Court name
HC: Civil Division (Uganda)
Judgment date
1 November 2017

Namaganda v Kisule & 2 Ors (Miscellaneous Application-2017/83) [2017] UGHCCD 139 (01 November 2017);

Cite this case
[2017] UGHCCD 139
Short summary:

Civil Procedure

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT MPIGI

MISCELLANEOUS APPLICATION NO. 83 OF 2017

(Arising from civil suit No. 61 of 2017)

NAMAGANDA ALLEN::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::APPLICANT

VERSUS

  1. KISULE ASTOCIO
  2. CENTENARY RURAL DEVELOPMENT BANK::::::::::::::RESPONDENTS
  3. MULIJU GENERAL AGENCIES & COURT BAILIFFS

 

BEFORE:  HON. JUSTICE WILSON MASALU MUSENE

RULING

The Applicant, Namaganda Allen, filed this application by Notice of Motion under  O. 41 rules 1,2 & 3  of the Civil Procedure Rules  and Section 98 of the Civil Procedure Act against the Respondents Kisule Astocio, Centenary Rural Development bank  and Muliju General Agencies and court bailiffs.  The Applicant was seeking for orders that:-

  • A temporaryinjunctiondoth issue restraining the Respondents,theiragents/servants or employeesand any one rightfully claiming under them from selling the mortgaged property at Nakabotongo on Block 212 Plot 122until Civil suit number61 of2017 is determined
  • Costs of the application beprovided for.

The applicant  was represented by M/s  Lubega Matovu & Co. Advocates, while the  2nd and 3rd  Respondents were represented by M/s  Kalenge, Bwanika Sawa & Co. Advocates.

 

The grounds in support of the application are detailed in the affidavit of the applicant, Allen Namaganda, but briefly are:-

  • That the applicant made major contributions at acquiring of both the matrimonial home and the mortgaged property at Nakabotongo to which the first Defendant mortgaged with out her knowledge and consent.
  • That the applicant proceeded to make contributions to construct a house at Sseguku on the said property which was mortgaged by the firstrespondent to the second Respondent without informing the applicant and subsequentlylosingtheir matrimonial home.
  • That the applicantfiled civil suit No. 61 of 2017against the Respondents in this honourable courtseeking among others a permanent injunction and thesuit had high chances of success.
  • That unless the temporary injunctionorder is granted, the Applicant is likely to suffer irreparable damageand loss which cannot be atoned by way of award of damages becausethe Respondents are dispossessing herof the property where she has an interest hencecivil suit No. 61 of2017will be rendered nugatory.

The  2nd  and 3rd  respondents filed an affidavit in reply sworn by Ronald  Sekidde  the  Senior  legal manager.  Emphasis  was on paragraphs 3,4,5,6,7 and 9.  They are reproduced herein in below:-

3)  That the applicant  is a stranger to the suit property and she has no cause of action against the  2nd and  3rd  Respondents as she holds no interest at all in the suit property

4)  That the  1st Respondent  willfully  pledged  the suit property  for a loan to the  2nd Respondent on the 13th day of May, 2013  and he presented his spouse  by the names of Nakato Sarah who duly  consented to the loan transaction  and to the pledge and ultimate sale of the mortgage property in the event of default.  (A  copy of the loan offer letter and the Banking facility  agreement is attached and marked  “A” and “B”  respectively.

5)  That the  1st Respondent was given opportunities on several occasions to  redeem the mortgaged property  to the extent  of executing a consent judgment  with the  2nd Respondent whose terms  he still failed to honour.  .

6)  That in specific  reply to paragraph 2,3, and 4  of the affidavit in support, the averments therein are false  and the Applicant is not a wife of the  1st Respondent but merely  an imposter  stationed to frustrate the bank from  exercising  its right to fore close the mortgage and liquidate the property to recover the loan monies.

7)  That  in reply  to paragraph 5 of the affidavit in support, the Respondent  advertised  the suit property in fulfillment of the consent judgment entered in civil suit No. 807 of 2015  after the plaintiff  breached the terms of payment agreed between the parties.

9)  That in reply   to paragraph 10  of the affidavit in support, it is in the interest of justice that this application be dismissed and the  2nd respondent be allowed to continue with  foreclosure  considering the fact that the  Respondent loaned  colossal sums of money to the 1st Respondent in 2013, which sums have not been paid to the present day.

Counsel  for the applicants submitted that the  1st, 2nd and 3rd  Respondents are about to sell the property on Block 212 Plot 122 with all developments  thereon in accordance with the consent Judgment in Civil Suit No. 807 of 2015 .  The applicant’s contention is that as a wife and  contributor to the capital used to buy the matrimonial property and business premises, that the 1st Respondent tricked her to move out of the matrimonial home so that she supervises coffee business in Gomba.  Reference was made  to  the advert in the  Saturday Monitor  where  the property in question has been Advertised for sale which will result  into irreparable damage to applicant.   It was  further submitted that: Further, that the first Respondent called upon the applicant to contribute on the purchase of machinery  and sold her land in Bukulula.  She gave  him the money to add  to the business and also the family house in Katale.  That for the last three years the applicant has been giving money to the  1st Respondent or on his account.  The Applicant  has also  been looking over the building, contributing both financial  material, not  forgetting the intangible and unquantifiable contributions added as the lawful wife.

Counsel  submitted that in view of the holding in American Cynamid Company vs Ethicon Limited [1975] All E.R 504, a serious  question of law has been raised,  hence the  need to maintain the  status quo.

Counsel for the  Applicant  concluded that the entire process of acquisition of the loan is questionable by the applicant, including mortgaging  the family  property  in question.

