Wakilii

Visare Uganda Limited v KCB Bank (U) Limited and Others [2025] UGCA 359

Court of Appeal · 2025 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated civil appeals and applications from two High Court (Commercial Division) decisions, together with applications for extension of time, leave to appeal, and to strike out appeals.
Decision
Consent judgment interest reduced from 48% to 6% per annum with refund of overpaid interest ordered; appeal against execution sale struck out.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal granted the appellant extension of time and leave to appeal against dismissal of its application to set aside a consent judgment, and dismissed the corresponding strike-out application. On the merits, the Court held that a 4% per month (48% per annum) rate of penal interest charged on US dollars by Grant Thornton, a non-financial institution, was exorbitant, unconscionable and contrary to court policy under section 26 of the Civil Procedure Act, and reduced it to 6% per annum, ordering a refund of overpaid interest to be assessed by an independent auditor. The appeal against the execution sale (Civil Appeal No. 294 of 2024) was struck out because the appellant failed to take essential steps, including timely service of the memorandum and record.

Outcome

Consent judgment interest reduced from 48% to 6% per annum with refund of overpaid interest ordered; appeal against execution sale struck out.

Facts

Visare Uganda Limited, registered proprietor of leasehold property on Lugogo Road, Kampala, borrowed US$2,500,000 from KCB Bank in 2017 to construct apartments and defaulted. To settle the debt, Visare agreed to sell 12 condominium units to Grant Thornton Management Limited at US$200,000 each, paid directly to KCB Bank. A tripartite agreement and later a consent judgment (31 August 2020) recorded the settlement, providing that on breach Grant Thornton could sell the suit property by auction to recover amounts paid with interest at 4% per month. Grant Thornton commenced execution to recover monies paid. Visare applied to set aside the consent judgment, which was dismissed. The property was sold at auction to Yi Hai Property Servicing Company for US$9,000,000. Visare's challenge to the sale was dismissed. Visare filed multiple appeals and applications, which were consolidated. On appeal Visare narrowed its challenge to whether the 4% per month interest was exorbitant and unconscionable.

Issues

  1. Whether the appellant should be granted an extension of time to apply for leave to appeal against the dismissal of its application to set aside the consent judgment.
  2. Whether the appellant should be granted leave to appeal against the dismissal of the application to set aside the consent judgment.
  3. Whether the appeal (Civil Appeal No. 1425 of 2023) should be struck out for being filed out of time and non-service.
  4. Whether the trial judge erred in refusing to review and set aside the interest rate of 4% per month in the impugned consent judgment as exorbitant and unconscionable.
  5. Whether the appeal challenging the execution sale (Civil Appeal No. 294 of 2024) should be struck out for failure to take essential steps within prescribed time.

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 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; the computed amount to carry interest at the court rate of 6% from the date the overpaid interest was paid till 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

Contract Law — Consent Judgments — Grounds for Setting Aside
A consent judgment is binding on the parties and cannot be varied or discharged unless obtained by fraud, collusion, mistake, misapprehension or ignorance of material facts, or by an agreement contrary to the policy of the court.
Contract Law — Unconscionable Interest — Court's Power to Reduce Exorbitant Rates
Under section 26 of the Civil Procedure Act, a court may decline to enforce a harsh and unconscionable rate of interest and reduce or nullify the interest clause even where the rate was voluntarily agreed by the parties, as freedom of contract does not extend to enforcing manifestly unfair terms.
Banking & Finance — Penal Interest — Non-Financial Institutions
A party that is not a financial institution or money lender cannot charge penal interest at the rates applicable to lenders; interest charged by such a party on breach of a settlement must be reasonable and fair, and 4% per month (48% per annum) on a US dollar sum is exorbitant, unconscionable and oppressive.
Civil Procedure — Extension of Time — Mistake of Counsel
The mistake or negligence of counsel should not be visited on the client, and where delay in filing an application for leave to appeal arises from counsel's error, the court may grant an extension of time notwithstanding the delay.
Civil Procedure — Striking Out Appeals — Failure to Take Essential Steps
Failure to serve the memorandum and record of appeal within the time prescribed by the Rules is a failure to take an essential step which, absent a satisfactory explanation or an application for validation or extension, renders the appeal liable to be struck out under Rule 82.
Civil Procedure — Notice of Appeal — Leave and Validity of Second Notice
Where leave to appeal is granted, a party may file a notice of appeal after leave, with time running from the date leave is granted; there cannot be two notices of appeal in a single appeal, and an unserved first notice may be struck out while a properly served subsequent notice stands.

