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Uganda Judgment

Commercial Court of Uganda

Greenland v Salim Musoke (High Court Suit No. 13 of 2006) [2006] UGCommC 53 (19 October 2006)

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01

Holding and result

The court found that the applicant, Greenland Bank Ltd. (in liquidation), had established an equitable mortgage over the property by deposit of the duplicate certificate of title and lodgment of a caveat. The respondent defaulted on repayment of the overdraft facility, and the debt stood at UGX 9,750,964 as of 11th March 2004. The facts and evidence presented in the affidavits were sufficient to warrant the issuance of an originating summons. The registered proprietor, James Opiny Isaya, has an interest in redemption and must be served with the summons to participate in the proceedings. The court ordered that the originating summons be issued and served on all interested parties, including the registered proprietor.

Court disposition

originating_summons_granted

Orders

  • Originating summons to issue for foreclosure and sale of the mortgaged property.
  • A copy of the originating summons to be served on James Opiny Isaya, the registered proprietor.
  • Costs of the suit to be determined.

02

Material facts

Parties

Greenland Bank Ltd. (in liquidation)

Applicant

Salim Musoke Musisi

Respondent

James Opiny Isaya

Respondent

Amounts and remedies

  • Outstanding Debt as of 11th March 2004: UGX 9,750,964

03

Procedural history

  1. Posture

    Originating Summons / Ruling on Application

04

Questions and positions

Legal issues

Party arguments

Applicant
The applicant contends that it holds an equitable mortgage over land comprised in Kyagwe Block 110 Plot 1005 Seeta by deposit of the duplicate certificate of title and lodgment of a caveat. The respondent obtained overdraft facilities from the applicant and failed to pay within the agreed time, resulting in a debt of UGX 9,750,964 as of 11th March 2004. The applicant seeks foreclosure of the respondent's right to redeem and permission to sell the mortgaged land.
Respondent
The respondent did not file a substantive affidavit in reply. However, the registered proprietor, James Opiny Isaya, is interested in redemption of the property and should be served with the originating summons to enable him to participate in the proceedings.

05

Court’s reasoning

  1. 01

    Sections 7 and 8 of the Mortgage Act (Cap. 229)

    An equitable mortgage can be created by deposit of title deeds and lodgment of a caveat.

  2. 02

    Order 34 rules 3A (now Order 37 rule 4) of the Civil Procedure Rules

    Foreclosure is a remedy available to a mortgagee upon default by the mortgagor.

06

Ratio, limits and disposition

Ratio decidendi

The court found that the applicant, Greenland Bank Ltd. (in liquidation), had established an equitable mortgage over the property by deposit of the duplicate certificate of title and lodgment of a caveat. The respondent defaulted on repayment of the overdraft facility, and the debt stood at UGX 9,750,964 as of 11th March 2004. The facts and evidence presented in the affidavits were sufficient to warrant the issuance of an originating summons. The registered proprietor, James Opiny Isaya, has an interest in redemption and must be served with the summons to participate in the proceedings. The court ordered that the originating summons be issued and served on all interested parties, including the registered proprietor.

Obiter and limits

  • The registered proprietor of the land, James Opiny Isaya, is interested in its redemption and should be served with the originating summons.
  • The facts raised in the application and affidavits in support are sufficient to warrant originating summons to issue.

Court disposition

originating_summons_granted

  • Originating summons to issue for foreclosure and sale of the mortgaged property.
  • A copy of the originating summons to be served on James Opiny Isaya, the registered proprietor.
  • Costs of the suit to be determined.

