Court name
HC: Civil Division (Uganda)
Judgment date
19 December 2013

Pacific Summit Hotel Ltd v DFCU Bank (U) Ltd (HCT-04-CV-MA-2013/9) [2013] UGHCCD 165 (19 December 2013);

Cite this case
[2013] UGHCCD 165

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA

HOLDEN AT MBALE

 

HCT-04-CV-MA-0009/2013

 

(ARISING FROM CIVIL SUIT NO. 0001/2013)

 

PACIFIC SUMMI HOTEL LTD..………………………………                                                                                                                       APPLICANT

VERSUS

  1. DFCU BANK (U) LTD
  2. OCHWO JOHN

T/a ROCKLAND GENERAL AUCTIONEERS

  1. STEEL & TUBE INDUSTRIES………………………..                                                                                                                        RESPONDENTS

 

 

 

BEFORE: THE HON. MR. JUSTICE HENRY I. KAWESA

 

RULING

 

In this application the applicant moved court under O.41 r.1 and 2 and O.52 r.1-3 of the Civil Procedure Rules for grant of a temporary injunction pending determination of the main suit.

 

The application is supported by the affidavit of Mwanga F.K, the Managing Director.  The order sought is to restrain the respondents or any of their agents from transferring the suit property comprised in Vol. 3455/ Fol 18 Bugwere Road, Mbale until the disposal of the main suit, and an order of temporary injunction restraining respondents from evicting the Applicant till disposal of the main suit.

 

Respondents filed affidavits in reply, as per affidavit of Mayanja for 1st Respondent, and Nilex Bhat for 3rd Respondent.

Counsel Mutembuli for applicants addressed court on the three conditions necessary for grant of a temporary injunction as being;

  1. Applicant has a prima facie case with probability of success.  He quoted paragraph 9 of the affidavit and paragraph 15 of the affidavit of Mwanga F.K.  In paragraph 9 applicant deponed that “the sale of applicant’s mortgaged property is illegal and unfair…”

 

In paragraph 15 he depones that, “it is just and equitable that the order is granted until disposal of the main suit which has substantial questions of law to be determined by this court.”

  1. That applicant will suffer irreparable damage not compensatable by damages.

 

Here he referred to paragraph12 of the affidavit in support, where applicant depones that Mr. Muwanga’s family stays on the suit property and have paid till 2014; and that if evicted he will suffer irreparable damage as it is not easy to get accommodation in Mbale.  He further referred to paragraph 14 where he depones that if the application is not granted it will render the suit nugatory; and that paragraph 8 shows that there is an eviction note already issued against them and that if their evicted they will suffer irreparable damage.

 

  1. That if court is doubtful, it will decide on a balance of convenience.  It was argued by Mutembuli for applicant, that the applicant is in possession of suit property, yet respondents are threatening to evict him and the tenants.  He argued that the balance of convenience is in favour of applicant who is in possession, unlike respondents who just intend to take possession.  They should be protected.

 

Here he referred to KIYIMBA KAGWA V, KATENDE 1955 HCB where it is stated that the grant of a temporary injunction is an exercise of Judicial discretion.  He prayed that court exercises its discretion and grants the orders sought.

 

Earlier, Counsel had referred to the case of Robert Kavuma v. Hotel International SCCA.8/1990, referred to by DCJ Mukasa Kikonyogo in Godfrey Kikonyo v. Mutabazi CA.165/2001, where courts are cautioned to confine itself strictly to the immediate object sought and that the court is enjoined as far as possible from prejudging the matters in issue in the main suit.

 

In response, Martin Asingwire (counsel for the 1st Respondent), attacked the applicant’s application that it does not state the grounds and only relays on the affidavit, which is defective.

 

He contended that the affidavit in support has falsehoods especially paragraphs 5 and 9.  He referred court to annex ‘E’ and annex ‘F’ and ‘A’ all which indicate that applicant has failed to make good the default, hence making paragraph 5 and 9 false.

 

He also attacked paragraph 20 of applicant’s affidavit and pointed out that it offends O.19 r.3 of the Civil Procedure Rules.

He referred to Uganda Journalist Safety Committee and 2 Others v. A.G. Const Petition 7/97; which states that averments that are based on information the information must be stated and if it is on belief, the belief must be stated.  If it is not done the affidavit falls on the wayside.

 

On falsehoods he referred to the Makerere University v. St. Mark Education Institute Others 1994 KLR 682  holding that an affidavit that contains lies and untruth cannot be relied upon for being defective and unreliable.

 

Counsel argued that the affidavit falls short of the requirements of an affidavit making it incurably defective and that it ought to be struck off.  He argued that since the application does not contain any ground, it should be also struck off.

 

On the requirements for grant of a temporary injunction, he argued that none of them were proved by the appellant.  He referred to annex ‘E’ to the application and said that it indicated a failure to pay and hence respondent had a right to sale.

