Wakilii

Nganda Kaweesi v R.L. Jain (High Court Miscellaneous Application No. 512 of 2008)

High Court · [2009] UGCOMMC 17 · 2009 Application Dismissed 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 for recovery of a loan guaranteed by the applicant
Decision
Application for unconditional leave to appear and defend dismissed with costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A guarantor's liability arises once the principal debtor defaults, and there is no rule requiring a creditor to exhaust other securities before turning to the guarantor unless the guarantee contains an express or implied condition precedent requiring such. The applicant admitted the guarantee, the default, and the amount claimed, and raised no valid defence. Application dismissed.

Outcome

Application for unconditional leave to appear and defend dismissed with costs

Facts

The respondent R.L. Jain advanced a loan of UGX 62,000,000 to Ali Ndaula, which was guaranteed by the applicant Nganda Kaweesi. As security, Ndaula provided a land title (Plot 163 Block 57 Bukumu, Luwero) and assigned his parliamentary car loan scheme entitlement. The guarantee stated that if Ndaula failed to repay, the guarantor would be liable for the loan amount with full interest. Ndaula defaulted, and the respondent filed a summary suit seeking UGX 121,880,000 from both Ndaula and Kaweesi. Kaweesi applied for unconditional leave to appear and defend, arguing that the lender must first exhaust the other securities before suing him as guarantor. He admitted signing the guarantee and did not dispute the default or the amount claimed.

Issues

  1. Whether the applicant must be granted unconditional leave to appear and defend the summary suit.
  2. Whether the respondent/lender must first realise other securities provided by the principal borrower before pursuing the guarantor.
  3. Whether the applicant raised a bona fide triable issue of fact or law.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Guarantee — Liability of Guarantor — Default by Principal Debtor
A guarantor's liability under a contract of guarantee arises once the principal debtor has failed to perform his obligations to the creditor, and the guarantor becomes personally liable for the debt, default or miscarriage of the principal without the creditor being required to first pursue the principal debtor.
Guarantee — Multiple Securities — Creditor's Choice
Where a creditor holds multiple securities including a guarantee and other collateral provided by the debtor, there is no rule requiring the creditor to exhaust or realise the other securities before turning to the guarantor, unless the guarantee contains an express or implied condition precedent requiring such.
Guarantee — Conditions Precedent to Liability
Any express or implied conditions precedent to a guarantor's liability must be fulfilled before recourse can be had to the guarantor. However, the mere fact that other security is intended or contemplated by the creditor does not make the taking of that security a condition precedent to the guarantor's liability unless the guarantor makes clear to the creditor before giving the guarantee that his guarantee is so conditional.
Summary Procedure — Leave to Defend — Test
In an application for leave to appear and defend a suit brought under summary procedure, the applicant must show by affidavit or otherwise that there is a bona fide triable issue of fact and law, and any defence raised must be stated with sufficient particulars so as to appear genuine and not merely vague statements denying liability.

Legislation cited (2)

Cases cited (2)

  • Mukulu Interglobal Trade Agencies v Bank of Uganda (1985) HCB 65
  • Tororo District Admin v Andalap Industries (1997) IV KALR 126

Full judgment

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

Nganda Kaweesi v R.L. Jain (High Court Miscellaneous Application No. 512 of 2008) [2009] UGCommC 17 (19 March 2009)
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.