Justice Boniface Wamala has ruled that,
"There is nothing illegal either within the said framework or under any other law for a person to lend money to another person under agreement.
What is illegal is for a person to do so as a business without a license or without compliance with existing provisions of the law"
The learned Justice further decided on When Can Unconditional leave to appear and defend Civil Suit be granted to the Applicant In A Summary Procedure Be Granted.
He ruled that,
The position of the law is that in accordance with Order 36 rule 4 of the Civil Procedure Rules, unconditional leave to appear and defend a suit will be granted where the applicant shows that he or she has a good defence on the merits; or that a difficult point of law is involved; or that there is a dispute which ought to be tried, or a real dispute as to the amount claimed which requires taking an account to determine or any other circumstances showing reasonable grounds of a bona fide defence. The applicant should demonstrate to court that there are issues or questions of fact or law in dispute which ought to be tried. The procedure is meant to ensure that a defendant with a triable issue is not shut out.
The General Rule on Summary Procedures
In Uganda, Civil suits (private suits between legal personalities) are governed by the Civil Procedure Act[1] under Section 19 is empowered to guide the process of all civil suits.
Section 19 reads,
“Every suit shall be instituted in such a manner as may be prescribed by the rules”
Summary procedure is a procedure in civil suits which allows the court to entertain proceedings in a summary nature whereby the defendant doesn't have an automatic right to defend himself.
A summary procedure is a quick way for the plaintiff who demands a liquidated sum to obtain a judgement where there is no evident defense.
Summary procedures are provided for Under Oder 36 Rule 2 of the Civil Procedure rules[2].
It suffices to note that summary procedure was made in the spirit of Article126 (2) (e)[3] which obliges court to administer substantive justice without undue regard to technicalities.
The rationale for Summary Procedure
The rationale is to aid the plaintiff to recover what is legally theirs if the defendant has no reasonable defense. The defendant/respondent against whom an action is brought by way of summary procedure can seek leave of court to appear and defend himself in-case he can convince court that there are questions of law/facts in dispute that need to be tried.
It is a further requirement under the law that in an application for leave to appear and defend a summary suit, there must be sufficient disclosure by the applicant, of the nature and grounds of his or her defence and the facts upon which it is founded. Secondly, the defence so disclosed must be both bona fide and good in law. A court that is satisfied that this threshold has been crossed is then bound to grant unconditional leave. Where court is in doubt whether the proposed defence is being made in good faith, the court may grant conditional leave, say by ordering the defendant to deposit money in court before leave is granted (as stated under Children of Africa vs Sarick Construction Ltd H.C Miscellaneous Application No. 134 of 2016).
The allowance for an application for leave is in the Spirit of Article 28[4] for it has the legal effect that all defendants with a genuinely triable issue are not shut out.
The point of law mentioned above has been discussed by Justice Boniface Wamala in his judgement on Ndyareeba Ronald’s application for leave to defend himself after a summary procedure was instituted against him in the case Ndyareeba Ronald v Joseph Arinaitwe[5] .
THE BACKGROUND OF THE APPLICATION
Ndyareeba’s application follows a summary suit that was brought against him for failure to pay back monies he had borrowed from Joseph Arinaitwe to a tune of 230,150,000 Shillings.
In the Summary suit where Arinaitwe is the applicant, he alleges that sometime between 2017 and 2018, Ndyareeba approached him seeking to borrow money totaling 257,150,000 Shillings.
The two agreed to a payment schedule in a Memorandum of Understanding made on 07/12/2018 to the effect that the last payment of the money owed will be made by 19/04/2019. Ndyareeba had only paid 27,000,000 Shillings at the time of the suit.
GROUNDS OF THE APPLICATION.
In his Application for leave, Ndyareeba had to raise substantial points of law or matters of fact in his favor to persuade court to give him an opportunity to be heard in the Summary suit against him. Ndyareeba laid the following points before Justice Boniface; (1).That the alleged money owed was not a liquidated sum capable of being recovered by summary procedure, (2). That Arinaitwe was not licensed to lend money.
ISSUE FOR DETERMINATION IN NDYAREEBA’S APPLICATION
Ndyareeba’s application raised one issue for determination; “Whether the application discloses any triable issues as to justify grant of leave to defend the summary suit?”
RULING OF JUSTICE BONIFACE WAMALA
Justice Boniface Wamala declined to grant Ndyareeba leave to defend himself in the Summary suit against him. The leave was denied because Ndyareeba failed to reach the necessary threshold to convince court that he had points of law or matters of fact in his defense that necessitate a trial.
The threshold does not necessarily require the Applicant to fully lay down his defense on the merits, but rather to merely satisfy the court that there was an issue or question in dispute which ought to be tried[6]
Additionally, it was held that the Applicant for leave must fully disclose the nature and grounds for his or her defense and the facts upon which that defense is founded.
Further still, the proposed defense should be bona fide and good in law. It should be made in good faith.
Where such a threshold is reached, the Applicant of a Summary suit shall not be entitled to a summary judgement. To read full case follow the link below👇🏻
Summarized By Abraham Morgan Musekura
Currently in LLB 3,
Uganda Christian University (UCU)
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