The Commercial Case Law Index is a collection of judgments from African countries on topics relating to commercial legal practice. The collection aims to provide a snapshot of commercial legal practice in a country, rather than present solely traditionally "reportable" cases. The index currently covers 400 judgments from Uganda, Tanzania, Nigeria, Ghana and South Africa.
Get started on finding judgments that are relevant to you by browsing the topic list on the left of the screen. Click the arrows next to the topic names to reveal a detailed list of sub-topics. Most judgments are accompanied by a short summary written by subject-matter expert postgraduate students from the University of Cape Town.
The applicants sought leave to defend a summary suit brought by the respondent for outstanding loan amounts. The applicants claimed that if granted leave to defend they would prove that the debt was satisfied in full.
The court held that it was to determine whether the applicant demonstrated a triable issue. The applicant is only required to show a fair and reasonable defense. The amendment to the Civil Procedure Code introduced by the Mortgage Financing Act was applicable in the circumstances. It provided that an applicant may be granted leave to defend a summary suit if he proved that he did not take a loan, or has paid it. The court held that the averment that the debt was paid in full raised a triable issue that can only be proved if the applicants were granted leave to defend.
When considering whether to grant leave to defend a summary suit, the court may consider the principles set out by the Indian Supreme Court in M/S Mechalec Engineers & Manufacturers v M/S Basic Equipment Corporation 1977 AIR 577, that the defendant has a good defense; if the defendant raises a triable issue that they have a fair, good faith, or reasonable defense; if the defendant discloses facts that may be deemed sufficient to entitle them to defend; and if there is no defence, or the defence raised is illusory. These principles are to be applied after the court is satisfied that the applicant has met the requirements of the Mortgage Financing Act amendment to the Civil Procedure Code.
The application was granted.
This was an application for leave to appear and defend a summary suit brought under the provisions of Order 36 rule 1 and Order 52 rule 3 of the Civil Procedure Rules.
The main issue before the court was whether the applicants’ defence was genuine and in good faith to warrant the leave. The respondents raised a preliminary objection to the application claiming that the application was filed out of time. They also accused the first and fourth applicants of forgery and submitted that representation by the applicants’ counsel was illegal since she had signed the supporting affidavit.
The court held that the application was filed in time due to lack of evidence to prove a false endorsement or forgery of the filed application. The court relied on Rule 9 of the Advocates (Professional Conduct) Regulations SI 267 – 2 in holding that the rule was not violated since the court was addressed in written submissions and this reduced the likelihood of counsel for the applicants to appear as a witness in the case. The court also applied the principle of company law that shareholders are separate from the company and declared that there was a misjoinder of the first to fourth applicants.
In conclusion, the court held that the application succeeded since the applicants raised a plausible defence to the claim. Accordingly, the applicants were given an unconditional leave to file a defence against the respondent’s suit within 14 days from the date of the order.