THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
MISCELLANEOUS APPLICATION No. 271 OF 2010
ARISING FROM HCCS 411 OF 2009
SAM LUKWAGO ..................................................PLAINTIFF/JUDGEMENT CREDITOR
LIBERTY CONSTRUCTION COMPANY LTD...DEFENDANT/JUDGEMENT DEBTOR}
JOHN BAPTIST WASSWA } RESPONDENTS
T/A TRUST GENERAL AUCTIONEERS }
The Applicant brought this application under order 22 rules 55, 56 and 57 of the Civil Procedure Rules. Section 98 Civil Procedure Act and section 33 Judicature Act for orders that:
2. The said property be released from attachment and sale as it does not belong to the judgement debtor and
3. For costs of the application.
2. The applicant holds the property on his own account.
3. Despite the fact that the bailiffs were warned that the said vehicle was not liable to attachment, they did not undertake in the due diligence to ascertain ownership before hastily conducting attachment of the same.
4. The said vehicle was on the in Kampala for servicing and at the time of attachment was supposed to be returned to a contract site. Its continued retention by bailiffs will cause immense financial loss and gross distortions to the objector’s contract.
In paragraph 5 of the affidavit the applicant avers that the vehicle was first registered in Uganda on the 7th of November 2008 in the name of Liberty Construction Ltd. Subsequently the first owner in Uganda transferred ownership to another person on the 17th of November 2008. On the 30th of December 2008 the vehicle was transferred to one Edmund Godfrey Mabiro. Thereafter on the 26th of March 2010 the Applicant bought the vehicle and caused it to be transferred into his name. Unfortunately Uganda Revenue Authority misplaced the vehicle registration after endorsing his ownership on the same so that only a certified ownership printout which was marked attached. In mid-April 2010 the applicant located the engineering equipment to a site in North Eastern Uganda. Annexure “F” is a contract between Messrs Equator General Contractors ltd and Moses Kamya the applicant executed on the 2nd of April 2010 hiring the property in issue.
The Applicant further brought the vehicle to a facility owned by Liberty Construction Company Ltd on Entebbe Road for service. However on the 26th day of April 2010 he learnt that the vehicle had been subjected to attachment while it was being prepared by workers of Liberty Construction Company Ltd for final checkup and transportation to the new site. The applicant called the court Bailiff one John Baptist and cautioned him against seizing the property for liabilities of which he was not a party nor had knowledge of but the court bailiff refused to listen and went ahead with the transaction. The property was advertised in the new vision newspaper at page 38.
Counsel Ntende Samuel appeared for the objector while Counsel Gilbert Nuwagaba represented the judgment creditor, (Lukwago Sam) and John Baptist Wasswa. Notice filed by Messrs Sekabanja and Company Advocates shows that they were instructed to represent Liberty Construction Ltd.
The applicants Counsel Ntende, submitted that the matter had been substantially argued before Hon. Justice Lameck Mukasa. I however asked him to address the court afresh. The case had reached a stage where the parties were directed to bring evidence. Particularly clear copies relating to particulars of registration and entries with URA and company registry.
The Applicants Counsel submitted that the applicant seeks to have released from attachment Motor Vehicle Registration No, UAL 123H Caterpillar engine and road earth moving equipment attached in execution of the decree in the High Court Civil suit 411 of 2009 between Lukwago Sam and Liberty Construction Company. That the property was not liable to attachment in that respect and that the execution was improper and misconceived.
The second order was that the property be released from attachment and sale as it did not belong to the judgment debtor at the time of attachment. He recounted the facts and grounds contained in the affidavit of Lukwago Moses. In the affidavit it is averred that the applicant purchased the vehicle on the 26th of March 2010 vehicles from one Edward Godfrey Mabiro a director of Liberty Construction Company. On the 29th March 2010 he paid and submitted the Log for transfer of vehicle. On the 26th of April 2010 the vehicle was attached by the bailiff in the false belief that it belonged to one of the directors and members of Liberty Construction Ltd, the judgment debtor. He submitted that the warrant for execution was against the property of Liberty Construction Ltd. At the time of attachment the objector informed the bailiff that he was acting wrongly. See paragraph 9 of affidavit. However the Bailiff deliberately neglected or refusal to heed to caution, and went ahead and attached the vehicle. At the time of attachment the vehicle was in the premises of Liberty Construction Ltd for service. Prior to this the vehicle was in Karamoja. Shortly after the attachment the application was brought. The attachment was 26th of April 2010 and within the next two weeks the application was brought in court.
