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Lutalo v Ntanda and 11 Others (Miscellaneous Application 180 of 2022)

High Court · [2023] UGHCCD 226 · 2023 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside default judgment and decree, stay execution, and obtain leave to file defence out of time arising from Civil Suit No. 71 of 2019
Decision
Default judgment set aside; applicant granted leave to file defence out of time; matter to proceed to substantive hearing

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court set aside a default judgment and decree where service of summons had not been properly effected and an arbitration clause in the parties' land sale agreements required disputes to be submitted to mediation before court proceedings. The order for substituted service was irregularly obtained because the process server's affidavit contained discrepancies and untruthfulness, and the applicant was not given an opportunity to participate in proceedings. Where an arbitration agreement exists, courts must refer matters back to arbitration unless the defendant has filed a defence and been heard.

Outcome

Default judgment set aside; applicant granted leave to file defence out of time; matter to proceed to substantive hearing

Facts

The Applicant entered into land sale agreements with the Respondents for sale of portions of land comprised in Bugerere Block 75, Plots 9 and 11. The agreements contained an arbitration clause requiring mediation before court proceedings. Disputes arose when the Applicant allegedly led the Respondents to a different plot of land during a site visit. The Applicant refunded UGX 80,000,000 but failed to refund the full amount. The Respondents filed Civil Suit No. 71 of 2019 claiming UGX 156,048,052. The Applicant was not personally served with summons; substituted service was ordered and effected by newspaper advertisement. Default judgment was entered on 13 January 2020. The Applicant only learned of the suit in April 2022 when bailiffs sought to execute the decree. The Applicant applied to set aside the default judgment, arguing he was not properly served and that the suit was premature as the parties had not first attempted mediation under the arbitration clause.

Issues

  1. Whether the procedure used by the applicant was proper.
  2. Whether the Applicant has provided sufficient reasons warranting setting aside judgment and decree and granting him leave to file a written statement of defence out of time in Civil Suit No. 71 of 2019.

Orders

  • The default judgment and decree entered in Civil Suit No. 71 of 2019 is set aside.
  • Execution of the decree in Civil Suit No. 71 of 2019 is stayed.
  • The Applicant is granted leave to file his written statement of defence in Civil Suit No. 71 of 2019 within 15 days from the date of this ruling.
  • Each party to bear their own costs of this application.

Rules and key headnotes

Service of Process — Substituted Service — Requirements for Valid Order
An order for substituted service is irregularly obtained where the affidavit in support contains discrepancies, untruthfulness, and inconsistencies regarding attempts at personal service, and where the process server's affidavit of service was filed after the application for substituted service despite claiming to have attempted service before the application.
Service of Process — Requirements for Effective Service
Service of summons must be effected personally wherever practicable under Order 5 rule 10 of the Civil Procedure Rules. Substituted service under Order 5 rule 18 is only available where the court is satisfied that service cannot be effected in the ordinary manner, and the party seeking substituted service must demonstrate exhaustion of all reasonable means of effecting personal service.
Arbitration Agreements — Mandatory Referral to Arbitration — Court's Duty
Where parties have agreed to submit disputes arising from their contract to mediation or arbitration before recourse to courts, and a case has commenced in court without the arbitration procedure being followed, the court is mandated under section 5 of the Arbitration and Conciliation Act Cap. 4 to refer the matter back to arbitration after both parties have been given a hearing, unless the arbitration agreement is null and void, inoperative, incapable of being performed, or there is no dispute between the parties.
Arbitration Clauses — Effect on Court Proceedings — Premature Suit
Where a contract contains an arbitration clause requiring mediation before court proceedings, a suit filed without first attempting mediation is premature and barred. The court must respect the mandatory provision of the Arbitration and Conciliation Act and make an order referring the matter to arbitration.
Setting Aside Default Judgment — Grounds — Improper Service
A default judgment may be set aside under Order 9 rule 12 of the Civil Procedure Rules where the defendant was not properly served with summons to file defence, leading to failure to participate in the proceedings. Where there was no effective service, the default judgment and decree were improperly obtained.
High Court Jurisdiction — Section 33 Judicature Act — Omnibus Applications
The High Court under section 33 of the Judicature Act has discretion to grant all remedies to which any party is entitled in respect of any legal or equitable claim properly brought before it, including setting aside ex parte judgments and staying execution. Once the court issues an order to set aside an ex parte judgment, stay of execution is implied as there would be nothing to execute once the judgment is set aside.

Legislation cited (8)

Cases cited (5)

  • Bitamisi Namuddu v Rwabuganda Godfrey (Supreme Court Civil Application No. 04 of 2015)
  • Godfrey Gatete and Another v William Kyobe (SCCA No. 07 of 2005)
  • Steam Investments Ltd v Isolux Ingenieria (HCCS No. 91 of 2021)
  • Kayizzi Godfrey v Osman Tom (Miscellaneous Application No. 1921 of 2016)
  • Shell (U) v AGIP (U) (Supreme Court Civil Appeal No. 49 of 1995)

Full judgment

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Lutalo v Ntanda and 11 Others (Miscellaneous Application 180 of 2022) [2023] UGHCCD 226 (24 July 2023)
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.