Wakilii

Pegasus Technologies Limited v Women Initiative for Rural Development Organisation and Others (Miscellaneous Application No. 28 of 2024)

High Court · [2025] UGCOMMC 157 · 2025 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Interlocutory application for discovery arising from Civil Suit No. 489 of 2020
Decision
Application for discovery granted with orders for production of documents within 30 days and special measures to maintain confidentiality

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Holding

The High Court granted the Applicant's application for discovery, ordering the Respondents to produce on oath payment receipts, tax returns, client registers, and related documents for the period January 2018 to August 2019. The court held that the documents sought were relevant to testing the Respondents' defence that transactions on the Flexi-Pay platform represented genuine payments for services consumed in Uganda. Confidentiality of tax returns and client data did not bar discovery, though the court ordered special measures to maintain confidentiality. The absence of a prior discovery request was not fatal. Costs were reserved to abide the outcome of the main suit.

Outcome

Application for discovery granted with orders for production of documents within 30 days and special measures to maintain confidentiality

Facts

The Applicant, a software development company, provided e-commerce aggregation services to Stanbic Bank Uganda Limited through its Flexi-Pay platform. Between February 2016 and February 2018, the 1st to 9th Respondents signed up as sub-merchants on the platform. In 2018, the Bank identified suspicious online transactions on the Respondents' accounts. A forensic investigation revealed fraudulent transactions totalling UGX 2,303,169,441, allegedly perpetrated by the 10th to 24th Respondents (directors of the merchant companies) who illegally accessed visa cardholders' details. Following chargebacks by Visa, the Applicant indemnified Stanbic Bank and commenced Civil Suit No. 489 of 2020 to recover the sum. The Respondents defended on the basis that the transactions represented genuine payments by customers who consumed their services in Uganda. The Applicant sought discovery of payment receipts, tax returns, client registers, and related documents to test the veracity of this defence.

Issues

  1. Whether the Applicant is entitled to an order for discovery on oath of payment receipts, tax returns, client registers, and related documents from the Respondents.
  2. Whether the documents sought are relevant to matters in issue in the main suit.
  3. Whether the documents sought exist and are in the possession, custody or power of the Respondents.
  4. Whether the application constitutes a fishing expedition.
  5. Whether confidentiality of tax returns and client data bars discovery.
  6. Whether the Applicant's failure to make a prior discovery request is fatal to the application.

Orders

  • An order for discovery on oath of all payment receipts for services in respect of which alleged transactions were done by the Respondents' alleged clients on the Flexi-pay platform between January 2018 and August 2019.
  • An order for discovery on oath of the Respondents' tax returns showing incomes received and declared to Uganda Revenue Authority for the period between January 2018 and August 2019.
  • An order for discovery on oath of the 3rd Respondent's client register and relevant admission forms/documents indicating medical details in respect of which the 3rd Respondent allegedly provided medical services to alleged clients who allegedly paid on the Flexi-Pay Platform.
  • An order for discovery on oath of the 4th, 5th, 7th and 9th Respondents' respective client registers indicating names, addresses, country of origin, purpose of visit, date of arrival and departure of alleged clients for the period between January 2018 and August 2019.
  • An order for discovery on oath of booking details and travel itinerary for all clients that allegedly used tour and travel services of the 4th, 7th, and 9th Respondents between January 2018 and August 2019.
  • An order for discovery on oath of booking, payment, and accommodation details of all clients that allegedly utilized services of the 5th Respondent between January 2018 and August 2019.
  • An order that the Respondents comply with all discovery orders within thirty (30) days from the date of this order.
  • An order directing the registrar to make arrangements to ensure confidentiality of the records/documents sought to be discovered is maintained.
  • An order sealing all documents presented by the Respondents as part of the discovery and expunging them from the public record of the proceedings in the main suit.
  • An order directing the Learned Registrar to make arrangements for special and confidential recording and safekeeping of the documents presented as part of discovery including prevention from access in a manner that contravenes the Data Protection and Privacy Act or the constitutionally enshrined right to privacy.
  • Costs of the Application shall abide the outcome of the main suit but should the Applicant/Plaintiff be successful they will only be entitled to 60% costs.

