Wakilii

Byaruhanga & Anor v Virunga Finances Ltd (Miscellaneous Application No. 107 of 2016)

High Court · [2016] UGCOMMC 55 · 2016 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend summary suit arising from alleged loan default
Decision
First applicant granted conditional leave to file defence; second applicant struck off application; matter to proceed to trial with securities deposited in court as security

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court granted the first applicant conditional leave to file a defence within 15 days, finding that triable issues existed concerning whether he borrowed money from the respondent company or from its managing director personally, particularly given contradictory dates in the loan documentation and the transfer of securities into the managing director's personal name. The second applicant's name was struck from the application. Securities deposited with Akifeza Grace Ngabirano were to be deposited in court as security pending determination of the main suit.

Outcome

First applicant granted conditional leave to file defence; second applicant struck off application; matter to proceed to trial with securities deposited in court as security

Facts

The first applicant sought a loan of UGX 410,000,000 in September 2013 from Akifeza Grace Ngabirano, providing securities including land titles, a vehicle logbook, and a blank cheque. He claimed he dealt only with Grace personally, not with the respondent company. He repaid UGX 22,000,000 in cash but refused further payment when Grace declined to provide receipts or copies of documents. The respondent company later sued for UGX 5,450,000,000 based on a loan agreement dated 12 February 2013, though supporting documents showed signatures dated September 2013. The first applicant discovered that several of the securities he provided had been transferred into Grace's personal name. A previous suit by the respondent for the same amount had been withdrawn for out-of-court settlement after the applicant paid UGX 6,000,000 in costs. The first applicant denied knowing the second applicant, Jane Frances Byaruhanga Muhumuza, who was named as guarantor.

Issues

  1. Whether the first applicant should be granted leave to appear and defend Civil Suit No. 092 of 2016.
  2. Whether the defence proposed by the first applicant discloses triable issues of law and fact.
  3. Whether leave should be granted unconditionally or subject to deposit of security.
  4. Whether the first applicant borrowed the sum claimed in the plaint from the respondent company or from Akifeza Grace Ngabirano as an individual.
  5. Whether the affidavit in support of the application contained falsehoods disqualifying the applicant from relief.

Orders

  • The first applicant granted conditional leave to file a defence within 15 days from the date of this order.
  • The applicant shall add Akifeza Ngabirano Grace by way of proposed counterclaim or cross action in the written statement of defence.
  • The second applicant's name struck off the application with no order as to costs.
  • Securities deposited with Akifeza Ngabirano Grace and some of which have been transferred into her name shall constitute security in the conditional leave and the titles shall be deposited in court by the Managing Director of the Respondent pending determination of the suit.
  • The securities shall operate as security for any monies the applicant may be held liable to pay in the main suit.
  • Costs of this application shall abide the outcome of the main suit.

Rules and key headnotes

Summary Suits — Leave to Appear and Defend — Test for Granting Leave
Before leave to appear and defend a summary suit is granted, the defendant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law. When there is a reasonable ground of defence to the claim, the plaintiff is not entitled to summary judgment. The defence must be stated with sufficient particularity to appear genuine; general or vague statements denying liability will not suffice.
Summary Suits — Purpose and Scope of Order 36 Proceedings
The purpose of summary procedure is to enable a plaintiff to obtain quick judgment where there is plainly no defence to the claim. Summary proceedings should not be allowed to become a means for obtaining an immediate trial of an action requiring hours or days of argument and citation of many authorities before the court can arrive at a final decision.
Summary Suits — Effect of Contradictory Documentary Evidence
Where there are conflicting documentary exhibits and contradictions in dates concerning the execution of a loan agreement, such as variation between the date stated in the agreement heading and the date of actual signature, the matter raises triable issues inappropriate for determination by way of summary suit.
Summary Suits — Conditional Leave — Form of Security
Under Order 36 rule 8 of the Civil Procedure Rules, leave to appear and defend may be given unconditionally or subject to such terms as payment of money into court, giving security, or otherwise as the court may think fit. Securities already deposited with the respondent in connection with the transaction may be ordered to be deposited in court to constitute security for conditional leave pending determination of the suit.
Affidavits — Inconsistencies and Falsehoods
Inconsistencies in affidavits cannot be ignored however minor, since a sworn affidavit is not a document to be treated lightly. Where an affidavit contains obvious falsehoods it becomes suspect, and an application supported by a false affidavit may be bound to fail because the applicant does not come to court with clean hands. However, mere contradictions between parties' affidavits on contested factual matters do not automatically render an affidavit false where those contradictions raise genuine triable issues.

Legislation cited (6)

Cases cited (7)

  • Maluku Interglobal Trade Agencies Ltd v Bank of Uganda [1985] HCB 65
  • Gatete and Another v Kyobe (2002) 2 EA 137
  • Miter Investments Ltd v East African Portland Cement Company Ltd (Miscellaneous Application No. 336 of 2012)
  • Bitaitana v Kanamira (1977) HCB 34
  • Livingston Kato v Filimoni Kaggwa (Civil Suit No. 19 of 1992)
  • Corporate Insurance Company Ltd v Nyali Beach Hotel Ltd [1995-1998] EA 7
  • Home and Overseas Insurance Co Ltd v Mentor Insurance Co (UK) Ltd (in liquidation) [1989] 3 All ER 74

Full judgment

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

Byaruhanga & Anor v Virunga Finances Ltd (Miscellaneous Application No. 107 of 2016) [2016] UGCommC 55 (1 July 2016)
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.