Wakilii

TAD Technical Services Limited & 2 Others v Equity Bank Uganda Limited (Miscellaneous Application 1845 of 2022)

High Court · [2024] UGCOMMC 8 · 2024 Application Partly Allowed — Conditional Leave Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for unconditional leave to appear and defend arising from Civil Suit No. 717 of 2022
Decision
Conditional leave granted; applicants must deposit UGX 380,000,000 within 90 days to proceed with defence

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Holding

The court held that applicants seeking leave to defend must present a plausible defence supported by evidence, not merely raise assertions. Where doubt exists as to whether the defence is made in good faith, the court may grant conditional leave. The applicants disputed the amount owing but failed to adduce documentary evidence to support their contention that UGX 70,000,000 was deducted. Conditional leave was granted requiring deposit of UGX 380,000,000 within 90 days.

Outcome

Conditional leave granted; applicants must deposit UGX 380,000,000 within 90 days to proceed with defence

Facts

The first applicant, a company, obtained a loan facility of UGX 360,000,000 from the respondent bank on 28 April 2021, guaranteed by the second and third applicants who are company directors. The applicants contended they received only UGX 290,000,000, alleging that UGX 70,000,000 was deducted and paid to Charlotte Tumuhairwe Komuhangi to release security land. The respondent produced a bank statement showing full disbursement of UGX 360,000,000 and stated that the loan was in default. The respondent commenced recovery proceedings including foreclosure, and the applicants contended they had not been served with a default notice. The respondent opposed the application, stating that default notices were served and that the guarantors gave primary personal guarantees to repay all monies owing.

Issues

  1. Whether the Application meets the requirements for the grant of leave to appear and defend Civil Suit No. 717 of 2022

Orders

  • Applicants granted conditional leave to appear and defend Civil Suit No. 717 of 2022.
  • Applicants to deposit UGX 380,000,000 within 90 days from the date of this ruling.
  • Applicants to file Written Statement of Defence within 15 days from the date of making the deposit.
  • If Applicants fail to make the deposit, default judgment will be entered against them for the sum of UGX 482,627,328.
  • Costs of the Application in the main cause.

Rules and key headnotes

Leave to Defend — Test for Grant of Unconditional Leave
Before leave to appear and defend is granted, the defendant must show by affidavit or otherwise that there is a bona fide triable issue of fact or law; the defendant is not bound to show a good defence on the merits but must satisfy the court that there is an issue or question in dispute which ought to be tried.
Leave to Defend — Purpose of Application and Standard of Proof
The purpose of an application for leave to defend is not to prove the applicant's defence to the suit but to ask for an opportunity to prove it through a trial; the court determines whether the defendant has shown good cause to be given leave, and good cause consists of evidence that the defendant has a triable defence.
Leave to Defend — Requirement of Plausible Defence with Supporting Evidence
An applicant seeking unconditional leave to defend must present a plausible defence supported by evidence; leave is declined where the grant would merely enable the applicant to prolong litigation by raising untenable and frivolous defences; the test is whether the defence raises a real issue and not a sham one.
Leave to Defend — Conditional Leave Where Good Faith in Doubt
For leave to defend, there must be sufficient disclosure by the applicant of the nature and grounds of defence and the facts upon which it is founded, and the defence must be both bona fide and good in law; where the court is in doubt whether the proposed defence is being made in good faith, the court may grant conditional leave by ordering the defendant to deposit money in court before leave is granted.

Legislation cited (3)

Cases cited (4)

  • Makula Interglobal Trade Agency v Bank of Uganda [1985] HCB 65
  • Geoffrey Gatete and Another v William Kyobe (Supreme Court Civil Appeal No. 7 of 2005)
  • Agony Swaibu v Swalesco Motor Spare and Decoration Dealers (High Court Civil Appeal No. 48 of 2014)
  • UMEME Ltd v Justice Anup Singh Choudry (Miscellaneous Application No. 736 of 2021)

Full judgment

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

TAD Technical Services Limited & 2 Others v Equity Bank Uganda Limited (Miscellaneous Application 1845 of 2022) [2024] UGCommC 8 (8 January 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.