Court name
HC: Civil Division (Uganda)
Judgment date
26 June 2017

DFCU Bank (U) Ltd v N.N Hardware (U) Ltd & Anor (HCT-04-CV- MA-2016/224) [2017] UGHCCD 118 (26 June 2017);

Cite this case
[2017] UGHCCD 118
Coram
Kawesa, J

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA

HOLDEN AT MBALE

 

HCT-04-CV- MA- 0224 OF 2016

(ARISING FROM MISC. APPLICATION NO. 213 AND 208-2016)

(ARISING FROM CIVIL SUIT NO. 0017 OF 2016)

 

DFCU BANK (U) LTD:::::::::::::::::::::::::: OBJECTOR /APPLICANT

VERSUS

N.N HARDWARE (U) LTD::::::::JUDGMENT CREDITOR/ RESPONDENT

AND

ZEYNE ENTERPRISES LTD::::::::JUDGMENT  DEBTOR/ RESPONDENT

 

BEFORE: HON. JUSTICE HENRY. I. KAWESA

RULING

These are objector  proceedings  against  the orders  of this court  for  execution by  attachment  of Motor vehicles  Registration  Nos UAU 166G, UAU 071G, UAU 077G, UAY 706S and  UAU 078G which  applicant / objector  claims  interest in.

 

The application is supported by the affidavit of Edith Ampaire Manager of Mbale branch of applicant.

The judgment   creditor   and judgment debtor filed their affidavits in reply through their representatives/ agents.

 

The grounds for the application were as listed under (a-g)

The same grounds were deponed to  by Edith  Ampaire  in  her  affidavit  and  are in  summary  that :  the attached  motor  vehicles  are not   the  properties  of the judgment  debtor  and not   liable  to  attachment. It was also  avered  that the objector/ applicant  is the lawful  owner/ lessor  of the all the above motor vehicles which  the  judgment  creditor  has/ or  seeks to attach. The  applicant  avers that it’s the owner of the above vehicles pursuant to a vehicle  sale and  lease arrangement  between  the  applicant/ objector and the judgment  debtor; as per annexes ‘a’ ‘b’ and ‘c’ to the affidavit  in support  of the application.

 

It was argued by the objector’s counsel in submission that the lease agreement under clauses 2A and ‘B’ of the Master Lease Agreement  (Annex ‘A’) expressly  states that the lessor  leases and the  lessee  takes on the lease equipment  for a  lease term as  provided  for in  the vehicle  lease  schedule (annex B).  It  was  a further   term  of    the  agreement  that  ownership  of the equipment  shall at all times  during  the lease term  remain   in the lessor, a term  of  48 months effective 20th  August  2014.( Per   clause 4  of  annex B).  The vehicles were listed under a schedule on annex B, and the objector still possessed the Registration books of the said vehicles.

 

Counsel in reference to legal authorities of Kisambira Sentamu Ismail V. Elima Elukana and Anor. ( 2006) 1 HCB 51 and  Moses Kamya V Sam  Lukwago  and  2 Ors , HCMA 271/2010  argued that the  applicant /objector  is the lawful  owner /lessor of the  suit property  and  possessed  a legal  interest  vested in the  said  vehicles at the time  of attachment  and thus  the same   ought  be released from  attachment .

 

They argued that objector had constructive possession, per Moses Kamya V. Sam Lukwago & 2 Ors (Supra).

Counsel also averred that the judgment creditor has attached the suit property whose value far exceeds the decretal sum of UGX 145,227,500/=  , and  that  if not  set  aside the objector/ applicant  shall suffer  irreparable damage and loss if the attachment  and sale  is not halted/ set aside, and that the orders were obtained illegally and irregularly.

 

The Respondents on the other hand opposed this application.

 

The main grounds of opposition were that the sole question to investigate is that of possession and questions of legal rights and title are irrelevant.

