THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL COURT DIVISION)
MISC. APPLICATION NO. 364 OF 2011
(ARISING OUT OF CIVIL SUIT NO. 205 OF 2010)
MUHUMUZA HILLARY ……………………………………. APPLICANT
- KEITH KALYEGIRA…} RESPONDENT/JUDGEMENT CREDITOR
- WENSI NUWAGABAJOHNSTONE.} RESPONDENT/JUDGEMENT DEBTOR
BEFORE LADY JUSTICE HELLEN OBURA
This application was brought by Notice of Motion under Order 22 rules 11, 55, 56 & 57 and Order 52 rules 1 & 5 of the Civil Procedure Rules SI 71-1 (CPR) seeking for orders that;
- The applicant’s house and plot comprised in part of Block 206 Plot 2641 land at Mpererwe measuring 0.150 hectares attached be released to the objector
- A second house occupied by the applicant and his family comprised in Block 206 Plot 2641 land at Mpererwe but belongs to the applicant is not a property of Wensi Nuwagaba Johnstone
- Provisions be made for costs of this application.
The application is supported by the affidavit of Muhumuza Hillary the applicant. The grounds of the application are that:-
- Block 206 Plot 2641 land at Mpererwe which is subject of attachment in Civil Suit No. 205 of 2010 comprises houses which are not a subject of attachment;
- The second house and plot comprised in Block 206 Plot 2641 land at Mpererwe is the property of the applicant which he purchased from the 2nd respondent and it is where he lives with his family;
- The applicant was and has been in possession of the said house and plot of land at the time of the attachment as an equitable lessee;
- The application is brought without undue delay;
- The applicant shall suffer irreparable loss if the application is not granted and no injustice will be caused to the judgment creditor if the applicant’s house and plot is released from attachment.
An affidavit in reply filed by counsel for the 1st respondent was sworn by Mr. Robert Mugabe the Court Bailiff who executed the court order. He deposed that:-
- Pursuant to the warrant of attachment and sale issued by court, he advertised and subsequently sold the judgment debtor’s property comprised in Kyadondo Block 206 Plot 2641 land at Mpererwe.
- Pursuant to sale of the property, he sought for a warrant to give vacant possession which was duly executed and he delivered the property to the buyer.
- The status quo has since changed and an application for stay, injunction, and or objector proceedings by the previous occupants would not arise as the attendant orders can not apply retrospectively.
- The purported lease agreement of the premises by the applicant was never brought to his notice since the lease is not registered on the title and he has been advised by his advocates that the lease can only operate interparty but can not affect the transactions of 3rd parties.
Another affidavit sworn by Hon. Awongo Ahmed was filed by counsel for the 2nd respondent. The deponent averred that:-
- On the 1st June 2011 he read in the Daily Monitor news paper that property comprised in Kyadondo Block 206 Plot 2641 land at Mpererwe was supposed to be sold by M/S PART-PROPERTY & ASSETS RECOVERY TRUST bailiffs within 30 days.
- He subsequently he contacted Mr. Ahaabwe Joseph t/a Summit Properties a property broker to find out for him if the property suited the description he wanted and upon inspection the property was found suitable for him.
- He approached M/s Ngaruye Ruhindi, Spencer & Co. Advocates who investigated the title and advised him to go ahead to purchase the property but cautioned him that the property had secured creditor M/s Equity Bank Ltd with a mortgage and further charge and they would need to be satisfied before any purchase.
- A meeting was convened with bank officials who advised that the debtor be brought on board and a sale agreement was concluded in the presence of all stake holders.
- It was later discovered that an order had been slapped on one of the titles by a purported lessee and he later learnt that a misunderstanding had developed between Mr. Wensi and his in-law’s family who retaliated by asserting interest on the land not withstanding that he had not paid for the same and negotiations between the two fell through as the in-law was bent on claiming that he owned the house whereas he did not.
- There was no legitimate claim on the property by the applicant whose efforts to assert a claim on the respondent’s property after the attachment by Court Bailiffs for sale was designed to disinterest potential buyers and derail the course of justice.
- Since a search was carried out before purchase and the secured claimants were settled the interim order on the property is an afterthought and ought to be vacated.
- If there is breach of agreement that can not affect his interest as bonafide purchaser as this objector proceeding which was fixed for hearing after a sale having taken place and property handed over to him is superfluous and of no legal consequence.
- Since, he has assumed possession of the property and embarked on developments and renovations of the property an interim order and or an injunction can not lie as the status quo has changed and the applicant should find other mechanisms to address the breach of the alleged lease agreement.