Application was brought to the attention of the bailiff and his counsel in May 2010. They KGN were served on the 13th of May 2010. It is submitted that that at or around 16th April 2010, the bailiff was advised that the vehicle belonged to Mabiro a director of liberty construction Ltd. Mabiro had become registered owner of the vehicle on the 30th of December 2008. See paragraph 5 (c) of Kamya’s affidavit so that by the 30th December 2008 the vehicle did not belong to the judgment debtor. The first registered owner was Liberty Construction on the 7th November 2008. That there was no application to attach property of one of the directors of liberty. At the time of attachment, the property clearly belonged to Kamya Moses. That position was communicated to the bailiff. See documents provided to the honorable court. In applications of this nature, emphasis is on the question of possession. Possession of the vehicle at the time of attachment was not for either Mabiro or the judgment debtor.
He submitted that the purported sale was not completed and there was a deliberate act which was unlawful and should not be sanctioned by this court. The provisions of the law should only be applied where execution and sale was done in the manner prescribed.
Nuwagaba Gilbert opposed the application. He firstly referred to section 46 (2) Judicature Act which bars suits against officers of court and asked the court to dismiss the suit against the bailiff summarily as he was merely given a warrant to attach and sell that vehicle. He should not be part of this suit. That the suit against him should be struck out or dismissed with costs.
Counsel further submitted that the case before court concerned release of property from attachment and not misconduct of the bailiff. He emphasized that the property had already been sold upon which reference was made to the supplementary affidavit in reply by John Baptist Wasswa. The property was advertised and sold to one David Mukumbya who paid the entire sum of 90 million shillings as reflected in paragraphs 5 and 6 and attachments (c) and (d). He further submitted that the applicants counsel had not applied for an order stopping the sale neither could the bailiff go against the order of court to attach and sell. In the absence of a restraint order he had to go ahead with the sale. He submitted that Counsel had amble time to apply for an interim order and he could not make allegations of misconduct against the Bailiff from the bar. If counsel was negligent he said this is not a ground for stay of proceedings in this suit. Once a sale occurred the provisions of Order 22 rule 55 cannot apply. They are overtaken by events. He cited rule 60 of order 22 and stated that it permits a person whose property is sold to file a suit. On the ground that the application has been overtaken by events Counsel for the Respondent submitted that there was nothing for court to investigate, neither was there any property to be released from attachment. As far as Order 22 rule 55 is concerned it deals with attachment and not sale. The remedy of the applicant was to set aside the sale. Consequently he submitted that the application lacked merit.
Counsel for the Respondent further submitted that the under order 22 rule 58 what was important was whether the property was in possession of the judgment debtor. He submitted that at the time of attachment the property was in possession of the judgment debtor. Furthermore the affidavit of Sam Lukwago avers that Liberty Construction Ltd was trying to dispose of that particular vehicle. That on the on 19th April 2010 the vehicle was found to be registered in the names of Mabiro the Managing Director of the judgment debtor. Having established that the vehicle was in the possession of Messrs Liberty Construction Ltd the judgment creditor did not know that the property had been sold to the applicant. The judgment creditor anticipated the managing Director of Liberty Construction Ltd to launch an objection but he did not object to establish his ownership. The judgment creditor moved for execution even before taxation of the bill of costs in order to prevent the sale. As far as possession is concerned counsel referred to the case of Harilal versus Buganda Industries (1960) EA. Page 318, the case of John Varjee vs. Simon Kalenzi UCLR p1997 – 2001 page 83. Judgment of court of appeal, Kitumba JA and the case of TransAfrica Assurance Company versus NSSF 1999 KLR 334. Registration is not conclusive evidence of ownership but only leads to a presumption. He submitted that Edmund Mabiro has 98 shares in Liberty Construction the company. In one of the resolutions he is personally responsible for the debts of the company. He signed the Resolution. This resolution is attached to the affidavit of John Baptist Wasswa dated 25th of October 2010.
