[2007] UGCommC 85
The court found that the applicants raised bona fide triable issues regarding the respondent's failure to exercise the right to sell the pledged land, the respondent's refusal to release the certificate of title for sale to willing buyers, and the circumstances under which the certificate of title registered in a...
Source-derived case information.
- Citation
- [2007] UGCommC 85
- Parties
- Plaintiff: R. L. Jain; Defendant: Kasozi G. Michael & Another
- Court
- Commercial Court of Uganda
- Jurisdiction
- Uganda
- Case Number
- High Court Miscellaneous Application No. 585 of 2007
- Procedural Posture
- Miscellaneous Application / Ruling on Application for Unconditional Leave to Appear and Defend
- Outcome
- application allowed
- Legal Topics
- Loan Agreements, Security Interest, Summary Procedure, Leave to Defend
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
R. L. Jain
Plaintiff
Kasozi G. Michael & Another
Defendant
Procedural Posture
Miscellaneous Application / Ruling on Application for Unconditional Leave to Appear and Defend
Legal Issues
- 1 What is the effect of the respondent's failure to exercise his right under the loan agreement to sell the land following the applicant's failure to pay off the loan within the agreed period of two months?
- 2 What is the effect of the respondent's failure to release the certificate of title for sale to ready and willing buyers?
- 3 Under what circumstances was the certificate of title, registered under the proprietorship of a stranger to the loan, received by the respondent as security for the loan to the applicants?
Ratio Decidendi
The court found that the applicants raised bona fide triable issues regarding the respondent's failure to exercise the right to sell the pledged land, the respondent's refusal to release the certificate of title for sale to willing buyers, and the circumstances under which the certificate of title registered in a third party's name was accepted as security. The respondent did not rebut the applicants' sworn averments, and the facts indicated genuine disputes requiring trial. The court held that the applicants are entitled to unconditional leave to appear and defend the suit, as the defence is not a mere denial but raises substantive issues of law and fact, particularly concerning the...
Court Disposition
application allowed
Orders
- Applicants are granted unconditional leave to appear and defend the suit.
- Applicants to file their written statements of defence within 14 days from the date hereof.
Full Case Text
Judgment text and source record
2 paragraphs
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L. }{\insrsid14571629\charrsid14571629 JAIN \'85}{\insrsid11799812\charrsid14571629 \'85\'85.\'85\'85\'85 \'85\'85\'85..\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85.. PLAINTIFF \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid11799812\charrsid14571629 \par }{\b\insrsid11799812\charrsid14571629 VERSUS \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\b\insrsid11799812\charrsid14571629 \par }\pard \qj \li360\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid14571629 {\insrsid11799812\charrsid14571629 K}{\insrsid10690899\charrsid14571629 AS}{\insrsid11799812\charrsid14571629 OZI G. MICHEAL & ANOTHER\'85 \'85\'85}{\insrsid12465950\charrsid14571629 \'85}{\insrsid11799812\charrsid14571629 \'85. DEFENDANTS \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid11799812\charrsid14571629 \par }{\insrsid12465950\charrsid14571629 \par }{\insrsid11799812\charrsid14571629 BEFORE: HON. MR. JUSTICE LAMECK N. MUKASA \par \par }{\insrsid12465950\charrsid14571629 \par }{\b\insrsid11799812\charrsid14571629 RULING: \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid467479\charrsid14571629 \par }{\insrsid12465950\charrsid14571629 \par }{\insrsid467479\charrsid14571629 This is an application brought by Notice of Motion under Order 36 rules 3 and 4 Orde}{\insrsid1773402\charrsid14571629 r}{\insrsid467479\charrsid14571629 52 rule}{\insrsid15802220\charrsid14571629 s}{ \insrsid467479\charrsid14571629 1 and 3 of the Civil Procedure Rules for or}{\insrsid10690899\charrsid14571629 ders}{\insrsid467479\charrsid14571629 that:-}{\insrsid10319906\charrsid14571629 \par }{\insrsid467479\charrsid14571629 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid1773402\charrsid14571629 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-390\li750\ri0\sl360\slmult1\widctlpar \jclisttab\tx750\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin750\itap0\pararsid14571629 {\insrsid1773402\charrsid14571629 The applican}{\insrsid10690899\charrsid14571629 t\rquote s}{\insrsid1773402\charrsid14571629 be granted unconditional leave to appear and defend this suit.}{\insrsid467479\charrsid14571629 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid5654526\charrsid14571629 \hich\af0\dbch\af0\loch\f0 2.\tab}}{\insrsid5654526\charrsid14571629 Costs}{\insrsid1773402\charrsid14571629 of this application be provides for. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid1773402\charrsid14571629 \par }{\insrsid12465950\charrsid14571629 \par \par }{\insrsid1773402\charrsid14571629 The grounds for this application are that: \par \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid1773402\charrsid14571629 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard \qj \fi-420\li780\ri0\sl360\slmult1\widctlpar \jclisttab\tx780\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin780\itap0\pararsid14571629 {\insrsid1773402\charrsid14571629 The Applicants/Defendants received a loan of Uganda Shs39}{\insrsid340414\charrsid14571629 , 000,000}{ \insrsid1773402\charrsid14571629 /= from the Respondent/Plaintiff at 15% interest per month for two months. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid1773402\charrsid14571629 \hich\af0\dbch\af0\loch\f0 (b)\tab}The 1}{\super\insrsid1773402\charrsid14571629 st}{\insrsid1773402\charrsid14571629 Applicant pledged his Certificate of Title to land comprised in Buddu }{\insrsid10690899\charrsid14571629 B}{\insrsid1773402\charrsid14571629 lock 101 Plot 24 at Kasambya }{\insrsid340414\charrsid14571629 Masaka as}{\insrsid1773402\charrsid14571629 security for the loan. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid10690899\charrsid14571629 \hich\af0\dbch\af0\loch\f0 (c)\tab}}{\insrsid10690899\charrsid14571629 It was expressly agreed by}{\insrsid1773402\charrsid14571629 both }{ \insrsid340414\charrsid14571629 parties that should}{\insrsid1773402\charrsid14571629 }{\insrsid10690899\charrsid14571629 the}{\insrsid1773402\charrsid14571629 said loan not be paid within two months, the }{\insrsid10690899\charrsid14571629 R}{ \insrsid1773402\charrsid14571629 espondent would go }{\insrsid10690899\charrsid14571629 a }{\insrsid1773402\charrsid14571629 head and sell the security without recourse to Courts of law. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid1773402\charrsid14571629 \hich\af0\dbch\af0\loch\f0 (d)\tab} The applicants are surprised that the Respondent has never recovered the initial loan amount, which has now attracted a huge interest. \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid1773402\charrsid14571629 \hich\af0\dbch\af0\loch\f0 (e)\tab}It is in the interest of justice that this Honourable Court grants this application. