Court name
Commercial Court of Uganda
Case number
Miscellaneous Application 331 of 2012
Judgment date
15 May 2013

Sendagire & Anor v Kirumira (Miscellaneous Application 331 of 2012) [2013] UGCommC 93 (15 May 2013);

Cite this case
[2013] UGCommC 93

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL COURT DIVISION)

MISC. APPLICATION NO. 331 OF 2012

 (Arising from Civil Suit No. 26 of 2008)

  1. SENDAGIRE STEPHEN
  2. NANYOMBI GLADYS…………………….......................APPLICANTS

VERSUS

KIRUMIRA GODFREY KALULE…………………………….RESPONDENT

 

BEFORE: HON. LADY JUSTICE HELLEN OBURA

 

RULING

This application was brought under Order 41 rules 1, 2 and 9 of the Civil Procedure Rules SI 71-1(CPR) and Section 98 of the Civil Procedure Act. The applicants sought for an order that a temporary injunction doth issue restraining the respondent, his agents, servants, employees or any other person claiming under him from transferring, selling, assigning, developing, disposing or carrying out any further developments, alteration, alienation or wastage on the land comprised in Busiro Block 383 Plots 214, 724 and 1199 at Dundu until the final disposal of the main suit. They also sought for an order that the costs of this application be provided for.

The grounds on which this application is premised as contained in the Chamber Summons are that:-

  1. The 1st applicant was at the time of instituting the main suit the registered proprietor of land comprised in Busiro Block 383 Plots 214, 724 and 1199 at Dundu.
  2. The said land was also encumbered with the applicants’ caveats at the time of instituting the main suit.
  3. The land is developed with modern structures housing a secondary school which the respondent is currently operating.
  4. The encumbrances were fraudulently removed from the said land and the same plots were fraudulently retransferred into the respondent’s name.
  5. The respondent’s actions are aimed at wasting and permanently depriving the applicants of their land.
  6. The applicants will suffer irreparable damage incapable of being atoned for by way of damages if the respondent is not accordingly restrained.
  7. It is just, fair and equitable that a temporary injunction doth issue against the respondent until the disposal of the main suit.

The application was supported by an affidavit deposed by Mr. Sendagire Stephen, the 1st applicant. The respondent filed an affidavit in reply deposed by Mr. Kirumira Godfrey Kalule, the respondent. In response the applicants filed an affidavit in rejoinder deposed by the 1st applicant.

When this application came up for hearing Mr. Joash Sendege represented the applicants while Mr. Walukagga Isaac represented the respondent. Both counsel were agreeable to filing written submissions in the matter which they did.

Counsel for the applicants argued that the applicants are contending that the sale of the suit property to the respondent by the 1st and 2nd defendants was illegal and fraudulent. On the other hand, the respondent is claiming to be a bona fide purchaser for value. The applicants are challenging the respondent’s claims. The applicant’s counsel submitted that the applicants have sufficiently made out a case to justify the issue of a temporary injunction against the respondent to ensure that the respondent does not deal in the suit land at all until the main suit is finally heard and determined. It is the applicants case that the respondent is free to remain in possession of the land but he should not be given chance to alienate it.

 

According to the applicants the respondent intends to dispose of the suit land. The respondent in his affidavit in reply has not denied that claim but has merely put forward arguments asserting that he is a bona fide purchaser for value thereby implying that despite the serious allegations of fraud raised against him and his co-defendants he should be given the liberty to deal with the property before the main suit is finalised.

It was submitted for the applicants that if the status quo is not preserved, the purpose of the whole suit will be completely lost and the suit will be rendered nugatory. In addition, it was contended that the applicants will suffer irreparable damage in the event that they ultimately win the case when the title to the suit land has already been transferred by the respondent to a third party who might turn out to be innocent. It is the applicants’ contention that no amount of damages can adequately atone for the loss of the applicants owing to the most unpredictable vagaries of life in Uganda which could make it impossible to replace the land and the school together with its attendant circumstances like goodwill, location etc.

Counsel for the applicants cited the case of Commodity Trading Industries v Uganda Maize Industries & Another (2001-2005) HCB 118 where it was held that the aim of the application for the temporary injunction is to maintain the status quo until determination of the whole dispute. Furthermore, that the status quo which is in issue is not about who owns the suit property but the actual state of affairs of the suit premises. The gist of a temporary injunction is the preservation of the suit property pending disposal of the main suit. The applicants’ counsel referred to the case of Kiyimba Kaggwa v Hajji Katende [1985] HCB 43 where it was held that where property is in danger of being wasted, damaged or alienated by any party to the suit, the court may grant a temporary injunction to restrain, stay and prevent the wasting, damaging and alienation of the property.  

