for a fact that UGX 64,748,300/= was due to be credited to the Applicant and had not been done.

Further that the Respondent even after closing Seeta and Kira depots as per the April report, refused to audit and reconcile the said places and that, the alleged investigation and

reconciliations by the respondent's finance team captioned "Seeta Account Details From 1st 10 July 2022 to 2023" reflects the Applicant as having over paid the Respondent to the tune of UGX 240,652,831/=, In particular excess as follows; Mukono UGX 118,334,659/=, Kisoga UGX 66,378,281/=, Kireka UGX 45,826,188/= and Bweyogerere UGX 10,113,706/=. And that, the Respondent declined to conduct a forensic audit and investigation upon termination of 15 the distribution agreements to the applicant's detriment.

That it is in the interest of justice that the Applicant's application be allowed.

### Respondent's affidavit in reply:

20 The Respondent's affidavit in reply was deposed by Stephen Emorut, the Head of Finance in the respondent's company, and he invited the court to strike out the applicant's affidavit in support for being incurably defective and that the application does not meet the basic requirement to warrant Court's grant of unconditional leave to appear and defend and that it does not disclose a plausible defense to the respondent's claim of breach of contract.

That the Applicant owes the Respondent UGX 1,499,098,361/= and the Applicant acknowledged its indebtedness to the Respondent on 21st October 2022, the Applicant wrote to the Respondent confirming outstanding liability of UGX 1,804,499,494/= as of June 30, 2022. That on 11 April 2023, the Applicant unequivocally admitted to owing the Respondent

30 UGX 1,563,846,661/= as of 2nd February 2023.

That on 15th August 2023, the respondent's lawyers wrote to the Applicant demanding UGX 1,563,846,661/= and that on 15th September 2023, the applicant's lawyers wrote to the Respondent expressing the applicant's commitment to pay the debt. And that, the Applicant

35 also alleged that there was an outstanding sum of UGX 66,638,300/= which would go into

offsetting the debt of UGX 1,563,846,661/=, that upon investigations, the Respondent

5 discovered that there was in fact an outstanding credit of UGX 64,748,300/= and not UGX 66,638,300/=.

That consequently, the Respondent offset the UGX 64,748,300/= from the UGX 1,563,846,661/=, and the applicant's indebtedness is to the tune of UGX 1,499,098,361/=.

10 That at no point during the pendency of the distributorship agreement and after the Respondent terminated it for the applicant's poor performance and failure to service accumulated debt, did the Applicant deny her indebtedness to the respondent.

That the Respondent consistently applied all the applicant's payments toward reducing the 15 applicant's debt; however, over time, the bank dishonored multiple cheques the Applicant issued to the respondent, and as a result, the applicant's indebtedness to the Respondent grew exponentially, hence the main suit. That the Applicant has not provided any evidence of the Respondent retaining security post-dated cheques that had cleared despite the Applicant having made cash payments, and that aside from adducing bank statements, the

20 Applicant has not set out any omissions of cash or cheque payments that she alleges in the statement.

Further, that in specific reply to paragraph 7 of the affidavit in support, it is false insofar as the Applicant allege that the Respondent withheld any of the monies due to them and the 25 Applicant shall be put to strict proof and that the Applicant was always aware of the instances the Respondent applied the applicant's money to offset the accumulated debt.

That in 2022, it was the Applicant and not the Respondent who contracted Victoria business consult (u) ltd to undertake a joint reconciliation of accounts for the period between 1st 30 January 2019 and 30 June 2022 and the report indicated that the amount owed to the Respondent was UGX 1,804,499,494/=; and subsequently on 21st October 2022, the Applicant wrote to the Respondent acknowledging the contents of the report and her

outstanding liability of UGX 1,804,499,494/= as of 30th June 2022.