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid1773402\charrsid14571629 \par }{\insrsid7410750\charrsid14571629 The main suit was brought by summary procedure. The Respondent thereby seeks to recover shs82}{\insrsid340414\charrsid14571629 , 875,000}{\insrsid7410750\charrsid14571629 /= arising out of a loan of Shs39}{ \insrsid340414\charrsid14571629 , 000,000}{\insrsid7410750\charrsid14571629 /= advanced by the Respondent to the Applicant payable within two months }{\insrsid10690899\charrsid14571629 with interest }{\insrsid7410750\charrsid14571629 at a rate of 15% per month. \par \par The Applicant}{\insrsid10690899\charrsid14571629 s}{\insrsid7410750\charrsid14571629 are seeking }{\insrsid340414\charrsid14571629 leave under}{\insrsid7410750\charrsid14571629 Order 36 rule 3 and 4 of the CPR to defend }{ \insrsid340414\charrsid14571629 the suit}{\insrsid7410750\charrsid14571629 . The law is that }{\insrsid10690899\charrsid14571629 the }{\insrsid7410750\charrsid14571629 applicant for such leave must show by affidavit or otherwise that there is a bonafide }{\insrsid340414\charrsid14571629 triable issue}{\insrsid7410750\charrsid14571629 of fact or law. Any defence raised should be stated with sufficient particulars as to }{\insrsid5654526\charrsid14571629 appear}{\insrsid7410750\charrsid14571629 genuine and not generally vague statements denying liability. See}{\insrsid340414\charrsid14571629 :}{\i\ul\insrsid340414\charrsid14571629 Muluku}{\i\ul\insrsid340414 Interglob}{\i\ul\insrsid13394390\charrsid14571629 al Trade Agencies Vs Bank of Uganda (1985) HCB 65; Tororo District Administration Vs A}{\i\ul\insrsid5454819\charrsid14571629 n}{\i\ul\insrsid13394390\charrsid14571629 dalalap Industries Ltd (1997) IV KALR 126 \par \par }{\insrsid13394390\charrsid14571629 This }{\insrsid340414\charrsid14571629 application is}{\insrsid9912136\charrsid14571629 supported by an }{\insrsid340414\charrsid14571629 affidavit, deponed}{\insrsid9912136\charrsid14571629 to by the 1}{ \super\insrsid9912136\charrsid14571629 st}{\insrsid10690899\charrsid14571629 Applicant Kasozi }{\insrsid1319399\charrsid14571629 G}{\insrsid9912136\charrsid14571629 . Michael. In paragraphs 3 and 4 he state}{\insrsid10690899\charrsid14571629 s}{ \insrsid9912136\charrsid14571629 that he pledge}{\insrsid10690899\charrsid14571629 d his Certificate of T}{\insrsid9912136\charrsid14571629 itle to land at Buddu Block 101 Plot 24 at Kasambya Masaka a}{\insrsid10690899\charrsid14571629 s}{ \insrsid9912136\charrsid14571629 security for the loan. That it was agreed that should the said loan not be paid within two months}{\insrsid340414\charrsid14571629 , the}{\insrsid9912136\charrsid14571629 Respondent would sell the security without recourse to Courts of law. In paragraph 6 he expresses surprise }{\insrsid340414\charrsid14571629 that the}{\insrsid9912136\charrsid14571629 }{\insrsid340414\charrsid14571629 Respondent has}{ \insrsid9912136\charrsid14571629 never sold off the security to recover the loan amount, which he contends has }{\insrsid340414\charrsid14571629 now attracted}{\insrsid9912136\charrsid14571629 a huge interest. He fu}{\insrsid13065409\charrsid14571629 r }{\insrsid9912136\charrsid14571629 ther sta}{\insrsid13065409\charrsid14571629 t}{\insrsid9912136\charrsid14571629 es, in paragraph 5, that he asked for the certificate of }{\insrsid340414\charrsid14571629 title from}{\insrsid13065409\charrsid14571629 the }{\insrsid340414\charrsid14571629 Respondent so}{\insrsid13065409\charrsid14571629 that he could sell off the land to the }{\insrsid340414\charrsid14571629 ready and}{\insrsid13065409\charrsid14571629 willing buyers but that }{ \insrsid340414\charrsid14571629 the Respondent}{\insrsid13065409\charrsid14571629 refused to handover the certificate of title.