Professional Documents
Culture Documents
.,
APPlICANT
VS
RESPONDENTS
IZAMA
RULING
The Applicant
restraining
from
filed
this application
the Respondents,
them
comprised
from
foreclosing
for
temporary
order
to issue
authority
and/or
property
Plot 53 Mackenzie
injunctive
mortgaged
to be
provided for.
The grounds
of the application
against
Respondents
the
resultant
mortgages
Illiterates
Protection
court to investigate
hearing
challenging
advertised
in the application,
which
no amount
Decision
o/Holl. Mr.
Jtstice
others
the
letter
and
for contravening
the
issues for
2015. Fourthly
the Applicant
of monetary
Christo~
the first
the Applicant's
among
filed
and determination.
second Respondent
through
property
if not restrained
compensation
loss for
of the
.'
main suit shall be rendered trifle. Fifthly the balance of convenience is in favour of
the Applicant for the grant of the orders sought in the application. Lastly that it is
fair, urgent and in the interest of justice that the interim injunctive orders sought
in the application is granted.
The application was fixed for the 13 April 2016 at 9:30 AM for hearing. However
in High Court Miscellaneous Application
sought for and obtained an interim order from the registrar of this court on 12
November 2015 stopping the sale of the mortgaged property. The order was
supposed to remain
in force until
Miscellaneous
dated
is"
of November
advocates wrote to the registrar seeking an earlier hearing da'te for the main
application than that fixed in the interim order.
I have carefully considered the matter and it is apparent from ground 3 of the
chambers summons that the Applicant in the interim order got the main remedy
of stopping the sale of the mortgaged property which was slated for 15 November
2015. When Counsel Masembe Kanyerezi of MMAKS advocates appeared in open
court in the absence of the Applicant's Counsel some days later he sought for an
earlier date on a complaint that the interim order was not properly issued. I
directed that an earlier day be fixed for hearing the parties and a hearing notice
was extracted for the
is"
is" of
io" December
2015.
Deciston
'
is" of
for adjournment
of the application.
was represented
that
negotiations
Regulations
adjournments
2012
particularly
regulation
13 which
deals with
2012 the Applicant had proposed to pay Uganda shillings 4,000,000,000/= only by
the 14th of January 2016. The Applicant proposed to pay the balance by the
February 2016.
zs" of
In reply Counsel Masembe submitted that the amounts owed to the Respondent
as of
is"
In addition there were recovery charges which he did not quantify as it did not
affect the application.
is Uganda
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injunction to continue she will have to pay 50% of the outstanding amount to the
Respondent prior to the court order extending the injunction under regulation 13
(5) of the Mortgage Regulations 2012 and this amounts to Uganda shillings
3,639,689, 960/=. If they want the order to continue, the deposit should be made
by the close of business on Monday 21st of December 2015. The reason why the
Respondent should not continue harping on settlement is that the security would
be released. He prayed that in the absence of making that deposit the interim
injunction should be vacated leaving the Respondent free to realise its security in
the property.
Counsel Charles Nsubuga in rejoinder did not agree. He contended that the
securities held by the Respondent were 4 in total. The properties are prime
properties
the Applicant
owes the
Uganda shillings cannot be released on the payment of less i.e. half of what is
outstanding.
On whether
the
proposed
refinancing
bank could
make an undertaking
by another
outstanding loan amount. Because there was no undertaking the application was
adjourned for ruling on the terms of grating an injunction or vacating the interim
injunction order to the 21st of December 2015 at 9.00 am.