- That on 8th 5 June 2023, the respondent's Head of Sales and Distribution wrote to the Applicant demanding payment of the outstanding sums by 30th June 2023, and the Respondent terminated the distribution agreement following the applicant's failure to improve her stock levels and that following the termination of the Distributorship agreement, the Respondent undertook a reconciliation of the total invoices raised against the total credits and total - receipts she received from the Applicant for the period between 1st July 2022 and 30th 10 June 2023. That the reconciliation also took into account the amount of UGX 1,804,499,494/= arising from Victoria Business Consults' reconciliation report and the summary of the reconciliation as follows: - - 15 Balance brought forward UGX 1,804,499,494/=, Bweyogerere UGX 10,113,706/=, Kireka UGX 45,826,188/=, Kisoga UGX 66,378,281/=, Mukono 118,334,659/=, less by the credit items UGX 64,748,300/= brings the total to UGX 1,499,098,361/=.

#### **Representation:**

20 The Applicant was represented by the law firm of M/S A. Mwebesa and Co. Advocates, while the law firm of M/S Kirunda and Co. Advocates represented the Respondent.

# **Evidence and Submissions:**

The parties' cases were supported by the affidavits sworn by the individuals stated above, 25 and the parties were supposed to file their submissions after finalizing the filing of affidavits per the High Court Commercial Division directive on such applications.

However, on the 3rd March 2025, Counsel for the Respondent wrote to the Court and brought some matters to the Court's attention. That the Respondent filed the main suit, Civil Suit No.

30 1218 of 2024 on 10th October 2024, and on 29th October 2024, the Applicant filed this here application. However, the Applicant did not bother to have the application admitted and fixed for hearing, nor did they serve the Respondent with a copy of the application.

Counsel for the Respondent followed up on the application with the Registrar, who admitted

35 the same on ECCMIS, and on 14th February 2025, the Respondent filed their affidavit in reply, and the same was served on the Applicant on 19th February 2025. On the 13th March 2025,


5 the Court fixed the application for hearing on 21st March 2025, and the hearing notice was uploaded on ECCMIS.

On the scheduled date of 21st March 2025, Applicants and Respondent's representatives and Counsel were present in court and the matter was adjourned in order for the parties to 10 undertake a reconciliation.

On 11th April when the amtetr came up for mention Court gave the following directions, applicant shall file its written submission by 17th April 2025, The respondent its submissions by the 23rd April 2025 and a rejoinder if any by the Applicant on 25th April 2025. The ruling

15 shall be delivered electronically on ECCMIS on the 30th April 2025 if the parties have not reached settlement by then.

The court further emphasized that written submissions be filed per the High Court Commercial Division directive, and to date, only the Respondent filed their submissions. The

20 Applicant did not file its affidavit in rejoinder or submissions, and as such, the averments in the affidavit in support of the application were considered on their part in arriving at this decision.

#### **Issues:**

25 Issue 1: Whether the Applicant has proven sufficient grounds to warrant a grant of unconditional leave to appear and defendant?

#### **PART I: PRELIMINARY POINT OF LAW.**

Pertinent to note is that the Respondent raised a Preliminary Point of law that the 30 Application is defective and improperly filed before the Court insofar as the Applicant filed out of the statutory timeline.

Counsel for the Respondent cited Order 36 Rules 3(1) and (2) of the Civil Procedure Rules that upon the filing of an endorsed plaint and an affidavit is as provided in rule 2 of this Order,

35 the court shall cause to be served upon the defendant a summons in Form 4 of Appendix A

5 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.

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

- 10 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. Counsel cited the case of China Railway No.3 Engineering Group Company Limited v Segken Services Limited, Miscellaneous Application No 161 of 2020), the - 15 Court held that the time for filing an application to appear and defend is stated in Form 4 (Summons under summary suit), and it states that, "You are required within ten days from the service of this summons to apply for leave from the court to appear and defend this suit… Form 4 is very clear as to the number of days within which an application for leave to appear and defend should be filed and it is to be filed within 10 days from the date of service of the - 20 summons.

strictly.

