Wakilii

B Sirley adn Company v Tanganyika Tegry Plastics Limited (Civil Appeal No. 14 of 1968)

East African Court of Appeal · [1968] EACA 14 · 1967 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from High Court judgment dismissing claim on promissory note
Decision
Appeal dismissed with costs to respondents

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal dismissed the appeal, holding that the appellant failed to prove he was a holder in due course of the promissory note. The cheque used to discount the note was drawn on the appellant's clients' account, raising a prima facie inference that he did not give value. The appellant's refusal to produce his ledger when challenged justified an adverse inference. The presumption under section 30(1) of the Bills of Exchange Ordinance was rebutted by the evidence.

Outcome

Appeal dismissed with costs to respondents

Facts

The appellant, a Nairobi advocate, sued as holder of a promissory note for Shs. 23,485 made by the respondents in favour of Polypen Limited. The note was issued in payment for ball-pen refills that Polypen Limited failed to deliver, resulting in total failure of consideration. The appellant was Polypen Limited's legal adviser, had formed the company, held two shares as nominee, and had been an alternate director. He discounted the note by giving Polypen Limited a cheque for Shs. 18,000 drawn on his clients' account. When challenged in cross-examination to prove he had first deposited his own funds to cover the cheque, the appellant refused to produce his ledger despite having been served with notice to produce all relevant books.

Issues

  1. Whether the appellant gave value for the promissory note.
  2. Whether the appellant was a holder in due course without notice of defect in title.
  3. Whether the trial judge erred in drawing an adverse inference from the appellant's failure to produce his ledger.
  4. Whether the presumption under section 30(1) of the Bills of Exchange Ordinance was rebutted.

Orders

  • Appeal dismissed.
  • Costs awarded to the respondents.

Rules and key headnotes

Bills of Exchange — Holder in Due Course — Burden of Proof
Where a cheque given to discount a promissory note is drawn on a solicitor's clients' account, this prima facie rebuts the presumption under section 30(1) of the Bills of Exchange Ordinance that the holder gave value, and the burden shifts to the holder to prove on a balance of probabilities that he first deposited his own funds to cover the cheque.
Adverse Inference — Failure to Produce Documents — Solicitor as Litigant
Where a solicitor litigant is served with notice to produce relevant books and is challenged in cross-examination with allegations of professional misconduct, his refusal to produce the documents or seek an adjournment to do so justifies the court in drawing an adverse inference against him, having regard to his special position as an officer of the court.
Bills of Exchange — Total Failure of Consideration — Defence Against Holder in Due Course
Total failure of consideration is a defence against a claim on a promissory note made by an immediate party, but is not a defence against a remote party who is a holder in due course, that is, a person who took the note in good faith and for value and who at the time the note was negotiated to him had no notice of any defect in the title of the person who negotiated it.
Bills of Exchange — Notice of Defect in Title — Close Connection with Drawer
Where a solicitor who is asked to discount a promissory note has a close personal connection with the drawer company (having formed it, held shares as nominee, and served as alternate director), and the note contains an unusual reference to a pro forma invoice on its face, and the endorsement shows a bank refused to accept it, the solicitor may be put on inquiry as to whether value had been given in accordance with the invoice.

Legislation cited (3)

  • Bills of Exchange Ordinance s.30(1)
  • Bills of Exchange Ordinance s.84
  • Civil Procedure Code Order XXXV

Cases cited (4)

  • Robinson v Reynolds (1841) 114 E.R. 76
  • Sakaldal Vrajdas v Chunilal Damji Mehta (1946) XIII EACA 58
  • A. N. Phakey v World Wide Agencies Ltd (XV EACA 1)
  • George and Co. v Pritam's Auto Service (XXII EACA 233)

Full judgment

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

B Sirley adn Company v Tanganyika Tegry Plastics Limited (Civil Appeal No. 14 of 1968) [1967] EACA 1 (3 July 1967)
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.