Wakilii

Byaruhanga v Equity Bank (U) Ltd (Miscellaneous Application No. 1052 of 2016)

High Court · [2017] UGCOMMC 33 · 2017 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 arising out of summary suit for recovery of loan debt
Decision
Conditional leave granted to file defence with security deposit of Uganda shillings 50,000,000 required within 30 days

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court granted conditional leave to defend where the bank statement showed a lower outstanding balance than the amount claimed in the plaint and the applicant alleged partial repayment. The applicant was required to deposit Uganda shillings 50,000,000 as security. The defendant must show a plausible defence to obtain leave under Order 36 of the Civil Procedure Rules, but need not prove a good defence on the merits at this stage.

Outcome

Conditional leave granted to file defence with security deposit of Uganda shillings 50,000,000 required within 30 days

Facts

The applicant obtained a loan facility of Uganda shillings 80,000,000 from the respondent bank at 28% per annum interest, repayable in 36 monthly instalments of Uganda shillings 3,309,100. The applicant deposited his land title for property comprised in Busiro Block 383 Plot 3887 at Kitende as security. The applicant defaulted on his repayment obligations and the loan was written off on 5 November 2014 with an outstanding amount of Uganda shillings 80,119,114. The applicant claimed he had repaid Uganda shillings 50,000,000 but provided no supporting evidence. The bank's account statement showed a balance of Uganda shillings 66,819,409, less than the amount claimed in the plaint. The applicant made without prejudice settlement offers of Uganda shillings 40,000,000 and later Uganda shillings 60,000,000.

Issues

  1. Whether the applicant disclosed a plausible defence to the respondent's claim for recovery of loan debt.
  2. Whether the applicant should be granted unconditional or conditional leave to defend the summary suit.

Orders

  • The applicant has leave to file a defence to the suit.
  • The applicant shall deposit with the court a sum of Uganda shillings 50,000,000 within a period of 30 days from the date of this order as security for payment of the respondent.
  • The applicant shall file a written statement of defence within 14 days from the date of this order.
  • The costs of this application shall abide the outcome of the main suit.

Rules and key headnotes

Civil Procedure — Summary Suits — Leave to Defend — Test for Granting Leave
A defendant applying for leave to defend a summary suit under Order 36 of the Civil Procedure Rules must show by affidavit that he has a plausible defence and that the action is not frivolous or vexatious. The defendant is not required to prove a good defence on the merits but must show that there is an issue or question in dispute which ought to be tried. The defence must be stated with sufficient particularity and must appear to be genuine and made in good faith.
Civil Procedure — Summary Suits — Leave to Defend — Conditional Leave
Where a plaintiff's claim is partly supported by documentary evidence but a discrepancy exists between the amount claimed and the amount shown in supporting documents, and the defendant raises an arguable issue regarding partial repayment, the court may grant conditional leave to defend upon the defendant depositing security for the undisputed portion of the claim.
Banking & Finance — Loan Recovery — Proof of Debt in Summary Proceedings
In a summary suit for recovery of a banking debt, where the bank's own account statement shows an outstanding balance lower than the amount claimed in the plaint, and no explanation is provided for the discrepancy, the plaintiff has not proved the full liquidated demand required for summary judgment under Order 36 rule 2 of the Civil Procedure Rules.

Legislation cited (6)

Cases cited (2)

  • Maluku Interglobal Trade Agencies Ltd v Bank of Uganda [1985] HCB 65
  • Souza Figuerido & Co Ltd v Moorings Hotel Co Ltd (1959) EA 426

Full judgment

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

Byaruhanga v Equity Bank (U) Ltd (Miscellaneous Application No. 1052 of 2016) [2017] UGCommC 33 (7 April 2017)
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.