That Since the provision establishes the timelines clearly within which the application should be filed, Order 51 Rule 8 is therefore not applicable in the circumstances. Counsel also cited the case of the Stop and See (U) Ltd v Tropical Africa Bank Ltd (MISC. APPLICATION NO 333 25 OF 2010) where the Court stressed that the time within which to file and serve court documents is of essence, and such provision should be interpreted as mandatory and applied

Counsel submitted that the Respondent filed Civil Suit No. 1218 of 2024 on October 10, 2024.

30 The Respondent extracted a summons to file a defense on October 16, 2024, which she served on the Applicant/Defendant on the same date. The summons, which are on the court record, clearly indicates that "You are required within ten days from the service of this summons to apply for leave from the court to appear and defend this suit." That the Applicant ought to have filed this Application on October 20, 2024, but only did so on October 29, 2024, 5 and without seeking the court's leave to file the Application out of time. She has also never served it on the Respondent to date.

As noted, the Applicant did not file any submission in this application, and there is nothing in the affidavit in support that addresses the Respondent's preliminary point of law, which

10 leaves it uncontested, but nonetheless, the Respondent still bears the burden of proving her allegations.

# Court's decision:

Order 6 Rule 28 of the Civil Procedure Rules provides for preliminary points of law, and it 15 states that Points of law may be raised by pleading. Any party shall be entitled to raise by his or her pleading any point of law, and any point so raised shall be disposed of by the court at or after the hearing; except that by consent of the parties, or by order of the court on the application of either party, a point of law may be set down for hearing and disposed of at any time before the hearing.

Rule 30 of the same Order provides for striking of pleadings and it states that the court may, upon application, order any pleading to be struck out on the ground that it discloses no reasonable cause of action or answer and, in any such case, or in case of the suit or defense being shown by the pleadings to be frivolous or vexatious, may order the suit to be stayed or

25 dismissed or judgment to be entered accordingly, as may be just.

It is trite that a preliminary point of law should be one which, when raised, has the potential of disposing off the suit without considering its merits. The main principle governing preliminary points of law was considered in the case of *Mukisa Biscuit Manufacturing Co*

- 30 *Ltd v West End Distributors Ltd [1969] 1 EA 696,* where it was held that… a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit …. A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law, which is argued on the assumption that all the facts pleaded by the other side - 35 are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the

 # 5 exercise of judicial discretion. See also *Pontrilas Investments Ltd V Central Bank of Kenya and Another, Reference No. 8 of 2017*.

It is trite law that where statutory provisions provide time within which an action is to be carried out, such provision has to be followed to the letter and cannot be adjusted at whim 10 without leave of court. They are matters of substantive law and not mere technicalities, and as such, must be strictly complied with. See the Supreme Court decision in the case *Uganda Revenue Authority v. Uganda Consolidated Properties Limited, Supreme Court Civil Appeal No. 31 of 2000*, and the dicta of the Honorable Justice Christopher Madrama (*as he then was*) in *Stop and See (U) Ltd v Tropical Africa Bank Ltd* (Supra), as cited by Counsel 15 for the Respondent.

The sum effect of the foregoing is that actions done outside of the statutory time provisions are null and void when leave for extension of time or filing out time is sought and granted.

In this instant case, such statutory time provision is provided for through Order 36 Rule 2, 20 which requires a response to a specially endorsed plaint to be filed within the time stipulated in the notice in the stated Form 4, and the same stipulates the time period to be 10 days from the date of service.

Counsel cited the case of China Railway No.3 Engineering Group Company Limited v Segken 25 Services Limited, Miscellaneous Application No 161 of 2020), the Court held that the time for filing an application to appear and defend is stated in Form 4 (Summons under summary suit), and it states that, "You are required within ten days from the service of this summons to apply for leave from the court to appear and defend this suit… Form 4 is very clear as to the number of days within which an application for leave to appear and defend should be 30 filed and it is to be filed within 10 days from the date of service of the summons.

I labored to peruse the record of filings in the Civil Suit No. 1218 of 2024 on ECCMIS, and the summons to file a defense was extracted 16th October 2024, and served on the applicant/Defendant on the same day per the affidavit of service of Kamanyire Mohamed,

35 which was uploaded on ECCMIS on the 28th October 2024.