Another affidavit in reply was sworn by Nuwagaba Wensi the second respondent. He deposed that:-
- On the 1st June 2011 he read the Daily Monitor News paper that his property comprised in Kyadondo Block 206 Plot 2641 was supposed to be sold by M/s PART- PROPERTY & ASSTETS RECOVERY TRUST bailiffs within 30 days following a judgment and warrant of the court.
- This was shortly before Mr. Mugabe Robert the court bailiff had delivered a warrant of attachment and sale of his property. He was invited for negotiations which resulted into Hon. Ahmed Awongo purchasing the property.
- He never signed for consideration called rent or premium or a lease with the applicant but rather the applicant approached him so that he could give him accommodation after the applicant had lost a job in Rwanda which prompted his untimely return to Uganda.
- The house the applicant was staying in with his wife until they were evicted and the same was handed over to Hon. Ahmed Awongo belongs to him.
The applicant filed a very long and argumentative affidavit in rejoinder to the affidavits in reply. On what was deposed by the Court Bailiff, he challenged the judgment and order made by this court in the summary suit that gave rise to this application and called it a sham simply because counsel for the plaintiff who drew the order made a mistake and put a wrong date. He averred that the property was subject to a mortgage and a charge and the alleged attachment and sale was null and void as Equity Bank did not consent to the attachment orders of court and the sale.
He further deposed that Equity Bank had been served with an interim order in respect of HCCS No. 226 of 2011 in Land Division preserving the status quo of the suit property and as such, the sale was tainted with illegalities and concealment of truth from court hence void. He deposed that he is the owner of the said house where he was residing with his family since December 2009.
In rejoinder to what was deposed by Hon. Awongo Ahmed, Muhumuza Hillary deposed among other things that the advertisement was in respect to one property whose photograph appeared in the news paper and not his house which was also sold. He averred that the buyer should have known that there was fraud since description of the land was not included in the advertisement.
He also deposed that the sale of the suit property had been ordered by court to be by public auction but the respondent in connivance with Hon. Awongo and Mugabe Robert conducted the sale by private treaty against the orders of this court and no place of sale was advertised to the public thereby denying him chance to object. He further stated that Hon. Awongo’s allegations of renovation and development are not true.
In rejoinder to Nuwagaba Wensi’s affidavit, Muhumuza deposed that it was full of lies intended to mislead court and cover up the fraudulent scheme. Further that the 2nd respondent admitted that the warrant was served on him and not on the applicant and can not impute service on him. He accused Wensi Nuwagaba of knowingly and willfully without his (applicant’s) authority negotiating the alleged sale and conveniently settling his debts. He deposed that the consideration of the lease was a reversionary right to the 2nd respondent at the expiring of the lease period which is 10 years. He prayed that Nuwagaba Wensi and Hon. Awongo Ahmed affidavits be struck off with costs for containing lies and being extraneous.
At the hearing of this application, Mr. Nangumya Geoffrey appeared for the applicant and Mr. George Spencer for the 2nd respondent. The 1st respondent whose counsel on record was M/S Kiwuuwa & Co. Advocates did not appear with his counsel. Counsel for the applicant and the 2nd respondent agreed to file written submissions and timelines were set by court for them to file and serve and the matter was fixed for mention to ensure compliance.
When this matter came up for mention all the parties had complied with the timelines except the 1st respondent who did not file his written submissions. He did not also appear with his counsel on that day. However, while I was preparing this ruling I came across his submission that was filed on 3rd April 2012, a day after the case was mentioned and fixed for ruling. On the date of mention, I had ruled that the 1st respondent’s submission would be dispensed with. Counsel for the applicant filed a rejoinder to the 1st respondent’s submission under protest.
While I take exception to such conduct by counsel and I strongly condemn it, I will in the interest of justice consider that submission in this ruling.
Counsel for the applicant submitted that the learned registrar of the Commercial Division of the High Court did not follow the mandatory procedure under Order 22 rule 11 and hence no ascertainment of certified extract of the register to the suit land was made. He argued that the applicant’s house was not advertised in the public notice and the respondents have failed to prove it. He submitted that the order of attachment and sale of immovable property comprised in Kyadondo Block 206 Block 2641 at Mpererwe and the warrant of attachment gave instructions which provided for proper advertising and description of the property for sale which was not done.