Legislation cited (17)

  • Civil Procedure Act s.26(1)
  • Civil Procedure Act s.26(2)
  • Civil Procedure Act s.26(3)
  • Tier 4 Microfinance and Money Lenders Act, Cap 61 s.88
  • Judicature (Court of Appeal Rules) Directions r.5
  • Judicature (Court of Appeal Rules) Directions r.40
  • Judicature (Court of Appeal Rules) Directions r.41
  • Judicature (Court of Appeal Rules) Directions r.44
  • Judicature (Court of Appeal Rules) Directions r.76
  • Judicature (Court of Appeal Rules) Directions r.78
  • Judicature (Court of Appeal Rules) Directions r.82
  • Judicature (Court of Appeal Rules) Directions r.83
  • Judicature (Court of Appeal Rules) Directions r.87
  • Judicature (Court of Appeal Rules) Directions r.88
  • Judicature (Court of Appeal Rules) Directions r.2(2)
  • Constitution of Uganda 1995 art.126(2)(e)
  • Constitution (Integration of ICT into the Adjudication Processes for Courts of Judicature) (Practice) Directions, Legal Notice No. 6 of 2019

Cases cited (57)

  • F. L. Kaderbhai and another v Shamsherali M. Zaver and others, [2008] UGSC (2017 October 2008)
  • Zam Nalumansi v Suleman Lule (Civil Application No. 2 of 1999)
  • Musa Afuterk v Commissioner Land Registration and 2 Others (Civil Reference No. 258 of 2010)
  • Ali Mwuanga 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 Appeal Reference No. 15 of 2016)
  • Sango Bay Estates Limited v Dresdner Bank, [1971] 1 EA 307
  • Degeya Trading Stores (U) Limited 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 & 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 Appeal No. 80 of 2012)
  • Visare Uganda Limited v KCB Bank Limited and another, Misc. Application No. 0531 of 2023
  • Barclays Bank of Uganda Ltd v Eddy Rodigues (Civil Appeal No. 5 of 1987)
  • Sgt. Oumo Joshua & Attorney General v Paul Wangoto Mugoga & Another (Civil Appeal No. 17 of 2022)
  • Kiboro v Posts & Telecommunication Corporation, (1974) E.A 155
  • James Bahinguza & Another v Attorney General (Civil Application No. 269 of 2013)
  • Genegri Plantation Limited v SWATT Security Limited (Civil Application No. 193 of 2024)
  • Bakaluba Peter Mukasa & Another v Nalugo Mary Margaret Sekizigitu (Election Petition Appeal No. 24 of 2011)
  • Andrew Mavii v Jomanji Property Construction Ltd (Civil Appeal No. 274 of 2014)
  • 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 Limited (In Liquidation) v Rwenzori Properties Limited (Civil Appeal No. 75 of 2006)
  • Nipun Norattam Bhatia v Crane Bank (Civil Appeal No. 75 of 2006)
  • Makula International Limited 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 Allibhai 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 (Misc. 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 (KLR)
  • Attorney General v Major (Rtd) Anthony Jallout Okullo (Civil Appeal No. 3 of 2020)
  • Barclays Bank (U) Limited & 2 Others v Emerald Hotel Limited & 3 Others (Civil Appeal Nos. 70 & 72 of 2017)
  • Butebi Investments Enterprises Limited 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 & 2 Others (Misc. Application No. 24 of 2015)
  • Eduard Rurangaranga and Mbarara Municipal Council v Horizon Coaches Limited (Civil Appeal No. 21 of 2018)
  • Miriam Kuteesa v Nantumbwe Edith & Others (Misc. Application No. 20 of 2014)
  • Herbert Semakula Musoke v Lawrence Nabamba (Civil Application No. 22 of 2019)
  • Batabaire Elizabeth v Ngobi Siraj and Others (Civil Application No. 326 of 2017)
  • Bigiruo Norah v The Returning Officer & Another (Civil Application No. 23 of 2017)
  • Nyirabarore Vannis and Another v Ngirakubanza Sarafina & Others (Civil 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 U.L.R 167
  • Loi Kageni Kiryapawo v Gole Nicholas Davis (Civil Application No. 15 of 2007)
  • Dr. S.B. Kingatta & Another v Suburamania Rajha Gopalan & Another (Civil Application No. 1000 of 2000)
  • Horizon Coaches Limited v Francis Mutabazi and Others (Civil Appeal No. 20 of 2001)
  • Ngenduwoha Bigiruta Norah v The Returning Officer, Buliisa District (Civil Application No. 23 of 2011)
  • Rulinda Fabrice Brad & Electoral Commission v Kayanja Vincent De Paul (Election Petition Application No. 10 of 2023)
  • Kibalama Mugwanga v Butebi Investments Enterprises Limited (Civil Appeal No. 190 of 2013)
  • Uganda Revenue Authority v Uganda Consolidated Properties Limited (Civil Application No. 31 of 2000)
  • Gaba Beach Hotel Limited v Cairo International Bank Limited (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 2025 UGCA 359 (23 October 2025)
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.