I have carefully considered the Application, and submissions of counsel. The
genesis is that a plaint was filed on the 9 of November 2015. Summons to file a
Deciaton afHon. Mr. Jistice
Chrh/opMtt ?Jta.drama
!zumiJ *'*-7+:
defence was issued for service on the Respondent by the court on the
November 2015. The Applicant
injunction
filed an application
for an interim
io"
of
order of
on the 10th of November 2015 and had it fixed for the iz"
of
November 2015 at 9.00 O'clock before the registrar. The main ground in the
application for an interim order was that the suit was advertised for sale on the
is" of
is"
of October 2015 at page 57. The property was advertised for sale by
public auction after expiration of 30 days from the date of the advertisement. The
Respondent bank is the Mortgagee. An interim order was issued on the
November 2015 restraining
iz"
of
comprised in LRV 2744 Folio 25 plot 47 Nabugabo Road and LRV 2339 Folio 19
Plot 53 Mackenzie Vale, Kololo Kampala. The order is to remain in force till the
io" of Feb 2016 when the application is to be heard. However the Application
was heard earlier. There was an attempt to object to the Application on the
ground that the interim order fixed the hearing for the io" of February 2016. I
overruled the objection because the purpose of an interim temporary injunction
is to preserve the status quo so as to enable the Applicant present her application
before the trial judge. It was to preserve the right of hearing so that the
application is not rendered nugatory by the remedy sought in the application
being rendered useless. I.e. the property would have been sold and the buyer
would get a good title before the application to restrain the sale could be heard
(See Souna Cosmetics Ltd vs. the Commissioner General URA and Commissioner
General URA HCMA No 424 of 20rl; Wilson vs. Church (1879) 2 Ch. D 454 (cited
with approval by the Supreme Court of Uganda in Somali Republic vs. Anoop
Sunderial Trean SCCANo. 11 of 1988}).
The first point to be made is that the interim order issued by the registrar offends
the spirit of Office Instruction No: 1 of 2014 issued by the Principal Judge for the
guidance of Registrars in issuing interim orders. It also violates the Mortgage
Regulations 2012.
Dsciston
o/Hon.
Mr.
Justice ChrhlO~
..-~~.-=':.J-,;-=::~---.-.~~'':'
Office Instruction No.1 of 2014 was issued by the Principal Judge on the
is" of
Secondly where pleadings have not been completed i.e. through the filing of
a defence; the court should refroin from entertaining any application in the
matter or even hearing any suit ex parte
Where, however, the circumstances of the case dictate issuance of an order
for the maintenance of the status quo in the interim, that is, for a limited
time only pending the disposal of the application for a temporary injunction
by the trial judge, registrars are enjoined to act judiciously while presiding
over such applications so that their decisions are defendable and are in
accordance with the law.
Any such interim order ought to expire upon the hearing of both parties,
unless of course it is extended in their pre~ence for a just cause."
In this case the interim order was issued before the pleadings were completed as
no defence had been filed. In fact summons was issued on the
io" of
November
2015. The same day a notice of motion application was filed and fixed for hearing
on the 12~.h
of November barely two days later. It is to be appreciated that the sale
of the mortgaged property had been fixed for the 15th of November 2015 three
days after the
iz"
hearing. The first problem with the interim order is that it fixed the main
application without consulting the trial judge who was to hear it and on the
io"
of Feb 2016 about 3 months later. Secondly it was not an injunction for a limited
time. In my opinion a limited time should not exceed 30 days unless there are
compelling reasons to do so which reasons must be given before the interim
injunction order is issued. Thirdly the interim injunction is not in accord with the
Mortgage Regulations 2012.
Decision
*'*-7+:
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, ,
property.
or any other
The wording
property
deposit
or outstanding
sale completely
party
reasonable
cause,
amount
whether
of regulation
to adjourn
discretionary
restraining
the Respondent
until
for a temporary
of
Regulations
of 30% of
to adjourn
the sale.
amount
application
and for
injunction
spouse, agent of
amount."
the outstanding
property.
upon deposit
on the courts to
of the mortgagor,
interested
regulation
power
of the security
2012 confers
the mortgagor
adjourn
Regulations
is exercised only
or forced
by way of an interim
authority
injunction.
order of
from
it
of
regulations
which
regulations
are applicable
to stopping
or adjourning
Regulations
2012 which
provide
as
follows:
(4) where
a sale is stopped
an agent
of the
mortgagor,
the spouse
at the request
interested
of the mortgagor,
of the mortgagor
interested
Deciston
or adjourned
or any other
or that
land; enter
into
possession of the
mortgaged land or sell the mortgaged land. The Mortgagee sell the property
under section 26 of the Mortgage Act after expiry of the time provided for the
rectification of the default stipulated in the notice served on him or her under
section 19.
The court has powers to review mortgages on the application of a Mortgagor
under sections 34 and 35 of the Mortgage Act on the grounds inter alia that it was
obtained
unlawfully
through
fraud,
deceit,
or misrepresentation
?1ta.drama
/zUmi3 *'*-7+:
by the
-',
As far as the power of sale is concerned the mortgagee is required to give notice
and serve a copy on the mortgagor. The sale may be by public auction unless the
mortgagor consents to a sale by private treaty. Where it is by public auction it has
to be advertised at least 30 days specifying the place of the auction, the date of
the action, being not earlier than 30 days from the date of the first advert. In the
circumstances of this case the intended sale was by auction and had been
advertised in the newspapers and to take place 30 days after the date of the
advertisement.