}{\insrsid7410750\charrsid14571629 \par }{\insrsid13065409\charrsid14571629 \par The Respondent filed an affidavit in reply dated 17}{\super\insrsid13065409\charrsid14571629 th}{\insrsid13065409\charrsid14571629 September 2007. I note that the Respondent does not }{\insrsid340414\charrsid14571629 therein deny}{ \insrsid13065409\charrsid14571629 or }{\insrsid340414\charrsid14571629 rebut}{\insrsid13065409\charrsid14571629 any of the }{\insrsid5654526\charrsid14571629 applicant\rquote s}{\insrsid13065409\charrsid14571629 averments on oath in paragraph}{ \insrsid5454819\charrsid14571629 s}{\insrsid13065409\charrsid14571629 4, 5 and 6 of the affidavit in support.. \par \par In paragraph 4 of his affidavit in reply }{\insrsid340414\charrsid14571629 the Respondent}{\insrsid13065409\charrsid14571629 avers that the Certificate of Title deposited as security by the 1}{\super\insrsid13065409\charrsid14571629 st}{ \insrsid13065409\charrsid14571629 }{\insrsid340414\charrsid14571629 Applicant was}{\insrsid13065409\charrsid14571629 not }{\insrsid340414\charrsid14571629 registered in}{\insrsid13065409\charrsid14571629 the 1}{\super\insrsid13065409\charrsid14571629 st}{\insrsid13065409\charrsid14571629 Applicant\rquote s names. Ms Joy Ntambirweki, counsel for }{\insrsid340414\charrsid14571629 the Respondent}{\insrsid13065409\charrsid14571629 , submitted th}{\insrsid13518549\charrsid14571629 a}{ \insrsid5454819\charrsid14571629 t i}{\insrsid13065409\charrsid14571629 n the circumstances there was no way the }{\insrsid340414\charrsid14571629 Respondent could}{\insrsid13065409\charrsid14571629 sell the land. Annexture \'93A\'94 to }{ \insrsid340414\charrsid14571629 the Respondent\rquote s}{\insrsid13065409\charrsid14571629 affidavit is a photocopy of the Certificate of Title to}{\insrsid7281884\charrsid14571629 t}{\insrsid13065409\charrsid14571629 h}{ \insrsid7281884\charrsid14571629 e}{\insrsid13065409\charrsid14571629 land. The Registered Proprietor is Ausi Mugeny}{\insrsid5454819\charrsid14571629 i, who is none of the Applicant}{\insrsid13065409\charrsid14571629 s}{ \insrsid1319399\charrsid14571629 .}{\insrsid13065409\charrsid14571629 However annexture B is a blank Transfer}{\insrsid1319399\charrsid14571629 }{\insrsid340414\charrsid14571629 Deed signed}{\insrsid1319399\charrsid14571629 by the said Ausi }{ \insrsid13065409\charrsid14571629 Mugenyi. It would appear that this blank transfer deed was }{\insrsid13518549\charrsid14571629 intended}{\insrsid13065409\charrsid14571629 to facilit}{\insrsid1319399\charrsid14571629 ate}{ \insrsid13065409\charrsid14571629 the }{\insrsid340414\charrsid14571629 sale of}{\insrsid13518549\charrsid14571629 }{\insrsid13065409\charrsid14571629 the land. \par \par The above facts }{\insrsid7281884\charrsid14571629 raise th}{\insrsid1319399\charrsid14571629 r}{\insrsid7281884\charrsid14571629 ee issues:-}{\insrsid13065409\charrsid14571629 \par }{\insrsid7281884\charrsid14571629 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid7281884\charrsid14571629 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-360\li720\ri0\sl360\slmult1\widctlpar \jclisttab\tx720\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin720\itap0\pararsid14571629 {\insrsid7281884\charrsid14571629 What was the effect of the Respondent}{\insrsid1319399\charrsid14571629 \rquote s}{\insrsid7281884\charrsid14571629 failure to exercise his right under the loan agreement to sell the land }{\insrsid340414\charrsid14571629 following the}{\insrsid7281884\charrsid14571629 Applicant\rquote s failure to pay off the loan }{\insrsid1319399\charrsid14571629 within the agreed period of }{\insrsid5454819\charrsid14571629 two months?}{\insrsid7281884\charrsid14571629 \par }\pard \qj \li360\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid14571629 {\insrsid5454819\charrsid14571629 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid7281884\charrsid14571629 \hich\af0\dbch\af0\loch\f0 2.