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Zirobwe Agali Awamu Agribusiness Training Association v Uganda Central Cooperative Financial Services & Another (Miscellaneous Application 532 of 2023)

High Court · [2024] UGCOMMC 288 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside default judgment and consent settlement arising from summary suit
Decision
Default judgment and consent settlement set aside; applicant granted unconditional leave to defend the main suit

Observed later treatment

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Holding

Held that the deponent, as secretary and principal officer of the applicant association, had competence to swear the supporting affidavit based on personal knowledge under Order 19 Rule 3(1) and Order 29(1) CPR. A board resolution to commence proceedings is not mandatory. Service was effective where summons were received by a receptionist acting under the manager's telephonic authorization and the company stamp was affixed. The applicant established good cause to set aside the default judgment by demonstrating a triable defence that the loan agreement may have been a grant rather than a repayable loan. The application was allowed and the default judgment, decree, and consent settlement set aside.

Outcome

Default judgment and consent settlement set aside; applicant granted unconditional leave to defend the main suit

Facts

The 1st Respondent filed a summary suit against the Applicant and others for recovery of UGX 227,370,798. The Applicant failed to file an application for leave to appear and defend within ten days. A default judgment was granted, a decree issued and extracted. During execution proceedings, the 2nd Respondent was arrested and entered a consent settlement with the 1st Respondent, depositing the applicant's certificate of title for land at Block 57 Plot 911 Bulemezi as security for the decretal sum. The Applicant subsequently filed this application seeking to set aside the judgment, decree, and consent settlement, arguing that the loan was actually a grant from a pilot project funded by CITA of the Netherlands and UCA and was not repayable.

Issues

  1. Whether the deponent of the applicant's affidavit in support has locus to swear the affidavit as a member of the applicant.
  2. Whether the suit is incompetent for having been filed without a board resolution authorising the institution of proceedings.
  3. Whether there was effective service of summons on the applicant.
  4. Whether the applicant has sufficient grounds to set aside the judgment, decree, and consent settlement.

Orders

  • Application allowed.
  • Default judgment and decree in Civil Suit No. 1102 of 2020 set aside.
  • Consent settlement in Execution Miscellaneous Application No. 389 of 2022 set aside.
  • Applicant granted leave to appear and defend the suit.
  • Applicant ordered to file written statement of defence within 14 days from delivery of ruling.
  • 1st Respondent ordered to return the certificate of title for Block 57 Plot 911 at Bulemezi to Mr. Kaliba Ismail.
  • Costs to abide the cause.

Rules and key headnotes

Civil Procedure — Affidavits — Competence of Deponent — Secretary as Principal Officer
A secretary of a corporation is a principal officer competent to swear an affidavit to facts within his or her knowledge and belief by virtue of position and work in the company under Order 29(1) of the Civil Procedure Rules.
Civil Procedure — Affidavits — Content Requirements — Knowledge and Belief
What is required in affidavits is the knowledge or belief of the deponent rather than authorization by a party to the litigation. Under Order 19 Rule 3(1) CPR, affidavits shall be confined to such facts as the deponent is able of his or her own knowledge to prove, except on interlocutory applications, on which statements of belief may be admitted provided the grounds are stated.
Company Law — Institution of Proceedings — Board Resolution — Not Mandatory
A resolution to commence a suit is not a necessary prerequisite for a company to institute legal proceedings. However, a lawyer or agent who commences action on behalf of a company must be duly appointed.
Civil Procedure — Service of Process — Corporations — Manager as Principal Officer
Under Order 29 Rule 2(a) CPR, service of summons on a principal officer of a corporation constitutes effective service. A manager is a principal officer involved in day-to-day management. Where a manager authorizes a receptionist by telephone to receive pleadings on behalf of the company and the company stamp is affixed, service is effective.
Civil Procedure — Setting Aside Default Judgment — Good Cause — Triable Defence
Under Order 36 Rule 11 CPR, a default judgment may be set aside where the defendant demonstrates good cause. Apart from ineffective service, good cause includes evidence that the defendant has a triable defence to the suit. A contention that a loan was actually a grant constitutes a triable issue sufficient to establish good cause.

Legislation cited (10)

Cases cited (8)

  • Mathew Rukikaire v Incafex Limited (Civil Appeal No. 3 of 2015)
  • Bankone Ltd v Simbamanyo Estates Ltd (HCMA No. 647 of 2020)
  • Bugerere Coffee Growers Limited vs Sebaduka and another 1970 E A
  • Rubaga Building Company Limited vs Gopo Dervsi Vekaria
  • Masaka Tea Estate Limited vs Shakikant Amratlal Karia
  • Money Lenders Association Uganda Limited and Another v Uganda Registration Services Bureau (High Court Miscellaneous Cause No. 11 of 2019)
  • Moneylenders Association of Uganda Limited & MK Financiers Limited v Uganda Registration Services Bureau (HCMA No. 1 of 2019)
  • Geoffrey Gatete & Another v William Kyobe (SCCA No. 7 of 2005)

Full judgment

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

Zirobwe Agali Awamu Agribusiness Training Association v Uganda Central Cooperative Financial Services & Another (Miscellaneous Application 532 of 2023) [2024] UGCommC 288 (12 July
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.