He further submitted that a copy of the news paper advertisement had a picture of the 2nd respondent’s house as property being attached and directed the occupants of the house to vacate or risk forceful eviction. He contended that the sale agreement refers to two different properties which is at variance and utter contradiction with the order of court for attachment and sale of property and the advertisement for public auction. He challenged the sale for being illegal on the grounds that;
- The sale agreement claims that the vendor is selling the property by virtue of the order of court in HCCS No.205 of 2010 whereas not.
- The alleged purchaser in the said agreement stated that he was desirous of purchasing the land with developments to wit; two houses one in the perimeter wall and another not in the perimeter wall and as such the terms of the agreement squarely places the parties to the said sale agreement and the very sale agreement in cohorts and as partners in crime of selling and purchasing property without the alleged court authority thus rendering the said sale agreement null and void.
- The alleged purchase of 2 houses duly advertised by the agent of court and in agreement with the 2nd respondent as an agent who introduced the alleged purchaser is an admission of a blatant illegality. The court order in issue did not attach two houses and neither was the house in the advertisement the applicant’s. The advertisement contravenes Public Auction Act and Court Bailiffs Regulations as cited by the deputy registrar in the said court attachment order.
- The sale agreement refers to full description of the two properties for sale allegedly duly advertised whereas the said advertisement did not carry any description of the property advertised as required by law and set as a condition by the Deputy Registrar High Court Circular No. 158 dated 17th July 1958. The purpose of which is to avail an opportunity to any party interested in the property advertised to lodge a claim which opportunity was denied to the applicant.
- Paragraph 4 of the sale agreement puts the entire agreement in question and to stricter scrutiny of all parties to the said agreement as the property it alleged to be transacted was not at all sanctioned by court hence rendering the sale transaction null and void.
- Failure to ascertain occupancy and ownership of the second house gives credence to the objector proceedings brought by the applicant herein as his equitable interest in the house could not be sold without lawful attachment or at all.
- The final performance of the agreement was dependent on obtaining vacant possession, effecting a transfer into the purchaser’s names, payment of the balance of the sale price, failure of which could not instantly transfer the interest in the property to the alleged buyer.
- The above terms were incapable of being executed and as such the sale of the applicant’s attached property is incomplete and so are the execution proceedings as required by Section 49 of the Civil Procedure Rules which provides that;
“subject to any law relating to the registration of to land, where immovable property is sold in execution of a decree, that sale shall become absolute upon payment of the full purchase price to the court, or to the officer appointed by the court to conduct that sale.”
Counsel for the applicant contended that the vendor who is a court broker did not adduce evidence of full payment neither did the purchaser claim the same. In support of this argument, he relied on the case of Uganda Posts and Telecommunications Corporation v Abraham Kitumba & Others SCCA No. 36 of 1995 where the learned justices held that where a person purchases an estate which he knows to be in occupation of another than the vendor, he is bound by all equities which the parties in such occupation may have in the land. It was therefore his submission that the alleged vendor and purchaser could have no right to evict the applicant from his house.
Counsel for the applicant also relied on Mustafa Ndigejjerawa v Kizito  ULR 31 where it was held that an instrument is not effectual until registered. He also relied on Kristofa Zimbe v Tokana Kamanza (1954) ULR 68 where it was held that no man can become owner of land until a statutory transfer of the land to him is registered. It was therefore his submission that the alleged purchaser of the house in issue cannot claim ownership of the same.
It was his contention that the respondents did not by way of execution proceedings confer title for the applicant’s house to the alleged purchaser as no transfer of land title has been effected. He further contended that since no full payment of the sale price can be claimed to have been made the execution process was incomplete, the objector proceedings can lawfully challenge the illegal attachment, illegal sale and illegal eviction of the applicant and prayed that court finds so.
Counsel for the applicant relied on a number of authorities to buttress his submission on the law governing objector proceedings. He referred toKisamba Sentamu Ismail Vs Ecima Elikana & Another  1 HCB at 152 where Justice Kasule J held that;
“Order 19 rule 55, 56 and 57 of the Civil Procedure Rules (now Order 22) empowers court to investigate and give appropriate relief to one who objects to court process of execution...”
He also referred to Uganda Mineral Water Ltd v Piran & Another [1994-1995] HCB 87 where Justice Musoke Kibuuka as he then was held that;
“…the court must answer the question whether on the date of attachment the judgment debtor or the objector was in possession of the property, if the court finds out that it was the judgment debtor who was in possession the inquiry will proceed no further. Secondly, the court must determine whether the objector held the property on his own account or in trust of the judgment debtor or some other person…….”
