Wakilii

Tomusange Lasto v Letshego (U) Limited and Others (Civil Suit No. 747 of 2018)

High Court · [2026] UGCOMMC 10 · 2026 Judgment for Defendant (Counterclaim Allowed) AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for wrongful advertisement of land; counterclaim for recovery of loan arrears heard ex parte after dismissal of main suit
Decision
Main suit dismissed for non-appearance; counterclaim allowed with judgment for recovery of loan arrears, interest, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court dismissed the plaintiff's suit for wrongful advertisement of land for non-appearance and proceeded ex parte on the defendant's counterclaim. Held that the counter defendants were indebted to the counterclaimant for a loan secured by powers of attorney and personal guarantee. The second and third counter defendants breached the loan agreement by defaulting on monthly instalments. The first counter defendant, as guarantor, was jointly and severally liable. The court awarded the outstanding balance of UGX 67,191,759.09 with interest at 33.6% per annum, applying the statutory interest rate cap under Legal Notice No. 21 of 2024 to revise the contractual rate of 46.8% per annum downward.

Outcome

Main suit dismissed for non-appearance; counterclaim allowed with judgment for recovery of loan arrears, interest, and costs

Facts

The plaintiff sued the defendant lender for wrongful advertisement of his land, claiming he never took a loan. The defendant counterclaimed, asserting that the second and third counter defendants approached it in 2017 with powers of attorney from the plaintiff authorising them to borrow UGX 80,000,000 secured by the plaintiff's land title. The loan was granted and secured by the land, an unregistered plot, and the first counter defendant's personal guarantee. The borrowers defaulted on monthly instalments. By February 2019, arrears stood at UGX 93,460,158.09. The defendant issued default notices and advertised the properties for sale. One property was sold for UGX 30,000,000, leaving a balance of UGX 67,191,759. The plaintiff's suit was dismissed for non-appearance. The counter defendants did not appear at the counterclaim hearing despite service.

Issues

  1. Whether the counter defendants are indebted to the counter claimant.
  2. Whether the counter defendants are in breach of the loan agreement.
  3. What remedies are available to the parties.

Orders

  • Judgment entered for the counterclaimant against the counter defendants jointly and severally.
  • Counter defendants to pay UGX 67,191,759.09 as the outstanding amount on the loan.
  • Interest thereon at the rate of 33.6% per annum from 28th February 2019 until payment in full.
  • Costs of the suit and of the counterclaim awarded to the counterclaimant.

Rules and key headnotes

Contract Law — Breach of Contract — Definition and Elements
A breach of contract occurs when a party neglects, refuses or fails to perform any part of its bargain or any term of the contract, express or implied, written or oral, without a legitimate legal excuse, resulting in damage or loss to the other party.
Banking & Finance — Guarantees — Nature and Liability of Guarantor
A guarantee is a secondary agreement in which the guarantor is liable for the debt on default of the principal debtor who is primarily liable. On default of the principal debtor, the guarantor is immediately liable to the full extent of the obligation without being entitled to require notice of default or previous recourse against the principal debtor. Both principal debtor and guarantor are jointly and severally liable to the creditor.
Contract Law — Damages — Special Damages — Proof Requirements
Special damages must be specifically pleaded and strictly proved. They compensate for quantifiable monetary losses such as past expenses, lost earnings, and out-of-pocket costs incurred directly as a result of the breach. Strict proof does not necessarily always require documentary evidence.
Banking & Finance — Interest Rates — Statutory Caps and Judicial Revision of Unconscionable Rates
Where a contractual interest rate exceeds the statutory ceiling established under the Tier 4 Microfinance Institutions and Money Lenders (Prescription of Maximum Interest Rate) Notice, 2024, the court has discretionary power under section 26(2) of the Civil Procedure Act to revise the rate downward to the maximum permitted by law.
Contract Law — Damages — General Damages — Relationship with Interest Awards in Commercial Disputes
In commercial disputes, an award of interest serves the same compensatory purpose as general damages by recognising loss of return opportunity and the unfair benefit enjoyed by the borrower who retained the money during litigation. Where interest at a commercial rate is awarded, an additional award of general damages would be tantamount to overcompensation.

Legislation cited (5)

Cases cited (22)

  • Waga B. Francis v The Chief Administrative Officer Maracha and Another (High Court Civil Suit No. 5 of 2016)
  • Stanbic Bank Limited v Celular Galore Limited and Two Others (High Court Civil Suit No. 50 of 2010)
  • Barclays Bank Ltd v Jing Hong and Guo Dong (High Court Civil Suit No. 35 of 2009)
  • Moschi v Lep Air Services Ltd [1973] AC 331
  • Mian Aqueel and Another v Exim Bank (U) Limited (High Court Miscellaneous Application No. 497 of 2017)
  • Borham-Carter v Hyde Park Hotel [1948] 64 TLR
  • Masaka Municipal Council v Semogerere [1998-2000] HCB 23
  • Musoke David v Departed Asians Property Custodian Board [1990-1994] EA 219
  • Kyambadde v Mpigi District Administration [1983] HCB 44
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Gapco (U) Ltd v AS Transporters (U) Ltd (Court of Appeal Civil Appeal No. 18 of 2004)
  • Storms v Hutchinson [1905] AC 515
  • Kabona Brothers Agencies v Uganda Metal Products & Enamelling Co Ltd [1981-1982] HCB 74
  • Kiwanuka Godfrey T/a Tasumi Auto Spares and Class Mart v Arua District Local Government (High Court Civil Suit No. 186 of 2006)
  • Hungerfords v Walker (1989) 171 CLR 125
  • James Fredrick Nsubuga v Attorney General (High Court Civil Suit No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and Another (High Court Civil Suit No. 177 of 2003)
  • Hadley v Baxendale (1854) 9 Exch 341
  • Charles Acire v M Engola (High Court Civil Suit No. 143 of 1993)
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Harriet Arinaitwe v Africana Clays Ltd (High Court Civil Suit No. 376 of 2013)
  • Spring Freight Logistics Limited v Amoo Holding International Limited and Others (High Court Civil Suit No. 556 of 2019)

Full judgment

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Tomusange Lasto v Letshego (U) Limited and Others (Civil Suit No. 747 of 2018) [2026] UGCommC 10 (19 January 2026)
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.