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Commercial Court of Uganda

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Judgment text

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Source document

Commercial Court of Uganda

Judgment

[2006] UGCommC 53

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0013-2006}{\b\fs24\insrsid8151036\charrsid11096457 \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8151036 {\b\fs24\insrsid8151036\charrsid11096457 \par }\pard \qc \fi360\li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8151036 {\b\fs24\insrsid6371324\charrsid11096457 GREENLAND . \'85\'85\'85\'85\'85\'85.\'85\'85 APPLICANT/MORTGAGEE}{\b\fs24\insrsid8151036\charrsid11096457

\par }\pard \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8151036 {\b\fs24\insrsid8151036\charrsid11096457 \par }\pard\plain \s2\qc \li0\ri0\keepn\widctlpar\aspalpha\aspnum\faauto\outlinelevel1\adjustright\rin0\lin0\itap0\pararsid8151036 \b\fs28\lang2057\langfe1033\cgrid\langnp2057\langfenp1033 {\fs24\insrsid6371324\charrsid11096457 VERSUS}{ \fs24\insrsid8151036\charrsid11096457 \par }\pard\plain \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8151036 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid8151036\charrsid11096457 \par }{\b\fs24\insrsid6371324\charrsid11096457 SALIM MUSOKE MUSISI\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85 RESPONDENT}{\b\fs24\insrsid8151036\charrsid11096457 \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid6371324 {\b\fs24\insrsid6371324\charrsid11096457 OPINY ISAYA \par }\pard \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8151036 {\b\fs24\insrsid8151036\charrsid11096457 \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8151036 {\b\fs24\insrsid8151036\charrsid11096457 \par }\pard\plain \s3\qc \li0\ri0\keepn\widctlpar\aspalpha\aspnum\faauto\outlinelevel2\adjustright\rin0\lin0\itap0\pararsid8151036

\b\fs28\lang2057\langfe1033\cgrid\langnp2057\langfenp1033 {\fs24\insrsid8151036\charrsid11096457 BEFORE:\tab THE HON. JUSTICE \tab LAMECK N. MUKASA \par }\pard\plain \s15\ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8151036 \fs24\lang2057\langfe1033\cgrid\langnp2057\langfenp1033 {\insrsid8151036\charrsid11096457 \par }\pard\plain \s4\qc \li0\ri0\keepn\widctlpar\aspalpha\aspnum\faauto\outlinelevel3\adjustright\rin0\lin0\itap0\pararsid8151036 \b\fs28\ul\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\ulnone\insrsid8151036\charrsid11096457 RULING \par }\pard\plain \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8151036 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\insrsid8151036\charrsid11096457 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2957161 {\fs24\insrsid8151036\charrsid11096457 This application is brought }{\fs24\insrsid3544\charrsid11096457 by way of an O}{ \fs24\insrsid93224\charrsid11096457 riginating Summons under sections 7 and 8 of the Mortgage Act (Cap. 229) and Order 34 rules 3A (now Order }{\fs24\insrsid2957161\charrsid11096457 37 rule}{\fs24\insrsid93224\charrsid11096457 4}{ \fs24\insrsid2957161\charrsid11096457 ) of}{\fs24\insrsid93224\charrsid11096457 the Civil Procedure Rules whereby M/S Greenland Bank

Ltd. }{\fs24\insrsid12864973\charrsid11096457 (in liquidation) claims an interest in the land comprised in Kyagwe }{ \fs24\insrsid3489583\charrsid11096457 B}{\fs24\insrsid2957161\charrsid11096457 lock 110}{\fs24\insrsid12864973\charrsid11096457 }{\fs24\insrsid2957161\charrsid11096457 Plot 1005}{\fs24\insrsid12864973\charrsid11096457 Seeta as an equitable mortgage}{ \fs24\insrsid3489583\charrsid11096457 e}{\fs24\insrsid12864973\charrsid11096457 by way of deposit of the duplicate certificate of title and lodgment }{\fs24\insrsid15538746\charrsid11096457 of a caveat thereon under Instrument No. MK 068129 of 20}{ \fs24\super\insrsid14892119\charrsid11096457 th}{\fs24\insrsid14892119\charrsid11096457 }{\fs24\insrsid15538746\charrsid11096457 May 2003.}{\fs24\insrsid8151036\charrsid11096457 \par }{\fs24\insrsid15538746\charrsid11096457 \par The plaintiff intends to seek orders for: \par \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid15538746\charrsid11096457 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-360\li720\ri0\sl360\slmult1\widctlpar \jclisttab\tx720\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin720\itap0\pararsid2957161 {\fs24\insrsid15538746\charrsid11096457 Foreclosure of the mortgag}{\fs24\insrsid3489583\charrsid11096457 or}{\fs24\insrsid8806571\charrsid11096457 \rquote }{ \fs24\insrsid14892119\charrsid11096457

