Wakilii

Mugisha Bernard and Others v Rwanyakabogo United Traders Co. Ltd and Another (Civil Appeal 110 of 2023)

High Court · [2025] UGHC 1217 · 2025 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from Magistrate Grade One decision on consolidated suits for loan recovery and trespass to land
Decision
Appeal dismissed with costs; trial court judgment upholding loan debt and dismissing trespass claim affirmed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed the appeal, holding that the defence of illegality based on absence of a money lending licence at the time of loan disbursement was excluded by the protective purpose of the Tier 4 Microfinance Institutions and Money Lenders Act 2016. The borrower could not rely on a technical defence to avoid repaying money received and used to his advantage. The court upheld the trial magistrate's finding that the appellants owed UGX 3,769,998 and found no evidence of trespass to land.

Outcome

Appeal dismissed with costs; trial court judgment upholding loan debt and dismissing trespass claim affirmed

Facts

The 1st respondent, a money lending company, disbursed a loan of UGX 2,900,000 to the 1st appellant on 29 August 2019 at 5% monthly interest, repayable in six monthly instalments of UGX 628,333. The 1st appellant pledged land as security. The 1st appellant defaulted on repayment. The 1st respondent obtained a money lending licence on 6 November 2019, after the loan was disbursed. The respondent sued for recovery of UGX 3,769,998. The 1st appellant counterclaimed for trespass, alleging the respondent's agents inspected the pledged land four times without permission. The trial magistrate found for the respondent on the loan claim and dismissed the trespass counterclaim. The appellants appealed, arguing the loan agreement was illegal and unenforceable for lack of a valid licence at the time of disbursement.

Issues

  1. Whether the loan agreement dated 29/08/2019 was illegal and unenforceable for lack of a valid money lending licence at the time of disbursement.
  2. Whether the appellants were indebted to the respondents and if so to what tune.
  3. Whether the respondents trespassed on the appellants' land.
  4. Whether the respondents acted fraudulently or illegally in dealing with the appellants.

Orders

  • Appeal dismissed.
  • Costs awarded to the respondents.

Rules and key headnotes

Money Lending — Illegality Defence — Protective Statutes — Tier 4 Microfinance Institutions and Money Lenders Act 2016
The defence of illegality based on absence of a money lending licence is excluded where the statute prohibiting unlicensed money lending is a protective statute enacted to protect the public from unscrupulous lenders. A borrower cannot rely on the lender's breach of licensing requirements to avoid repaying money received and used to his advantage.
Illegality — Ex Turpi Causa — Parties Not in Pari Delicto
The principle that no court will lend its aid to a person who founds his cause of action upon an illegal act has significant exceptions where the parties are not in pari delicto. Where a statute is intended to protect one class of persons from another, the protected party may bring an action notwithstanding participation in the breach.
Issues for Determination — Framing of Issues — Departure from Scheduled Issues
A party is bound by the issues framed at scheduling and cannot raise new issues in submissions that were not canvassed at trial. Evidence is directed at proof of the case as set out in the pleadings and covered by the issues framed. A party will not be allowed to succeed on a case not set up in the pleadings except by way of amendment.
Documentary Evidence — Parol Evidence Rule — Section 91 Evidence Act
Where the terms of a written contract are clear, no oral evidence may be admitted to contradict, vary, add to or subtract from those terms. A party who acknowledges signing a loan agreement for a stated amount cannot rely on oral evidence that a different amount was received.
Trespass to Land — Proof of Trespass — Inspection of Security
Trespass to land consists in any unjustifiable intrusion by one person upon land in the possession of another. Where land is pledged as security for a loan and the borrower defaults, inspection of the security by the lender's agents does not constitute trespass. The burden is on the claimant to prove unauthorized entry and interference with possession.
Grounds of Appeal — Argumentative Grounds — Order 43 Rule 1(2) CPR
A ground of appeal must not be argumentative. Grounds that are narrative and argumentative offend Order 43 Rule 1(2) of the Civil Procedure Rules and may be struck out.

Legislation cited (4)

Cases cited (19)

  • Makula International Ltd v His Eminence Cardinal Nsubuga (1982) HCB 11
  • Naks Ltd v Kyobe Senyange (1982) HCB 52
  • Abdu Wamala v Hajji Sulaiman & 2 Others (Civil Appeal No. 16 of 2020)
  • J. Muluta v S. Katama (Supreme Court Civil Appeal No. 11 of 1999)
  • Fr. Narsensio Begumisa and 3 Others v Eric Kibebaga (Supreme Court Civil Appeal No. 17 of 2002)
  • Katumba Byaruhanga v Edward Kyewalabye Musoke (Court of Appeal Civil Appeal No. 2 of 1998)
  • Attorney General v Florence Baliraine (Court of Appeal Civil Appeal No. 79 of 2003)
  • Ranchobai Shbhai Patel Ltd & Another v Henry Wambuga & Another (Supreme Court Civil Appeal No. 6 of 2017)
  • Fam International Ltd & Ahmed Farah v Mohamed El Faith [1994] III KALR 108
  • Inter Freight Forwarders (U) Ltd v East African Development Bank (Supreme Court Civil Appeal No. 33 of 1992)
  • Holman v Johnson (1775) 1 Cowp 341
  • Hounga v Allen [2014] 1 WLR 2889
  • Maxim Nordenfelt Guns and Ammunition Co v Nordenfelt [1893] 1 Ch 630
  • Tinsley v Milligan [1994] 1 AC 340
  • Patel v Mirza [2016] UKSC 42
  • Browning v Morris (1778) 2 Cowp 790
  • Ben Kavuya & 2 Others v Wakanyira David George (Supreme Court Civil Appeal No. 31 of 2021)
  • Lutaya v Stirling Civil Engineering Co. Ltd (Court of Appeal Civil Appeal No. 11 of 2011)
  • Lovinsa Nankya v Nsibambi (1980) HCB 81

Full judgment

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

Mugisha Bernard and Others v Rwanyakabogo United Traders Co. Ltd and Another (Civil Appeal 110 of 2023) [2025] UGHC 1217 (12 September 2025)
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.