Justice Susan Abinyo of the Commercial Division of the High Court has dismissed an attempt by a Ntungamo-based businessman, Alex Mugisha, to defend himself in a fuel supply debt dispute with Stabex International Limited.
Stabex sued Mugisha under a summary procedure, a system that allows creditors to obtain a quick judgment where the defendant is not expected to have a reasonable defence.
Mugisha could only defend himself after applying for formal permission from the court. He therefore filed an application seeking leave to appear and defend, arguing that the dispute involved issues that required a full trial.
In his affidavit, Mugisha admitted that he had been in the fuel business with Stabex between 2012 and 2019. He said he honoured all payment obligations during that period. He added that between April and May 2019, he paid Shs 26 million to Stabex through the company’s bank account at Stanbic Bank Ntungamo branch.
However, he claimed the company had refused to acknowledge receiving the money. He said he could not access Stabex’s bank statements to reconcile the accounts and insisted that after considering his alleged payments, he only owed Shs 62 million and not Shs 88 million as claimed by Stabex.
He asked the court to allow him to present this defence at a full hearing.
Stabex rejected all his claims. In its affidavit in reply, sworn by Robinson Kimutai, the company’s head of credit, Stabex, described Mugisha’s application as “frivolous” and “a waste of court time”. The company argued that Mugisha had not attached a single document to prove that he deposited Shs 26 million as he claimed.
It said that the burden of proving such payments lay squarely on him. Stabex also attached a fuel supply statement, which it said showed the complete history of supplies and payments made by Mugisha. According to this document, the outstanding balance is Shs 88 million.
Stabex further argued that Mugisha’s story was contradictory. The company stated that Mugisha issued cheques worth Shs 88 million, which bounced. Stabex argued that it made no sense for Mugisha to claim that he paid Shs 26 million and yet later issued cheques for the full amount of Shs 88 million, unless the alleged payment had never taken place.
The company asked the court to dismiss the application because Mugisha had failed to raise any triable issue and had not presented a credible defence.
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Justice Abinyo considered all the affidavits filed and the oral submissions made by the lawyer for Stabex. She explained that under Order 36 of the Civil Procedure Rules, a defendant in a summary suit must demonstrate the existence of a bona fide triable issue before being allowed to defend. She emphasised that leave to defend should only be granted where the defence is not a sham.
Justice Abinyo found that Mugisha had admitted owing Stabex at least Shs 62 million. She stated that this admission severely weakened his application because he was required to dispute the entire claim or present evidence showing why the claimed amount was wrong.
She wrote that the argument that he owed Shs 62 million instead of Shs 88 million amounted to an admission that he was indebted to the company.
The judge added that Mugisha had failed to fulfil the legal requirement to prove the facts he relied on. She quoted the Evidence Act, which states that the burden of proof lies on the party who asserts a fact. She noted that Mugisha had not produced any proof of the Shs 26 million payment he claimed to have made.
She said that without bank slips, receipts, or any other supporting documents, the court could not accept his version of events.
Justice Abinyo also observed that although Stabex’s affidavit in reply did not contain the fuel supply statement, the document had already been filed as an attachment to the main suit. She said the statement indicated the indebtedness of Shs 88 million and that Mugisha had not provided evidence to challenge its accuracy.
“For the foregoing reason, this court finds that there is no plausible defence or triable issue,” she said.
Justice Abinyo ruled that Stabex is entitled to a decree for the full amount of Shs 88 million in the main suit. She also awarded costs of both the application and the suit to Stabex.
This means that unless Mugisha appeals the decision, Stabex can proceed with debt recovery measures.