5 Then Applicant filed this Application on 29th October, 2024.

Order 51 Rule 2 of the Civil Procedure Rules excludes Sunday(s) from the computation of time where a limited time. In this instant case, the computation of the 10 days starts on the day of service of 16th October 2024 and the 10 days excluding Sunday(s) ended on the 26th

- 10 October 2024, while the Applicant filed this application on the 29th October 2024, two days after the expiration of the statutory 10 days' period. There is no evidence on record of leave for extension of time or to file the application out of time, thereby making this application improper on record. - 15 In the premises, I am convinced the Respondent has sufficiently proved her Preliminary Objection and this application being filed out of the prescribed 10 days renders it null and void thereby meaning, there was no application to appear and defend in Civil Suit No. 1218 of 2024 and per Order 36 Rule 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 - 20 or her, the plaintiff shall be entitled to a decree for an amount not exceeding the sum claimed in the plaint.

Therefore, the Preliminary Point of Law/Objection is allowed.

25 However, without prejudice to the above finding, I will go ahead to determine the merits of the application as though it was filed within time and is proper on record for purposes of certainty and clarity for the applicant, and whatever the finding will be, it is moot.

## PART II: THE MERITS.

- 30 As discerned thus far, the main suit was commenced by way of a specially endorsed plaint under Order 36 Rule 2 of the Civil Procedure Rules. This procedure is used to originate liquidated or certain claims for which it is believed that the Defendant does not have a defense to the claim. In this procedure, there is no automatic right to defend. The right to defend is only conferred by the leave of the court, upon an application by the Defendant in - 35 the summary suit.

5 In the case of *Post Bank (U) Ltd v Abdul Ssozi SCCA No. 8 of 2015,* the Supreme Court laid down the rationale of proceeding under a specially endorsed plaint and 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 defenses in order to unreasonably prolong litigation. Apart from assisting the 10 courts in disposing of cases expeditiously, Order 36 also helps the economy by removing unnecessary obstructions in financial or commercial dealings." See also *Zola & Another v. Ralli Brothers Ltd. & Another [1969] EA 691, 694.*

In the event the defendant believes that he or she that it has a tenable defense or that there 15 are matters in the case that require the Court try, the defendant files an application to appear and defend the specially endorsed plaint under Order 36 Rule 4 and its success then makes the procedure of a specially endorsed plaint untenable and then morphs into an ordinary suit. In *Kotecha v. Mohammed [2002] 1 EA 112*, the threshold for the grant of leave to appear and defend was laid out, and that…. For the Defendant to be granted leave to appear 20 and defend if he should be able to show that he has a good defense on the merit(s); or that a real dispute as to the amount claimed which requires taking an account to determine; or any other circumstances showing reasonable grounds of a bona fide defense. See *Saw V Hakim 5 TLR 72; Ray v Barker 4 Ex DI 279*; *Churanjilal & Co. v. A. H. Adam (1950) 17 EACA, 92,* and *Hasmani v. Banque du Congo Belge (1938) 5 EACA 89 at 89.*

In this instant case, the applicant's grounds shall be measured against the thresholds. Firstly, where the defendant/Applicant has a good defense on the merit(s).

In this threshold, it has been noted over time that it is not sufficient to simply deny 30 indebtedness. Firstly, because a general denial of indebtedness is not itself a valid defense under Order 6 Rule 8 of the Civil Procedure Rules. See *Eco Bank Uganda Limited v Kalson's Agrovet Concern Ltd & Anor HCCS No. 573 of 2016.*

Further, in *Uganda Commercial Bank v Mukoome Agencies [1982] HCB 22*, the Court of 35 Appeal unanimously held that:

5 "In an application for leave to appear and defend in summary suits, the defense and triable issues must not only be disclosed, but the intended Written Statement of Defense should be annexed to the application….it would serve a good purpose if the intended Written Statement of defense is annexed to the Notice of Motion as it would help the judge make up his mind whether to refuse or grant the application".

