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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF
UGANDA AT KAMPALA
(COMMERCIAL COURT
DIVISION)
HCT-00-CC-CS-0626 OF 2004
KAGA LIMITED ::::::::::::::::::::::::::::::::::
PLAINTIFF
VERSUS
HIDAYA NANTONGO :::::::::::::::::::::::::::::
DEFENDANT
BEFORE: THE HONOURABLE MR. JUSTICE YOROKAMU
BAMWINE
J U D G M E N T:
The Plaintiff
is a corporate body registered under the laws of Uganda. It is in the business
of lending money to the public. Its
claim against the Defendant is for recovery
of Shs.10,075,000-, interest and costs.
It is the Plaintiff’s case
that sometime in April 2003, the Plaintiff extended a loan facility to the
Defendant. The amount
is stated to be Shs.13,000,000-. The Defendant was to
pay a monthly interest of 15%. The Plaintiff’s case is that she made
part
payment and remained with a balance of Shs.10,075,000-. Hence this
claim.
At the scheduling stage, there was only one point of agreement,
namely: that there was a loan agreement between the Plaintiff and
the Defendant.
The rest is disputed.
Issues:
1. Whether the Defendant is
indebted to the Plaintiff in the sum claimed.
2. Whether the Plaintiff is
entitled to the reliefs claimed.
Representation:
Mr. Kajeke for
the Plaintiff.
Mr. Tebyasa for the Defendant.
Before I proceed to
assess the available evidence on the matter, I find it necessary to comment on
the burden of proof in a case such
as this and the standard proof.
In
law, a fact is said to be proved when the Court is satisfied as to its truth.
The general rule is that the burden of proof rests
on the party who asserts the
affirmative of the issue or question in dispute. When the party adduces
evidence sufficient to raise
a presumption that what he asserts is true, he is
said to shift the burden of proof: that is, his allegation is presumed to be
true,
unless his opponent adduces evidence to rebut the presumption.
In
the instant case, the Plaintiff has alleged in its plaint that the Defendant
owed it Shs.10,075,000-. The Defendant denies it.
The burden of proof lies on
the Plaintiff to prove that what it asserts against the Defendant is true. The
standard of proof is
on the balance of probabilities.
As to whether the
Defendant is indebted to the Plaintiff the sum claimed, that is,
Shs.10,075,000-, I must observe right from the
word go that the evidence offered
by the Plaintiff’s witnesses on the matter is inconsistent.
PW1
Arthur Mwine is a Court Bailiff/Debt Collector. He was instructed in the latter
capacity to recover money from the Defendant.
The instructions were in writing.
These instructions, received twice on 10/10/2003 indicated the amount to be
either Shs.13,870,957-
(D. Exh. v) or Shs.8,270,000- (D. Exh. iv). In view of
that conflict, it is his evidence that he went back to the Plaintiff for
fresh
instructions and that he was told that the outstanding amount was
Shs.8,270,000-.
PW2 Allan Mugisha Nyirinkindi is the Managing Director,
M.D, of the Plaintiff company. It is his evidence that although the amount
stated in the plaint is Shs.10,075,000-, the actual claim of the Plaintiff
against the Defendant is now about Shs.5,000,000-. He
was unable to commit
himself on the amount due, claiming that the company financial controller knew
it better. But this witness
was categorical that between filing the suit in
August 2004 to-date, the Defendant has not made any payment to the company. He
is
aware that some vehicles were sold for purposes of the proceeds being used to
off-set the debt but he had no records of when those
sales took place, to whom
or how much was realized out of them for that purpose. I considered it a shame
that a person claiming
to be the M.D of a company whose business is to lend
money to the public could put up such a poor show.
The said financial
controller, Mataga Nassali, appeared as a witness, PW3. Her evidence is that
the payment period for the loan was
three months. That the Defendant failed to
pay within the stipulated contract period but asked for an extension which the
company
granted. That when the 3 months also elapsed, the Plaintiff considered
the loan a bad one and stopped charging interest on the outstanding
balance,
according to their records standing at Shs.8,780,957-.
There is evidence
that the loan facility was extended to the Defendant in April 2003. If this
Court were to accept PW3 Nassali’s
evidence as truthful, it would mean
that the initial 3 months elapsed somewhere in July 2003 and that the extension
was up to October
2003. However, Nassali’s evidence is not supported by
P. Exh. 1 or P. Exh. 11, the two loan agreements herein. These two
documents
show that the loan period was one month, not three. It was given in
April and renewed in May 2003. This appears to tie in with the
Defendant’s evidence that
by July 2003 the Plaintiff had agreed to waive
off the interest. It had already become a bad debt.
Let me now turn to
the Defendant’s evidence. She agrees that she borrowed Shs.13m from the
Plaintiff. The Plaintiff took three
of her vehicles as security for the loan.
These were:
1. Toyota Hiace UAE 368 J.
2. Toyota Corona UAD 986
W.
3. Subaru Impreza UAE 957 K.
That on top of that, the Plaintiff
asked for post dated cheques covering the loan amount and that since she had no
current Account,
her brother in law, one Ayub Manafwa stood in for her as the
guarantor for the payment of that loan and that he issued post-dated
cheques to
that effect. The loan agreement bears her out in that regard. It is her
evidence that by May 2003, the whole amount,
including interest, stood at
Shs.13,282,500-. She avers that thereafter she experienced some difficulty in
paying off the loan.
