THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

CIVIL DIVISION
MISCELLANEOUS APPLICATION NO. 49 of 2020

[Arising from CIVIL SUIT NO.215 OF 2020]

1. GOLDEN LEAVES [U] LTD

2. MRS. ZHANG NAN

3. MR. ZHAN NAN:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANTS

VERSUS

ISMAIL DABULE::::::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT

BEFORE: HON. JUSTICE SSEKAANA MUSA

RULING

The applicant brought this application under Order 36 rules 3 & 4, O.52
rules 1 & 3 of the CPR. He sought for orders that this court grants
unconditional leave to appear and defend Civil Suit No. 215 of 2020 and
costs of the application be provided for.

The application was supported by the affidavit of the applicant; FANG

LIU.

The facts leading to this Application are that the Applicants entered into a
tenancy agreement with the respondent wherein the Applicants operated a
restaurant known as The Great Chinese Wall under Golden Leaves [U] Ltd.
The Applicants were to pay a monthly rent of Ugshs. 5,000,000/= [Uganda
Shillings Five Million]. The Respondent alleges that the 2nd and 3rd
applicants operating under the 1st applicant did not pay rent for a period of
over 12 months from May 2018 to April 2019 making the money to
accumulate to the tune of Ugshs. 60,000,000/= [sixty million shillings].

It is alleged that the applicants for a period of 12 months kept on promising

to pay rent to no vein and vacated the premises without the knowledge of
the respondents. The Respondents aggrieved by the actions of the
Applicants, filed a summary suit vide civil suit No. 215 of 2020 claiming
payment of the Ugsh 60,000,000/= being rent arrears, payment of interest at
a commercial rate of 25% per annum from cause of action till payment in
full and cost for the suit.

In response to the above, the Applicant has filled this application for
unconditional leave to appear and defend the suit.

The grounds of the application disclosed in the Notice of Motion are as

follows:
• That the Applicants are not indebted to the Respondent in the sum
claimed in the plaint or any other sum.

• The suit is incompetent and bad in law as it does not disclose a cause
of action against the applicants and a non-existent party [2nd
applicant] was sued.

• The suit against the 2nd and 3rd Defendants is incompetent on grounds
that they were sued in their capacity as directors of the 1 st defendant
whereas by law they are not personally liable for acts of the 1 st
defendant.

• There is no written tenancy agreement on which the respondent

premises its claim of over UGX60, 000,000.
 • The Applicants have a good and plausible defence to the clam filed
by the respondent as any rent obligations to the Respondent were
settled and the said tenancy lapsed in February 2019 and not April
2019 as alleged by the respondent.

• That any rent obligation outstanding as of February 2019 were settled

by the kind gesture of the 1st defendant handing over the restaurant
with its goodwill clientele and assets to the respondent with no cost.

• There are triable issues that warrant the fling of the defence as these
issues cannot be determined in a summary manner.

• That it is only just, fair and equitable that the applicants be granted
unconditional leave to appear and defend the suit.

He additionally attached the receipts to justify settlement against rent

obligation for previous months and payment of all utilities bills.

According to the Applicant after referring to the law and the facts disclosed
in the Applicant’s application and supporting evidence, the Applicant
raises the following triable issues namely:
1. Whether the Applicants have by Affidavit disclosed a triable issue of fact or
law.
2. Whether the 2nd and 3rd defendants can be sued in their capacity as directors
for the acts of the 1st defendant.
3. Whether the Affidavit accompanying the plaint by not having a court stamp
was not filled as required by law.
4. Whether this matter was filled in a wrong division of the High Court of
Uganda.
5. Whether the claim for Ugshs 60,000,000 is backed by any written evidence
as required by law.
The applicant was represented by Ms Abio Patience while the respondent
was represented by Mr. Omongole Richard. The parties filed written
submissions which I have perused and considered in this ruling.

Determination
Whether the applicants have by affidavit disclosed a triable issue of fact or law?
The plaintiff in summary suit is entitled to summary judgment on liability
if there is no issue which can be truly disputed and no other reason why
there should be a trial.

The foundation for applications for leave to appear and defend is premised
under order 36 rules 3 and 4 of the civil Procedure Rules which provides
that upon the filing of an endorsed plaint and consequent service on the
defendant , the defendant shall not appear and defend the suit except upon
applying for and obtaining leave from court.