In rejoinder counsel for the Applicant Mr. Ntende submitted that section 46 (2) of the Judicature Act required the Bailiff acting on the orders of court to act judicially. The question is whether the bailiff acted judicially. Then it can be determined whether he acted lawfully. The section does not bar an action against the bailiff where he has acted wrongly. With reference to the two affidavits in reply if the court is to believe the averments of the judgment creditor where he says that he filed a suit against liberty construction No. 441 of 2009, what mind would apply where it is alleged that the property of a judgment debtor filed in 2009 was transferred in 2008 counsel wondered? He submitted that Liberty Construction ceased being proprietor of the vehicle and handed over possession to Mabiro. On the other hand execution took place in 2010. As far as the application was concerned, it covers release of property from sale. The sale can be set aside under section 33 of the Judicature Act to avoid multiplicity of suits.
If there was any negligence of counsel, it should not be visited on the objector/claimant. He asked court to grant the application and order the seller to refund the money of the sale to the buyer because the property was wrongly sold.
Supplementary affidavit by John Baptist Wasswa avers that a warrant of attachment and sale was issued by court on the 2nd of April 2010. A further examination of the attachment from court record shows that this was an error. The warrant of attachment was actually issued on the 20th of April and not 2nd April 2010. The bailiff then proceeded to and attached vehicle registration No. UAL 123H. An advertisement was placed in the New Vision on the 5th of May 2010 and is attached as annexure “A” to the affidavit
The property was sold to one Mukumbya David at 90,000,000/= whereupon he paid Uganda shillings 40,000,000/- leaving a balance of Uganda Shillings 50, 000,000/=. The bank deposit evidence is annexed as “C”. The returns of the attachment and sale were attached as annexure “B”. (NB the application was filed on the 10th of May 2010 and the advertisement was placed in the New Vision of the 5th of May 2010 and the date of sale in the advert is stated as the 19th of May 2010.)
A further affidavit sworn by John Baptist Wasswa on the 15th of October 2010 avers that on the 4th of October court directed that documents pertaining to the shareholding and of Eng Edmund Mabiro Godfrey in Liberty Construction Ltd be provided to court. The documents show that Edmund had 98 ordinary shares and Dennis Lugemye 2 ordinary shares. The position according to annexure A and “B” are that the above two share holders were the only shareholders of Liberty construction as by the 12th of January 2008. The return of allotment filed by the company on the 14th of January 2008 reflects the above shareholding. The resolution of Liberty Construction Company attached to the affidavit of John Wasswa is dated 31st of March 1999. Paragraph 1 thereof provides that Edmund Godfrey Mabiro and Mr. Joel Kirume be the only share holders and are therefore obliged to recapitalize the company and take the responsibility of payment of all prevailing company debts and financial commitments.
On the other hand the Applicants obtained a printout by Revenue authority dated 15th October 2010 which gives the following details about the vehicle namely: The date of first registration of the vehicle is 7th November 2008 and the current owner of the vehicle in dispute is Kamya Moses. Transfer of the vehicle to Kamya Moses and the fees therefore were paid on the 29th of March 2010. Transfer form is also dated 29th of March 2010.
The records show that in HCCS NO. 411 of 2009 the Respondent/judgment creditor through KGN advocates applied for execution of decree on the 19th of April 2010. The same was filed in court the same day. The warrant of attachment and sale was issued by the court on the 20th of April 2010. The return of warrant of attachment by Messrs Trust Auctioneers and Court bailiffs was made in a letter dated 19th of May 2010 showing that property was attached and sale took place o the 19th of May 2010.