It was counsel’s submission that from the above, there are only two main questions for determination, namely;
- Whether the applicant was in possession of the house in issue at the time the order of attachment and sale issued on 30th May 2011.
- And whether the applicant’s possession of the house in issue was on his own account and not on the account of the 2nd respondent, thus rendering the house in dispute not liable for attachment.
In arguing the above issues, counsel strongly relied on evidence of the applicant. On the first question, he argued that possession and occupation was admitted by Robert Mugabe, Awongo Ahmed and the applicant deposed to it in his affidavit in rejoinder. He prayed that court answers this question in the affirmative.
In regard to the second question, counsel maintained his earlier argument that the 2nd respondent does not deny the lease or his signatures initialed on all pages and it was his submission that the lease agreement is valid. He challenged the explanations offered by the 2nd respondent that the lease was for purposes of processing electricity connection. He contended that that account cannot be believed as they are inconsistent with evidence given in HCCS No. 226 of 2011 where the 2nd respondent stated that he had employed the services of the applicant to supervise construction of the house in dispute whereas in the instant application he stated in his affidavit that he was approached by the applicant’s wife for accommodation when the applicant lost a job in Rwanda.
Counsel argued that these set of facts are highly contradictory and do not make any legal, equitable or common sense as to warrant a summary dismissal of the applicant’s lease and occupation of the house in dispute. He prayed that court finds that the applicant occupied the house on his account by virtue of the lease agreement and as a lawful occupant with equitable rights over the house which interests are protected by the Land Act, Registration of Titles Act and the Constitution of the Republic of Uganda.
In response to the contention that the status quo had already changed as sale had already taken place, counsel for the applicant argued that this submission could not stand owing to the position of law on execution by court. He relied on the case of Sam Kaggwa v Beatrice Nakityo [2001-2005] 2 HCB 120 where Mukasa J held that;
“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 proceeding are taken or if taken and are not successful, the sale will then be made absolute.”
It was therefore his submission that the alleged sale was never conclusive as to prevent court from addressing the anomalies and irregularities committed in disposal or dealing with such a judicial sale.
In regard to the allegations of fraud and illegalities, counsel for the applicant strongly relied on the applicant’s evidence and it was his argument that court can not sanction an illegality. He relied on the authority of Makula International Ltd v Cardinal Nsubuga Civil Appeal No.4 of 1981 and Kisugu Quarries Ltd v Administrator General  1 EA 163 which are to the effect that a court of law cannot sanction that which is illegal. Illegality once brought to the attention of court overrides all questions of pleadings, including any admissions made thereon.
He also argued that the respondents did not deny allegations of fraud and referred to Sam Kaggwa v Beatrice Nakityo (supra) where court held that where averments made by a party are neither denied nor rebutted by the opposite party the presumption is that they were admitted by that party as true facts.
In reply, counsel for the 2nd respondent submitted that the attachment and sale were sanctioned by the court and have taken place already unchallenged. That at the time of attachment and sale the only visible encumbrance was a mortgage which was discharged and therefore Hon. Awongo acquired full title to the property. That the court’s interest at this stage is not whether the sale was lawful or legal and court can not be seen to retrospectively investigate an already sold property minus a pleading to that fact. He argued that the applicant sat on his rights at the time the advertisement was made and instead of seeking for the right remedy then, he decided to sue for compensation for breach of lease agreement where he obtained an interim order.
In regard to the advertisement, counsel argued that the applicant was aware that the property advertised was his and he (applicant) deposed to this in his affidavit in support of notice of motion in Misc. Application No. 364 of 2011. It was contended that the applicant is just on a fishing expedition and his remedy is not in this application. Counsel relied on the case of Intraship (U) Ltd v G.M (U) Ltd & F. Mungereza (1994) 111 KLR 222 where court held that once a sale has taken place it is conclusive, the applicant’s remedy would be instituting proceedings for other reliefs, if any, instead of rushing for postmortem. He also relied on the case of Caltex Oil (U) Ltd v Petrol (U) Ltd & Another Misc. Application No. 86 of 2004 where Arach Amoko, J (as she then was) held that;
“In my understanding, objection to attachment means objection to attachment of property where property is attached in execution of a decree but before it is sold. Rule 55 does not apply after the property has been sold.”
He prayed that the application be dismissed with costs.
Counsel for the 1st respondent in his submissions basically agreed with counsel for the 2nd defendant’s submission. He however added that it’s strange that the applicant did not join the purchaser as a party to the application. He cited the case of Kamya Moses v Lukwago Sam High Court Misc. Application No. 271 of 2010 where Justice Christopher Madrama stated that;
“Even though I held that the attachment was irregular, I also held that the question of irregularity of the sale cannot be tried without the purchaser being made a party, this is because the purchaser might be an innocent purchaser without notice of the defect in title.”