Order 36 rule 4 o the CPR further provides that the application for leave to
appear and defend the suit shall be supported by affidavit which shall state
whether the defence alleged goes to the whole or to part only and if so to
what part of the plaintiff’s claim.

The above provisions are premised on the fact that the plaintiff has failed
to establish a prima facie case for summary judgment and thus the
summary judgment should not be granted or entered. The defendant
(applicant) is required to satisfy the court that “there is an issue or question in
dispute which ought to be tried or that there ought for some other reason to be a
trial”

The settled law is that for an application for leave to defend to be granted,
the applicants has to show that there is a bonafide triable issue of fact or
law that he will advance in defense of the suit. In the case of Maluku
Interglobal Trade Agency vs Bank of Uganda [1985] HCB 65, at 66 while
considering the above rule court held that;
 “Before leave to appear and defend is granted, the defendant must show by
affidavit or otherwise that there is a bonafide triable issue of fact or law.
When there is a reasonable ground of defence to the claim, the defendant is
not entitled to summary judgment. The defendant is not bound to show a
good defence on the merits but should satisfy the court that there was an
issue or question in dispute which ought to be tried and the court shall not
enter upon the trial of issues disclosed at this stage.”

In the case of Bunjo vs KCB (Uganda) Ltd (Misc. Application No. 174 of
2014) while considering the same principle court held that;
“It is generally accepted that the court should not enter upon a trial on any
of the issues raised. However, in the case of Corporate Insurance Co. Ltd
vs Nyali Beach Hotel Ltd [1995-1998], EA7 the Court of Appeal of
Kenya ruled that leave to appear and defend will not be given merely because
there are several allegations of fact or law made in the defendant’s affidavit.
The allegations are investigated in order to decide whether leave should be
given. As a result of the investigation even if a single defence is identified, or
found to be bonafide, unconditional leave should be granted to the
defendant”.
If the applicant raises a triable issue or if there is a good reason why there
should be a trial, he will be given unconditional leave to defend. If he is not
able to show that there is a triable issue or cannot satisfy the court why the
case should be tried, then the plaintiff will be granted a summary
judgment. See Rankine Bernadatte Adeline v Chenet Finance Ltd [2011] 3
SLR 756; PM Credit Opportunities Fund v Tantoo Tiny [2011]3 SLR 1021

The applicant does not need to satisfy the court that he is more likely to
succeed on the issue or question. He/she merely has to satisfy the court that
there is a question or issue which can only be properly determined at a
proper trial. It is not for the court hearing the application to determine or
investigate the merits of the issues raised by the applicant. The court
should only ascertain whether an issue has been raised which should be
tried. The duty of the court is to carefully examine the facts in order to
ascertain whether there is truly a triable issue.
The power to give a summary judgment in intended only to apply to cases
where there is no reasonable doubt that a plaintiff is entitled to judgment,
and where it is inexpedient to allow a defendant to defend for mere
purposes of delay. The courts should be robust in their approach to
applications for leave to defend by carefully scrutinizing defences to ensure
that the respondent/plaintiff is not improperly deprived of a judgment in
commercial transactions ‘where cash flow is the lifeblood to make
commerce work’. See Habibullah Mohamed Yousuff v Indian Bank [1999] 2
SLR (R) 880; MP-Bilt Pte Ltd v Oey Widarto [1999]1 SLR (R) 908

In the instant case, the respondent submits that the suit does not raise any
triable issues of law or fact and it’s just an attempt to waste court’s time.
However, the applicants submit that there are serious questions of fact and
law that ought to be answered as laid out in the affidavit of Fang Liu
wherein the applicants state that they are not indebted to the respondent in
the sum claimed and also went ahead to adduce receipts of payment made
during the tenancy and date on which they vacated the premises leaving
all its clientele, Goodwill and assets to the respondents at no costs.

In addition, the applicants also add that there was no tenancy agreement to
verify such a contract and that the respondent sued a non-existent party
and went ahead to file this matter in the wrong division.

In my view, the applicants have already demonstrated that they have a

defence to the claim that is brought under summary procedure.

These are all triable issues of law and fact that cannot be settled in a
summary suit.

I accordingly allow the application for unconditional leave to appear and

defend the suit.

The applicants should file a defence to the suit within 15 days of the ruling.
Costs shall abide the outcome of the main suit.

I so Order

Ssekaana Musa
Judge
15th June 2021