Wakilii

Ndahura v Twine (Miscellaneous Application 2 of 2023)

High Court · [2023] UGHCCD 325 · 2023 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend arising from summary suit for recovery of friendly loan
Decision
Application dismissed with costs; summary judgment entered for plaintiff for UGX 269,000,000

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Holding

The court dismissed the application for leave to appear and defend, finding that the applicant failed to raise any triable issues. The friendly loan agreement was valid and binding, the applicant acknowledged receipt of the loan sum by signing the agreement, and no illegality was established under the Money Lenders Act as the respondent was not carrying on a business of money lending. The alleged memorandum of understanding was not binding on the respondent and could not be imported into the interpretation of the loan agreement. Summary judgment for UGX 269,000,000 was entered in favour of the plaintiff with costs.

Outcome

Application dismissed with costs; summary judgment entered for plaintiff for UGX 269,000,000

Facts

The respondent/plaintiff filed a summary suit claiming UGX 269,000,000 under a friendly loan agreement dated 25 November 2020. The applicant/defendant sought unconditional leave to appear and defend, alleging that repayment was conditional on receiving compensation from UNRA, that he had not personally received the money, that the respondent was an unlicensed money lender, and that he had not been served with statutory notice. The friendly loan agreement clearly stated that the applicant acknowledged receipt of UGX 269,000,000 and undertook to repay in full by 31 December 2020. The applicant produced a memorandum of understanding dated 5 November 2020 allegedly conditioning repayment on UNRA compensation, but this document bore no endorsement by the respondent. The suit was filed on 4 October 2022, long after the repayment deadline.

Issues

  1. Whether the Applicant raises triable issues as to warrant the grant of unconditional leave to appear and defend the suit.
  2. Whether the Applicant is entitled to costs.

Orders

  • Application for leave to appear and defend HCCS No. 01/2022 declined and dismissed.
  • Summary judgment for UGX 269,000,000 entered in favour of the Respondent/Plaintiff.
  • Costs of the application awarded to the Respondent.

Rules and key headnotes

Civil Procedure — Summary Suits — Leave to Appear and Defend — Test for Grant
For an order of unconditional leave to appear and defend to be granted, the applicant must show that he has a good defence on merit, or that a difficult point of law is involved, or that there is a dispute as to the facts which ought to be tried, or a real dispute as to the amount claimed which requires taking an account to determine, or any other circumstances showing reasonable grounds of a bonafide defence. The applicant is not bound to show a good defence on merits but must satisfy the court that there is an issue or question in dispute which ought to be tried.
Civil Procedure — Summary Suits — Sham Defence — Test
The test to determine whether a defence is a sham is to see whether the defence raises a real issue and not one which is a sham, in the sense that if the facts alleged by the defendant are established, there would be a good or even a plausible defence on those facts. The intended written statement of defence should be annexed to the application to help the judge determine whether to refuse or grant the application.
Contract Law — Loan Agreements — Acknowledgement of Receipt — Effect
Where a loan agreement expressly states that the borrower acknowledges receipt of the loan sum by signing the agreement, and the borrower has neither denied signing the agreement nor claimed coercion or misrepresentation, there is no need for additional documentation in the form of delivery payment receipts or other acknowledgement. The acknowledgement in the agreement itself is sufficient evidence of receipt.
Contract Law — Interpretation — Extrinsic Documents — When Inadmissible
A separate document that is not endorsed by one of the parties and is not referred to or alluded to in the main agreement cannot be imported into the interpretation of that agreement. Such a document does not bind the party who did not endorse it and is not connected with the claim under the main agreement.
Contract Law — Money Lending — Money Lenders Act — Application — Friendly Loans
Not every person who lends money at interest carries on the business of money lending. The Money Lenders Act applies to persons whose business is that of money lending and who advertise or announce themselves or hold out in any way as carrying on that business. There is nothing illegal for a person to lend money to another person under agreement where the lender does not carry on the business of money lending. A person who merely advances a friendly loan without interest and security repayable within a specified period is not carrying on the business of money lending and does not require a money lender's license.
Civil Procedure — Statutory Notice — Application — Ordinary Litigants
The requirement to serve a statutory notice of intention to sue under the Civil Procedure Limitations (Miscellaneous Provisions) Act applies only to scheduled corporations, government, or local authorities. An ordinary litigant is not entitled to such notice. Even where the requirement applies, failure to serve the statutory notice does not vitiate the proceedings but only risks denial of costs to the party who proceeded without issuing the notice.

Legislation cited (8)

  • Civil Procedure Rules O.36 r.2
  • Civil Procedure Rules O.36 r.4
  • Civil Procedure Rules O.51 r.1
  • Civil Procedure Rules O.51 r.2
  • Civil Procedure Act s.98
  • Money Lenders Act s.1(h)
  • Money Lenders Act s.21
  • Civil Procedure Limitations (Miscellaneous Provisions) Act 20/69 s.2(1)(c)

Cases cited (9)

  • Children of Africa v Sarick Construction Ltd (HCMA No. 134 of 2016)
  • Maluku Interglobal Trade Agency v Bank of Uganda [1985] HCB 65
  • Mrs Raj Duggal Vs Ramesh Kumar Bansal, 1990 Supreme Court of India 2018
  • UCB v Mutin Agencies [1982] HCB 22
  • Clessy Barya v Jomo Robert Kashaija (HCCS No. 894 of 2019)
  • Litchfield v Dreyfus (1906) 1 KB 584
  • Mbabali Muyanja v UCB (HCCS No. 261 of 1993)
  • Kampala Capital City Authority v Kabandize & 10 Others (SCCA No. 13 of 2014)
  • Francis Butagira v Deborah Namukasa (1992-1993) HCB 98

Full judgment

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Ndahura v Twine (Miscellaneous Application 2 of 2023) [2023] UGHCCD 325 (18 August 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.