He also relied on Section 49 of Civil Procedure Act Cap. 71 which has already been alluded to above.
He further submitted that counsel for the applicant’s submissions are out of scope and relied on the case ofKamya Moses v Lukwago Sam (supra) where it was 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. The application failed and the property could not be released to the applicant as the purchaser had obtained a good title and the property had been sold. Counsel therefore submitted that since the suit property had been sold, the application is incompetent and as such ought to be dismissed.
I have carefully considered the written submissions of all the parties in which they are in agreement on the principles of law governing objector proceedings. This application is brought under Order 22 rules 55, 56 & 57 of the CPR which deal with objection to attachment of property. It has been argued for the respondents that an objector proceeding should take place before the property attached is sold. I will deal with this argument in more details later in this ruling.
However, I wish to give a brief background to this application. In 2010, the 1st respondent brought a summary suit against the 2nd respondent for a liquidated demand of Shs. 84,800,000/= arising from a debt which the 2nd respondent acknowledged. The 2nd respondent filed an application for leave to appear and defend the suit which he subsequently withdrew upon admitting the debt which he had originally denied. This court then entered judgment for that amount of money and costs of the suit. It was in execution of the decree extracted from that order of this court that a warrant of attachment and sale was issued and the 2nd respondent’s property was attached and sold.
The applicant upon learning that the property had been attached filed a suit in the Land Division in which he claimed for compensation of Shs. 136,000,000/= from the 2nd respondent and Equity Bank jointly and severally for breach of a lease agreement. He also claimed for an alternative order of specific performance by the 2nd respondent’s plot being surveyed off so that a lease for the part he developed could be registered. His claim as stated in the amended plaint filed on 8th July 2011 was based on a lease agreement signed between him and the 2nd respondent on 11th January 2010.
The applicant also filed this application on 1st July 2011. However, I must curiously observe that while this application was filed exactly one month after the property had been attached and advertised for sale on 1st June 2011; it was never fixed for hearing and served immediately. It was fixed for hearing on 23rd January 2012 and served on the respondents on 1st December 2011 as per the affidavit of service on record. This was long after the sale had taken place on 19th August 2011.
Interestingly, when this application came up for hearing on 23rd January 2012, there was no hurry to prosecute it. Counsel for the applicant sought an adjournment on behalf of counsel for the 2nd respondent who stated could not have audience before court as he was not robbed. The 1st respondent and his counsel were absent. It was then adjourned to 27th February 2012.
On 27th February 2012, counsel for the applicant and counsel for the 2nd respondent appeared but both the 1st respondent and his counsel were still absent. Counsel for the applicant requested for yet another adjournment on the ground that the 1st respondent and his counsel were absent. He proposed to file written submissions which they were allowed to do and timelines set.
With the above background in mind, I now turn to consider the competence of this application which is being challenged. It was argued for the respondents that the investigation/proceedings envisaged under Order 22 rules 55, 56 and 57 do not apply to the current situation where sale has already taken place. The wordings of order 22 rules 55, 56 and 57 of the CPR, in my view, support this argument. Order 22 rule 55 (1) specifically addresses investigations of claims to and objections to attachment and is worded as hereunder:
“ Where any claim is preferred to, or any objection is made to the attachment of any property attached in execution of a decree on the ground that the property is not liable to the attachment, the court shall proceed to investigate the claim or objection with a like power as regards the examination of the claimant or objector, and in all other respects, as if he or she was a party to the suit; except that no such investigation shall be made where the court considers that the claim or objection was designedly delayed”.
Under this rule the court is empowered to investigate the claim in an objection made to attachment of property which has been attached in execution of a decree. The general ground prescribed by order 22 rules 55 for such an application for release of property from attachment is that the property is not liable to attachment. Proof of that calls for determination of relevant questions of law or fact or mixed law and fact. Order 22 rule 56 deals with the production of evidence by the claimant or objection of his or her interest in the attached property at the time of the attachment. It provides that:
“The claimant or objector shall adduce evidence to show that at the date of the attachment he or she had some interestin the property attached.”
Rule57 provides for release of property from attachment where court investigates under rule 55 and it is satisfied that for the reasons stated in the claim or objection the property was not, when attached, in the possession of the judgment debtor or some person in trust for him or her, or in the occupancy of a tenant or some other person paying rent to him or her, or that, being in the possession of the judgment debtor at that time, it was not in his or her possession on his or her own account or as his or her own property.