From the above it is clear that the property in question was in the physical possession of the judgment debtor when a warrant of attachment was issued on the 19th of April 2010. The property was attached and sold on the 19th of May 2010. At this point the judgment creditor thought that the property belonged to Edmund Mabiro. In the meantime the Applicant filed the current application on the 10th of May 2010 while the property was advertised for sale in the new Vision of the 5th of May 2010. By the time it was advertised, there was no application before the court. One might rightly or wrongly surmise that the application of the Applicant was prompted by the New Vision advert of the 5th of May 2010. The sale was slated to take place on the 19th of May 2010. No order of the court was sought or obtained to stop the sale from taking place. Consequently the sale took place and returns of the sale were made on the same day that is the 19th of May 2010.
The issue of whether the property belonged to a third party and cannot be sold is a matter of law. The crucial question would be whether the sale by a bailiff under the powers of the court is a valid sale even where the title is defective. It must from the outset be mentioned that after the sale on the 19th of May 2010, the status quo had changed. A third party, namely Mr. Mukumbya David had entered the scene. He had bought the property and had made part payment of 40,000,000/= for it. The question of the third party affects procedural questions and substantive rights of the parties. For any order to be made affecting the sale, the purchaser is a necessary party and should be heard where possible. This is even more so when the sale was conducted by the court or an officer of the court.
Counsel for the Respondents submitted that the application was defective in that the property had already been sold. In his submissions Order 22 rules 55, 56, 57 and 58 deal with attachment and not property which has been sold. Secondly he submitted that where property has been sold, the aggrieved party should file a suit under rule 60. We shall test this argument in the context of the facts of this case.
The fact that the property has been sold is not in dispute. The sale is complete and the contract made when the hammer falls. If the buyer defaults in payment, that is another matter. The sale can be voided and a resale ordered.
The side note or head note to order 22 rule 55 of the Civil Procedure Rules specifically and expressly deals with objections to attachment. It provides:
Order 22 rule 56 deals with the production of evidence by the claimant to the effect that at the date of attachment he or she had some interest in the property attached. It provides:
Order 22 rule 57 gives grounds for release of property from attachment by the court in the following terms:
• The possible grounds for release of property from attachment are inclusive of the satisfaction of court by the evidence of any of the above grounds.
• Τηεπερσονωηοσεπροπερτψισωρονγφυλλψατταχηεδλοσεστηεπροπερτψτοαβονα fide purchaser for value.
“60. Savings of suits to establish a right to attached property.
It has been held that order 22 rules 55 – 59 are preliminary and summary in nature but not conclusive. Rule 60 of order 22 confirms that position. The courts have limited power under the above cited rules in determining title. All it needs to do is to establish that some interest is disclosed but it does not need to delve into complex questions of law or conclusively determine the question of ownership or title, or right to the property attached. It is a summary procedure releasing the property from attachment and should the party aggrieved so desire, it, he or she may sue for a final determination of question of ownership or who should have possession in the matter. In the case of Harilal & Company versus Buganda Industries Ltd  1 EA 318, the Judgment of Lewis J about the scope of order 19 rule 55 and subsequent rules on what is to be investigated by court.
“What is to be investigated is indicated by the next three following rules, viz. r. 59, r. 60 and r. 61. The question to be decided is, whether on the date of the attachment, the judgment-debtor or the objector was in possession, or where the court is satisfied that the property was in the possession of the objector, it must be found whether he held it on his own account or in trust for the judgment-debtor. The sole question to be investigated is, thus, one of possession. Questions of legal right and title are not relevant, except so far as they may affect the decision as to whether the possession is on account of or in trust for the judgment-debtor or some other person. To that extent the title may be part of the inquiry. But ultimate questions of trust, or complicated questions like the benami nature of a transaction, are not within the scope of the inquiry and are not intended to be gone into.
