Wakilii

Vicom Center Ltd & 2 Ors v ABC Capital BanK Ltd (HCT-00-CC-MA 1011 of 2014)

High Court · [2015] UGCOMMC 64 · 2015 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside ex parte judgment in civil suit
Decision
Ex parte judgment in Civil Suit No. 339 of 2014 stands; application to set it aside refused

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Application dismissed. Substituted service was properly ordered where the applicants' office was closed and they were elusive. Advertisement without plaint annexures sufficiently notified applicants of the suit. A creditor may sue principal debtor and guarantor together. The 4th applicant admitted being a guarantor. Where mortgage security is insufficient due to the mortgagor's act, the mortgagee may sue for the debt without foreclosing under Mortgage Act s.21(1)(d).

Outcome

Ex parte judgment in Civil Suit No. 339 of 2014 stands; application to set it aside refused

Facts

The applicants sought to set aside an ex parte judgment entered against them in a banking suit. The respondent bank had obtained substituted service by newspaper advertisement after finding the applicants' office closed and the applicants declining to provide their current address when contacted by phone. The 1st applicant was the principal debtor on an overdraft facility. The 2nd, 3rd and 4th applicants were alleged guarantors. The loan was secured by a mortgage, but the security was occupied by bibanja holders. After judgment, the 4th applicant was arrested during execution. The applicants contended they were not properly served, that the 4th applicant was not a guarantor, that principal debtor and guarantors cannot be sued together, and that the bank should have foreclosed before suing.

Issues

  1. Whether substituted service was properly effected on the applicants.
  2. Whether the advertisement for substituted service was valid without attaching the plaint and annexures.
  3. Whether a principal debtor and guarantor can be sued together.
  4. Whether the 4th applicant was a guarantor to the loan.
  5. Whether the respondent was entitled to sue for the debt before foreclosing on the mortgage security.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Service of Process — Substituted Service — Validity Where Defendant Elusive
Where a defendant's office is closed, the defendant has moved from the last known address, and the defendant declines to provide a current address when contacted by phone, substituted service by newspaper advertisement is justified as the only method of service available.
Service of Process — Advertisement Without Plaint Annexures — Sufficiency
Although Civil Procedure Rules Order 5 Rules 2 and 18 require service of summons to be accompanied by the plaint and annexures, where substituted service is by newspaper advertisement and the defendant is elusive, the advertisement without attachments sufficiently notifies the defendant of the existence of the suit and the venue from which pleadings can be obtained.
Guarantees — Joint Action Against Principal Debtor and Guarantor
A creditor may sue a principal debtor and guarantor together. When the principal debtor breaches the contract, the guarantor is simultaneously put in breach of the guarantee contract, entitling the creditor to proceed against both parties.
Mortgages — Right to Sue Before Foreclosure — Insufficient Security
Under section 21(1)(d) of the Mortgage Act 2009, a mortgagee may sue for the money secured by the mortgage without first foreclosing where the mortgagee is deprived of the whole or part of the security or the security is rendered insufficient through the wrongful act or default of the mortgagor, including where the mortgaged property is occupied by bibanja holders with the mortgagor's permission.

Legislation cited (4)

Cases cited (1)

  • Moschi v Lep Air Services and Others [1973] AC 345

Full judgment

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

Vicom Center Ltd & 2 Ors v ABC Capital BanK Ltd (HCT-00-CC-MA 1011 of 2014) [2015] UGCommC 64 (16 March 2015)
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.