I wish to observe that much as the above provisions are intended to be invoked before the attached property is sold, courts have in some instances gone ahead and investigated the applicant’s claim and even set aside sale that has already taken place. See Allen Nsubuga Ntananga v Uganda Micro Finance Ltd and Others HCT MA No. 426 of 2006among other authorities. In the circumstances therefore, there is no rigid rule that once sale has been done application of this nature should not be entertained. I believe the circumstance of each case must be looked at and decided on its own merit. If it is proved that the attachment and sale was conducted contrary to the law I do not see what would prevent a court of justice from investigating the matter and setting it aside if the justice of the case so demands.
In the instant case the sale was under court supervision. It was contended that the attachment and sale was done contrary to the law and so it should be set aside. To that end, a number of arguments were made based on the following:- requirement of a certified extract from the register as per Order 22 rule 11 of the CPR; the mode of sale used; nature/style of advertisement; allegations of collusion and connivance with a view to defraud the applicant of his property; and contempt of the court order.
As regards the contention that the registrar of this court did not follow the mandatory procedure under Order 22 rule 11 and hence no ascertainment of certified extract of the register to the suit land was made, with due respect to counsel I find that this is not a mandatory requirement. As clearly stated in the head note of that rule it is only in certain cases that the certified extract of the register may be required. The rule itself says “the court may require” and “not shall” require implying that it is discretional. I therefore reject the argument of counsel for the applicant that it was a mandatory requirement and I find that failure to comply with that requirement was not fatal.
On the mode of sale, it was argued for the applicant that the sale should have been by public auction in accordance with the High Court Circular No. 1 of 1958 but it was instead by private treaty. I find Order 22 rules 62 and 63 of the CPR instructive on this matter. Rule 62 provides that; “except as otherwise prescribed, every sale in execution of a decree shall be conducted by an officer of the court or by such other person as the court may appoint for this purpose, and shall be by public auction in the prescribed manner”.
Rule 63 provides for notification of sales by public auction. Rule 63 (1) provides that; “where any immovable property is ordered to be sold by public auction in execution of a decree the court shall cause a copy of the order to be served in the manner set out in rule 51 (2) of this Order for the service of the order of attachment and, in sales of both movables and immovable property, shall also cause public notice and advertisement of the intended sale in such manner as the court thinks fit”.
The term of sale in the instant case as stated at the back of the warrant of attachment was as set out in the High Court Circular No. 1/58 dated 17th day of July1958. The schedule to the warrant indicated that the judgment debtor’s property comprised in Kyaddondo Block 206 Plot 2647 at Mpererwe and developments thereon estimated at Shs. 100,000,000 was to be attached and sold.
I have made all efforts to look at the High Court Circular No. 1 of 1958 to no avail. Counsel for the applicant who authoritatively submitted that the Circular was not complied with did not even avail a copy to court. I could not locate a copy of the same anywhere not even in the High Court Library or in the Execution Division of the High Court. In the absence of that Circular, this court cannot authoritatively rule on whether or not it was complied with.
Be that as it may, my understanding of Order 22 rules 62 and 63 is that a mode of sale can either be by public auction or it can be prescribed otherwise by court. I base this interpretation on the opening statements of rule 62 to the effect that
“except as otherwise prescribed…” and rule 63 (1)that“where any immovable property is ordered to be sold by public auction…”
The schedule to the warrant of attachment and sale in this case did not prescribe the mode of sale. In my view it could be either by public auction or private treaty as was done. I cannot therefore fault the mode of sale adopted by the court bailiff.
On the style of advertisement used, it was argued for the applicant that the advertisement did not state the description of the property to be sold but only a photograph of a house was put in the newspaper to confuse and conceal from the applicant the attachment and sale. It was further argued that although the applicant’s property was sold, it was never included in the advertisement which had only the picture of the 2nd applicant’s house.
The argument that the advertisement did not have description of the property to enable the applicant object, in my view, is defeated by the applicant’s conduct of filing Civil Suit No. 226 of 2011 in the Land Division and this application. The applicant knew that there was an eminent sale of the property attached and advertised for sale and that is why he filed the suit to claim for compensation and this application to object the attachment and sale. He was well aware of what was going on and so he cannot claim that the style of advertisement used prevented him from taking the necessary steps which he actually took.