 

On irreparable damage he referred court to Fredrick Zabwe v. Mars Trading Co. & OR 1998 KLR, focusing on the principle that irreparable damage is damage not atonable in damages.

He argued that loss of property is atonable in damages and the applicant didn’t show anywhere that in this case the injury is not atonable for in damages.  He argued that as a person who mortgaged his property for money, he can as well be compensated by money as a result of the mortgage.  He prayed for dismissal of the application on the above grounds.

 

Counsel for 3rd Respondent, Mr. Seruwoza, argued in association with first Respondent’s submissions.

 

He emphasized that the 3rd Respondent is a bonafide purchaser.  He responded to an advert, bidded and paid for the property.  He argues that by the time of completion of this transaction, the applicant had waived off his equitable right of redemption by virtue of his annexes ‘E’ and ‘F’.  He referred to Halisburys Law Reports Par. 722-25 Vol. 32 4th Edn, where it says that where a right of sale has arisen the mortgage cannot be restrained from selling, and where the mortgage has sold to a purchaser the mortgagors right of redemption is extinguished.  He referred to Edward F. Coosins LAW OF MORGAGES Pg.226-228, emphasizing that the purchaser is protected.  He also said that no prima facie case was made out by applicant.  He is to suffer no irreparable loss citing Maitha v. Housing Co. of Kenya & or 2003 Vol.1 EAR 133, where it was said that securities are valued before lending is contemplated by the parties and before the sale is contemplated therefore damages would be an adequate remedy.  Referring on LUYIGA V. STANBIC BANK (U) LTD (Unreported) MSC 2002/12, he concluded that where damages can atone, then temporary injunction should not issue.

 

On balance of convenience he argued that since the sale was completed the applicant is illegally in the premises and courts should not allow him to continue his illegality.  Convenience is therefore against the applicants.

 

He referred court to the case of SAVOURS INT. (U) LTD V. DFCU BANK LTD MSC. 283/2002, arising from 239/2002 where J. Okumu Wengi held that Court should not grant an injunction restraining a mortgagee from exercising his statutory powers.  For those reasons, he prayed that court dismisses the application.

 

In cross reply Mr. Mutembuli argued that counsel were going into the merits of the main suit and insisted that he had shown that applicant’s case satisfied the principles required to grant a temporal injunction.  He referred to O.41 r.1 of the Civil Procedure Rules, that his application is by chamber summons whose grounds are contained in affidavit. The evidence is in the affidavit.  He defended his arguments that the issues raised as falsehoods that they are truthful.  He argued that the balance of convenience disfavours applicants who have no alternative accommodation, and argued that the issue of bonafide purchaser is for the main suit.  He therefore maintained his previous prayers.

 

The duty of this court is to examine whether the applicant has satisfied the conditions laid down under O.41 r.1 and 2 and O.52 r.1 and 3 CPR and I will dispose them off in the order argued by applicant.

 

However before this is done, the Respondent (1st), raised two points of law, which must be resolved first, before going into the merit of the application.  These relate to;

  1. Whether the failure to place grounds within the chamber summons and only placing them in the affidavit was fatal to applicant’s case.
  2. Whether paragraphs 5 and 9, and paragraph 20 of the affidavit of the applicant render the affidavit defective rendering the application irregular.

 

Under order 41 of the Civil Procedure Rules, provisions are made regarding the procedure for applications for temporary injunctions and interlocutory orders.

O.41 r.1 states that “ where in any suit it is proved by affidavit or otherwise….

Rule 9, (O.41 r.9) then states, applications under rules 1 and 2 shall be summons in chambers.

 

The rules above indicate that the evidence in cases of temporary injunction can be provided by affidavit.  The proof is therefore by affidavit.  Failure to place grounds in the motion is not fatal as it was not specifically covered under the rule above.  The affidavit of the applicant is not faulty for containing the grounds of the motion it supports in this matter.

 

Turning to the specific paragraphs found offensive that is paragraphs 5 and 9, and 20, I find that the contents of paragraphs 5 and 9 are not falsehoods.  They relate to the case for applicant regarding the sequencing events leading to his case.  I agree with Counsel Mutembuli that the counsel for respondent did not specify how these paragraphs allude to falsehoods.  This matter without wasting time on it did not warrant the attack it received.

 

However paragraph 20 of the affidavit states as follows:

That whatsoever I have stated herein above is true and correct to the best of my knowledge, belief and information.

 

This according to respondent’s counsel offends O.19 r.3, of the Civil Procedure Rules, and is for that reason incompetent for reasons discussed in the cited case; as already discussed.

The law governing affidavits in O.19 r.3 is to the effect that,

Affidavits shall be confined to such facts as the deponent is able of his or her own knowledge to prove, except on interlocutory applications, on which statements of his or her belief may be admitted provided that the grounds thereof are stated.”

