Court name
Commercial Court of Uganda
Judgment date
17 June 2014

Kiwanuka v Microfinance Support Centre Ltd (Miscellaneous Application-2013/701) [2014] UGCommC 79 (17 June 2014);

Cite this case
[2014] UGCommC 79














By this application made under S.33 C.P.A, S.98 C.P.A and 041 rr, 2 and 9 C.P.R, the Applicant sought a Temporary injunction to issue against the Respondent, its agents, or assignees preventing them from attaching, selling or in any way disposing off the Applicant’s matrimonial home / property at Makindye, comprised in LRV 932, Folio 3, Plot 156 Kyadondo Block 262, pending the determination of the main suit.

Costs of the application were also applied for.

The application was supported by the affidavit of the Applicant.  The grounds for the application are that the property of the Applicant was pledged as a security for a loan without her consent.

The property was advertised for sale upon default in payment of the loan and the Applicant and her family were required to vacate it within 14 days from 07.08.13. – the date of the advertisement .

That since the mortgage of the home was irregularly and illegally done, the Applicant and her family will suffer irreparable damage, inconvenience, suffering, embarrassment and great loss unless their eviction is restrained.

The application was opposed by an affidavit in reply sworn by the Manager Legal Services, of the Respondent Company.

She deponed interalia that Uganda Academic Enhancement Company Ltd applied to the Respondent for a loan that was approved.  A loan agreement for the sums of 280,000,000/- was executed between the parties and the loan was secured by 3 properties that included the property claimed by the Applicant – which is registered in the name of Haji Kamadi Kiwanuka.

The Respondent diligently carried out research about the property before approving the loan that included a survey and valuation.

The registered owner of the property, Haji Kamadi Kiwanuka affirmed by Statutory Declaration that he was not married and authorized the borrowing company to pledge the land in issue as security.

Accordingly, the Respondent denies that the Applicant is the wife of the registered proprietor and contends the suit was a deliberate ploy to delay the sale of the suit property and prevent the Respondent from recovering the amounts due to it.

The Applicant has not indicated that she is able and willing to pay a deposit on the amounts sought as required by law and that can be compensated by way of damages in the unlikely event of her succeeding.

The Respondent on the other hand was likely to suffer more damage.

The application was heard on 07.05.14 in absence of the Second Defendant (husband of the Applicant).  Counsel for the Applicant went through the grounds of the application arguing that although Second Defendant distances himself from his marital status, the transaction was illegal and Applicant was not party to the illegality.

Contending that illegalities cannot be condoned and relying upon the supporting affidavit, Counsel prayed that application be allowed.  The case of Hanifa Kawooya vs. Attorney General and Another Misc. Appl. 46/2010 was relied upon for the conditions under which an injunction can issue.

Counsel for the Respondent opposed the application, while he agrees with the requirements to be met as set out in Hanifa’s case (Supra) and Giella vs. Cassman Brown & Co. Ltd [1963] EA 358, he referred to the affidavit in reply, arguing that application should be dismissed as there was no probability of success in the suit, as it was a simple case of contract.  – The case of Madhivan and Another vs. _ [1988-90] HCB was relied upon to support his submissions.

Counsel pointed out that the issue in the present case was not different from that in Madhvani’s case.  That is failure by the mortgagor to meet payment obligation and filing a suit through wife to delay recovery.  He asserted that there were therefore no serious triable issues for court to determine.

Secondly, that since the property has a monetary value; the Applicant can be compensated by way of damages if she succeeds.  The Respondent being a financial institution can pay.

That the balance of convenience was in favor of the Respondent who would be denied a chance to recover its money.

But that if court is inclined to grant the application, then the Applicant ought to be directed to make a security deposit of 30% of the forced sale value under Regulation 13 of the Mortgage Regulations.

Otherwise that application should be dismissed with costs.

In rejoinder, Counsel for the Applicant submitted that the marriage certificate attached to the application raises triable issues as to whether Applicant is married and if the Second Defendant was authorized to mortgage the property without consent.

While the survey and evaluation report raises issue whether the Respondent exercised due diligence to determine property was matrimonial property or not.

Denying that application was just meant to delay the recovery of the Respondent’s money, Counsel for the Applicant insisted Applicant wants to vitiate the whole transaction, as she was more likely to suffer irreparable damage, this being her home, such damage as can never be satisfied by monetary terms.

Further that there was also the question of legality of lending as the Respondent did not adhere to the provisions of the law.

Though agreeing with the authorities cited, he argued that the Madhvani case (Supra) supports the application.  And that court has power under Reg.13 Mortgage Regulations to postpone sale.  And that shs. 30% should not be paid where court is in doubt of the facts.  He reiterated earlier prayers.

Issue: Whether this is a proper case for issue of an injunction.

As pointed out by both Counsel and rightly so, the main considerations for granting an injunction have been established by decided cases as the following.

  • Prima facie case with a probability of success.
  •  That is, the suit from which the application arises is not frivolous and vexatious as it discloses triable issues.
  • Failure to grant the injunction would render the disputed matter mugatory and would result in irreparable injury to the Applicant that cannot be atoned for by way of damages.
  • Where court is in doubt, the application will be decided on a balance of convenience. – Giella vs. Cassman Brown & Co. Ltd (Supra).

Courts have emphasized that the Applicant who seeks the remedy must come to court with clean hands, since an injunction is an equitable remedy.

Further that, the purpose of the injunction is to preserve the status quo until matters in issue have been dealt with.

The status quo in the present case is that the property in issue has been advertised for sale.  It was pledged as security for a loan, by the Second Defendant who is also the registered owner.

While giving the property as security, the Second Defendant affirmed by Statutory Declaration that he is not married, which the Applicant contents.  There is a certificate of marriage attached to the application.

The Applicant who claims that the property is her matrimonial home, also asserts that the transaction was illegal for lack of her consent, and that she will suffer irreparable damage unless the injunction issues.

However, the Respondent insists that the application is meant to delay the Respondent from recovering its dues, upon failure by the mortgagor to meet payment obligations.

Upon giving the submissions of both Counsel due consideration, I am inclined to agree that there are triable issues raised by the Applicant.  It is not possible without a hearing to determine whether or not the Second Defendant is married to the Applicant.  The Second Defendant denied the marriage by statutory declaration, which raises issues of fraud/illegalities, which the Applicant ought to be given a chance to prove before the property is sold.

However, since the property had already been advertised for sale, the Application is allowed on condition that the Applicant pays security deposit of 30% of the outstanding amount.

  • Refer to Regulation 13 (1) (4) and (6) of the Mortgage Regulations.

Costs will abide the outcome of the suit.