Court name
Commercial Court of Uganda
Judgment date
4 September 2014

Alokait v Engineering Tradelinks Ltd & Anor (Miscellaneous Application-2014/394) [2014] UGCommC 131 (04 September 2014);

Cite this case
[2014] UGCommC 131

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

 

MISCELLANEOUS APPLICATION NO 394 OF 2014

(ARISING FROM MISC. APPLICATION NO. 0337 OF 2014)

(ALL ARISING FROM CIVIL SUIT NO 593 OF 2012)

 

ALOKAIT IMMACULATE OSUNA ………………….. APPLICANT

 

VERSUS

 

  1. ENGINEERING TRADELINKS LTD……….. 1st RESPONDENT
  2. DFCU BANK LIMITED …………………………2nd RESPONDENT

 

BEFORE HON. JUSTICE FLAVIA SENOGA ANGLIN

RULING

These Objector proceedings were brought under the provision of 0.22 r 55 and 56 C.P.R, SS. 33, 34 and 35 of the Mortgage Act 2009, S.39 Land Act and 0.52 r1 and 3 C.P.R.

The Applicant sought orders of this court releasing from attachment the immoveable property comprised in Kyaggwe Block III, Plot 599.

It was the Applicant’s further contention that the mortgage on the said land was illegal and void and whatever interest that had been paid had to be refunded.  Costs of the application were also applied for.

The application was supported by the affidavit of the Applicant which was read and relied upon at the hearing.

The Applicant states that she is the wife of the First Respondent’s wife and her consent was not obtained before her matrimonial home was mortgaged.

The Applicant resides on the said land and will suffer irreparable loss if the sale of the said land goes ahead as intended.  And that it is therefore in the interest of justice that the application be allowed.

There is an affidavit in reply sworn by the Legal Officer of the Second Defendant, contesting the application.

There are also two affidavits in rejoinder.

When the application was called for hearing, Counsel for the Applicant referred to the paragraphs 2-13 of the supporting affidavit and submitted that read together with the affidavits in rejoinder; it is apparent that there is a threat to sell the house and that Applicant is resident in the house.

Further that the affidavit in support is not misleading or incurably defective as it is not disputed that Applicant is married and the property is matrimonial property.

Counsel insisted that the house is under attachment which includes attachment of title, coupled with the advertisement for sale.  And that since the title is in possession of the Second Respondent, the sale could be by private treaty and there is no need for warrant of attachment.

Asserting that no consent was obtained, it was submitted that Applicant meets all requirements necessary to be allowed. The case of Lawrence Muwanga vs. Stephen Kyeyune C.A 12/01 and Allen Nsubuga Ntananga vs. Uganda Micro Finance Ltd and 4 Others M/A 426/06 – were cited in support.

It was pointed out that S.39 Land Act also prohibits Sale, mortgage of property interlia without consent of the spouse.  And without any such consent, any purported transaction on such property is a nullity and void abinitio.

SS.5, 38 (1) (A), 38 (1) of the Mortgage Act – were relied upon for definition of matrimonial property, security of occupancy of spouse and requirement of spousal consent. And Regulation 64 Mortgage Regulations – for the form consent should take.

And the case of Alice Okiror and Another C.S. 149/10 – where __ Justice Obura declared a mortgage void for lack spousal consent: And the case of Enid Tumwebaze vs. Mpeirwe Stephen and Another HC C.A. 0039/2010 – for the re-interpretation of S.39 Land Act.

It was pointed out that, the advertisement to sale the Applicant’s home was only brought to the attention of the Applicant after the case between First and Second Respondent was dismissed – Annnexture B – the basis of the sale is an illegal mortgage.

Emphasizing that the Applicant stays in the house with her children, Counsel argued that if at all any consent was given, it was given by an imposter and that Second Respondent was negligent.

Counsel prayed court to review the mortgage terms under S.34 Mortgage Act in the interest of justice and S.35 (1) Mortgage Act and handover the title to the property to the Applicant and also order payment of costs of the application to the Applicant..

In response, Counsel for the Respondents raised 3 points of law:

The first one was that while application was made under 0.22 r 55 and 56 C.P.R. – no grounds were elaborated as required.

That SS. 33, 34 and 35 Mortgage Act – provide for ways in which a party can be heard in court but there has to be grounds.

In the present case, Counsel argued, the Second Respondent has not yet extracted a decree and the execution proceedings have not began.  There is no warrant of attachment and the advert is dated 18.04.14.  The application was therefore prematurely made

The case of Enid Tumwebaze (Supra) he argued, is distinguishable from the present case in that, in Tumwebaze’s case, there was an application for execution and warrant of attachment had issued.  But there is no warrant of attachment in the present case.

To support his argument, Counsel relied upon the case of TransAfrica Assurance Co. Ltd vs. NSSF – SCU [199_] IEA 352 Page 4-12 – where court held that “without Warrant of Attachment, there is no need to bring objector proceedings.”

That under 0.22r55 C.P.R there has to be warrant of attachment. And that if the advertisement served the same purpose as the warrant of attachment, the law would have provided for it.

Counsel them submitted that the application should be found to be premature.

Furthermore that under S.33 and 34 Mortgage Act – court can review mortgage if evidence of illegality is led.  But that in the present case no evidence other than lack of spousal consent was led.

That at the time the mortgage was executed under the old Mortgage Act, a declaration of marriage was sufficient.  Counsel wondered how court could review the Mortgage deed without seeing it, asserting that it would affect the rights of the parties to the transaction.  And that since it was not clear under which law the mortgage was executed, it cannot be reviewed.

It was also Counsel’s argument that there is no evidence of a legal marriage as there was no evidence of the purported marriage having been registered with the Registrar of Marriages.  The Annexture A – presented to court lacks the signature of the Registrar of Marriages and is not certified. The case of Wamono _ vs. Equity Bank and Another Miscellaneous Application 600/12 p.13 was cited in support.

While acknowledging that the Applicant may have a case, Counsel argued that the procedure used was wrong and therefore no evidence was led for relief sought.  He submitted that the Applicant should have filed a suit and sought an injunction to stop the sale, and lead sufficient evidence.  He ten prayed that application be dismissed with costs.

Upon giving the submissions of both Counsel the best consideration, I can in the circumstances, I find that I am more persuaded by the arguments of Counsel for the Respondent as regards the procedure used to seek a remedy.

While the disputed property was advertised for sale, it is in the possession of the Objector who claims ownership thereof.  As the property has not yet been attached and is still occupied by the Objector, the issue of releasing it does not arise.  It should accordingly remain in the possession of the Objector until otherwise directed by court.

The best interests of the Objector will be better served by filing a suit against the Respondents so that all the other issues raised by the application can be properly determined after hearing of evidence from both sides.

Application is disallowed for those reasons.  Each party should bear its own costs.

 

FLAVIA SENOGA ANGLIN

JUDGE

04.09.14