Hajj Bumali Kadjingo v The Non Performing Assets Recovery Trust (Civil Appeal No. 19 of 2002)

Supreme Court · [2004] UGSC 58 · 2004 Appeal Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second appeal from a Court of Appeal decision dismissing a first appeal against a ruling of the Non-Performing Assets Recovery Tribunal on a preliminary objection

Decision

Appeal dismissed; the preliminary objection that the plaint disclosed no cause of action was rejected and the matter falls to be determined on evidence

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Holding

On a second appeal the Supreme Court considered whether a preliminary objection that the plaint disclosed no cause of action against the appellant — a director of the borrower company who had signed the loan agreement and mortgaged his property as security — could succeed. The Court held that the matters raised, including whether the appellant was liable and whether the named entities were the same, turned on facts that could only be established by evidence at trial and could not be conclusively resolved on a preliminary objection. The objection was a mere technicality without merit, and the Court of Appeal and the Tribunal were right to reject it. The appeal was dismissed.

Facts

The respondent sued the appellant, together with Kapeeka Coffee Works Ltd and Abu Kasozi Kadjingo, for recovery of UGX 839,030,585, being part of a loan advanced by the Uganda Commercial Bank to Kapeeka Coffee Works Ltd. The appellant was sued in his capacity as one of two directors of the company. He had signed the loan agreement on behalf of the company, mortgaged his Mailo property as security, and covenanted to pay the loan on demand. The loan was to finance an investment project at the Kapeeka coffee factory, known as Kapeeka Coffee Hulleries. When the suit came before the Non-Performing Assets Recovery Tribunal, the appellant raised a preliminary objection that the plaint disclosed no cause of action against him, contending that Kapeeka Coffee Works Ltd and Kapeeka Coffee Hulleries were different entities. The Tribunal rejected the objection, as did the Court of Appeal on first appeal.

Issues

Whether the plaint disclosed a cause of action against the appellant, who was sued in his capacity as a director of the borrower company.
Whether a preliminary objection that the plaint disclosed no cause of action could be sustained where the question of the appellant's liability required the calling of evidence.
Whether the respondent's notice for affirmation of the Court of Appeal decision should be struck out for being served out of time under rule 88(1).

Orders

The respondent's notice for affirmation of the Court of Appeal decision struck out for service out of time.
Appeal dismissed.

Key headnotes

Civil Procedure — Pleadings — Cause of Action — Preliminary Objection

A preliminary objection that a plaint discloses no cause of action cannot succeed where the defendant's liability turns on questions of fact that can only be established by adducing evidence at trial.

Civil Procedure — Preliminary Objections — Objections Requiring Evidence

A preliminary objection that raises matters which can only be resolved by examining evidence is a mere technicality without merit and ought to be rejected.

Company Law — Directors — Liability — Whether Cause of Action Disclosed

Where a director who signed a company's loan agreement and mortgaged his property as security is sued for recovery of the debt, the plaint discloses a cause of action against him, and the extent of his liability is a matter to be determined at trial rather than on a preliminary objection.

Legislation cited (1)

Rules of the Supreme Court r.88(1)

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.