Wakilii

Visare Uganda Limited v KCB Bank (U) Limited and Others (Civil Appeal No. 1425 of 2023; Civil Appeal No. 294 of 2024; Civil Application No. 0420 of 2023; Civil Application No. 409

Court of Appeal · [2025] UGCA Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated civil appeals and applications from High Court (Commercial Division) decisions dismissing applications to set aside a consent judgment and to set aside a sale by execution, together with applications for extension of time, leave to appeal, and to strike out appeals
Decision
Extension of time and leave to appeal granted; consent judgment interest reduced from 48% to 6% per annum with overpaid interest to be ascertained by an independent auditor; second appeal challenging the execution sale struck out for failure to take essential procedural steps

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Holding

The Court of Appeal allowed the extension of time and leave to appeal, holding that a previous counsel's mistake should not be visited on the client. On the substantive appeal against the consent judgment, the Court held that while a consent judgment cannot be lightly set aside, courts have discretion under s.26(1) of the Civil Procedure Act to refuse enforcement of unconscionable interest. It found the 4% per month (48% per annum) penal interest charged by a non-financial entity on a US dollar debt exorbitant and unconscionable, reducing it to 6% per annum. The Court struck out the second appeal challenging the execution sale for the appellant's dilatory conduct and failure to take essential procedural steps within the prescribed time.

Outcome

Extension of time and leave to appeal granted; consent judgment interest reduced from 48% to 6% per annum with overpaid interest to be ascertained by an independent auditor; second appeal challenging the execution sale struck out for failure to take essential procedural steps

Facts

Visare Uganda Limited, registered proprietor of a leasehold property on Lugogo Road, Kampala, borrowed US$2,500,000 from KCB Bank (U) Limited in 2017 to construct residential apartments, secured on the suit property. Visare defaulted and the Bank commenced foreclosure. To settle the debt, Visare agreed to sell 12 condominium units to Grant Thornton Management Limited, and a tripartite agreement directed payments to KCB Bank. On 31 August 2020, a consent judgment was entered in Civil Suit No. 898 of 2019 between Visare, KCB Bank and Grant Thornton. The consent provided that on breach, Grant Thornton could sell the suit property to recover its payments with interest at 4% per month. Grant Thornton commenced execution to recover monies paid. Visare's application to set aside the consent judgment was dismissed, as was its later application challenging the execution sale of the property to Yi Hai Property Servicing Company. Visare appealed both decisions to the Court of Appeal, generating multiple consolidated applications.

Issues

  1. Whether the applicant had shown sufficient cause to be granted an extension of time to apply for leave to appeal against the dismissal of the application to set aside the consent judgment.
  2. Whether the applicant should be granted leave to appeal against the High Court's refusal to set aside the consent judgment.
  3. Whether the appeals should be struck out for failure to serve the Notice of Appeal, filing of two Notices of Appeal, and failure to take essential steps within the prescribed time.
  4. Whether the interest rate of 4% per month (48% per annum) in the consent judgment was exorbitant, unconscionable and oppressive and should be reviewed and reduced.
  5. Whether the second appeal (Civil Appeal No. 294 of 2024) should be struck out for the appellant's failure to take essential steps within the prescribed timelines.

Orders

  • Civil Application No. 0420 of 2023 for leave to appeal is allowed. Each party to bear its costs.
  • Civil Application No. 0531 of 2023 for extension of time to apply for leave to appeal is allowed. Each party to bear its costs.
  • Civil Application No. 431 of 2024 to strike out the appeal is dismissed with costs to the respondent.
  • Civil Appeal No. 1425 of 2023 is allowed with costs against the 2nd respondent.
  • The interest rate charged by Grant Thornton Management Limited is reduced to 6% per annum.
  • The appellant is entitled to the amount of interest it overpaid, to be ascertained by an independent auditor or referee appointed by the Registrar, carrying interest at the court rate of 6% from the date the overpaid interest was paid until payment in full.
  • Civil Application No. 409 of 2024 by Yi Hai Property Servicing Company to strike out the appeal is allowed with costs to the applicant.
  • Civil Application No. 419 of 2024 by Grant Thornton Management Limited and Festus Katerega to strike out the appeal is allowed with costs to the applicants.
  • Civil Appeal No. 294 of 2024 is struck out with costs.

