Wakilii

Premier Credit Ltd v Bakundama Ismail Adam and Others (Civil Suit No . 261 of 2016)

High Court · [2025] UGCOMMC 508 · 2025 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance debt recovery action for breach of loan agreement and guarantees, heard ex parte following defendants' failure to enter appearance
Decision
Judgment entered for the plaintiff against all defendants jointly and severally for the outstanding loan amount, general damages, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the defendants breached the loan agreement and guarantee agreements. The first defendant defaulted on monthly repayments from May 2015 and provided fraudulent security in the form of non-existent land. The plaintiff proved its case on the balance of probabilities despite the defendants' failure to enter appearance. The court awarded the outstanding principal sum of UGX 49,847,170, general damages of UGX 9,969,434 calculated at 20% per annum on the principal, and costs. The court declined to award additional interest on general damages.

Outcome

Judgment entered for the plaintiff against all defendants jointly and severally for the outstanding loan amount, general damages, and costs

Facts

Premier Credit Ltd, a licensed financial institution, entered into a loan agreement with the first defendant on 20 November 2014 for UGX 35,000,000, with the remaining defendants acting as guarantors. The plaintiff disbursed UGX 32,375,000 after deducting fees. The first defendant was obligated to make monthly repayments of UGX 1,791,666 over 36 months. The first defendant defaulted from May 2015, making no full monthly instalments between June and December 2015, and ceasing all payments from 28 May 2015. The security offered was land at Block 234, Plot 310 Kyadondo County, Mengo, on which the plaintiff registered a mortgage. When the plaintiff attempted to sell the property following default, a third party contested the title in High Court Civil Suit No. 46 of 2016, which found that the first defendant had mortgaged non-existent land. The defendants failed to enter appearance despite service of a Notice of Default.

Issues

  1. Whether the Defendants breached the loan agreement and guarantee agreements and are liable to the plaintiff for the amount claimed?
  2. What are the remedies available for the plaintiff?

Orders

  • A declaration that the Defendants breached the loan agreement and the guarantee agreements.
  • The defendants pay to the plaintiff UGX 49,847,170 as the outstanding sum.
  • The defendants pay to the plaintiff general damages of UGX 9,969,434.
  • The defendants pay the costs of the suit.

Rules and key headnotes

Evidence — Burden of Proof — Ex Parte Proceedings — Plaintiff's Duty to Prove Case
In ex parte proceedings where the defendant has not entered appearance, the plaintiff still bears the legal burden of proving the case on the balance of probabilities and must adduce sufficient evidence to establish the facts asserted.
Contract Law — Breach of Contract — Definition and Elements
A breach of contract occurs where one or both parties fail to fulfil the obligations imposed by the terms of the contract, including failure to perform a contractual obligation within the agreed time, and constitutes a failure without lawful excuse to perform any promise that forms all or part of the contract.
Contract Law — Loan Agreements — Guarantees — Joint and Several Liability
Where guarantors execute guarantees for the repayment of a loan with all interest due, they become jointly and severally liable with the borrower for the outstanding principal sum and accrued interest upon the borrower's default.
Civil Procedure — Pleadings — Fraud — Requirement of Particularity
Allegations of fraud must be pleaded with particularity, detailing the who, what, when, where, and how of the misconduct, specifying the false or misleading statements, and explaining why they are false. Failure to plead fraud with requisite particularity prevents the court from making a finding of fraud even where fraudulent conduct is evidenced.
Damages & Quantum — General Damages — Breach of Contract — Delayed Repayment of Money
In cases of delayed repayment of money, additional general damages are not awarded separately; instead, compensation is provided in the form of interest calculated based on prevailing interest rate and inflation during the period of delay, to reflect the real value of money lost and ensure the creditor is made whole.
Damages & Quantum — General Damages — Calculation — Interest on Principal as Damages
General damages for breach of a loan agreement may be calculated by applying an interest rate per annum on the principal sum to reflect the profit that the money would have generated during the breach period, from the date the principal sum fell due until payment in full.
Civil Procedure — Costs — Costs Follow the Event — Successful Party
A successful party can only be denied costs if it is proved that, but for their conduct, the action would not have been brought. Where a party succeeds in the main purpose of the suit, costs will follow the event.

Legislation cited (10)

Cases cited (12)

  • Miller v Minister of Pensions (1947) 2 All ER 372
  • Nakana Trading Co Ltd v Coffee Marketing Board (Civil Suit No. 137 of 1991)
  • Storms v Hutchinson [1905] AC 515
  • James Fredrick Nsubuga v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and Another (High Court Civil Suit No. 177 of 2003)
  • Hadley v Baxendale (1854) 9 Exch 341
  • Charles Acire v M Engola (High Court Civil Suit No. 143 of 1993)
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305
  • Nilecom Limited v Kodjo Enterprises (Civil Suit No. 18 of 2014)
  • Sowah v Bank for Housing & Construction [1982-83] 2 GLR 1324
  • Uganda Development Bank v Muganga Construction Co Ltd (1981) HCB 35

Full judgment

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

Premier Credit Ltd v Bakundama Ismail Adam and Others (Civil Suit No . 261 of 2016) [2025] UGCommC 508 (30 September 2025)
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.