Wakilii

Shine Pay (U) Ltd v Sarah Kagoro and Anor - (HCT-00-CC-CS 548 of 2004)

High Court · [2006] UGCOMMC 13 · 2006 Judgment for Plaintiff (Modified Quantum) AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of loan under summary procedure; default judgment set aside and defence filed
Decision
Judgment for plaintiff on modified quantum; defendants liable jointly and severally for UGX 12,320,000 plus interest at 25% per annum

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court found that although the defendants signed a loan agreement for US $20,765, credible evidence showed they actually received only UGX 19,000,000 by cheque from the plaintiff's sister company. The court rejected the plaintiff's claim for the US dollar amount. The court held that the contractual interest rate of 15% per month (180% per annum) was excessive and unconscionable, constituting a disguised charging of exorbitant interest. The court awarded the plaintiff special damages of UGX 12,320,000 (after discounting the balance by 30% due to both parties' dishonest conduct) plus interest at 25% per annum. Each party was ordered to bear its own costs.

Outcome

Judgment for plaintiff on modified quantum; defendants liable jointly and severally for UGX 12,320,000 plus interest at 25% per annum

Facts

The plaintiff, a registered money lender, sued the defendants for recovery of US $20,765 plus interest at 15% per month. The suit was brought under summary procedure and default judgment initially entered but subsequently set aside. The parties agreed the defendants borrowed money and the plaintiff is a registered money lender. The plaintiff produced a loan agreement signed by both parties showing a loan of US $20,765. The first defendant testified she signed the agreement but actually received only UGX 19,000,000 by cheque. She produced a cheque dated 20 May 2004 for UGX 19,000,000 drawn on Eladam Enterprises Ltd (the plaintiff's sister company where the plaintiff's managing director owned majority shares) payable to Little Sisters, and a bank statement showing the cheque was cleared on 25 May 2004. The defendants' sewing machines were attached and sold for UGX 1,400,000. Security land provided by the defendants through an intermediary proved to be bogus.

Issues

  1. Whether the Defendants borrowed US $20,765 from the Plaintiff.
  2. Whether the Defendants have defaulted in the payments of the said sum of money.
  3. Whether the interest of 15% per month on any unpaid instalment is excessive and unconscionable.
  4. Whether the Plaintiff is entitled to the remedies prayed for.

Orders

  • Judgment entered for the Plaintiff against the Defendants jointly and severally.
  • Special damages awarded: UGX 12,320,000.
  • Interest on special damages awarded at 25% per annum from the date of judgment until payment in full.
  • Each party to bear its own costs.

Rules and key headnotes

Evidence — Parol Evidence Rule — Contracts — Written agreement contradicted by oral and documentary evidence
Where a contract has been reduced to writing, evidence extrinsic to the document cannot normally be admitted to add to, vary or contradict it. However, where there is a dispute as to what transpired between the parties, evidence can be admitted to show that a written contract has been varied or even rescinded.
Evidence — Burden of Proof — Civil cases — Standard on balance of probabilities
In civil cases, the burden of proof lies on the party who asserts the affirmative of the issue in dispute. When that party adduces evidence sufficient to raise a presumption that what he asserts is true, the burden shifts to the opponent to adduce evidence to rebut the presumption. The standard of proof is on a balance of probabilities.
Evidence — Circumstantial Evidence — Cheque and bank statement corroborating oral testimony
A cheque issued by a related company at the material time, coupled with a bank statement showing the cheque was cleared in favour of the defendant, constitutes strong circumstantial evidence capable of rebutting the presumption raised by a written loan agreement stating a different amount and currency.
Evidence — Adverse Inference — Failure to lead available evidence
The court is entitled to draw an adverse inference from a party's failure to lead evidence that is within that party's means to produce and would be relevant to determining a material issue.
Contract Law — Interest — Excessive contractual interest rate — Court's discretion to reduce
The court has discretion to award interest at less than the contractual rate when the contractual rate is manifestly excessive. Interest of 15% per month (180% per annum) on a purportedly interest-free friendly loan is excessive and unconscionable, constituting an indirect and disguised charging of exorbitant interest through a penalty clause.
Civil Procedure — Costs — Discretion to depart from the general rule — Both parties guilty of dishonest conduct
Although the usual rule is that the unsuccessful party pays the successful party's costs, this is discretionary. Where both parties have come to court with unclean hands and engaged in dishonest conduct, and the plaintiff has achieved only partial success, the court may order each party to bear its own costs in the interests of justice.
Evidence — Doctrine of Non-est Factum — Carelessness of signatory excludes the defence
The doctrine of non-est factum permits a person who executed a written document in ignorance of its character to plead that notwithstanding the execution, it is not their deed. However, a person cannot invoke the doctrine if they carelessly sign a document containing blanks which are later filled in otherwise than in accordance with their instructions.

Legislation cited (3)

Cases cited (3)

  • United Dominions Trust Ltd v Western [1976] QB 513
  • Juma v Habib [1975] EA 103
  • Shine Pay (U) Ltd v Kiyonga Francis (HCCS No. 547 of 2004)

Full judgment

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

Shine Pay (U) Ltd v Sarah Kagoro and Anor - (HCT-00-CC-CS 548 of 2004) [2006] UGCommC 13 (25 April 2006)
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.