In Premchard Richard v. Ouamy Services Ltd (1969) EA 514 at 517 Spry J as he then was said,

It has repeatedly been said by this court that affidavit based on information must disclose the source of information (see Standard Goods Corporation Ltd vs. Harakchard Nahus and Co. (1950) 17 EACA 9) on this ground alone the Judge would have been entitled to refuse to act on the affidavit, this is not merely a matter of form, but goes to the essential value of the affidavit.”

 

Also in Eseza Namirembe v. Musa Kizito (1972) ULR 88 which was a case by originating summons the application was dismissed amongst other reasons because the supporting affidavit did not set forth the plaintiff’s means of knowledge or her grounds of belief and did not distinguish between matters stated on information and belief and those deponed to on the deponents knowledge.

 

The above seems to be the strict interpretation of the requirements of O.19 r.3 of the Civil Procedure Rules by the Courts.  Numerous authorities have continued to emphasize that an affidavit which does not conform to the above requirement is defective and must be rejected.

Hon. J. Okello emphasized this position in Allen Isingoma v. Alex Muhairwe & 2 Others HCCCNo.39/92, when he held that,

It is clear that disclosing the source of information, of facts deponed to information and giving ground of belief where facts are deponed to on belief and distinguishing between those facts which are deponed to on information, belief and knowledge of the deponent are fundamental requirements in the drafting of an affidavit.  An omission in any of them goes to the essential root of the affidavit.  It renders the affidavit incurably defective.”

 

Applying the above holdings to the issue at hand, an examination of the affidavit sworn as a whole would be helpful to determine whether the same offends the above standard.

 

According to the matters deponed to in the affidavit deponent avers to issues of personal knowledge, but does not distinguish them from those that are in his belief so that he points out the grounds on which he bases to believe so.  He has deponed to matters within his information, again without distinguishing them from those within his knowledge and belief.  The affidavit is presented as a whole without taking heed to the requirements that govern affidavits in support of interlocutory matters under O.19 r.3.

 

As pointed out by counsel in the case of Uganda Journalist Safety Committee and 2 Others v. AG Const. Pet. 7/97 and the case of Allen Isingoma v. Alex Muhairwe & 2 Others cited already, I will adopt the approach of J. Okello, who stated that in applications of that nature, the affidavit goes to the root, and it is incurably defective, thus rendering the entire application defective since the chamber summons it is filed in support contains no grounds for the application.  J. Okello states thus:

It is clear that disclosing the source of information of facts deponed to information and giving ground of belief where facts are deponed to on belief and distinguishing between those facts which are deponed to on information, belief and knowledge of the deponent are fundamental requirements in the drafting of an affidavit.  It renders the affidavit incurably defective.” I agree

 

This affidavit  is found to be in violation of the above legal requirement and is therefore incurably defective.

I am alive to the current practice where courts have since the Supreme Court decision of Kiiza Besigye v. Museveni, and the provisions of Article 126 of the Constitution relaxed this position to allow parties save parts of affidavits not found offensive in the name of substantive justice; as discussed by J. Lugayizi in Italian Ashalthaulage Ltd & 2 Ors v. Assist (U) Ltd CA No. 90 of 2000.

 

However this practice is distinguishable from the circumstances of this application, where there was a total failure to conform to the rules making it impossible for this court to save the affidavit.

 

In the case of C. Katuramu v. Matiya Kiiza and Others HCCVA No. DR/89 JUSTICE Mukanza, was able to save the affidavit by implying that since it had been sworn by an Advocate, it was assumed that he knew, believed, and had information of what he deponed to, even if he had not complied with the rule to distinguish and reveal the matters in knowledge, information and belief.

 

However in his affidavit, the deponent Mr. Mwanga Francis states in paragraph 1 that he is the Managing Director of the applicant hotel, and deponed in that capacity.  However he later depones to facts within the specialty of the Bank (paragraph 3, 4, 5, 6, 9, 16).  He depones to matters within the specialty of law.  (Paragraph 6, 9, 11, 12, 15, 17).  These paragraphs cannot allow me to follow the Hon. J. Mukanza precedent and read in the affidavit that what he deponed to were all in his belief, knowledge and information.

 

I have therefore reached the conclusion that for the reasons stated above, the affidavit is incurably defective and cannot be allowed to stand.

 

Having found so, I will not go into the determination of the rest of the arguments which were raised because the defect in the affidavit has eaten up the entire taproot of the application and has totally terminated it.  Without the affidavit, there is no motion.  Without the motion there is no application, therefore this application must fail and is dismissed for violating the provisions of O.19 r.3.

 

Costs to respondents.  I so order.

 

Henry I. Kawesa

JUDGE

19.12.2013