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Geomax Engineering Limited & Another v Stanbic Bank Uganda Limited (Miscellaneous Application 2520 of 2023)

High Court · [2024] UGCOMMC 203 · 2024 Application Dismissed; Conditional Leave 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 debt recovery arising from loan facility agreements
Decision
Application struck off for want of proper affidavit; applicants granted conditional leave to defend the main suit subject to payment of UGX 170,000,000 within 45 days

Observed later treatment

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Holding

The court struck off the application for leave to defend because the supporting affidavit was not commissioned, rendering the application incompetent. However, the court found triable issues in the main summary suit because the bank failed to produce bank statements corroborating the claimed loan arrears. Exercising its duty to ensure summary procedure is only used for appropriate cases, the court granted conditional leave to defend subject to payment of UGX 170,000,000 (approximately 5% of the claimed debt) as a compromise balancing both parties' interests pending trial.

Outcome

Application struck off for want of proper affidavit; applicants granted conditional leave to defend the main suit subject to payment of UGX 170,000,000 within 45 days

Facts

Between 2018 and 2019, the first applicant (Geomax Engineering Limited) entered into loan facility agreements with the respondent bank (Stanbic Bank Uganda Limited) secured by mortgages, debentures, and personal guarantees including that of the second applicant (Nabaya Silver). The loans were to finance bid bonds, performance guarantees, and construction contracts in eastern Uganda. The bank filed a summary suit claiming loan arrears of UGX 3,407,381,713 as at December 2022. The applicants applied for unconditional leave to defend, contending that not all loan sums were disbursed as agreed, that the bank had recovered substantial sums from securities without disclosure, that some contracts were frustrated by the bank's refusal to extend performance guarantees, and that a forensic audit would show they were not indebted. The supporting affidavit was not commissioned by a commissioner for oaths.

Issues

  1. Whether the application for leave to appear and defend was competent.
  2. Whether there was any triable issue in Civil Suit No. 1154 of 2023 warranting conditional leave to defend.

Orders

  • This application is hereby struck off the Court record.
  • The Applicants are granted leave to appear and defend Civil Suit No. 1154 of 2023 on condition that they pay the sum of UGX 170,000,000 to the Respondent within 45 (forty-five) days from the date of this order.
  • The Applicants shall file their written statement(s) of defence in Civil Suit No. 1154 of 2023 within 7 (seven) days from the date of satisfying the payment condition.
  • Costs of this application shall abide by the outcome of Civil Suit No. 1154 of 2023.

Rules and key headnotes

Affidavits — Commissioning Requirement — Effect of Non-Commissioning
An affidavit which is not commissioned by a commissioner for oaths is not an affidavit in law. This defect is fundamental and not a mere technicality that can be overlooked under Article 126(2)(e) of the Constitution. An application grounded in affidavit evidence but not supported by a validly commissioned affidavit is fatally and incurably defective and incompetent.
Summary Procedure — Appropriateness — Court's Duty to Ascertain Triable Issues
Before entering summary judgment, the court has a duty to ascertain and confirm that the plaintiff's claim was appropriate for summary procedure, even where the application for leave to defend is incompetent. Summary procedure is reserved for straightforward cases where the demand is liquidated and there are no points requiring trial.
Banking — Summary Suits for Recovery — Requirement to Produce Bank Statements
In a summary suit for recovery of loan arrears, facility agreements, guarantees, and mortgage deeds alone are insufficient to prove the quantum of outstanding debt. Bank statements showing debits and credits are necessary to corroborate assertions that loan sums were disbursed and that the borrower defaulted on repayment. Where such statements are not produced, triable issues arise that preclude summary judgment.
Leave to Defend — Conditional Grant — Balancing Interests of Parties
Under Order 36 Rule 8 of the Civil Procedure Rules, the court may grant leave to appear and defend a summary suit subject to conditions including payment of money into court. Where triable issues exist but the application for leave is incompetent, the court may impose a condition requiring payment of a portion of the claimed sum as a compromise to balance the interests of both parties pending trial, with provision for refund if the plaintiff's claim fails.

Legislation cited (4)

Cases cited (4)

  • EAA Company Limited v Uganda National Bureau of Standards (HC Consolidated Miscellaneous Applications No. 965 and 1009 of 2023)
  • Post Bank (U) Ltd v Abdu Ssozi (Supreme Court Civil Appeal No. 08 of 2015)
  • Negalambire Faruku & 2 Others v Woira Brian (High Court Miscellaneous Application No. 1145 of 2020)
  • Maluku Interglobal Trade Agency v Bank of Uganda [1985] HCB 65

Full judgment

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

Geomax Engineering Limited & Another v Stanbic Bank Uganda Limited (Miscellaneous Application 2520 of 2023) [2024] UGCommC 203 (17 July 2024)
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.