Wakilii

Kencom (U) Ltd & 2 Ors v Eco Bank (U) Ltd (Miscellaneous Application No. 148 of 2017)

High Court · [2017] UGCOMMC 129 · 2017 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside exparte judgment and decree arising from default in HCCS No. 651 of 2014
Decision
Exparte judgment and decree in HCCS No. 651 of 2014 to stand; applicants' application to set aside dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the application to set aside an exparte judgment in a loan recovery suit. The second applicant's affidavit was struck out for non-compliance with the Illiterates Protection Act. Service by substitution was held valid where applicants made themselves unavailable. The third applicant was found to be a guarantor based on his signature and the parties' intention, notwithstanding the omission of his name at the beginning of the guarantee document. Applicants failed to show they were denied natural justice or had a viable defence.

Outcome

Exparte judgment and decree in HCCS No. 651 of 2014 to stand; applicants' application to set aside dismissed

Facts

Kencom (U) Ltd borrowed UGX 634,371,527 from Ecobank secured by mortgage and personal guarantees from the second and third applicants. When the company defaulted, Ecobank sued all three parties. After multiple attempts to serve the applicants at the registered address and by telephone failed, the bank obtained an order for substituted service through newspaper publication on 17 July 2015. The applicants did not respond and Ecobank obtained exparte judgment on 14 December 2015. When execution commenced, the applicants filed this application to set aside the judgment, claiming they were not served, the second applicant was illiterate and could not read the newspaper, and the third applicant was not a guarantor. The mortgaged property was subject to injunctive orders in another suit preventing foreclosure.

Issues

  1. Whether the applicants were effectively served with summons to justify the exparte judgment.
  2. Whether the second applicant's affidavit was admissible given his claimed illiteracy and failure to comply with the Illiterates Protection Act.
  3. Whether the third applicant was a guarantor under the Personal Guarantee and Indemnity document.
  4. Whether the applicants demonstrated sufficient cause to set aside the default judgment and showed they have a good defence to the suit.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Evidence — Affidavits — Illiterate Deponents — Verification Requirements under Illiterates Protection Act
An affidavit sworn by an illiterate person that has not been subjected to verification as required by sections 2 and 3 of the Illiterates Protection Act is incurably inadmissible and must be struck out.
Civil Procedure — Service of Process — Substituted Service — Effectiveness Where Party Makes Themselves Unavailable
Where a party makes themselves unavailable for personal service by providing an incorrect address and maintaining inaccessible telephone contacts, substituted service by publication in a newspaper is reasonable and effective, and failure to serve is occasioned by the party themselves.
Contract Law — Guarantees — Interpretation — Intention of Parties and Execution
Where a guarantor signs a Personal Guarantee and Indemnity document at the place designated for a guarantor's signature, the fact that their name was omitted from the opening recital does not invalidate the guarantee if the parties' intention to guarantee and their conduct in acting upon it are established.
Civil Procedure — Setting Aside Default Judgment — Requirement to Show Good Defence
An applicant seeking to set aside a default judgment must attach a draft defence to the application to enable the court to determine whether there is a good defence to justify setting aside the judgment; failure to do so is fatal to the application.

Legislation cited (2)

Cases cited (1)

  • Kasaala Growers Co-operative Society v Kakooza Jonathan & Kalemera Edson (Supreme Court Civil Appeal No. 19 of 2007)

Full judgment

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

Kencom (U) Ltd & 2 Ors v Eco Bank (U) Ltd (Miscellaneous Application No. 148 of 2017) [2017] UGCommC 129 (26 October 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.