Wakilii

Nile Bank Ltd and Anor v Thomas Kato and Ors - (High Court Miscellaneous Application No. 1190 of 1999)

High Court · [2000] UGCOMMC 5 · 2000 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to strike out written statement of defence arising from civil suit for breach of contract
Decision
Defence struck out; judgment entered for plaintiffs for purchase price; matter to proceed to formal proof on interest and damages

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Court granted application to strike out defence under Order 6 rule 29 CPR. Defence consisted of general denials violating Order 6 rule 7 by failing to deal specifically with each allegation. Defence of illegality failed to plead facts or specify which provisions of Companies Act were breached, offending Order 6 rule 5. Judgment entered for plaintiffs for purchase price; formal proof ordered for interest and general damages.

Outcome

Defence struck out; judgment entered for plaintiffs for purchase price; matter to proceed to formal proof on interest and damages

Facts

In 1990, defendants as shareholders sold Sanyu Properties Ltd and its assets including plots 44 and 46 Kampala Road to the plaintiffs for Shs. 60,000,000. The sale agreement contained an indemnity clause (clause 9) requiring defendants to indemnify plaintiffs against claims by the Departed Asians Property Custodian Board or other claimants, and to refund the purchase price with interest if such claims succeeded. In 1997, Central Properties & Development Ltd repossessed both properties under the Expropriated Act, with certificates of repossession registered on the titles. Plaintiffs demanded compensation under clause 9; defendants refused. Plaintiffs sued for breach of contract claiming Shs. 250,241,095 including interest. Defendants filed a defence containing general denials, a plea of illegality under the Companies Act without specifying provisions breached, and denial that any claim on the properties had occurred. Plaintiffs applied to strike out the defence.

Issues

  1. Whether the defence filed by the Defendants disclosed a reasonable answer to the Plaintiffs' claim.
  2. Whether the defence of illegality was properly pleaded.

Orders

  • The written statement of defence is struck out for failing to disclose a reasonable defence.
  • Judgment is entered for the Plaintiffs against the Defendants for Shs. 60,000,000 being the purchase price.
  • The claim for interest and general damages shall be set down for formal proof on October 18, 2000.
  • Defence counsel is free to participate in the formal proof.

Rules and key headnotes

Civil Procedure — Pleadings — Written Statement of Defence — General Denials — Order 6 rule 7 CPR
A defendant must deal specifically with each allegation of fact in the statement of claim which he does not admit. A general denial of multiple paragraphs of a plaint without specific traverses offends Order 6 rule 7 of the Civil Procedure Rules, which is mandatory, and such a defence is liable to be struck out.
Civil Procedure — Pleadings — Defence of Illegality — Order 6 rule 5 CPR — Requirement to Plead Facts
Where a defendant pleads illegality as a defence, the facts relied upon to establish the illegality must be specifically stated. A bare assertion that a transaction was illegal because provisions of a statute were flouted, without stating which provisions or the factual basis for the contravention, offends Order 6 rule 5 of the Civil Procedure Rules and does not disclose a reasonable defence.
Civil Procedure — Striking Out Pleadings — Order 6 rule 29 CPR — Exercise of Discretion
The court's discretion under Order 6 rule 29 of the Civil Procedure Rules to strike out pleadings should be exercised only in plain and obvious cases where the pleading discloses no reasonable answer or is frivolous and vexatious. The court examines the pleadings and annextures thereto, not subsequent affidavits.
Contract Law — Indemnity Clauses — Breach — Entitlement to Refund
Where parties to a sale agreement incorporate an indemnity clause obliging the vendor to indemnify the purchaser against third party claims and to refund the purchase price with interest if such claims succeed, the purchaser is entitled to enforce that indemnity upon repossession of the property by a third party with superior title.

Legislation cited (6)

Cases cited (7)

  • Dever Finance Co. Ltd v Harold G. Cold [1969] 1 WLR 1877
  • Kahima & Anor v UTC [1978] HCB 318
  • Libyan Arab Uganda Bank v Messrs Intrepco Limited [1985] HCB 73
  • North Western Salt Co. Ltd v Electrolytic Alkali Co. Ltd [1914] AC
  • Obidegwu F v D.B Ssamakadde (Civil Suit No. 59 of 1992)
  • Phillips v Copping [1935] 1 KB 15
  • Warner v Sampson [1959] 2 WLR 109

Full judgment

↓ Download PDF

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

Nile Bank Ltd and Anor v Thomas Kato and Ors - (High Court Miscellaneous Application No. 1190 of 1999) [2000] UGCommC 5 (29 August 2000)
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.