Wakilii

Florance Atto-v- Remode Enterprises Ltd (HCT-00-CC-MA 501 of 2006)

High Court · [2007] UGCOMMC 6 · 2007 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend a summary suit for loan recovery
Decision
Applicant granted unconditional leave to appear and defend the summary suit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the applicant raised bona fide triable issues warranting leave to defend. Although the plaint wrongly cited Order 33 instead of Order 36, the irregularity was cured under Article 126(2)(e) of the Constitution as the plaint was properly endorsed for summary procedure. The applicant established triable issues regarding the excessiveness of interest charged (computed at 178% per annum) and the respondent's licensing status at the time of the loan, neither of which was rebutted by the respondent.

Outcome

Applicant granted unconditional leave to appear and defend the summary suit

Facts

On 17 August 2005, the respondent lent the applicant UGX 3,000,000 under a loan agreement providing for 3% monthly interest and a late payment fine of 5% of instalments due every seven days (20% per month on due amounts). The loan was payable in two equal monthly instalments by 17 October 2005. The applicant defaulted. The respondent instituted a summary suit claiming UGX 8,868,000, comprising principal, interest of UGX 180,000, and late payment fines of UGX 5,148,000. The applicant applied for leave to defend, denying indebtedness, contending the interest was excessive and unconscionable, challenging the procedural propriety of the summary suit, and asserting the respondent was unlicensed to carry on money lending business in August 2005.

Issues

  1. Whether the applicant raised bona fide triable issues entitling her to unconditional leave to defend the summary suit.
  2. Whether the summary suit plaint was defective for citing Order 33 instead of Order 36 of the Civil Procedure Rules.
  3. Whether the interest charged by the respondent was harsh, excessive and unconscionable under the Money Lenders Act.
  4. Whether the respondent was licensed to carry on money lending business at the time of the loan.

Orders

  • Application allowed.
  • Applicant granted leave to defend the main suit.
  • Applicant to file written statement of defence within 14 days.
  • Costs of the application awarded to the applicant.

Rules and key headnotes

Civil Procedure — Summary Suits — Leave to Defend — Test for Granting Leave
For leave to defend a summary suit to be granted under Order 36 Rules 3 and 4 of the Civil Procedure Rules, the applicant must show that there is a bona fide triable issue of fact or law, and the defence raised must be stated with sufficient particularity to appear genuine and not merely general vague statements denying liability.
Civil Procedure — Procedural Irregularities — Invocation of Article 126(2)(e) — Test for Curing Defects
Procedural defects can be cured by the invocation of Article 126(2)(e) of the Constitution. The test is whether the irregularity is serious enough to prevent the court from hearing the application and determining it on its merits. If strict observance of the procedural rules would lead to injustice, the court should be willing to overlook the irregularity.
Banking & Finance — Money Lending — Excessive Interest — Statutory Presumption
Under section 12 of the Money Lenders Act, where interest charged exceeds 24% per year, the court is entitled to presume that the interest charged is excessive, and under section 11 the court may alter the interest payable where it finds the interest to be harsh and unconscionable.
Banking & Finance — Money Lending — Licensing Requirement — Effect of Non-Rebuttal
Where an applicant avers that a respondent lender was not licensed to carry on money lending business at the time of the loan, and the averment is neither denied nor rebutted by the respondent, it is presumed to be true unless evidence to the contrary is adduced, thereby raising a triable issue.

Legislation cited (6)

Cases cited (6)

  • Muluku Intergrobal Trade Agencies Ltd v Bank of Uganda [1985] HCB 65
  • Tororo District Adminstration vs. Andalalamp Industries Ltd [197] N KALR 126
  • Besigye Kiiza v Museveni Yoweri Kaguta (Electoral Petition No. 1 of 2001)
  • Akon International vs. Kasirye Byamukunga & Co. Advocates [1995] 111 KALR 91
  • Intraship (U) Ltd vs. GN. Combine (U) Ltd [1994] V1 KALR 42
  • Massa vs. Acehn [1978] HCB 279

Full judgment

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

Florance Atto-v- Remode Enterprises Ltd (HCT-00-CC-MA 501 of 2006) [2007] UGCommC 6 (24 January 2007)
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.