In response, counsel for the respondent submitted that the grounds for granting a temporary injunction are now settled as confirmed in the case of Anguyo Sam v Centenary Rural Development Bank & Others Misc. Application No. 487 of 2010. Thus the applicant must show a prima facie case with a probability of success. Secondly, the applicant must prove that he will suffer irreparable injury that cannot be adequately compensated by an award of damages and thirdly, if the court is in doubt it will decide the application on a balance of probabilities.

Concerning a prima facie case, the respondent’s counsel submitted that courts have defined prima facie case as serious questions of law to be tried. It was submitted for the respondent that the applicants have not shown any serious questions of law to be decided against the respondent. It was argued that the applicants were indebted to DFCU bank, failed to settle their indebtedness and the suit property was sold to the respondent. It was the view of the respondent’s counsel that the applicants were against the realization of the security in favour of the Bank and this suit is simply a plot to frustrate the respondent’s business.

As regards the second condition, counsel for the respondent submitted that irreparable injury must be substantial or material that it cannot be compensated for in damages. It was submitted that the suit property was valued in annexture H to the respondent’s affidavit and in the unlikely event that the suit is decided against the respondent, the injury suffered by the applicants can be compensated in damages and the defendants in the head suit have the capacity to compensate the applicants.

On the third condition, it was submitted that the respondent is in possession of the suit property as the lawfully registered proprietor. Further that the suit property is developed with a school and the weighing scale tilts in favour of the respondent whose enjoyment and right to deal with the suit property as he pleases should not be interfered with. It was also argued that, in any event, if at all the applicants succeed in the head suit the value of the suit property would have appreciated.

In rejoinder the applicants’ counsel submitted that the applicants have clearly made a prima facie case as there ware serious questions of law to be tried based on fraud, illegality and deceit against the respondent and his co-defendants all of whom are being sued jointly and severally in the suit. It was argued that the submission is supported by facts set out in the plaint which was attached as annexture to the applicants’ affidavit in rejoinder as well as the affidavit in support. In addition, it was argued that considering the gigantic commercial importance and value of the subject matter, it cannot be denied that the plaintiff shall suffer irreparable damage if the status quo is not preserved. It was argued for the applicant that the irreparable damage does not mean that there must not be physical impossibility of repairing injury but means that the injury must be substantial or a material one that cannot be adequately compensated for in damages. He referred to the case of Kiyimba Kaggwa (supra).

I have carefully read the pleadings in this matter together with the relevant documents attached. I have also given due consideration to the submissions made by both counsel. In a number of cases the courts have reiterated the principles upon which a temporary injunction is granted. It is trite that the purpose of a temporary injunction is to preserve matters in status quo until questions to be investigated in the suit can be finally disposed of. See Kiyimba Kaggwa (supra). Counsel for the respondent correctly stated the three conditions for grant of an interlocutory injunction as was long been established by Spry VP in the leading case of Geilla v Cassman Brown and Co. Ltd [1973] EA 358.

It is now trite that for the purposes of grant of a temporary injunction it is sufficient for the applicants to prove that there are triable issues that merit judicial consideration. At this stage there is no requirement for the applicants to establish a strong prima facie case with a high probability of success.

With reference to the first condition, I have looked at the 3rd amended plaint filed by the applicants/plaintiffs in the main suit. I note that from paragraphs 29, 30 and 31 thereof it is alleged that the plaintiffs’ property was advertised for sale and it did not take place on the scheduled date. No other date was communicated and yet the property was sold to the respondent. Under paragraphs 32 and 36, the plaintiffs averred that they lodged caveats in the suit land forbidding change in proprietorship or dealings in the land but the respondent was fraudulently registered on the register of titles in respect of land comprised in Busiro Block 383 plot 724 at Kitende. Further in paragraphs 37 and 38 of the said plaint the plaintiffs contended that the 3rd defendant/respondent’s application for a special certificate of title was never advertised as required by law. It is the plaintiffs’ case that the purported sale to the respondent and his subsequent registration on the suit land was fraudulent, illegal and high handed designed at defeating their interest in the suit land.