N reply, counsel for  2nd  and  3rd Respondents submitted that the facts to the application are that the 1st Respondent borrowed  Ug shs 180,000,000/=(Uganda shillings one hundred  eighty  million) from the 2nd Respondent (hereinafter called “the bank”) on the  13th May, 2013 .  The said loan was repayable within a period of 24 months  at an interest  rate of 23 % p.a  which was payable in arrears on a monthly basis.

The 1st Respondent provided property comprised in private Mailo register, Busiro Block 379, Plot 598 at Seguku Katale and Block 212 Plot 122 Mengo, Gomba at Nakabotongo and also presented his spouse by the names of Nakato Sarah who duly  consented to the loan transaction and to the pledge and ultimate  sale of the mortgage property in the event of default.

Counsel  added that the  1st Respondent  defaulted on the servicing  of his loan installments and the  2nd Respondent Bank sold the property  comprised  in Busiro Block 379, Plot 598 at Seguku Katale at Ug. Shs 80,000,000/=  which proceeds were used to offset the 1st Defendant’s indebtedness and to clear recovery costs leaving an outstanding amount of Ug.  Shs 157,678,074/=.

Further  submissions were that the 1st Respondent  thereafter sued the  2nd Respondent vide H.C.C.S NO. 807 of 2015, Kisule Astacio v Centenary  Bank Ltd, wherein he prayed for inter alia a permanent  injunction  restraining the Respondents from disposing off the suit property  comprised in Block 212 Plot 122 at Nakabotongo Gomba  (hereinafter called the suit property).

And that by the consent of the 1st and  2nd Respondents in the instant suit,  on the 8th day of July  2016, judgment was entered in the bank’s favour  for a sum of Ug. Shs 157,678,074/=.  By virtue  of the same consent judgment  (which is attached and marked “C”  on the  2nd  and 3rd Defendant’s affidavit in reply to the instant application),  the bank  agreed to  lift  foreclose on the suit property  and it was further agreed that the 1st Respondent should pay  the entire outstanding  sum by  the 31st day of December, 2016.

Counsel concluded that when  the 1st Respondent  still breached the terms of the consent judgment  and in April, 2017, the  bank decided  to advertise the suit property vide a warrant to attach and sale the said property  (Annexture “A” of the Plaintiff’s affidavit in support of the application).

The issue before court is whether this application for temporary injunction should be granted to restrain the  2nd and 3rd Respondents from selling the mortgaged property at Nakabotongo on Block 212 Plot 122.   The law on granting of temporary injunctions  is settled.  In E.L.T Kiyimba Kagwa vs Haji Abdu Nasser  Katende [1985] HCB 43, Odoki J ( as he then was)  laid down conditions  upon  which a temporary injunction should be granted as follows:

  • The applicant must show a prima facie case with a probability of success.
  • The injunction will not normally be granted unless the applicant might otherwise suffer irreparableinjury which would not adequately be compensatedby an award of damages.
  • If Court is in doubt, itwould decide an application on the balance of convenience.

As far as the matter of prima facie case is concerned, the applicant in the instant application claims that the  suit  property  at Nakabotongo on Block 212 Plot 122 is matrimonial property,  and that the applicant as a wife of the  1st Respondent has an interest therein that merits the protection of this court.

Notwithstanding the validity of the marriage between applicant and 1st Respondent, which I shall not dwel on at this stage, the property in question is a subject of a mortgage. Counsel for the  2nd and 3rd  Respondents has quoted  Regulation 13 (10) of the mortgage regulations whereby if a spouse or agent of a mortgagor or any other interested partly  wishes to adjourn a sale by public auction, he/she  has to pay a security deposit of 30% of the forced sale value of the mortgaged property.

In this case, the Applicant would have to pay the 30% of the outstanding sum of UGX 157,678,074, which is UgX 47,303,422/=. In that regard, the present application would be incompetent.  Secondly, in Commercial  Division H.C.C.S NO. 80 of 2015, Kisule Astacio vs Centenary Bank LTD, consent Judgment was entered in favour of  Centenary  Bank Ltd for the sum of UGX 157,678,074/=.  Pursuant to that  consent  Judgment, the Bank agreed to list fore closure on the suit property on agreement that 1st Respondent  now pays the outstanding sum by 31.12.2016.  As counsel for  2nd Respondent submitted, it was upon the  1st Respondent’s breach of the terms of the consent judgment that the Bank decided to advertise the suit property for sale.  So whereas counsel  for the Applicant has submitted in rejoinder that the applicant is not seeking  to adjourn the sale of the mortgaged property but to stop  it all together, the practical effect of granting the Temporary  injunction being sought  now would be to sabotage the consent Judgment entered into by the 1st Respondent, Kisule Astacio, (who is husband of Applicant Namaganda Allen) and Centenary Rural  Development  Bank.  This court  cannot be a party to such frivolous and vexatious proceedings where a husband  has entered into a consent of judgment and the wife purportedly files another civil suit in this court  which would amount to setting aside or varying the consent  judgment in Commercial Division HCCS NO. 807 of 2015.  That is not how the High Court  anywhere  in this country works.  The best option for the applicant would have been to file an application for review in H.C.C.S NO. 807 of 2015 or institute  objector proceedings therein.  The filing of Mpigi H.C.C.S NO. 61 of 2017 out of which this application arose was in the circumstances misconceived, frivolous and  vexatious.

I accordingly  find and hold that there is no prima facie case made out, warranting the grant of a temporary injunction.

This Court , which is not only a Court of law but also a  Court of Justice cannot allow a husband and wife to play hide and seek games after borrowing  money from the  Bank, entering a Consent  Judgment  and then rushing from one Court  to another to delay  or postpone payment.

The application is accordingly  hereby dismissed with costs.

 

…………………….

W. Masalu Musene

Judge

01/11/2017