Wakilii

Peak Partnership Limited and Barbara Kisakye Lumu t a Peal Valuers and Surveyors v Centenary Rural Development Bank Limited (Miscellaneous Application No. 3103 of 2023)

High Court · [2025] UGCommC 1 Application Dismissed; Judgment Entered for Respondent AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend Civil Suit No. 1565 of 2023, a specially endorsed plaint seeking recovery of UGX 149,000,000
Decision
Application for leave to defend dismissed; decree entered for the Respondent in the underlying suit for UGX 149,000,000 with interest at 21% per annum from 19 April 2023

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the applicants failed to demonstrate a bona fide triable issue of law or fact warranting leave to defend. The alleged lack of corporate authorization was not a defense where the company subsequently ratified the commitment through part payment and legal correspondence. The defense of coercion was not proved. The triable issues raised by the applicants related to the circumstances giving rise to the indemnification agreement, not to the existence of the debt itself. Where leave to appear and defend is refused under Order 36, the plaintiff is entitled to immediate decree. Application dismissed; judgment entered for the respondent for UGX 149,000,000 plus interest at 21% per annum from 19 April 2023.

Outcome

Application for leave to defend dismissed; decree entered for the Respondent in the underlying suit for UGX 149,000,000 with interest at 21% per annum from 19 April 2023

Facts

The applicants, valuers, were engaged by the respondent bank to value property offered as security for a loan to Balaga William. The applicants allegedly valued the wrong property. By letters dated 14 and 29 December 2020, the first applicant undertook to indemnify the respondent UGX 260,000,000, being the forced sale value of the incorrectly valued property. The applicants paid UGX 110,000,000, leaving a balance of UGX 149,000,000. The respondent sued for the balance by way of specially endorsed plaint. The applicants applied for leave to appear and defend, arguing inter alia that the commitment lacked corporate authorization, was made under duress, and that the respondent should have exhausted its remedies against the mortgagor first. The respondent contended that the commitment was made by the managing director and ratified by subsequent part payment and legal correspondence from the applicants' lawyers.

Issues

  1. Whether the Applicant has proven sufficient grounds to warrant a grant of unconditional leave to appear and defend

Orders

  • Application dismissed for lack of merit.
  • The Plaintiff/Respondent is awarded a decree in Civil Suit No. 1565 of 2023 for the sum of UGX 149,000,000.
  • Interest at 21% per annum from 19 April 2023 until payment in full.
  • Costs of the suit to the Respondent.
  • Costs of this application to the Respondent.

Rules and key headnotes

Civil Procedure — Summary Procedure — Leave to Appear and Defend — Test for Grant of Leave
For a defendant to be granted leave to appear and defend a specially endorsed plaint under Order 36 Rule 4 of the Civil Procedure Rules, the defendant must show that he or she has a good defense on the merits; or that a difficult point of law is involved; or that there is a dispute which ought to be tried; or a real dispute as to the amount claimed which requires an account to determine; or any other circumstances showing reasonable grounds of a bona fide defense. The defense so disclosed must be both bona fide and good in law.
Civil Procedure — Summary Procedure — Triable Issues — Nature of Defense Required
In an application for leave to appear and defend under Order 36, the defense and triable issues raised must relate to the existence or non-existence of the debt claim itself, not to the circumstances giving rise to the indebtedness. An applicant must convince the court that there are triable issues surrounding the debt claim, such as discrepancies in the amount claimed, complete payment, or lack of entitlement to the amount claimed.
Contract Law — Corporate Authority — Ratification by Subsequent Conduct
Where a managing director of a company makes a commitment on behalf of the company, the company may ratify that commitment through its subsequent conduct, including making part payment on the commitment and acknowledging the debt through legal correspondence. A third party contracting with a company is not required to inquire into the internal management procedures of the company to determine whether corporate authorization was obtained.
Civil Procedure — Summary Procedure — Effect of Refusal of Leave to Defend
Where, after hearing an application by a defendant for leave to appear and defend a specially endorsed plaint, the court refuses to grant such leave, the plaintiff is entitled as against the defendant to a decree on the sums claimed under Order 36 Rule 5 of the Civil Procedure Rules.

Legislation cited (8)

Cases cited (19)

  • Isubikalu T/a Laftaz Comedy Lounge v Nalongo Estate Limited (Miscellaneous Application No. 668 of 2019)
  • Makula Interglobal Trade Agency Ltd v Bank of Uganda [1985] HCB 65
  • Geoffrey Gatete & Another v William Kyobe (Supreme Court Civil Appeal No. 07 of 2005)
  • Children of African v Sarick Construction Limited (Miscellaneous Application No. 134 of 2016)
  • David Nahurira v Baguma Cyprian Begumanya and Others (Civil Suit No. 392 of 2014)
  • Barclays Bank (U) Ltd v Howard Bakoja, Civil Suit No. 53
  • China and South Bank v Tanson Gin [1990] AC 536
  • Post Bank (U) Ltd v Abdul Ssozi (Supreme Court Civil Appeal No. 8 of 2015)
  • Zola & Another v Ralli Brothers Ltd & Another [1969] EA 691
  • Kotecha v Mohammed [2002] 1 EA 112
  • Saw V Hakim 5 TLR 72
  • Ray v Barker 4 Ex DI 279
  • Churanjilal & Co v A H Adam (1950) 17 EACA 92
  • Hasmani v Banque du Congo Belge (1938) 5 EACA 89
  • Eco Bank Uganda Limited v Kalson's Agrovet Concern Ltd & Anor (Civil Suit No. 573 of 2016)
  • Uganda Commercial Bank v Mukoome Agencies [1982] HCB 22
  • National Cement Co (U) Ltd v 2M Capital Ltd (Miscellaneous Application No. 772 of 2020)
  • Pamela Anyoti v Root Capital Inc (Miscellaneous Application No. 844 of 2023)
  • AngloCyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873

Full judgment

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

Peak_Partnership_Limited_and_Barbara_Kisakye_Lumu_t_a_Peal_Valuers_and_Surveyors_v_Centenary_Rural_Development_Bank_Limited_(Miscellaneous_Application_No._3103_of_2023)_[2025]_UGCo
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.