He said that this was a question of evidence, which the objectors have the onus to prove. They claimed that the supporting affidavit   is false. The supporting master lease is not sealed, and the supporting affidavit is alien to the transactions.

He attacked the supporting log Book as being a vehicle which   was not the subject of attachment.

 

Respondent argued that the listed vehicles were under constructive possession of the judgment debtor, and the applicant did not prove ownership. They prayed that application be dismissed.

 

In rejoinder applicants re-echoed the earlier position, insisting that court cannot sunction what is illegal.

 

Having  reviewed all the arguments above, I have addressed  my mind  to the  provisions of  O. 40 R.8 of the Civil Procedure Rules which  provides  for  the investigation of property attached  before judgment. It states that:

Where  any  claim  is preferred to property attached  before  judgment, the claim shall be  investigated  in the manner  herein  before  provided for the investigation  of claims to property attached in execution of a decree for the payment of  money…”

 

This imports the provisions of O. 22 rules 55 and 57. The  test  is whether  the property is  in possession of the person  at the time of attachment  was in his  or her  possession on his or her  own  account.

Hon. J. Kiryabwire in Rev. Ezra Bikangiso V New Makerere Kobil Station MA. 10 of 2010 held that:

A lessee without special authority to the contrary cannot sell what is owned by a lessor.”

 

The Judge found that no attachment before judgment can issue where it affects the rights of   third parties. This was also the position in  Abby Mugimu v Basa Basa (1991) ULSLR1 91 at  195:

 

This is the argument raised by the objectors in this application. From the evidence it is clear  that there was a  standard  lease agreement  between  applicant/objector and the  judgment  debtor (as  argued by the  applicant’s counsel under paragraph  4.2,4.3,4.4- 4.8. This fact is not denied. I find that applicants have proved that they are the lawful owner / lessor of the suit properties. The Respondent’s argument that the affidavit in support is illegal is not founded on fact, because the applicants have in rejoinder successfully explained that  there  was  no requirement  for sealing of the lease as per  Kintu V  Kyotera Coffee  Growers (1976) HCB 336, and  Section 50 of the Companies Act that;

Documents requiring authentication by a company signed by the Director or Secretary do not need to be sealed

It is not fatal, even if the lease was not sealed, did not render the documents invalid. The argument that the deponent was a lien to the information is also not sustainable given the fact that the affidavit mentions that she was the Mbale branch Manager of the applicant and had knowledge of the matter as such. She swore that the facts were in her knowledge under paragraph 6 that the properties are property of the objector/ applicant. I do not find the statement hearsay.

 

The applicants have further  shown by evidence contained in  the affidavit of Edith  Ampaire in paragraph 9, 10, 11, and 12 that the value of the suit  property is tainted with procedural errors and illegalities and  the  value  of the property  exceeds the decretal  amount of  145, 277,500/= . This was not controverted by Respondents.

 

I also  find that contrary  to  what  is stated by  Mugobera  Sam  in paragraph 8 of his affidavit in reply, the log book  in respect of motor vehicle  UAY 706S is in respect  of  motor vehicle which is  listed under “F”  warrant  of attachment  as one of the vehicles to be attached.

 

It is therefore immaterial to rely  on the return of warrant  to disclaim  the  applicant’s prayer of  release of  UAY 706S from  attachment since  a court  order  was already  issued authorizing  its attachment and  can be attached any time on  such  authority.

From the finding above, I have been satisfied and I am in agreement with applicants that this application is proved as argued. This court is satisfied   that all motor vehicles listed in this application as Tata trucks UAU 166G, UAU 071G,UAU 077G, UAY 706S,  and UAU 078G are  the property of the objector/ applicant  or properties in which the holds substantial  interest  and  should therefore not be liable to  attachment.

The application is granted.

Given the history of this application and the equities involved, in the interest of justice each party will bear its own costs.

I so order.

 

 

Henry I. Kawesa

JUDGE

29.06.2017