s}{\fs24\insrsid15538746\charrsid11096457 right to redeem the mortgaged property. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid15538746\charrsid11096457 \hich\af0\dbch\af0\loch\f0 2.\tab}Mortgage}{\fs24\insrsid3489583\charrsid11096457 e}{\fs24\insrsid15538746\charrsid11096457 /Plaintiff to be permitted to }{ \fs24\insrsid3489583\charrsid11096457 sell }{\fs24\insrsid15538746\charrsid11096457 all the mortgaged land upon foreclosure }{\fs24\insrsid3489583\charrsid11096457 in accordance }{\fs24\insrsid15538746\charrsid11096457 with the law. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid15538746\charrsid11096457 \hich\af0\dbch\af0\loch\f0 3.\tab}Costs of the suit. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2957161 {\fs24\insrsid15538746\charrsid11096457 \par The }{\fs24\insrsid1209749\charrsid11096457 application}{\fs24\insrsid15538746\charrsid11096457 is supported by an affidavit dated 31}{\fs24\super\insrsid15538746\charrsid11096457 st}{\fs24\insrsid15538746\charrsid11096457 March 2006 and a supplementary affidavit dated 24}{\fs24\super\insrsid15538746\charrsid11096457 th}{\fs24\insrsid15538746\charrsid11096457 May 2006 }{\fs24\insrsid2957161\charrsid11096457 both deponed}{\fs24\insrsid15538746\charrsid11096457 to by Ben Sekabira the Bank

}{\fs24\insrsid6371324\charrsid11096457 o}{\fs24\insrsid15538746\charrsid11096457 f Uganda coordinator Cooperative Bank (in liquidation). The evidence therein shows that the defendant obtained overdra ft facilities from the plaintiff which he has failed to pay within the agreed time and by 11}{\fs24\super\insrsid15538746\charrsid11096457 th}{\fs24\insrsid15538746\charrsid11096457 March 2004 the debt}{\fs24\insrsid2957161\charrsid11096457 stood at shs9,750,964/= . As security the defendant had deposited the title in respect of the described land pursuant to a power of attorn ey executed by the registered proprietor thereof one James Opiny Isaya. I find the facts raised in the application and the affidavits in support sufficient to warrant Originating Summons to issue and I so order. The said James Opiny Isaya as the registe red proprietor of the land is interested in its redemption. It is accordingly }{\fs24\insrsid12284444\charrsid11096457 ordered}{\fs24\insrsid2957161\charrsid11096457 that a copy of the Originating Summons, to be fixed for hearing }{ \fs24\insrsid3489583\charrsid11096457 by the registry,}{\fs24\insrsid2957161\charrsid11096457 should also be served on him. I }{\fs24\insrsid12284444\charrsid11096457 so}{\fs24\insrsid2957161\charrsid11096457 order.}{ \fs24\insrsid15538746\charrsid11096457 \par }{\fs24\insrsid2957161\charrsid11096457 \par \par

}{\fs24\insrsid12284444\charrsid11096457 \par \par }{\fs24\insrsid2957161\charrsid11096457 \par }\pard \qc \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid12284444 {\fs24\insrsid2957161\charrsid11096457 Hon, Mr. Lameck N. Mukasa \par }{\b\fs24\insrsid2957161\charrsid11096457 Judge \par }{\fs24\insrsid2957161\charrsid11096457 20}{\fs24\super\insrsid2957161\charrsid11096457 th}{\fs24\insrsid2957161\charrsid11096457 October 2006 \par \par }\pard \ql \li360\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid15538746 {\fs24\insrsid15538746\charrsid11096457 \par }\pard \ql \li0\ri0\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0 {\fs24\insrsid8151036\charrsid11096457 \par }}

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Authorities

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Mortgage Act (Cap. 229)

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Civil Procedure Rules Order 34 rules 3A (now Order 37 rule 4)

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