As regards the contention that the applicant’s house was sold when it was not advertised for sale, I refer to the schedule to the warrant of attachment and sale which described the judgment debtor’s/2nd respondent’s property to be attached and sold as “comprised in Kyadondo Block 206 Plot 2647 at Mpererwe and developments thereon estimated at Shs. 100,000,000/=”.
Clearly from that description what was to be attached and sold was land and developments thereon. To my mind this was in line with the Latin Maxim “quicquid plantatur solo solo cedit” which means that all that is attached to land (fixtures) become part of it.Even though the photograph of the second house was not included in the advertisement, I do not fathom how that house could have been separated from the land that was being attached. In the premises, I find no merit in this argument and I reject it.
On fraud, collusion and connivance, it was contended for the applicant that the respondents, the court bailiff and the buyer colluded and connived to defraud the applicant of his property. I wish to observe that an objector proceeding like this one should not delve into investigating such serious allegations as fraud which must be specifically pleaded and strictly proved. I will therefore desist from doing so. The applicant can pursue that claim in his suit before the Land Division or file a separate suit altogether to seek redress.
Finally on contempt of the court order, it was argued for the applicant that the sale was conducted against a subsisting court order to maintain the status quo. I have had the opportunity to look at the Interim Injunction Order issued by the Registrar Land Division on 24th June 2011 in Misc. Application No. 405 of 2011 arising from Misc. Application No. 404 of 2011; arising from Civil Suit No. 226 of 2011. The order was to the effect that:-
“This application coming up ex parte, the respondent having been duly served this 24th day of June 2011 before HIS WORSHIP THE REGISTRAR LAND DIVISION BATEMA N.D.A for an interim order in the presence of Mr. Geoffrey Nangumya counsel for the applicant/plaintiff.
IT IS HEREBY ORDERED that;
- The application is hereby granted as prayed. The status quo must be maintained till disposal of the main application and/or further orders of this court in respect of Kyadondo Block 206 Plot 2641 Land at Mpererwe.
- Costs of this application be in the cause”.
On 19th August 2011 while that Order was still subsisting although it was meant to be in the interim, the court bailiff entered into a sale agreement with the purchaser in respect of the land and developments thereon. The bailiff subsequently applied for and obtained a warrant for vacant possession and the plaintiff who was resisting the attachment and sale was evicted from the suit house. It was the applicant’s contention that the Interim Injunction Order was served on the 2nd respondent who was a party to the suit from which the application that gave rise to that order arose. It was also contended that the buyer became aware of the order and therefore was put on notice.
The Court of Appeal in Civil Appeal No. 109 of 2004Amrit Goyal-vs-Harichand Goyal & Others held that an order of court remain an order of court until set aside by a court of competent jurisdiction. The buyer Hon. Ahmed Awongo in paragraph 7 of his affidavit in rejoinder alluded to an order that was slapped on one of the judgment debtor’s titles by a purported lease. He does not expressly state at what point this was discovered but discerning from the contents of paragraphs 5, 6 and 7 of his affidavit, it appears this was at the stage of transfer after sale had been conducted. None of the respondents addressed court on this serious matter although it was raised in the applicant’s affidavit in rejoinder and submission.
If at all the Interim Order was served on the concerned parties and they still went ahead with the sale, there would be no doubt that the sale was conducted contrary to the court order that the status quo be maintained. The 2nd respondent who is alleged to have been served with the Interim Order of Injunction was a party to the application although it proceeded ex parte. He did not deny or rebut the allegation of the applicant that the order was served on him. I therefore take it that he was served.
He admitted that he participated in the sale of the suit property and a copy of the sale agreement shows that he witnessed the signature of the vendor. He should have notified the parties to the sale that there was a court order maintaining the status quo. It is not known whether he did so but as the registered proprietor of the land and a party to the suit he ought to have done so. I therefore find that the sale was done contrary to the court order. This finding alone would ordinarily vitiate the sale but for reasons that I will give later in this ruling, I reserve my conclusion until I look at the merit of this application which I now turn to consider.
It was argued for the applicant that in an application like this one, there are only two main questions for determination, namely; whether the applicant was in possession of the house in issue at the time the order of attachment and sale was issued on 30th May 2011; and whether the applicant’s possession of the house in issue was on his own account and not on the account of the 2nd respondent, thus rendering the house in dispute not liable for attachment. This, I believe is to do with proof of interest in the property. In other words, the applicant must prove that he has some interest in the property attached which ought to be protected from attachment and sale. This was the holding of Madrama, J inMaria Odido v Tekie Ezra Misc. Application No. 329 of 2009 which I find persuasive.
