Wakilii

Okao v The Microfinance Support Centre Ltd (Civil Appeal No. 59 of 2015)

Court of Appeal · [2024] UGCA 366 · 2024 Appeal Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court ruling dismissing an application to set aside a default judgment entered in a summary suit
Decision
Appeal allowed; default decree against the appellant set aside and she was granted 15 days to file a defence in the original suit.

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Holding

The appellant, against whom a default judgment had been entered in a summary suit, applied to set it aside on grounds of non-service and absence of liability. The Court of Appeal held that she had not been properly served: substituted service on a family member under Order 5 rule 13 of the Civil Procedure Rules is available only where the defendant cannot be found after attempts at personal service, which were absent here. She also had a triable defence, having guaranteed only a fully-repaid first loan and not the outstanding second loan. Payment made under forcible execution did not amount to approbation and reprobation. The appeal was allowed and the decree against her set aside.

Facts

The respondent advanced two loans to a borrower company: a first loan of Shs 100,000,000 in 2007, which the appellant guaranteed, and a second loan of Shs 70,000,000, which she did not guarantee. The first loan was fully repaid by October 2009. When the head suit was filed in 2011, the outstanding sum arose only from the second, unguaranteed loan. The respondent sued the appellant by summary procedure at the High Court in Gulu and obtained default judgment when she did not apply for leave to defend. She applied to set the judgment aside, contending that she had not been served with the plaint and summons and that she was not a guarantor of the outstanding loan. During execution of the decree she paid part of the decretal amount. The High Court dismissed her application, holding that she had been served and was using court process to avoid justice.

Issues

  1. Whether the appellant was properly served with the summons and plaint in the summary suit.
  2. Whether the appellant had a triable defence given that she had not guaranteed the outstanding loan.
  3. Whether payment of part of the decretal amount during execution barred the appellant from contesting the decree by reason of approbation and reprobation.

Orders

  • Appeal allowed.
  • Decree in the original suit set aside in relation to the appellant.
  • Appellant granted 15 days from the date of this judgment within which to file a defence.
  • Costs of the appeal awarded to the appellant; costs below to abide the outcome of the original suit.

Key headnotes

Civil Procedure — Service of Process — Substituted Service under Order 5 rule 13
Substituted service on an agent or adult member of the defendant's family under Order 5 rule 13 of the Civil Procedure Rules is available only where the defendant cannot be found; a process server who has the means to locate the defendant must first attempt personal service, and may resort to substituted service only after genuine but futile efforts to trace the defendant.
Civil Procedure — Setting Aside Default Judgment — Existence of a Triable Issue
Where a defendant against whom default judgment has been entered shows a triable defence, the judgment should be set aside so that the matter proceeds to trial.
Contract Law — Privity of Contract — Liability of a Non-Guarantor
A person who did not guarantee a loan cannot be held liable on it under privity of contract, and cannot be made liable as a necessary third party where that capacity is not averred in the plaint.
Civil Procedure — Estoppel — Approbation and Reprobation — Payment under Execution
Payment of part of a decretal amount under forcible execution does not amount to approbation and reprobation and does not deprive a judgment debtor of the right to contest a decree wrongfully obtained against her.

Legislation cited (2)

  • Civil Procedure Rules Order 5 rule 13
  • Judicature (Court of Appeal Rules) Directions rule 30

Cases cited (4)

  • Energo (U) Ltd v Godfrey Rubarema and Another [2020] UGCA 2082
  • Stephen Seruwagi Kavuma v Barclays Bank (U) Ltd (Miscellaneous Application No. 634 of 2010)
  • Banco Arabe Espanol v Bank of Uganda [1999] UGSC 1
  • Rwakashaija Azarious and others v Uganda Revenu[e] ... UGSC 8
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.