Court name
Commercial Court of Uganda
Judgment date
22 January 2015

Mafabi v Stanbic Bank (U) Ltd & Anor (Miscellaneous Application-2014/435) [2015] UGCommC 13 (22 January 2015);

Cite this case
[2015] UGCommC 13

THE RUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

 

MISC. APPLICATION 435 OF 2014

(ARISING FROM MISC. APPLICATION 153 OF 2014)

 

SULAIMAN MAFABI …..……………………………………… APPLICANT

 

VERSUS

 

STANBIC BANK (U) LIMITED

SM CATHAN LAND AND PROPERTY………….………... RESPONDENTS

 

 

 

BEFORE: LADY JUSTICE FLAVIA SENOGA ANGLIN

 

RULING

 

This application made under S.98 C.P.R and 0.50 r 3, 0.52 rr 1 and 3 C.P.R and S.33 of the Judicature Act seeks orders of this court to stay the intended sale of the Applicant’s property comprised in Plot 7 Wagagi Road, Mbale Municipality, pending the hearing and final determination of HCCS 153/2014.

 

Costs of the application were also applied for.

 

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

 

There is a supplementary affidavit in reply although a copy of the affidavit in reply could not be traced on the court records.

 

The Applicant is the Defendant in C.S 153/14 filed by the Respondent and where the Applicant filed application N0. 183/2014. Seeking leave to defend.

 

The Applicant contends that the property, the subject matter of the suit is the security for the sums claimed by the First Respondent in the main suit.

 

That therefore, the intended sale of the property before the disposal of the main suit is intended to undermine the court process to which both parties have submitted.

 

While Counsel for the Applicant admits that notice of default in the mortgage payments was served on the Applicant, and the First Respondent instructed the Second Respondent to advertise the mortgaged property for sale, at the same time the Respondent filed a suit thereby submitting to the jurisdiction of court and cannot therefore exercise the right of sale under the Mortgage Act until the matter before court is determined.

 

That to allow the Respondent to proceed with the sale under the Mortgage Act will render the suit and the application for leave to defend nugatory.

 

Counsel for the Respondent argued on the other hand that staying the sale of the property pending determination of the main suit presupposes that the Applicant has a right to be heard in the summary suit. Which is not the case.  He pointed out that the application and affidavit in support do not deny the existence of the debt and the Applicant has confirmed that notice of mortgage default was served and that the Respondent has a right of recourse in the event of default on the mortgage.

 

That in the light of the above admissions, the contention that the matter is subjudice has been taken out of context.

 

Counsel for the Applicant maintained the earlier submissions.

 

The issue for the court to determine is whether given the circumstances pleaded by each party the application should be allowed.

 

Both the affidavit in support and supplementary affidavit in reply indicate that the property in issue was mortgaged to service the loan advanced to the Applicant.

 

The Respondent filed a suit against the Applicant and the Applicant filed an application for leave to appear and defend.

 

The mortgaged property was subject matter of the said suit and court decided on 05.11.14 that the sale of the property could not go ahead until this application had been disposed of by court.

 

The court adjourned the suit, the matter pending delivery of the ruling on notice.

 

The application for leave to appear and defend was called for hearing on 06.11.14.  Counsel for the Applicant admitted that his client owed the money demanded by the Respondent and was actually in the process of paying.  Court then decided that in the circumstances there was nothing to defend and entered judgment against the Applicant in the sum that was being claimed, less what had already been paid, if at all.

 

Costs of that application were also granted to the Respondent, although sale of the property was again stayed pending ruling in the present application.

 

However, it is apparent from all the foregoing circumstances that after judgment was entered against the Applicant in Miscellaneous Application 183/2014, this application for stay of execution was overtaken by events.

 

Without any further justification for the stay of the intended sale, the application cannot be allowed and it accordingly fails for those reasons.

 

Counsel for the Applicant informed court that matter was taken for mediation.  I wish to observe that court cannot certainly stop parties from reaching amicable settlements in matters if they so wish.

 

But for all the reasons given herein, the application is dismissed with costs to the Respondent.

 

 

FLAVIA SENOGA ANGLIN

JUDGE

22.01.15