The above decision is a matter of good practice, and it is the mark as well as it behooves an organized litigant/advocate, as it makes it easier for the judicial officer to identify and establish the defense put by the applicant. It also goes a long way into subconsciously convincing a judicial officer that the Applicant is indeed serious and is not just merely 15 abusing the Court process.

In this instant application, the Applicant did not annex a draft of their intended defense; ergo, the Court will have to make sense of what amount's a defense from the affidavit in support. The Applicant in paragraph 3 of the affidavit in support stated that the Applicant is not 20 indebted to the Respondent in the claimed sum of UGX 1,499,098,361/=, or at all. Further in paragraphs 4 and 5, the Applicant stated that the Applicant at all material times deposited post-dated cheques which were either banked and honored, or the Applicant made cash payments in replacement of the deposited security cheques. And that on a multitude of occasions during the pendency of the distribution agreements, the Applicant made cash 25 payments to the respondent, but the Respondent without justification or reasons retained the said security post-dated cheques that was cleared and overtime, the Respondent accumulated several of the Applicant's cheques that formed the basis of the claim. And that the Respondent has several omissions of cash and cheque payments made by the Applicant in its customer statements over time that are reflected in the Applicant's Bank statement as 30 a debit by the Applicant.

The Respondent, in response to the applicant's claim of not owing the Respondent under paragraph 5.2.2 of the affidavit in reply, stated that on 11th April 2023, the Applicant unequivocally admitted to owing the Respondent UGX 1,563,846,661/= as of 2nd February

35 2023. The in annexure A of the affidavit in support attached a letter from the Respondent,


- 5 and I had a chance to peruse the said letter. It is dated 11th April 2023, and the reference of the letter verbatim is, "Settlement of outstanding liability of UGX 1,568,094,393." And the first paragraph states that verbatim, "We hereby wish to acknowledge the outstanding liability with Crown Beverages Ltd of Ugx 1,568,094,393 as at 28/02/2023, and we are on the verge of setting this obligation". Lastly, the letter is authored by the Applicant's deponent, - 10 Namutebi Juliet.

Therefore, the Applicant's failure to come to court on the scheduled hearing date and the failure to file a submission leaves the Respondent's rebuttal to their claim of not being indebted to the Respondent, or not unrebutted and what remains is the fact that the applicant's defense of not being indebted at all has been debunked by their admission of

15 indebtedness through the Letter of Acknowledgment of debt in annexure A of the affidavit in support.

In the circumstances, it is my opinion that the Applicant has failed to show that they have a tangible defense to the respondent's claim and thus has fallen short in fulfilling the threshold 20 of a tangible defense.

There is a real dispute as to the amount claimed, which requires taking an account to determine.

- The Applicant in paragraphs 7, 8 and 9 of the affidavit in support stated that, the Respondent 25 has at all material times had grave variations in its claims as the outstanding debt as per the Audit Report dated 18th October 2022, it was stated as UGX 1,804,499,494/= by the Respondent's letter dated 7th March 2023 it was stated as UGX 1,612,914,600/= by the Respondent's letter dated 26th April 2023, it was stated as UGX 1,599,761,007/= and by the Respondent's letter dated 15th August 2023 it was stated UGX 1,568,094,393/= and that the - 30 Respondent on several occasions withheld money due to the Applicant that had accumulated through the Applicant's provision of stock within its areas of distribution at the request of the Respondent that were utilized for promotional activities of the respondent's products without crediting the applicant's customer account and informing the Applicant but merely kept on offsetting money from the accounts contrary to the distribution agreement.

- 5 Further, that the Auditors, Victoria Business Consult (U) Limited, was Imposed on the Applicant and under the control of the respondent, and that the auditors only reconciled positions from the applicant's books and did not engage the Respondent and as such, the audit report dated 19th October 2022 was partially complied. That on 15th September 2023, the applicant, upon realization of grave inconsistencies, requested reconciliation of accounts - 10 as the Applicant discovered non-credited items amounting to UGX 66,638,300/= and the same was investigated by the Respondent's finance team, which established a fact.

