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Kidega Jude Clement and Another v Spa Financial Services (Miscellaneous Application 1159 of 2016)

High Court · [2017] UGCOMMC 297 · 2017 Application Partly Allowed; Judgment on Admission Entered 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 arising from Civil Suit No. 916 of 2016
Decision
Judgment on admission entered for UGX 143,200,000; applicants granted leave to defend the disputed balance of UGX 141,600,000

Observed later treatment

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Holding

Court held that where applicants dispute part of a money lending claim raising triable issues on loan duration and applicability of the Money Lenders Act, they are entitled to unconditional leave to defend. However, where applicants admit part of the claim and express willingness to pay, court may enter judgment on admission for the admitted sum under Order 13 rule 6 of the Civil Procedure Rules while granting leave to defend the disputed balance.

Outcome

Judgment on admission entered for UGX 143,200,000; applicants granted leave to defend the disputed balance of UGX 141,600,000

Facts

The respondent lent UGX 140,000,000 to the first applicant in December 2015. The second applicant stood as guarantor. Both applicants issued security cheques. The applicants paid back UGX 56,800,000. The respondent claimed a total of UGX 284,800,000 as unpaid principal and interest and sued in Civil Suit No. 916 of 2016. The applicants admitted owing UGX 143,200,000 but disputed the balance, claiming the loan was for four months at 12% per month interest, making the total payable UGX 200,000,000. The respondent maintained the loan was for twelve months and that interest would accrue until paid in full. The applicants issued security cheques worth UGX 200,000,000 which were dishonoured when banked between June and October 2016. The applicants contended that the interest rate was illegal and unconscionable under the Money Lenders Act.

Issues

  1. Whether the applicants should be granted unconditional leave to appear and defend HCCS No. 916 of 2016
  2. Whether the applicants admitted part of the respondent's claim entitling the respondent to judgment on admission
  3. Whether the loan period was for four months or twelve months
  4. Whether the interest rate of 12% per month is excessive, illegal and unconscionable under the Money Lenders Act

Orders

  • Judgment on admission entered against the applicants jointly and severally in favour of the respondent in the sum of UGX 143,200,000.
  • Applicants granted unconditional leave to appear and defend the balance of UGX 141,600,000.
  • Applicants directed to file their written statement of defence within fifteen (15) days from the date of this ruling and serve the same upon the respondent.
  • Costs of this application to abide the cause.

Rules and key headnotes

Civil Procedure — Summary Suits — Leave to Appear and Defend — Test for Grant of Leave
For an applicant to be granted leave to appear and defend a summary suit, the court must be satisfied that the applicant has shown a bonafide triable issue of law or fact, not that they have proven a good defence on the merits. The purpose of the application is not to prove the defence but to obtain an opportunity to prove it through trial.
Civil Procedure — Judgment on Admission — Conditions for Grant under Order 13 Rule 6
Where an applicant clearly, unambiguously and precisely admits part of a plaintiff's claim and expresses willingness and readiness to pay the admitted sum, the court may enter judgment on admission for that sum under Order 13 rule 6 of the Civil Procedure Rules while still allowing the applicant to defend the un-admitted portion of the claim.
Civil Procedure — Leave to Appear and Defend — Triable Issues — Disputes on Material Facts
A dispute between parties as to the duration of a loan agreement, the applicable interest calculation, and whether statutory provisions regulating money lending apply to the transaction, constitutes triable issues requiring investigation and adjudication, warranting the grant of unconditional leave to defend.

Legislation cited (7)

Cases cited (14)

  • Makula International Ltd v Cardinal Nsubuga (1982) HCB 11
  • Dembe Trading Enterprises Ltd v Welcome Impex Uganda Ltd (High Court Civil Suit No. 246 of 2006)
  • Uganda Baati v Patrick Kalema (High Court Civil Suit No. 126 of 2010)
  • Naris Byarugaba v Shivam MKD Ltd (1997) HCB 71
  • Jamil Ssenyonjo v Jonathan Bunjo (Civil Suit No. 180 of 2012)
  • Sembule Investments Ltd v Uganda Baati Limited (Miscellaneous Application No. 664 of 2009)
  • Evas Babigumira v Huadar Guandong Chinese Company Limited (Miscellaneous Application No. 214 of 2016)
  • Andrew Tusiime v Hajj Kassim Julamba (High Court Civil Suit No. 578 of 2012)
  • Sheriff Osman v Hajji Haruna Mulangwa (Supreme Court Civil Appeal No. 38 of 1995)
  • Enscon Limited v Cable Corporation Limited (Miscellaneous Application No. 756 of 2013)
  • Bunjo Jonathan v KCB Bank Uganda Limited (Miscellaneous Application No. 174 of 2014)
  • Bhaker Kotecha v Adam Muhammed (Court of Appeal Civil Appeal No. 48 of 2001)
  • Geoffrey Gatete and Another v William Kyobe (Supreme Court Civil Appeal No. 7 of 2005)
  • Rajiv Kumar v Patel Sureshbhai (High Court Miscellaneous Application No. 815 of 2014)

Full judgment

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

Kidega Jude Clement and Another v Spa Financial Services (Miscellaneous Application 1159 of 2016) [2017] UGCommC 297 (23 February 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.