Wakilii

National Enterprise Development Association Ltd v Kezia Mbabazi and Anor (HCT-00-CC-CS 425 of 2005)

High Court · [2005] UGCOMMC 64 · 2005 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of loan contract with formal proof after interlocutory judgment
Decision
Judgment entered for plaintiff against both defendants jointly and severally with damages and interest

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court granted judgment for the plaintiff money-lending company against both defendants jointly and severally for breach of a loan contract. The 1st defendant borrowed Shs.10,000,000 and failed to repay. The 2nd defendant guaranteed payment and failed to honour that guarantee. The court awarded special damages of Shs.8,899,600 representing principal and interest, general damages of Shs.1,000,000 for loss of use of money, and interest on both at commercial and statutory rates respectively.

Outcome

Judgment entered for plaintiff against both defendants jointly and severally with damages and interest

Facts

In May 2004, the 1st defendant Kezia Mbabazi applied for and received a loan facility of Shs.10,000,000 from the plaintiff, a money-lending company, to be repaid in fifteen monthly instalments with interest at 4% per month. The 2nd defendant Ameria Momo Masiko guaranteed payment of the loan. The 1st defendant failed to make the required monthly payments. By the time of filing suit, the outstanding amount including principal, interest, and surcharge for late payment was Shs.8,899,600. The defendants were served with summons on 31 May 2005 but refused or neglected to file a defence. An interlocutory judgment was entered against them on 5 July 2005. From the time of filing to the date of judgment, the 1st defendant made no payments. The 2nd defendant failed to honour her guarantee.

Issues

  1. Whether the 1st Defendant breached the loan agreement by failing to repay the loan facility.
  2. Whether the 2nd Defendant as guarantor is liable for the outstanding debt.
  3. What quantum of damages should be awarded for breach of the loan contract.

Orders

  • Judgment entered for the plaintiff against the defendants jointly and severally.
  • Special damages of Shs.8,899,600 awarded to the plaintiff.
  • General damages of Shs.1,000,000 awarded to the plaintiff.
  • Interest on special damages at the obtaining commercial rate from the date of filing the suit till payment in full.
  • Interest on general damages at the rate of 8% per annum from the date of judgment till payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Contract Law — Breach of Contract — Failure to Repay Loan — Liability of Principal Borrower and Guarantor
Where a borrower receives a loan and fails to repay according to the agreed terms, and a guarantor undertakes to guarantee payment of the loan, both the principal borrower and the guarantor are liable jointly and severally for the outstanding debt.
Civil Procedure — Interlocutory Judgment — Effect of Failure to File Defence
Under Order 8 rule 3 of the Civil Procedure Rules, every allegation of fact in the plaint, if not denied specifically or by necessary implication, is taken to be admitted, and where defendants are served but fail to file a defence, their liability is determined upon entry of interlocutory judgment.
Damages & Quantum — Breach of Contract — Measure of Damages — Loss of Use of Money
The damages which a party ought to receive for breach of contract should be such as may fairly and reasonably be considered as either arising naturally from the breach itself or such as may reasonably have been in the contemplation of the parties at the time of making the contract as the probable result of its breach.
Damages & Quantum — General Damages — Loss Suffered by Lending Institution — Denial of Use of Money
Where a money-lending institution that depends on borrowing from other institutions on interest is denied use of its money through breach of a loan agreement, it suffers loss for which general damages may be awarded as compensation, not as punishment, separate from recovery of the principal sum.

Legislation cited (1)

  • Civil Procedure Rules O.8 r.3

Full judgment

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

National Enterprise Development Association Ltd v Kezia Mbabazi and Anor (HCT-00-CC-CS 425 of 2005) [2005] UGCommC 64 (9 November 2005)
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.