Wakilii

Atuhaire Juliet v PK Route Masters Limited (Civil Suit 299 of 2023)

High Court · [2025] UGCOMMC 522 · 2025 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for declarations regarding loan repayment and mortgage legality; plaintiff's suit dismissed for non-appearance; defendant's counterclaim for loan recovery proceeded ex parte
Decision
Plaintiff's suit dismissed for non-appearance; defendant's counterclaim allowed with judgment for recovery of loan balance, interest, general damages, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the plaintiff breached the loan agreement by failing to repay UGX 118,400,000 as agreed, having paid only UGX 6,400,000. The contractual interest rate of 48% per annum was found harsh and unconscionable under Civil Procedure Act s.26(1) and reduced to 24% per annum. The defendant was awarded recovery of the outstanding principal balance of UGX 112,000,000 plus interest at 24% per annum, general damages of UGX 20,000,000, and costs.

Outcome

Plaintiff's suit dismissed for non-appearance; defendant's counterclaim allowed with judgment for recovery of loan balance, interest, general damages, and costs

Facts

In November 2021, the plaintiff applied to the defendant for a loan of UGX 80,000,000, secured by a mortgage over her matrimonial home at Nsosa. The defendant advanced UGX 118,400,000 under a loan agreement dated 2nd December 2021, with interest at 4% per month (48% per annum), repayable in 6 months. The plaintiff received UGX 77,000,000 in cash after processing costs. The plaintiff paid only UGX 6,400,000 towards the loan. The defendant issued a notice of default on 28th July 2022 and a notice of sale on 6th October 2022, followed by a newspaper advertisement on 15th October 2022. The plaintiff brought suit challenging the loan terms and mortgage, but did not appear at trial. The defendant counterclaimed for recovery of the outstanding loan balance.

Issues

  1. Whether the Plaintiff is liable for breach of contract.
  2. What reliefs are available.

Orders

  • A declaration that the Plaintiff breached the loan agreement executed on 2nd December 2021 by failing to repay the loan as agreed.
  • The Plaintiff shall pay UGX 112,000,000 being the balance of the loan principal to the Defendant.
  • The Plaintiff shall pay interest on UGX 112,000,000 at the rate of 24% per annum from 2nd December 2021 until payment in full.
  • The Plaintiff shall pay general damages of UGX 20,000,000 to the Defendant.
  • The Plaintiff shall pay interest on the general damages at the rate of 14% per annum from the date of judgment until payment in full.
  • Costs of the suit and of the counterclaim are awarded to the Defendant.

Rules and key headnotes

Breach of Contract — Failure to Repay Loan — Burden of Proof
Where a defendant adduces evidence of a loan agreement and proves that the plaintiff failed to comply with the repayment schedule, and the plaintiff does not appear to present contrary evidence, the court will find the plaintiff liable for breach of contract.
Interest Rates — Unconscionable Interest — Judicial Intervention under Civil Procedure Act s.26(1)
A court has a statutory duty under Civil Procedure Act s.26(1) to scrutinize agreements for the payment of interest and may substitute a harsh and unconscionable interest rate with a rate it deems just, even where the agreement was freely entered into by the parties.
Interest Rates — Assessment of Unconscionability — Comparison with Market Rates
An interest rate is considered high, excessive and unconscionable if it significantly exceeds prevailing market interest rates at the time and is not justified by an unusually high credit risk. An interest rate of 48% per annum is usurious and unconscionable where the weighted average lending rate for the relevant period was 18.60% per annum and no unique justifying factors are proved.
Mortgages — Enforcement — Right to Redemption — Re-issuance of Notices
Where a mortgagee is entitled to have recourse to mortgaged property to recover outstanding loan monies, but time has passed and interest has accrued since earlier notices were issued, the mortgagee must re-issue notices of default and sale indicating revised sums due before proceeding with enforcement, so as not to clog the mortgagor's right to redemption.
General Damages — Breach of Contract — Financial Loss and Inconvenience
General damages are the losses which flow naturally from a defendant's breach and are what the law presumes to be the direct, natural or probable result of the breach. Where a lender has been denied the opportunity to plough back monies tied up in litigation into its business and has suffered financial loss and inconvenience as a result of delayed resolution of a loan recovery case, an award of general damages is appropriate.

Legislation cited (6)

Cases cited (9)

  • Miller v Minister of Pensions [1947] 2 All ER 372
  • William Kasozi v DFCU Bank Ltd (High Court Civil Suit No. 1326 of 2000)
  • Arvind Patel v Okaka Eric Engola (High Court Civil Suit No. 1324 of 2023)
  • MTN Two One Two Staff Coop. & Credit Society Ltd v Samuel Majwega Musoke (High Court Civil Suit No. 82 of 2021)
  • Walusimbi's Garage Ltd & 2 Ors v NCBA Bank Uganda Ltd (High Court Miscellaneous Application No. 1561 of 2024)
  • JAS Ventures International Ltd v Atuhaire Juliet (High Court Civil Suit No. 676 of 2021)
  • Opia Moses v Chukia Lumago Roselyn & 5 Ors (High Court Civil Suit No. 22 of 2013)
  • Mohanlal Kakubhai v Warid Telecom (U) Ltd (High Court Civil Suit No. 224 of 2011)
  • Kwizera Eddie v Attorney General (Supreme Court Constitutional Appeal No. 1 of 2008)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Atuhaire Juliet v PK Route Masters Limited (Civil Suit 299 of 2023) [2025] UGCommC 522 (30 December 2025)
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.