“As pointed out by Mr. Justice Sadasiva Ayyar in Ramaswami Chetty v. Mallapa:
‘in summary proceedings held in accordance with certain statutory provisions intended for speedy disposal of “emergent” disputes, the court may be prohibited from going into complicated questions of title or investigating complicated questions like fraud, trust and so on, while giving the party defeated in the summary inquiry, the right to have the whole matter and all the questions which are in dispute fully investigated in an ordinary regular suit. . . . The court is bound to order the release of the attached property if it finds possession in the claimant on his own account, even if there is title and disposing power remaining in the judgment debtor’.” (Emphasis added)
Order 22 rule 70 provides:
(2) On payment of the purchase money, the officer or other person holding the sale shall grant a receipt for the purchase money, and the sale shall become absolute.
(3) Where the movable property to be sold is a share in goods belonging to the judgment debtor and a co-owner, and two or more persons, of whom one is the co-owner, respectively bid the same sum for the property or for any lot, the bidding shall be deemed to be the bidding of the co-owner.
The property sold is movable property and the Respondent officer of the court John Baptist Wasswa avers that sale was made as per the advert in the new vision. Whether or not the sale was made in the prescribed manner is not the subject of inquiry in this application. It should be observed that the sale became absolute. Any irregularity in conducting the sale does not vitiate it per se. Rule 71 deals with this. It gives a right to a person injured by reason of any irregularity to sue for compensation. Order 22 rule 71 is reproduced for ease of reference. It provides:
It is open to the applicant to sue for compensation or recovery of the property. I must add that Liberty Construction Ltd may not be absolved merely because some other person’s property has been sold.
In other words the full purchase price for the movable property had been paid and the sale of the property had become absolute by the time of the hearing of this application. There was no application to stop the sale. No suit has been filed for compensation or for any other cause of action that might impeach the sale. Moreover in this application the purchaser is not a party and the court cannot invoke any inherent powers to set aside the sale.
Section 33 of the Judicature Act cap 13 provides:
I appreciate that the High Court has powers to grant remedies any of the parties are entitled to. In my humble opinion no party is entitled to an order or remedy which affects another party before or outside court without due process. Section 33 of the judicature Act should not be invoked where it directly affects a party who ought to be heard but who has not waived the right to a hearing. i.e. the purchaser. Secondly it should be invoked where the party is entitled to the remedy sought and the legal or equitable claim is properly before the court. In this case specific rules deal with objections to attachment. Other rules deal with setting aside or adjournment of sales by court. The latter rule would have obliged the applicant to serve the purchaser and thereby give him an opportunity to establish his bona fides. In the circumstances section 33 of the Judicature Act cannot be invoked in this case.
I have also considered section 46 (2) of the Judicature Act referred to by the parties. The provision protects an officer of the Court who acts judicially from suits being filed against them.
Counsel for the Respondent asked me to strike off the name of the John Baptist Wasswa from being a Respondent summarily. However the current application does not seek any relief enforceable against the bailiff. Without prejudice to any alleged cause of action against the bailiff, there is no claim that is enforceable and the question of liability if any of the bailiff cannot be properly tried in this application. The application seeks declaration that the property was not liable to attachment and for it to be released from attachment and sale. There are comments about his alleged misconduct if there is any. These include the assertion that the bailiff was informed before the sale at the point of attachment that the property belonged to the applicant and not judgment debtor. This position is made worse by the fact that the judgment creditor’s lawyers and bailiff knew that the property belonged to one Mabiro as far as prima facie evidence of the log book of the vehicle was concerned. The position of the Respondent is that the company resolution made it clear that Mr. Mabiro was personally liable for the debts of the judgment creditor. This however is not the proper application to comment about that moreover Mabiro is also not a party to this application. Comments about the law dealing with liability of court bailiffs are however in order.
“As far as I understand the law, where in an execution a party to the case assists, connives or colludes with the bailiff, resulting in unlawfully execution, then neither the party nor the bailiff can escape liability and the court shall invoke section 35 (2) of the Civil Procedure Act to avoid a multiplicity of suits so as to settle the matter within the same procedure. Examples are not far to find. They include a situation in which the judgment creditor identifies the wrong property to the bailiff for the attachment, where the bailiff is privy to the truth. It also involves a situation in which the bailiff colludes with the judgment creditor to undervalue for sale of the attached property. That where the bailiff, without the participation or active involvement of the judgment creditor, undervalues the property and sells it at undervalue, unless he can prove that the act was not wilful, then he cannot appeal for the immunity.
