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Ready Agro Suppliers Ltd and Ors v Uganda Development Bank Ltd (HCT-00-CC-MA 379 of 2005)

High Court · [2005] UGCOMMC 44 · 2005 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for leave to defend arising from summary suit for loan recovery
Decision
Judgment entered for the respondent bank against all three applicants for the full sum claimed plus interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the application for leave to defend by all three applicants. The third applicant's application was unsupported by a timely affidavit. The first and second applicants failed to establish a triable issue as to the loan debt, failing to articulate whether the defence went to the whole or part of the claim as required by Order 33 Rule 4. The alleged counterclaim for breach of contract was found to be without merit and not supported by the written loan agreement. Judgment was entered for the respondent bank for the full sum claimed with interest.

Outcome

Judgment entered for the respondent bank against all three applicants for the full sum claimed plus interest and costs

Facts

The respondent bank advanced a loan of US$250,000 to the first applicant company for importation of fertilizers and internal transportation costs. The first applicant defaulted, and the bank sued for recovery of US$140,752.19 against the company and two directors who stood as guarantors. The applicants sought leave to defend, denying the debt and alleging the bank breached the agreement by refusing to pay port charges at Mombasa and transportation costs from Mombasa to Kampala totalling US$16,500. The applicants attached payment receipts but did not specifically address the bank's statement of account showing the outstanding balance. The third applicant filed his supporting affidavit one month after the application deadline without leave of court.

Issues

  1. Whether the applicants' applications for leave to appear and defend were properly supported by affidavits as required by Order 33 Rule 4 of the Civil Procedure Rules.
  2. Whether the applicants raised a triable defence to the respondent's claim for loan recovery.
  3. Whether the applicants established a valid counterclaim for breach of contract against the respondent.
  4. Whether the applicants satisfied the requirement to state whether the defence alleged went to the whole or part only of the plaintiff's claim.

Orders

  • Application for leave to appear and defend dismissed with costs.
  • Judgment entered for the respondent in the sum of US$140,752.19.
  • Interest awarded at 12% per annum from 31 January 2005 to 4 May 2005 (date of filing).
  • Thereafter interest awarded at court rate until payment in full.
  • Costs of the suit awarded to the respondent.

Rules and key headnotes

Civil Procedure — Summary Suit — Leave to Defend — Requirements under Order 33 Rule 4
An application for leave to appear and defend a summary suit must be supported by an affidavit which states whether the defence alleged goes to the whole or to part only of the plaintiff's claim, and if to part only, which part of the claim. A general denial without specifying whether the defence goes to the whole or part of the claim does not satisfy the requirements of Order 33 Rule 4 of the Civil Procedure Rules.
Civil Procedure — Summary Suit — Leave to Defend — Time Limits and Supporting Affidavits
An affidavit filed in support of an application for leave to defend must be filed within the time prescribed for instituting the application. An affidavit filed one month after the application without leave of court cannot support an application for leave to defend and the application will be dismissed as unsupported by evidence.
Civil Procedure — Summary Suit — Leave to Defend — Sufficiency of Defence Disclosed
A defendant seeking leave to defend must articulate a specific defence showing whether payments made wholly or partially discharge the debt claimed. Where a defendant attaches payment receipts but fails to reconcile them with the plaintiff's statement of account or state which part of the claim is disputed, no triable issue is raised.
Contract Law — Loan Agreements — Scope of Utilisation — Internal Transportation Costs
Where a loan agreement specifies that funds are to be used for importation of fertilizers and internal transportation costs, and the borrower interprets internal transportation as transport within Uganda from the warehouse to customers, port charges at Mombasa and rail transport from Mombasa to Kampala fall outside the scope of internal transportation costs and are not covered by the loan facility.
Civil Procedure — Counterclaim — Set-off in Summary Suit — Partial Defence
Where a defendant raises a counterclaim in an application for leave to defend and the counterclaim applies to only part of the plaintiff's claim, the plaintiff is entitled under Order 33 Rule 6 to judgment forthwith for the part of the claim to which the counterclaim does not apply, and the defendant may be allowed to defend the residue.
Contract Law — Breach of Contract — Proof of Alleged Oral Terms
A party alleging breach of an express oral term not contained in the written agreement must show when the term was made, where it was made, and in what form it was made. Bare allegations of additional oral terms without substantiation are insufficient to establish a triable issue.
Banking & Finance — Interest on Loans — Rate After Commencement of Suit
Where parties agree to a contractual interest rate on a loan, that rate applies only up to the date of filing suit. Thereafter, the court rate of interest applies until payment in full.

Legislation cited (3)

Cases cited (1)

  • Elizabeth Edmea Camille v Amin Mohamed EA Merali and Another [1966] EA 411

Full judgment

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

Ready Agro Suppliers Ltd and Ors v Uganda Development Bank Ltd (HCT-00-CC-MA 379 of 2005) [2005] UGCommC 44 (21 July 2005)
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.