The Respondent in response in paragraphs 9.2, 9.3 and 10 of the affidavit in reply stated that in 2022, it was the Applicant and not the Respondent who contracted Victoria business consult (u) ltd to undertake a joint reconciliation of accounts for the period between 1st 15 January 2019 and 30 June 2022 and the report was received by Applicant's deponent, Namutebi Juliet without objection. The Respondent reproduced the report in paragraph 10 of the affidavit in reply with consideration of the applicant's credit as follows: -

Balance brought forward UGX 1,804,499,494/=, Bweyogerere UGX 10,113,706/=, Kireka 20 UGX 45,826,188/=, Kisoga UGX 66,378,281/=, Mukono 118,334,659/=, less by the credit items UGX 64,748,300/= brings the total to UGX 1,499,098,361/=.

Therefore, the foregoing report rebuts the Applicant's claim for the need of book reconciliation because their credit was not considered, and again, in the Applicant's failure 25 to file a submission leaves the Respondent's rebuttal to their claim uncontested.

In the circumstances, I am inclined to believe that all matters that need the Court's examination of the books of account were actually reconciled, and thus there is no dispute on the actual amount owed.

In the premises, the Applicant has failed to meet the threshold required for granting of leave to appear and defend. And as such, this application for leave to appear and defend is dismissed.

35 Issue 2 is held in the negative for lack of merit.

# 5 Whether the Applicant brought this application in good faith.

I formulate this particular ground based on the applicant's conduct in the course of this application and I find it telling that the Applicant did not only have sufficient grounds but conducted the application in a manner that only make one arrive to the conclusion that they brought the application in bad faith, in abuse of Court process and ultimately with the

10 intention of frustrating the respondent.

This is informed by the applicant's refusal or dilatory conduct in serving the Respondent with the application notice; the applicant's failure or refusal to attach a draft copy of the intended Written Statement of Defense; the applicant's refusal or failure to pursue fixing the 15 application for hearing; the applicant's failure or refusal to appear in court on the scheduled date for hearing; and the applicant's failure or refusal to file an affidavit in rejoinder or their

failure or refusal to file written submissions.

Therefore, it is my considered opinion that the Applicant not only had no grounds to make

20 the application succeed but in bad faith, intended to abuse the court process to drag the respondent's case and frustrate them.

In the premises, I would not be inclined to grant the application leave to appear and defend due to the conduct exhibited in this matter.

## 25 *Costs:*

Section 27 of the Civil Procedure Act provides that costs follow the suit unless there is a strong reason to suggest the contrary and are awarded at the court's discretion. See, *Anglo-Cyprian Trade Agencies Ltd v. Paphos Wine Industries Ltd, [1951] 1 All ER 873.*

In the instant case, this application being struck off on the strength of the Respondent's

30 preliminary objection, I find no reason to deny the Respondent the costs of this application.

According to Order 36 rule 5 of *The Civil Procedure Rules*, where, after hearing an application by a defendant for leave to appear and defend the suit, the court refuses to grant such leave, the plaintiff is entitled as against the defendant to a decree. Consequent thereto, judgment is

35 entered for the Respondent against the Applicant in the sum of shs. UGX 1,499,098,361/=.

5 That decretal amount is to bear interest at the rate of 21% pa from the date of judgment until payment in full.

#### **In Conclusion,**

I accordingly make the following orders,

- 10 a) This application is struck off for being filed out of time. - b) The Plaintiff/Respondent is awarded a decree in Civil Suit No. 1218 of 2024 for the sum of UGX 1,499,098,361/=, interest at 21% pa from the date of judgment until payment in full and costs of the suit. - c) The Respondent is awarded the costs of this application.

#### 15

I so order.

Delivered electronically this\_\_\_\_\_\_\_\_\_\_ day of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_2025 and uploaded on ECCMIS. 12th May

**Ocaya Thomas O. R Judge, 12th May, 2025.**

25