I have carefully considered the submissions on the deposit of security. Both
is in the
that the
deposit is made prior to the stoppage of the sale. On the other hand the
Applicant's Counsel sought for more time to have the deposit made. Specifically
Counsel Charles Nsubuga prayed that the Applicant is given up to 14 January 2016
to deposit about 50% of the outstanding amount and the 50% amounts to about
Uganda shillings 4,000,000,000/=.
I have duly considered the Mortgage Regulations 2012 as we" as the effect of the
interim order stopping the' sale until 10 February 2016. No other order can be
made until and unless the interim order issued by the registrar is set aside.
On the ground of non-compliance
13 of the Mortgage
Regulations 2012, the interim interactive order restraining the Respondent, their
agents, servants or anybody deriving authority from them from foreclosing and/or
selling the Applicant mortgaged property described in the order dated
iz"
of
November 2015 is hereby set aside for not having been issued in accordance with
the law.
That notwithstanding
and the advertised sale was not adjourned but stopped for an indefinite period
pending the hearing of the main application
2015. The law is that where an adjournment has been achieved under regulation
Deciston
ofHon,
MI',
/zuma *'*-7+:
13 (7) for a period of more than 14 days, a fresh advertisement has to be issued in
accordance with regulation 8. Regulation 13 (7) of the Mortgage Regulations 2012
provides as follows:
"(7) Where a sale is adjourned under this regulation for a period longer
than 14 days, a fresh public notice shall be given in accordance with
regulation 8 unless the mortgagor consents to waive it."
The advertised sale was supposed to take place on 15 November 2015. This
application was heard on 18 December 2015 more than a month after the date.
Furthermore the sale was stopped before the event of public auction took place
and the order was issued on 12 November 2015 three days earlier. In the
premises I have considered Regulation 8 of the Mortgage Regulations 2012. It
provides that a mortgagee exercising a power of sale under the Act shall subject
to the Act and Regulations, sell the mortgaged property by public auction. It
further
provides that a sale shall not take place before the expiration of 21
working days from the date of service of the notice as specified in section 26 of
the Act. Any person who contravenes Regulation 8 commits an offence.
This ruling will be read on 21 December 2015. Thereafter if the Respondent is to
re-advertise the property for sale, the sale shall be in January 2016. The practical
effect of the period of notice is that the proposal of the Applicant to deposit
Uganda shillings 4,000,000,000/=
if the injunction application
deposit the amount of money to stop the sale for purposes of redemption of the
property under regulation 13 (1), (4) or (5) of the Mortgage Regulations. In such
cases the person conducting the sale namely the second Respondent upon getting
a deposit of money as prescribed by the regulations of 30% for adjournment or
50% for redemption of the property is obliged to stop the sale. 21 working days
from the 21st of December 2015 will exclude Christmas Day which is the zs" and
the zs" and 2ih of December 2015, the 1st of January 2016, the 2nd and 3rd of
January 2016 as well as the 9th and
io" of
implies that it would not take place before the 14th of January 2016. In the
Dl1cislon
Chri5lO~ ??tadrama
/ZtImB. *'*-1+:
10
premises even if the application was not allowed both parties would not suffer
any further prejudice.
I have further considered the regulations to the effect that under regulation 13 (1)
the court may adjourn the sale upon an application
requests for adjournment
to the person
conducting the sale of the mortgaged property. At this point in time there is no
advertised date and place of sale and therefore there is no new date and place for
conducting
There is nothing to
adjourn.
In the circumstances and using the traditional jurisdiction of the Court in granting
injunctions as an equitable remedy I hold that the purpose of the application can
be met by giving a conditional
injunction
injunction
or anybody
authority
from
them
from
selling the
Deciston
11
above, the
shall lapse.
the period
is extended
by this court
from
time
unless
to time or by
5. In the circumstances
by the Applicant.
Ruling delivered
Christopher Madrama
Izama
Judge
Ruling delivered
Counsel Masembe
Mr. Ramachandran
in court
Christopher Madrama
Izama
Judge
21/12/2016
Decision
?1ta.drama /zOmE*'*-7+:
12
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shall be borne