\tab}}\pard \qj \fi-360\li720\ri0\sl360\slmult1\widctlpar \jclisttab\tx720\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin720\itap0\pararsid14571629 {\insrsid7281884\charrsid14571629 What was the effect of }{\insrsid12465950\charrsid14571629 the Respondent\rquote s}{\insrsid7281884\charrsid14571629 failure to release the Certificate of Title for sell to ready and willing buyers}{\insrsid1319399\charrsid14571629 ?}{\insrsid7281884\charrsid14571629 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid7281884\charrsid14571629 \par {\listtext\pard\plain\lang1033\langfe1033\langnp1033\langfenp1033\insrsid7281884\charrsid14571629 \hich\af0\dbch\af0\loch\f0 3.\tab}}\pard \qj \fi-360\li720\ri0\sl360\slmult1\widctlpar \jclisttab\tx720\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin720\itap0\pararsid14571629 {\insrsid7281884\charrsid14571629 Under }{\insrsid12465950\charrsid14571629 wh}{\insrsid1319399\charrsid14571629 at}{\insrsid12465950\charrsid14571629 circumstances}{\insrsid7281884\charrsid14571629 was the Certificate of Title, registered under }{\insrsid12465950\charrsid14571629 the proprietorship}{\insrsid7281884\charrsid14571629 of a stranger to the loan received by the Respondent as security for the }{\insrsid12465950\charrsid14571629 loan to}{\insrsid5454819\charrsid14571629 the Applicants?}{\insrsid7281884\charrsid14571629 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid7281884\charrsid14571629 \par In his submission Mr. Matovu, Counsel for the applicant}{\insrsid1319399\charrsid14571629 ,}{\insrsid7281884\charrsid14571629 argued that the Respondent}{\insrsid1319399\charrsid14571629 \rquote }{\insrsid7281884\charrsid14571629 s failure to }{ \insrsid1319399\charrsid14571629 sell }{\insrsid7281884\charrsid14571629 the land had resulted into the accumulation of the interest which }{\insrsid1319399\charrsid14571629 he }{\insrsid7281884\charrsid14571629 now demands. The loan was of Shs39}{ \insrsid340414\charrsid14571629 , 000, 00}{\insrsid7281884\charrsid14571629 /= }{\insrsid340414\charrsid14571629 advanced on}{\insrsid7281884\charrsid14571629 5}{\super\insrsid7281884\charrsid14571629 th}{\insrsid7281884\charrsid14571629 Octobe r 2006 for a period of two months at a monthly interest of 15}{\insrsid1319399\charrsid14571629 %}{\insrsid7281884\charrsid14571629 . There is an issue whether in the circumstances }{\insrsid1319399\charrsid14571629 the }{ \insrsid7281884\charrsid14571629 Respondent is entitled to the accumulated interest. \par \par In view of the above identified traible issues this application is allowed. Applicants are to file }{\insrsid340414\charrsid14571629 their Written}{\insrsid7281884\charrsid14571629 Statements }{\insrsid340414\charrsid14571629 of Defence within 14}{ \insrsid7281884\charrsid14571629 days from the date hereof. The Applicants are awarded costs of this application}{\insrsid1319399\charrsid14571629 . }{\insrsid7281884\charrsid14571629 I so order. \par \par \par \par \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid7281884\charrsid14571629 \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid7281884\charrsid14571629 HON. MR. JUSTICE LAMECK N. MUKAS}{\insrsid1319399\charrsid14571629 A}{\insrsid7281884\charrsid14571629
\par }{\b\insrsid7281884\charrsid14571629 JUDGE \par }{\insrsid7281884\charrsid14571629 25/10/2007 \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid7281884\charrsid14571629 \par \par \par }{\insrsid13065409\charrsid14571629 \par \par }{\insrsid11799812\charrsid14571629 \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid11799812\charrsid14571629 \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid14571629 {\insrsid6754790\charrsid14571629 \par }}