In regard to possession, I wish to observe that the applicant is objecting attachment of a house situate on the judgment debtor’s land which he claims belong to him. In his affidavit in support of the application, he stated that he was in possession of that house at the time of attachment. His counsel also submitted at length on this point and the respondents in their respective affidavits admitted that the applicant was evicted from that house under a warrant for vacant possession issued by court. I therefore find that the applicant was in possession of the house in dispute at the time the order of attachment and sale was issued.
On the issue of interest in the suit property, I am persuaded by the observation of Madrama, J in Maria Odido v Tekie Ezra (supra) where he stated that;
“The interest involved or which the claimant asserts in the objector application for the protection of court must be an interest capable of legal protection. The court protects such an interest in the property from attachment and sale. This also means that the claim, the subject matter of investigation must disclose an interest which would prima facie enjoy legal protection if held to be true……”
Counsel for the applicant submitted that the applicant is a lessee and that the lease agreement is legal/valid among others. It was contended for the respondents that the lease was not registered as a search was conducted before the transaction but did not find it as an encumbrance and hence the applicant had no interest. I must observe that this court cannot determine the validity or legality of the alleged lease agreement as it is beyond the scope of this application. The applicant has already filed a suit in the Land Division where the validity of that lease agreement and his rights as derived from it will be determined. The concern of this court is whether the applicant has any right over the suit property worth protecting.
The applicant has shown that there was a subsisting lease agreement between him and the 2nd respondent in respect of the suit property. The agreement itself is not denied by the 2nd respondent who offers a different explanation to the circumstances which led to the signing of that agreement. Prima-facie that agreement confers upon the applicant some equitable right over the suit property that would be worth giving legal protection. For that reason, I find that the second question is answered in the affirmative.
In view of the above findings, if this application was heard and determined before the sale of the attached property took place I would not have found any difficulty in granting the prayers sought. However, in view of the fact that sale of the property has already taken place and the interest of a 3rd party is involved, the next question for consideration is whether attachment and sale of the suit property can be set aside. I have looked at the circumstances of this case and my observations and conclusion on this question are as follows.
First of all, the applicant did not join the buyer of the suit property as respondent to this application. I believe this was a serious omission that this court cannot just overlook. The buyer is the person who will ultimately be affected by an order setting aside the sale. In other words, this court would be determining what affects his rights without giving him a hearing. That would be contrary to the principle of natural justice which this court is enjoined to follow in all proceedings.
While I am alive to the fact that this court has inherent power under section 98 of the Civil procedure Act to make any such orders as may be necessary for the ends of justice, I am also aware that it should be mindful that such orders do not cause injustice to other people who are not party to the suit. As rightly observed by my brother Madrama, J, inKamya Moses v Lukwago Sam (supra), indeedno party is entitled to an order or remedy which affects another party before or outside court without due process.
The applicant alleged that the purchaser had notice that an interim order maintaining the status quo had been issued. However, from the chronology of events as stated in the affidavit of the buyer especially from paragraphs 5 to 8, it appears he learnt about the interim order after the sale had been conducted. Even then, he needed to have been given a chance by way of making him a party to this application so as to respond to that allegation. He could be a bona fide purchaser for value without notice. I cannot therefore sit in this court in his absence and make an order that affects his rights without hearing him when the Shs. 175,000,000/= he paid as the purchase price plus some other expenses he could have incurred so far are at stake.
Secondly, I have also taken into account the fact that the applicant has already filed a suit in the Land Division in which he claims compensation from the 2nd respondent for breach of the lease agreement. His prayer for an order of specific performance in that suit is an alternative prayer. I am convinced that his interest will be adequately catered for by that suit if he proves his case.
Thirdly, I have weighed the impact of setting aside the sale whose proceeds sorted out the 2nd respondent’s several financial liabilities and I am of the view that many people who are not party to this application would be adversely affected by an order setting it aside. To my mind it would be in the best interest of justice if the sale is not set aside despite the fact that I have found some irregularities in the process and that the applicant has shown that prima-facie it has some interest in the property.
In the circumstances, I decline to grant this application with the result that it is dismissed with costs to the 2nd respondent. I make no order as to costs for the 1st respondent who did not appear in court but later smuggled in his written submission against the order of this court dispensing with it.
I so order.
Dated this 10th day of July 2012.
Ruling delivered in chambers at 3.45 pm in the presence of Mr. Geoffrey Nangumya for the applicant who was present. Both respondents and their counsel were absent.