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Uganda Judgment

Commercial Court of Uganda

B.D.S.Ltd v Imad F. Shteiwi (High Court Miscellaneous Application No. 505 of 2008) [2008] UGCommC 51 (20 October 2008)

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01

Holding and result

The court found that the applicants were properly served at their company address and that the claim was based on dishonoured cheques. While the court did not find sufficient grounds to set aside the decree unconditionally, it recognized the substantial amount involved (USD 55,000) and granted the applicants conditional leave to defend the suit. The condition imposed was that the applicants must deposit the sum of USD 55,000 into court within 14 days. If they comply, the decree and execution are stayed and they may defend the action. If they default, the original decree is revived and the respondent is at liberty to enforce the sale. The court also clarified that the applicants may seek an extension of time for payment by applying to court or by mutual consent with the respondent. Costs of the application were awarded to the respondent.

Court disposition

conditional_leave_to_defend_granted

Orders

  • Applicants/Defendants to pay USD 55,000 into court within 14 days as a condition for leave to defend.
  • Decree and execution stayed subject to payment into court.
  • In default of payment, original decree revived and respondent at liberty to enforce sale.
  • Applicants may apply for extension of time for payment or seek mutual consent with respondent.
  • Costs of the application awarded to the respondent.

02

Material facts

Parties

B. D. S Limited

Applicant

Imad F. Shteiwi

Respondent

Amounts and remedies

  • Amount to Be Deposited Into Court: USD 55,000

03

Procedural history

  1. Posture

    Miscellaneous Application / Ruling on Application to Set Aside Ex Parte Decree and Stay Execution

04

Questions and positions

Legal issues

Party arguments

Applicant
The applicants contend that the ex-parte decree and warrant of execution should be set aside as they were not given an opportunity to defend the suit. They seek leave to defend and a stay of execution, arguing that there are merits to their defence and that the amount involved is substantial.
Respondent
The respondent argues that the claim is based on dishonoured cheques issued by the applicants, that there was no communication or proposal for payment from the applicants, and that the applicants were properly served. The respondent maintains that the suit was correctly brought and opposes the setting aside of the decree.

05

Court’s reasoning

  1. 01

    Order 36 Rule 11, Civil Procedure Rules

    Court must consider whether the applicants were properly served and whether there is merit in the defence before setting aside an ex-parte judgment.

  2. 02

    Order 36 Rule 11, Civil Procedure Rules; Section 33 Judicature Act

    Court may impose conditions when granting leave to defend or setting aside a decree, especially where the claim is based on a dishonoured cheque.

06

Ratio, limits and disposition

Ratio decidendi

The court found that the applicants were properly served at their company address and that the claim was based on dishonoured cheques. While the court did not find sufficient grounds to set aside the decree unconditionally, it recognized the substantial amount involved (USD 55,000) and granted the applicants conditional leave to defend the suit. The condition imposed was that the applicants must deposit the sum of USD 55,000 into court within 14 days. If they comply, the decree and execution are stayed and they may defend the action. If they default, the original decree is revived and the respondent is at liberty to enforce the sale. The court also clarified that the applicants may seek an extension of time for payment by applying to court or by mutual consent with the respondent. Costs of the application were awarded to the respondent.

Obiter and limits

  • Applicants may apply for extension of time to pay into court if they face difficulties, or seek mutual consent from the respondent to extend time without returning to court.

Court disposition

conditional_leave_to_defend_granted

  • Applicants/Defendants to pay USD 55,000 into court within 14 days as a condition for leave to defend.
  • Decree and execution stayed subject to payment into court.
  • In default of payment, original decree revived and respondent at liberty to enforce sale.
  • Applicants may apply for extension of time for payment or seek mutual consent with respondent.
  • Costs of the application awarded to the respondent.

Source and reliance status

Commercial Court of Uganda

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Source document

Judgment reading view

Judgment text

The complete available source text.

Source document

Commercial Court of Uganda

Judgment

[2008] UGCommC 51

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{\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}} {\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15627438 \b\f36\fs32\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\f0\fs24\insrsid5771281\charrsid15627438 THE REPUBLIC OF UGANDA \par }{\b0\f0\fs24\insrsid5771281\charrsid15627438 \par }{\f0\fs24\insrsid5771281\charrsid15627438 IN THE HIGH COUT OF UGANDA AT KAMPALA \par COMMERCIAL COURT DIVISION \par \par HCT \endash 00 \endash CC \endash MA - 505 - 2008 \par \par B. D. S LIMITED\tab ::::::::::::::::::::::::::::::::::::: APPLICANT \par \par VS \par \par }{\f0\fs24\insrsid3962030\charrsid15627438 IMAD F. SHTEIWI}{\f0\fs24\insrsid5771281\charrsid15627438 ::::::::::::::::\tab RESPONDENT \par \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15627438 {\f0\fs24\insrsid5771281\charrsid15627438 \par }\pard \qc