She contacted Allan Mugisha, the M.D, to sell one of the
vehicles which had been offered as security for the loan, a Toyota Corona
UAD
986 W. Her evidence is that Shs.5m was realized out of it and that of this
amount, Shs.3m was put to the defrayment of the loan.
This transaction is
reflected in the statement of Account, P. Exh. 111, as deposit on the loan on
24/4/2003. While the Plaintiff
claims that Receipts were being issued in
respect of all such payments by the Defendant, none has been exhibited to Court
reflecting
that deposit. To that extent, Court is of the view that the Receipts
do not reflect all payments effected by the Defendant. As
fate would have it,
the Defendant who, it would appear, was also not in the habit of recording such
transactions does not know when
the sale of this vehicle took place.
The
policy of the company, as per the evidence of PW3 Nassali, was to stop payment
of interest on loans which had become bad debts.
There is evidence that come
October 2003, no interest is reflected on the Defendant’s statement of
Account, P. Exh. 111.
There is no written evidence of the parties ever meeting
to agree on the stoppage. However, in view of the clear evidence that come
October 2003 the loan attracted no further interest, Court accepts the
Defendant’s evidence that at some stage the Plaintiff
waived payment of
interest on the loan. I take that stage to have been in July 2003 since the
loan period was one month effective
April 2003. It appears to me that PW3
thought the waiver was in October because of her mistaken belief that the loan
period was
three months.
It is the Defendant’s evidence further
that after the Toyota Corona had gotten out of their way, the parties now moved
onto
the mini-bus, the Toyota Hiace UAE 368 J. Her evidence is that the market
value was about Shs.13m but that she agreed with Allan
Mugisha that he would
take it for Shs.7m. That Mugisha told her later that he had so far been paid
Shs.1.4m out of the sale proceeds
thereof. This much is not disputed by Allan
Mugisha save that he denies involvement in the sale. There is evidence, P. Exh.
111,
that Shs.1.4m was deposited in respect of the loan on 29/7/2003. Again it
is not known who actually bought this vehicle. Suffice
it to say, however, that
the Defendant had given it to the company as security for the loan, to be sold
in the event of a default
in payments. In view of that evidence, Court finds
that Mugisha’s evidence that he was not involved in its sale is
dishonest.
From the evidence above regarding sale of two vehicles, the
statement of Account, P. Exh. 111, that puts the balance at Shs.12,442.738-
as
at 29/7/2003 cannot be accepted as correct. Court is of course mindful of the
fact that the said statement was not in existence
at the time the Plaintiff
filed this suit (the same came into existence on 30/8/2005).
It is the
Defendant’s evidence that she was not involved in the sale of the
mini-bus; that the transaction was between Allan
Mugisha and Ayub Manafwa. As I
will show presently, Ayub’s evidence on this point is on all fours with
that of the Defendant.
Regarding the 3rd vehicle, a Subaru
Impreza, the Defendant’s evidence is that she agreed with Allan Mugisha
that it be exchanged with another
vehicle, a Toyota Corolla, which was done.
That the Corolla fetched her Shs.4.3m. Two Receipts totaling to that much are
on record.
The amount is reflected on the statement of Account, P. Exh. 111, as
payments on 20/1/2004 and 1/4/2004 respectively. It is clear
from all this
evidence that the Plaintiff’s claim that by the time if filed the case in
August 2004 the outstanding balance
was shs.10,075,000- lacks merit. The amount
was certainly much less than that.
The Defendant’s case is that it
was only Shs.253,518-. Her witness, DW1 Ayub Manafwa, said that he had issued
post dated cheques
to the Plaintiff and that upon sitting with Allan Mugisha and
the Defendant, it was agreed that upon the said Manafwa surrendering
his own
Subaru (quite different from the Subaru Impreza which the Defendant had offered
as security for the loan) his own indebtedness
to the Plaintiff and that of the
Defendant would cease. That on that understanding, the post dated cheques which
he had issued to
the Plaintiff on behalf of the Defendant and had been banked
and dishonoured, were returned to him and he destroyed them. Although
the loan
agreement shows that such cheques were issued to the Plaintiff, the evidence of
its witnesses does not show what happened
to them. The assumption is that they
were returned to DW1 Manafwa and he destroyed them.
I have already
observed that the Plaintiff portrayed to Court a disorganized system of keeping
its accounts records, to the extent
that each witness stated to Court a figure
different from the other regarding the Defendant’s alleged indebtedness.
In view
of the doubts expressed upon the Plaintiff’s evidence as a whole,
the Plaintiff has not satisfactorily or at all discharged
its burden of proof.
Accordingly, Court is not satisfied on a balance of probabilities that the
Defendant owes any money to the
Plaintiff beyond the amount admitted in her
written statement of defence and her evidence in Court. In view of that
conclusion,
Court holds that the Plaintiff is not entitled to the reliefs sought
against the Defendant.
I would dismiss the suit with costs to the
Defendant and I do so. The admitted sum of Shs.253,518- shall be deducted from
the Defendant’s
taxed costs. I so order.
Yorokamu
Bamwine
J U D G E
12/12/2005
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.RTF of original document