Wakilii

Hallmark Enterprises friends SACCO Ltd v Kwesiga (HCCS 657 of 2017)

High Court · [2019] UGCOMMC 28 · 2019 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of liquidated debt following defendant's default in loan repayment and failure to file defence
Decision
Judgment entered in favour of the plaintiff for the outstanding loan balance with interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that judgment for liquidated demands where no defence is filed must be entered under Order IX rule 6, not rule 8, which applies only to unliquidated claims requiring assessment. The defendant was liable for the outstanding loan balance of UGX 100,662,085 after partial payment. General damages were refused for lack of proof of actual loss. Interest was reduced from 36% to 24% per annum in the court's discretion.

Outcome

Judgment entered in favour of the plaintiff for the outstanding loan balance with interest and costs

Facts

The plaintiff SACCO loaned four individuals UGX 252,831,000 in January 2017 at 3% monthly interest. Following disagreements among the borrowers, the loan was restructured and the defendant signed a new agreement on 2 May 2017 acknowledging his portion of UGX 75,549,049 with monthly installments of UGX 3,754,472 commencing 1 June 2017. The defendant defaulted on payments. The plaintiff wrote demanding payment on 10 July 2017. The defendant responded on 15 July 2017 but failed to pay. The suit was filed on 22 August 2017. The defendant was served but filed no defence. The plaintiff applied for interlocutory judgment, which was entered under Order IX rule 8, claiming UGX 113,643,104. The defendant later deposited UGX 12,981,019, leaving a balance of UGX 100,662,085. The defendant's advocates acknowledged the debt in a letter dated 20 July 2018 and proposed a payment schedule.

Issues

  1. Whether the plaintiff was entitled to judgment on the liquidated demand in the absence of a defence.
  2. Whether the court should grant judgment under Order IX rule 8 or Order IX rule 6 of the Civil Procedure Rules.
  3. Whether the plaintiff was entitled to general damages.
  4. What rate of interest should be awarded on the judgment sum.

Orders

  • The Defendant to pay UGX 100,662,085 to the Plaintiff.
  • The Defendant to pay interest on the principal sum at a rate of 24% per annum from 22nd August 2017 till payment in full.
  • Defendant shall bear costs of the suit.

Rules and key headnotes

Civil Procedure — Default Judgment — Liquidated vs Unliquidated Claims — Proper Rule Application
Where a plaint claims a liquidated demand and the defendant fails to file a defence, judgment must be entered under Order IX rule 6 of the Civil Procedure Rules, not under Order IX rule 8, which applies only to claims for unliquidated pecuniary damages or detention of goods requiring assessment of value.
Civil Procedure — Default Judgment — Liquidated Demands — Interest
Under Order IX rule 6, when judgment is entered on a liquidated demand, the court may award interest at the rate specified in the agreement, or if no rate is specified, at 8% per annum to the date of judgment, plus costs.
Damages & Quantum — General Damages — Burden of Proof — Need for Evidence
A plaintiff claiming general damages must adduce evidence to prove actual loss suffered as a result of the defendant's wrongful act. Mere submissions by counsel without evidentiary foundation are insufficient to support an award of general damages.
Contract Law — Interest — Court's Discretion — Reduction of Contractual Rate
The court retains discretion to reduce a contractually agreed interest rate where it considers the rate excessive, even where the parties have agreed to a specific rate in their contract.

Legislation cited (4)

Cases cited (3)

  • James Fredrick Nsubuga v Attorney General (HCCS No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and Another (HCCS No. 177 of 2003)
  • Kibimba Rice Ltd v Umar Salim (SCCA No. 17 of 1992)

Full judgment

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

Hallmark Enterprises friends SACCO Ltd v Kwesiga (HCCS 657 of 2017) [2019] UGCommC 28 (17 September 2019)
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.