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Stanbic Bank Uganda Limited v Millers Choice Limited & 2 Others (Miscellaneous Application 707 of 2024)

High Court · [2024] UGCOMMC 171 · 2024 Application Granted — Judgment on Admission AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for judgment on admission arising from a civil suit for recovery of loan arrears
Decision
Judgment on admission and default judgment entered in favour of plaintiff. Defendants jointly and severally liable to pay UGX 427,487,440 plus interest at 19% per annum from 23 May 2023 until full payment.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court granted judgment on admission against respondents who admitted obtaining a loan of UGX 400,000,000 and failing to meet loan repayment obligations. The court held that the respondents' defence—that the bank promised additional credit for start-up capital—was unsupported by evidence and inadmissible under the parole evidence rule, as the alleged promise was not incorporated into the written loan agreement. A default judgment was also entered against defendants who failed to file a defence.

Outcome

Judgment on admission and default judgment entered in favour of plaintiff. Defendants jointly and severally liable to pay UGX 427,487,440 plus interest at 19% per annum from 23 May 2023 until full payment.

Facts

The plaintiff bank advanced a loan of UGX 400,000,000 to the first defendant for constructing a water and juice processing line. The second and third defendants executed personal guarantees for the loan. The first defendant used the funds to construct the processing line but subsequently failed to meet its loan repayment obligations. The defendants claimed they were promised additional working capital after completing the line, which the bank allegedly failed to provide. No documentary evidence supported this claim. The bank instituted Civil Suit No. 0441 of 2023 seeking recovery of UGX 427,487,440 in outstanding arrears. In their written statement of defence, the defendants admitted receiving the loan and failing to repay it. The fourth defendants, guarantors, never filed a defence despite being served.

Issues

  1. Whether judgment on admission should be entered against the Respondents in Civil Suit No. 0441 of 2023.

Orders

  • A judgment on admission is entered in Civil Suit No. 0441 of 2023 in favour of the Applicant/Plaintiff against the Respondents/1st, 2nd and 3rd Defendants jointly and severally.
  • A default judgment is entered in favour of the Applicant/Plaintiff against the 4th Defendants in Civil Suit No. 0441 of 2023.
  • The Defendants in Civil Suit No. 0441 of 2023 shall jointly and severally pay the outstanding loan arrears of UGX 427,487,440 to the Applicant/Plaintiff.
  • Interest is payable on the sum in (iii) above at the rate of 19% per annum from 23 May 2023 until full payment.
  • Costs of Civil Suit No. 0441 of 2023 and of this application are awarded to the Applicant/Plaintiff.

Rules and key headnotes

Judgment on Admission — Requirements for Granting
A judgment on admission under Order 13 rule 6 of the Civil Procedure Rules is a matter of judicial discretion, not of right. The admission must be clear, unambiguous, unequivocal, positive and not open to doubt. The court should exercise its discretion only in plain cases where admissions of fact are so clear and unequivocal that they amount to an admission of liability entitling the plaintiff to judgment.
Judgment on Admission — Reading Pleadings as a Whole
When dealing with an application for judgment on admission based on a pleading, the court must consider the entire pleading and not cherry-pick parts of it. Where an admission of liability in one paragraph is qualified by an explanation in another paragraph, the application for judgment on admission should be rejected. A judgment on admission should only be entered when an admission of liability is made without any other part of the pleading explaining away that admission.
Parole Evidence Rule — Oral Terms Not Incorporated in Written Contract
Where parties have reduced their agreement to writing, evidence of alleged oral terms or promises not expressly incorporated in the written contract is inadmissible by virtue of the parole evidence rule under sections 91 and 92 of the Evidence Act. If an oral promise was truly part of the parties' consensus at the time of entering into a written agreement, the written contract would and should have said so expressly.
Burden of Proof — Corroboration Required
Under section 103 of the Evidence Act, the burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence. A party who alleges the existence of an oral agreement or promise must adduce corroborating evidence beyond mere assertion in an affidavit to discharge this burden.
Personal Guarantees — Liability of Guarantors
Where guarantors execute personal guarantees to repay a loan in full on demand, they are bound by those guarantees. Uncorroborated claims that the guarantees were executed on condition of further credit being extended are insufficient to defeat liability where no documentary evidence supports the alleged condition.
Default Judgment — Failure to File Defence
Where a defendant has been effectively served with summons to file a defence but fails to do so, and the plaint is drawn for recovery of a liquidated sum, interest and costs only, the court may enter a default judgment against that defendant under Order 9 rule 7 of the Civil Procedure Rules.

Legislation cited (7)

Cases cited (3)

  • Miraj Barot v Salvation Army (HCCS No. 713 of 2015)
  • Cassam v Sachania [1982] KLR 191
  • Board of Governors, Nebbi Town S.S.S. v Jaker Food Stores Ltd (HCMA No. 0062 of 2016)

Full judgment

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

Stanbic Bank Uganda Limited v Millers Choice Limited & 2 Others (Miscellaneous Application 707 of 2024) [2024] UGCommC 171 (7 June 2024)
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.