\li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15627438 {\f0\fs24\insrsid5771281\charrsid15627438 RULING \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15627438 {\f0\fs24\insrsid5771281\charrsid15627438 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15627438 {\b0\f0\fs24\insrsid11167344\charrsid15627438 This is an Application brought by motion under Section 33 of the Judicature Act}{ \b0\f0\fs24\insrsid3962030\charrsid15627438 ,}{\b0\f0\fs24\insrsid11167344\charrsid15627438 Section 93 CPA, order 36 Rule 11, order 22 rule 34 and Order 52 Rule 1 & 3 of the CPR. \par \par }{\b0\f0\fs24\insrsid3962030\charrsid15627438 The}{\b0\f0\fs24\insrsid11167344\charrsid15627438 Defendants/Applicants seek to set aside the ex-parte Decree and warrant of execution passed in Civil Suit No. 231 of 2008}{ \b0\f0\fs24\insrsid3962030\charrsid15627438 ,}{\b0\f0\fs24\insrsid11167344\charrsid15627438 the stay of execution in the Civil suit No. 231of 2008 and to be granted unconditional leave to defend together with cost}{ \b0\f0\fs24\insrsid3962030\charrsid15627438 s}{\b0\f0\fs24\insrsid11167344\charrsid15627438 of this application. \par \par The Plaintiff issued the claim based on the issuance of several cheques by

Jae}{\b0\f0\fs24\insrsid3295787\charrsid15627438 l}{\b0\f0\fs24\insrsid11167344\charrsid15627438 Li mited the previous name of the company BDS Limited in the total sum of 55, 000 dollars. These cheques were dishonoured}{\b0\f0\fs24\insrsid3295787\charrsid15627438 ,}{\b0\f0\fs24\insrsid11167344\charrsid15627438 there was no come back or communication from the Applicants/Defendants as to proposals with respect to }{\b0\f0\fs24\insrsid10226605\charrsid15627438 payment of the dishonoured cheque and the Plaintiffs correctly sued the Applicants/Defendants on the cheque.}{\b0\f0\fs24\insrsid11167344\charrsid15627438 }{\b0\f0\fs24\insrsid3962030\charrsid15627438 \par \par }{\b0\f0\fs24\insrsid10226605\charrsid15627438 In setting aside the orders or the judgment in default in the main suit, the court has to consider whether the Applicants/Defendants were }{\b0\f0\fs24\insrsid2779297\charrsid15627438 served with the Application and whether there }{\b0\f0\fs24\insrsid3295787\charrsid15627438 are any merits }{\b0\f0\fs24\insrsid2779297\charrsid15627438 in the case. }{\b0\f0\fs24\insrsid3295787\charrsid15627438 \par \par \par }{\b0\f0\fs24\insrsid2779297\charrsid15627438 The court is satisfied that the Court}{\b0\f0\fs24\insrsid3295787\charrsid15627438 process}{\b0\f0\fs24\insrsid2779297\charrsid15627438 server had properly served the Ap}{ \b0\f0\fs24\insrsid3295787\charrsid15627438

plicants and Defendants at the}{\b0\f0\fs24\insrsid2779297\charrsid15627438 company address in Hannington road }{\b0\f0\fs24\insrsid3295787\charrsid15627438 and in so }{ \b0\f0\fs24\insrsid2779297\charrsid15627438 far as the merits of the case are concerned this is an action brought on }{\b0\f0\fs24\insrsid3295787\charrsid15627438 a}{\b0\f0\fs24\insrsid2779297\charrsid15627438 cheque and the court does not propose to go into any further detail. }{\b0\f0\fs24\insrsid3962030\charrsid15627438 \par \par }{\b0\f0\fs24\insrsid2779297\charrsid15627438 However in }{\b0\f0\fs24\insrsid3295787\charrsid15627438 view}{\b0\f0\fs24\insrsid2779297\charrsid15627438 of the large amount in the case in the sum of 55,000 dollars, the court shall give the Defendants/Applicants the opportunity to defend the action on condition that they pay the sum of 55,000 dollars }{\b0\f0\fs24\insrsid16668651\charrsid15627438 into the court within the next 14 days subject thereto the Decree and stay of execution shall be stayed. }{\b0\f0\fs24\insrsid3295787\charrsid15627438 \par }{\b0\f0\fs24\insrsid16668651\charrsid15627438 In default of payment of the said sum o}{\b0\f0\fs24\insrsid15026610\charrsid15627438 f 55,000 dollars into the court, the original decree will be revived and the Plaintiffs will be }{ \b0\f0\fs24\insrsid3962030\charrsid15627438 at liberty to go ahead and enforce the

sale.}{\b0\f0\fs24\insrsid11167344\charrsid15627438 \par }{\b0\f0\fs24\insrsid3962030\charrsid15627438 \par Just to clarify the situation for the future, in the even}{\b0\f0\fs24\insrsid3295787\charrsid15627438 t}{\b0\f0\fs24\insrsid3962030\charrsid15627438 the Applicants/Defendants have any difficulties in paying the monies into the court, they are at liberty to apply to the cour t for extension of time or to communicate their problems to the Plaintiff/Respondents and seek their mutual consent whereby the time for payment into the court will be or can be extended without the need to come back to the court. \par \par The costs of this Application are the Plaintiffs}{\b0\f0\fs24\insrsid4133298\charrsid15627438 \rquote }{\b0\f0\fs24\insrsid3962030\charrsid15627438 . \par \par \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid15627438 {\f0\fs24\insrsid3962030\charrsid15627438 Anup Singh Choudry \par Judge \par 21/10/2008 \par }}

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Authorities

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Cases, legislation, regulations, and constitutional provisions identified in the available record.

Section 33 Judicature Act

Legislation

Legislation referenced in the available case record.

Section 93 Civil Procedure Act

Legislation

Legislation referenced in the available case record.

Order 36 Rule 11 Civil Procedure Rules

Legislation

Legislation referenced in the available case record.

Order 22 Rule 34 Civil Procedure Rules

Legislation

Legislation referenced in the available case record.

Order 52 Rule 1 & 3 Civil Procedure Rules

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Legislation referenced in the available case record.

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