The high court followed the judgment in Hannington Wasswa and Another versus Maria Onyango Ochola and 3 Others SCCA 22 of 1995. Platt JSC held at page 8: that “A court broker has immunity under section 46 of the judicature Act so long as he acts lawfully.” Wrongful execution is defined by Halsburys Laws of England 4th Edition volume 17 Butterworth’s London 1976 page 274 paragraph 457 inter alia in the following terms:
Where an execution and sale have taken place, appropriate proceedings should be taken before the sale becomes absolute. This gives room for claims by other persons other than the judgment debtor. See case of Jandu vs. Kirpal and Another  1 EA 225. In this case the court quoted from Chitaley and Rao on sale of immovable property at page 229:
Mr. Salter argues that this section does not seem to lay down an absolute rule. It must, he thinks, be agreed that a vesting order can be set aside on at least the ground of fraud.
The scope and object of this section (corresponding to the Indian s. 65) is stated by Chitaley and Rao, op. cit., p. 762, in these words:
“A judicial sale, unlike a private one, is not complete immediately it takes place. It is liable to be set aside on appropriate proceedings . . . If no such proceedings are taken, or if taken are not successful, the sale will then be made absolute . . . Questions, therefore, arise as to whether the auction-purchaser is entitled to rents and profits during the period between the two dates, i.e. the date of the sale and the date of the certificate of sale. Again, there may be successive sales of the same property in execution of different decrees giving rise to questions of priority of title with reference to dates of confirmation. Questions as to the validity of private sales by auction-purchasers or judgment-debtors before the date of confirmation may also arise. In order to settle the law bearing on such questions, this section lays down that though the property does not vest in the auction-purchaser till the date of confirmation, once the sale is confirmed and becomes absolute, the title of the auction purchaser shall relate back to the date of the sale itself.” (Emphasis added)
In that case an action had been brought in the county court against the son of the present plaintiff, and judgment was recovered and execution issued against him. The county court bailiff seized goods at the son’s house, amongst them being a horse which was claimed in writing by the plaintiff as required by the county court rules. The bailiff then sold the horse by auction. It was bought and paid for by the defendant and the proceeds of the sale were duly paid into court by the bailiff. Subsequently to the sale execution creditor admitted the plaintiff’s title to the horse. The plaintiff then brought the present action against the defendant in the county court to recover damages for wrongful conversion of the horse. The county court judge found that the horse at the time of the seizure was the property of the plaintiff, but that the defendant, when he bought it, had no notice that it was the plaintiff’s property. He gave judgment for the plaintiff on the ground that the sale by the bailiff gave the defendant no title to the goods. The defendant appealed, and the Divisional Court allowed the appeal. On a further appeal to the Court of Appeal, Lopes LJ held at page 561:
The final result is that the Applicants application being an application for release from attachment has been overtaken by events. The property cannot be released to the Applicant as the purchaser prima facie has obtained a good title under the rules of court. There is no claim against the bailiff and none can be properly tried in this application. The application does not deal with the question of sale of property especially given the fact that the purchaser of the property in question is not a party. In view of my finding that at the time of attachment the property had been sold to the applicant and in view of the summary and preliminary nature of findings under order 22, rules 55 – 59, subject to further proceedings, using the inherent powers of court under section 98 of the Civil Procedure Act and section 33 of the Judicature Act, the proceeds of the sale of Motor Vehicle UAL 123H shall be deposited in court. The Court bailiff is and subject to any further proceedings, obliged to account for the proceeds of the sale to the Applicant. In the premises the remainder of the Applicant’s application is incompetent and stands dismissed with costs to the Respondents.
Ruling delivered in the presence of:
3rd December, 2010.