Wakilii

Jonel Ltd v Koboko Enterprises Ltd (Miscellaneous Application No. 27 of 2016)

High Court · [2016] UGCOMMC 49 · 2016 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to defend a summary suit arising from dishonoured cheques
Decision
Applicant granted unconditional leave to defend; matter to proceed to full hearing

Observed later treatment

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Holding

The High Court granted the applicant unconditional leave to file a defence in a summary suit based on dishonoured cheques. The court held that the respondent failed to provide notice of dishonour as required under sections 47 and 48 of the Bills of Exchange Act, and that the complex business relationship between the parties raised triable issues requiring reconciliation of accounts that could not be determined summarily.

Outcome

Applicant granted unconditional leave to defend; matter to proceed to full hearing

Facts

The applicant and respondent were business partners engaged in the supply, sale and distribution of the respondent's products in the Entebbe area since 2010. The respondent filed a summary suit claiming UGX 60,000,000 based on three cheques dated 28 September 2015 issued by the applicant that were dishonoured. The applicant contended that the cheques were issued in 2012 as security for dealings and should not have been banked. The applicant alleged complex accounting issues involving the respondent's employees who had failed to account for stock and collections totalling UGX 58,379,637, and claimed that after reconciliation the respondent actually owed the applicant UGX 1,610,134. The applicant sought unconditional leave to file a defence and counterclaim.

Issues

  1. Whether the applicant had demonstrated sufficient triable issues to be granted unconditional leave to defend the summary suit.
  2. Whether the affidavit in support of the application was defective for failure to comply with the rules governing identification of exhibits.
  3. Whether the respondent had given proper notice of dishonour as required under the Bills of Exchange Act before claiming on the dishonoured cheques.
  4. Whether the applicant's defence disclosed a bona fide dispute requiring reconciliation of accounts between the parties.

Orders

  • Application for unconditional leave to defend allowed.
  • Applicant granted unconditional leave to file and serve a written statement of defence within 7 days from the date of this order.
  • Costs of this application to abide the outcome of the main suit.
  • Respondent's preliminary objection to the competence of the affidavit overruled.

Rules and key headnotes

Affidavit Evidence — Exhibits — Commissioner for Oaths Rules — Failure to Mark Exhibits in Prescribed Form
Failure by a commissioner for oaths to identify exhibits attached to an affidavit in the statutory format prescribed under the Third Schedule to the Commissioner for Oaths (Advocates) Act is an irregularity of form and not substance where the documents are clearly identifiable in the body of the affidavit itself, and does not render the affidavit defective or inadmissible.
Bills of Exchange — Cheques — Dishonour — Notice of Dishonour — Requirement
For a plaintiff to rely on a bounced cheque in a summary suit, it must show that it gave the defendant a notice of dishonour of the cheque as required under sections 47 and 48 of the Bills of Exchange Act. The notice must be in writing, sufficient to identify the bill, and intimate that the bill has been dishonoured by non-payment.
Summary Suit — Leave to Defend — Triable Issues — Bills of Exchange
Where parties have a business relationship involving supply and sale of goods, and the defendant alleges that goods were returned but not accounted for and that agents of the plaintiff have outstanding sums, the facts require reconciliation of accounts after evidence has been adduced and tested, and cannot be tried in a summary suit. Unconditional leave to defend must be granted where such triable issues exist.
Summary Suit — Order 36 — Liquidated Demand — Counterclaim
Order 36 rule 2 of the Civil Procedure Rules deals with a liquidated demand in money payable by the defendant arising upon contract. Where it is in dispute whether there is a liquidated demand which is uncontested or to which there is no defence, and the defendant alleges a counterclaim which would leave the plaintiff owing it, the averments require trial and summary judgment cannot be granted.
Bills of Exchange — Cheques — Security Cheques — Banking
A cheque that was issued as security is not supposed to be banked except as agreed. Where a defendant contends that cheques forming the basis of a summary suit were issued as security and the plaintiff banked them contrary to the agreement, this raises a triable issue that cannot be determined summarily.

Legislation cited (14)

Cases cited (8)

  • Kotecha v Mohammed [2002] 1 EA 112
  • Solomon Software (EA) Ltd v Microsoft Corporation [2003] 1 EA 300
  • Begumisa George v East African Development Bank (Miscellaneous Application No. 451 of 2010)
  • Kakooza John Baptist v Electoral Commission (SC Election Petition Appeal No. 11 of 2011)
  • Saggu v Road Master Cycles [2002] EA 258
  • Naris Byarugaba v Shivam M.K.D Ltd [1997] HCB 71
  • Red fox Bureau De Change v Anke Alemayehu [1997-2001] UCLR 359
  • Sembule Investments Ltd v Uganda Baati Ltd (Miscellaneous Application No. 664 of 2009)

Full judgment

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

Jonel Ltd v Koboko Enterprises Ltd (Miscellaneous Application No. 27 of 2016) [2016] UGCommC 49 (2 June 2016)
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.