Still in paragraph 36 (III) of the 3rd amended plaint there are particulars of fraud alleged to have been committed by the respondent. These are:

  1. Conniving with the 1st and 2nd defendants to defeat the plaintiffs’ interest
  2. Conniving with the 1st and 2nd defendants to make wrongful declarations on the consent form.
  3. Defrauding government of revenue through wrongful declarations
  4. Converting the plaintiffs’ moveable properties well knowing the same not to be subject of the mortgage and purported sale.
  5. Conniving with both the 1st and 2nd defendant to defeat the plaintiffs’ interest.
  6. Pretending to help the plaintiffs fulfill their financial obligations with the 1st defendant while actually stabbing them in the back leading to alter of sacrifice
  7. Acting with discander and deceit.
  8. Making false promises which were calculated with low cunning with the sole aim of defeating the plaintiffs’ interest in the suit land.
  9. Wrongfully arresting and detaining the 2nd plaintiff with an aim to instill fear in her and weaken her resolve to fight for their property.

In addition, it was argued for the applicants that the particulars of fraud are all attributed to the respondent who is not disputing the fact that there was on the register of title a court injunction order and two caveats lodged by the applicants at the time of registration of the property in his name. The respondent’s answer to the allegations of illegality is that he was not responsible for the violation of the law as alleged by the applicants.  However, the respondent does not deny the fact that he is the beneficiary of the alleged illegality nor does he explain how he managed to procure the registration of his name on the register of titles even when it is alleged that it was done contrary to the law.

Although the respondent argued that the 1st applicant’s affidavit does not show any fraud on the part of the respondent, the 1st applicant’s affidavit in rejoinder and the 3rd amended plaint annexed to that affidavit show details of particulars of fraud allegedly committed by the defendants, including the respondent in this case. At least the particulars of fraud as alleged against the respondent are set out in the plaint.  For that reason I do not agree with the respondent’s submission. Secondly, counsel for the respondent argued that there is no evidence adduced to show that the respondent unlawfully vacated the caveats and interim order or that the suit property was fraudulently transferred into his names. What the respondent is asking for is beyond the scope of this application. The applicants can only prove these allegations at the trial of the main suit by leading evidence. As stated earlier in this ruling, at this stage there is no requirement for them to establish a strong prima facie case with a high probability of success.

In addition, it is now a settled principle that once an illegality is brought to the attention of the court it cannot ignore it. It must investigate and determine its effect on the subject matter of the suit as was held in the case of Makula International v His Eminence Cardinal Nsubuga & Another [1982] HCB 1. Applying the above principle to this case, I am of the firm view that serious allegations of illegality have been made against the respondent. In the premises, I do find that there are triable issues that would merit judicial consideration concerning the respondent’s role in the purported sale transaction of property comprised in Busiro Block 383 plots 214, 724 and 1199 and his subsequent registration as proprietor thereof. This court is therefore satisfied that the applicants have met the first condition.

Turning to the second condition, it was submitted for the applicants that they will suffer irreparable damage if they win the case when the title to the suit land has already been transferred by the respondent to a third party. It was the respondent’s case that the suit property has value, the injury suffered by the applicants can be compensated in damages and the defendants in the head suit have the capacity to compensate the applicants.

Lord Diplock in American Cyanamid Co. v Ethicon Ltd [1975] 1 ALL E.R. 504 established the test that is applied in determining the second condition and the principles were followed by the High Court of Uganda in various cases such as Pan African Commodities Ltd & Another v Barclays Bank Plc HCMA No. 385 of 2007 to the effect that if damages in the measure recoverable at common law would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted however strong the plaintiff’s case appears at this stage.

While I agree with the respondent that the suit property has value as per the Appraisal Report and Valuation annexed as “H” to the affidavit in reply, and the defendants in the main suit have capacity to compensate the applicants, I do not agree that the injury that might be suffered by the applicants can be compensated by an award of damages. I am inclined to agree with the applicants that no amount of damages could adequately atone for the loss of the applicants in replacing the suit property together with the good will of the school. In the premises, the applicants have also met the 2nd condition.

As regards the third condition, this court is not in doubt given its findings on the 1st and 2nd condition. Nonetheless, the balance of convenience favours granting of this application since the respondent is already in possession of the suit property and will still be at liberty to alienate it in the event that he becomes the successful party in the main suit.

In the result, this application is allowed and the orders prayed for granted. Costs shall be in the main cause.

I so order.

Dated this 15th day of May 2013.

 

Hellen Obura

JUDGE

Ruling delivered in chambers at 3.00pm in the presence of:-

  1.  Ms. Fiona Kunihira h/b for Mr. Joash Sendege for the applicants
  2. The 1st applicant.

No appearance for the respondent.

 

JUDGE

15/05/13