Rules and key headnotes

Extension of Time — Mistake of Counsel Not Visited on Client
A mistake or negligence of a party's counsel should not necessarily be visited on the client, and may constitute sufficient cause for granting an extension of time to take a procedural step.
Leave to Appeal — Prima Facie Arguable Grounds and Absence of Dilatory Conduct
An applicant seeking leave to appeal must show that the intended appeal raises prima facie grounds meriting serious consideration or has a reasonable chance of success, and that the applicant has not been guilty of dilatory conduct.
Consent Judgments — Grounds for Setting Aside
A consent judgment binds all parties and cannot be varied or discharged except on grounds that would enable a court to set aside an agreement, such as fraud, collusion, mistake, misapprehension, ignorance of material facts, or contravention of court policy.
Unconscionable Interest — Court's Power to Reduce Under Civil Procedure Act s.26(1)
Where an agreement for payment of interest is sought to be enforced and the court finds the agreed rate harsh and unconscionable, the court may under section 26(1) of the Civil Procedure Act give judgment for payment of interest at such rate as it considers just; freedom of contract does not extend to enforcing manifestly unfair or usurious interest terms.
Penal Interest — Non-Financial Institutions Cannot Charge Usurious Rates
Penal interest imposed on breach by a party that is not a financial institution or money lender must be reasonable and fair; an interest rate of 4% per month (48% per annum) on a US dollar debt charged by a non-lending entity is exorbitant, unconscionable and oppressive.
Striking Out Appeal — Failure to Take Essential Steps and Serve Notice of Appeal
Failure to serve a Notice of Appeal, to file the Memorandum and Record of Appeal within the prescribed 60 days, and to serve them within seven days, without seeking extension or validation, constitutes a failure to take essential steps under Rule 82 of the Court of Appeal Rules, and an appellant guilty of dilatory conduct cannot invoke Article 126(2)(e) to escape mandatory procedural time limits.

Legislation cited (15)

Cases cited (56)