Rules and key headnotes

Discovery — Scope and Purpose — Relevance Test
Discovery extends to any non-privileged document that is relevant to the matters in issue in the proceedings, provided that it appears reasonably calculated to lead to the discovery of admissible evidence. A document is relevant if it has any tendency to make the existence of any fact of consequence to the suit more or less probable than it would be without the evidence. Discovery rules are given broad and liberal treatment such that even very weak material evidence will be deemed relevant if it has any tendency to prove or disprove a fact in issue, so long as it does not reach the speculative level.
Discovery — Confidentiality — Not an Absolute Bar
There is no principle in English law by which documents are protected from discovery by reason of confidentiality alone. In exercising its discretion to order discovery, the court may have regard to the fact that documents are confidential and that disclosure would involve a breach of confidence, but confidentiality per se is not sufficient to prevent discovery. The court can take measures to guard the confidentiality of documents while ensuring their production, including ordering special arrangements for confidential recording and safekeeping and sealing documents from the public record.
Discovery — Prior Request — Non-Compliance Not Fatal
Although it is trite law that prior to an application for discovery, the applicant ought to request discovery of the documents and may proceed to file an application only once refused, non-compliance with the requirement to make a prior discovery request does not automatically make an application for discovery fatally defective. This is particularly so where, from the responses of the respondents, the discovery request would not have been allowed anyway. Within the framework of Article 126 of the Constitution, the role of the court is to resolve matters substantively, rather than unduly insist on compliance with procedures and processes.
Discovery — Fishing Expedition — Burden of Proof
The court will decline an application for discovery that is a fishing expedition, especially where the documents requested are vague and ambiguous. It is the role of a party who claims an application is a fishing expedition to prove the same. It is not enough for a party to throw unsubstantiated allegations at the court, hoping that the court will fill in the gaps, speculate or use its powers to separate the hay from the chaff. Courts base their decisions on evidence and not assumptions, abstractions or innuendos.
Discovery — Costs — Where Prior Request Not Made
Where an application for discovery would have been necessary had the applicant made a prior request for discovery, the applicant would not be entitled to full costs notwithstanding that they prevailed in the application. Where the application is made against the backdrop of a main suit which is still live, and whose determination will show whether the discovery proceedings would have been necessary in the first place, the court may order that costs abide the outcome of the main suit, with a reduction in the percentage of costs recoverable to reflect the failure to make a prior request.

Legislation cited (8)

Cases cited (22)

  • Dresdner Bank Ag v Sango Bay Estates Ltd (No. 3) [1971] 1 EA 326
  • Dresdner Bank Ag v Sango Bay Estates Ltd (No. 4) [1971] 1 EA 409
  • Simbamanyo Estates and Another v Equity Bank Uganda Limited and Others (Miscellaneous Application No. 853 of 2024)
  • Loftin v. Martin 776 S.W.2d 145 (1989)
  • Compagnie Financiere du Pacifique v Peruvian Guano (1882) Co 11 QBD 55
  • Medtronic Inc v Guidant Corp Civil File Nos. 00-1473 (MJD/JGL), 00-2503 (MJD/JGL) (D. Minn. May. 25, 2004)
  • Mutesi v Attorney General (Miscellaneous Application No. 19 of 2016)
  • Science Research Council v Nassé (1979) IRLR 485
  • O'Callaghan v Mahon [2007] IESC 17
  • R v. Chief Constable of West Midlands. Ex p. Wiley [1995] 1 A.C. 274
  • Alfred Crompton Amusement Machines Ltd v Customs and Excise Commissioners (No. 2) [1972] 2 QB 102
  • Independent Newspapers (Ireland) Ltd v Murphy (2006) IEHC 276
  • John Kato v Muhibauer AG and Another (Miscellaneous Application No. 175 of 2011)
  • Anguba Peter v Housing Finance Bank (Miscellaneous Application No. 434 of 2022)
  • Night Nagujja v Namuwonge Agnes and Others (Miscellaneous Application No. 1878 of 2021)
  • Centenary Bank v Federation of Association of Uganda Exporters Limited and Others (Civil Suit No. 474 of 2016)
  • Luswata Mary Veronica v Exim Bank (Miscellaneous Application No. 1118 of 2023)
  • Harry Ssempa v Kambagambire David (Civil Suit No. 408 of 2014)
  • Iyamuleme David v Attorney General (Civil Appeal No. 4 of 2013)
  • Kwizera Eddie v Attorney General (Civil Appeal No. 1 of 2008)
  • UDB v Muganga Construction (1985) HCB 35
  • AKT Project Management and Others v DFCU Bank (Miscellaneous Application No. 2046 of 2023)

Full judgment

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Pegasus Technologies Limited v Women Initiative for Rural Development Organisation and Others (Miscellaneous Application No. 28 of 2024) [2025] UGCommC 157 (3 April 2025)
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