Wakilii

Tibeingana and Co. Advocates and Anor v Warugaba (H.C.Miscellaneous Application No. 119 of 2020)

High Court · [2021] UGCOMMC 77 · 2021 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for leave to appear and defend summary suit arising from Civil Suit No. 1046 of 2019
Decision
Applicants granted leave to defend; matter to proceed to trial

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the applicants disclosed reasonable grounds of defence warranting leave to appear and defend the summary suit. The applicants asserted they were merely guarantors in a money lending transaction and denied the debt in its entirety, raising a triable issue as to the nature of the transaction and the applicability of the Contracts Act requirement that transactions exceeding twenty-five currency points be reduced to writing. The court found these matters constituted triable issues requiring a full hearing.

Outcome

Applicants granted leave to defend; matter to proceed to trial

Facts

The respondent advanced funds totalling UGX 86,500,000 to the applicants and a third party (Angela Kobel) for an investment scheme managed by the applicants from which the respondent was to earn monthly interest. The investment failed and the applicants executed memoranda of understanding undertaking to refund the money. Only UGX 16,000,000 was refunded, leaving an outstanding balance of UGX 70,500,000. The respondent commenced summary suit proceedings against the applicants and Kobel. The applicants applied for leave to appear and defend, contending they acted merely as guarantors for the third defendant and that the debt should be recovered from that party, not from them. They further argued that the guarantee was void ab initio as it was not reduced to writing as required by Section 10(5) of the Contracts Act 2010 for contracts exceeding twenty-five currency points.

Issues

  1. Whether the application raises triable issues for which the applicant should be granted leave to appear and defend Civil Suit 1046 of 2019.

Orders

  • Application allowed.
  • Applicants granted leave to appear and defend the summary suit.
  • Applicants to file written statement of defence within fifteen days from the date of this ruling and serve the same on the respondents.
  • Costs shall abide the outcome of the main suit.

Rules and key headnotes

Civil Procedure — Summary Suit — Leave to Appear and Defend — Test for Granting Leave
In order to avoid judgment being entered in a summary suit, the defendant must show that there is a triable issue or that for some other reason there ought to be a trial; where the defendant raises a triable issue on affidavit, leave to defend must be granted even if the case appears weak, but mere denials are insufficient and the defendant must clearly disclose the nature and extent of the defence.
Civil Procedure — Summary Suit — Triable Issues — Denial of Debt
Where an applicant for leave to defend asserts that a transaction was a money lending transaction in which the applicants were merely guarantors and denies the debt in its entirety, this constitutes a triable issue warranting leave to defend.
Contract Law — Guarantee — Writing Requirement — Contracts Act 2010
A defence that a guarantee is void ab initio for non-compliance with Section 10(5) of the Contracts Act 2010, which requires contracts exceeding twenty-five currency points to be reduced to writing, raises a triable issue in summary suit proceedings.

Legislation cited (6)

Cases cited (5)

  • Jimmy Kasule v Steel Rolling Mills (1995) 11
  • Corporate Insurance Co. Ltd v Nyali Beach Hotel Ltd [1995-1998]
  • Sembule Investments Ltd v Uganda Baati Ltd (M.A No. 664 of 2009)
  • Makula Interglobal Trade Agency v Bank of Uganda (1985) HCB 65
  • Miter Investments Ltd v East African Portland Cement Co. Ltd (M.A No. 0336 of 2012)

Full judgment

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

Tibeingana and Co. Advocates and Anor v Warugaba (H.C.Miscellaneous Application No. 119 of 2020) [2021] UGCommC 77 (19 March 2021)
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.