  • Musa Afuterk v Commissioner Land Registration and 2 Others (Civil Reference No. 258 of 2010)
  • Ali Muwanga Kibiige v Yako Bank Limited and Another (Civil Application No. 148 of 2024)
  • David Muhenda v Humphrey Mirembe (Civil Appeal No. 5 of 2012)
  • Kananura Andrew Kansiime v Richard Henry Kaijuka (Civil Application Reference No. 15 of 2016)
  • F. L. Kaderbhai and Another v Shamsherali M. Zaver and Others [2008] UGSC
  • Zam Nalumansi v Suleman Lule (Civil Application No. 2 of 1999)
  • Sango Bay Estates Ltd v Dresdner Bank [1971] 1 EA 307
  • Degega Trading Stores (U) Ltd v Uganda Revenue Authority (Civil Application No. 16 of 1996)
  • Apollo Bright Bueyakye and Others v Prof. Sam Tulya Muhika (Civil Application No. 239 of 2023)
  • Katungulu John Matovu and 2 Others v Godfrey Rwabugonda (Civil Appeal No. 9 of 2021)
  • Steven Kosozi and 2 Others v People's Transport Service (Civil Appeal No. 27 of 1993)
  • Livingstone Kogaya Kizito v Charles Wollgo (Civil Application No. 80 of 2012)
  • Barclays Bank of Uganda Ltd v Eddy Rodrigues (Civil Appeal No. 5 of 1987)
  • Sgt. Oumo Joshua and Attorney General v Paul Wangoto Mugoya and Another (Civil Appeal No. 17 of 2022)
  • Kiboro v Posts & Telecommunication Corporation (1974) EA 155
  • James Bahinguza and Another v Attorney General (Civil Application No. 269 of 2013)
  • Genegri Plantation Ltd v SWATT Security Ltd (Civil Application No. 193 of 2024)
  • Andrew Maviri v Jomayi Property Construction Ltd (Civil Appeal No. 274 of 2014)
  • Bakaluba Peter Mukasa and Another v Nalugo Mary Margaret Sekizigilu (Election Petition Appeal No. 24 of 2011)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Eridadi Tito Nsubuga and Another v Attorney General (Civil Application No. 58 of 1998)
  • Francis Kigaga v Josephine Segajja and Wilbrod Birabuta (Civil Appeal No. 76 of 2010)
  • Greenland Bank Ltd (In Liquidation) v Rwenzori Properties Ltd (Civil Appeal No. 75 of 2006)
  • Nipun Norattam Bhatia v Crane Bank (Civil Appeal No. 75 of 2006)
  • Makula International Ltd v His Eminence Cardinal Nsubuga and Another [1982] HCB 11
  • Hirani v Kassam (1952) EA 131
  • Attorney General and Another v Kamoga [2008] 2 EA 31
  • Mohamad Alibhai v W.D. Bukenya (Civil Appeal No. 56 of 1996)
  • Basiima Kabonesa v Attorney General and Coffee Marketing Board (Civil Appeal No. 16 of 2021)
  • Friedhelm Erwin Jost and Another v Roko Construction Ltd and 2 Others (Miscellaneous Application No. 89 of 2021)
  • J v B [2016] 1 WLR 3319
  • JAS Ventures International Ltd v Afithaire (Civil Suit No. 676 of 2021)
  • Dhiman v Singh (Civil Appeal E380 of 2023) [2025] KECA 1264
  • Attorney General v Major (Rtd) Anthony Jallout Okullo (Civil Appeal No. 3 of 2020)
  • Barclays Bank (U) Ltd and 2 Others v Emerald Hotel Ltd and 3 Others (Civil Appeal Nos. 70 & 72 of 2017)
  • Butebi Investments Enterprises Ltd v Kibalama Mugwanga (Civil Appeal No. 354 of 2013)
  • Kasibante Moses v Electoral Commission (Election Petition Application No. 7 of 2012)
  • Kasule Samuel v Mubeezi James and 2 Others (Miscellaneous Application No. 24 of 2015)
  • Eduard Rurangaranga and Mbarara Municipal Council v Horizon Coaches Ltd (Civil Appeal No. 21 of 2018)
  • Miriam Kuteesa v Nantumbwe Edith and Others (Miscellaneous Application No. 20 of 2014)
  • Herbert Semakula Musoke and Another v Lawrence Nabamba and Others (Civil Application No. 22 of 2019)
  • Batabaire Elizabeth v Ngobi Siraj and Others (Civil Application No. 326 of 2017)
  • Bigiruo Norah v Returning Officer and Another (Civil Application No. 23 of 2017)
  • Nyirabarore Vannis and Another v Ngirakubanza Sarafina and Others (Application No. 37 of 2018)
  • National Housing & Construction Co. Ltd v Salome T.B. Kyomukama (Civil Application No. 133 of 2009)
  • William Kyobe v Geoffrey Gatete and Another [2001] 1 ULR 167
  • Loi Kageni Kiryapawo and Electoral Commission v Gole Nicholas Davis (Civil Application No. 15 of 2007)
  • Dr. S.B. Kingatta and Another v Suburamania Rajha Gopalan and Another (Civil Application No. 1000 of 2000)
  • Horizon Coaches Ltd v Francis Mutabazi and Others (Civil Appeal No. 20 of 2001)
  • Ngenduwoha Bigiruta Norah v Returning Officer Buliisa District and Electoral Commission (Civil Application No. 23 of 2011)
  • Rulinda Fabrice Brad and Electoral Commission v Kayanja Vicent De Paul (Election Petition Application No. 10 of 2023)
  • Kibalama Mugwanga v Butebi Investments Enterprises Ltd (Civil Appeal No. 190 of 2013)
  • Uganda Revenue Authority v Uganda Consolidated Properties Ltd (Civil Application No. 31 of 2000)
  • Gaba Beach Hotel Ltd v Cairo International Bank Ltd (Civil Application No. 34 of 2003)
  • Shah Bharmal v Santosh Kumari (1961) EA 679
  • Attorney General v Oriental Construction Co. Ltd (Civil Appeal No. 7 of 1990)

Full judgment

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Visare Uganda Limited v KCB Bank (U) Limited and Others (Civil Appeal No. 1425 of 2023; Civil Appeal No. 294 of 2024; Civil Application No. 0420 of 2023; Civil Application No. 409
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.