Wakilii

Ggingo v Diamond Trust Bank Uganda Ltd (Miscellaneous Application No. 937 of 2016)

High Court · [2017] UGCOMMC 19 · 2017 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside default judgment and for leave to defend arising from Civil Suit No. 131 of 2016
Decision
Default judgment set aside; final determination of leave to defend stayed pending disclosure and clarification of the debt by affidavit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court set aside the default judgment on the ground that substituted service was improperly ordered where no attempt was made to serve the defendant personally as required by Order 5 rule 10 of the Civil Procedure Rules. The only legitimate basis for default judgment is effective service and failure to apply for leave within time. The court stayed final determination of the application for leave to defend pending compliance with disclosure directions and clarification of the quantum of the debt by affidavit, as the applicant's affidavit did not comply with Order 36 rule 4 requiring specification whether the defence goes to the whole or part of the claim.

Outcome

Default judgment set aside; final determination of leave to defend stayed pending disclosure and clarification of the debt by affidavit

Facts

The respondent bank filed a summary suit (Civil Suit No. 131 of 2016) seeking to recover Uganda shillings 2,896,645,023/= from the applicant arising from a facility letter dated 21 September 2012 granting a loan of Uganda shillings 1,880,000,000/=. The respondent obtained an order for substituted service by advertisement in the New Vision newspaper on 17 June 2016. The applicant did not apply for leave to defend and default judgment was entered on 30 June 2016. On 21 September 2016, the applicant received a Notice to Show Cause from the court's execution division and subsequently learned of the judgment. The applicant filed this application to set aside the judgment, claiming he was never personally served, was unaware of the suit, and had sold mortgaged properties yielding over Uganda shillings 1,000,000,000/= to reduce the debt. The respondent contended the applicant refused to acknowledge service and had no defence as he received the money and did not repay it.

Issues

  1. Whether the applicant was validly served with summons for leave to defend in the summary suit.
  2. Whether the default judgment entered against the applicant should be set aside.
  3. Whether the applicant has raised a plausible defence meriting leave to defend.

Orders

  • Default judgment entered in Civil Suit No. 131 of 2016 is set aside.
  • Respondent to furnish the Applicant with the information sought by the Applicant's lawyers by letter dated 20th January 2016 within one week from the date of this order.
  • Applicant to file an affidavit clarifying how much money is owed to the Respondent pursuant to the information obtained within a further one week.
  • Final ruling on the application stayed pending compliance with the above directions.
  • Ruling to be fixed for final decision after the parties have complied with the court's directions.

Rules and key headnotes

Civil Procedure — Service of Process — Substituted Service — Preconditions for Ordering
Substituted service cannot be ordered under Order 5 rule 18 of the Civil Procedure Rules where no attempt was made to serve the defendant personally or through an agent as provided for by Order 5 rule 10 of the Civil Procedure Rules. The court must be satisfied that for any reason the summons could not be served in the ordinary way before ordering substituted service.
Civil Procedure — Default Judgment — Setting Aside — Basis for Entry of Default Judgment
The only legitimate basis for the entry of a default judgment is effective service of summons and plaint on a defendant and failure of the defendant to apply for leave to defend within time. A default judgment entered without effective service cannot stand and must be set aside.
Civil Procedure — Summary Suits — Leave to Defend — Requirements under Order 36 rule 4
An application for leave to defend a summary suit under Order 36 rule 4 of the Civil Procedure Rules must be supported by an affidavit which states whether the defence alleged goes to the whole or part only of the claim, and if part only, to what part. It is not sufficient to merely aver that there is a good defence to the claim; the affidavit must specify the nature and scope of the defence.

Legislation cited (10)

Full judgment

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Ggingo v Diamond Trust Bank Uganda Ltd (Miscellaneous Application No. 937 of 2016) [2017] UGCommC 19 (31 March 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.