[2010] UGCA 58

### THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA,

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### AT KAMPALA

CORAM: HON. JUSTICE L. E. M. MUKASA-KIKONYOGO, DCJ

HON. JUSTICE C. N. B. KITUMBA, JA

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HON. JUSTICE S. B. K. KAVUMA, JA

# CIVIL APPEAL NO. 39 OF 2OO7

TROPICAL AFRICA BANK LTD APPELLANT

#### VERSUS

GRACE WERE MUHWANA RESPONDENT

lArising from the judgment of the High Court sifting at Kampala, given by Justice J. B. Katutsi, on llth Aprit 2006 in Civil Suit No. 1022 of 1997)

JUDGMENT OF HON. JUSTICE L. E. M. MUKASA-KIKONYOG O. DCJ This appeal is against the judgment of the High Court delivered on 1110412006 at Kampala in Civil Suit No. 1022 of 1997.

The appellant, Tropical Africa Bank Ltd., was found liable to the Respondent by the High Court and was ordered to pay costs. The appellant appealed to the Court of Appeal of Uganda at Kampala against the decision of the trial court.

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## Backqround

Grace Were Muhwana (PW1) was the plaintiff in the suit before the High Court, and is the respondent in this appeal. The respondent filed the suit in the High Court, naming two defendants: Tropical Africa Bank Ltd., and her husband, Christopher Were Muhwana. She was challenging the sale of a parcel of land situated in Ntinda, Kampala, known as LRV 1289 Folio 15 Plot No. Misc.437.

She and her husband had purchased the disputed plot for constructing matrimonial home. The certificate of title to the suit land was registered on 0410111984, but only in the name of her husband as the registered proprietor. The registration of the title deed in the name of her husband alone was on mutual trust and for convenience. However, "there was no written arrangements between the respondent and her husband concerning the property."

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Subsequent to the purchase of the suit property, the respondent and her husband constructed their matrimonial home thereon. The respondent claimed that she made substantial capital contributions to the construction of the home, shouldering "about 45% of the cost." She claimed that whilst her husband "was supervising the workers she was paying for the wages." Additionally, Paddy Sendegeya (PW2) testified that pursuant to the respondent's instructions, he transported various home construction materials to the freshly-cleared plot in question. PW2 stated that the respondent "paid me for my services" rendered in connection with the construction of the matrimonial home.

On 18/01/1993, Christopher Were Muhwana executed ^a document entitled "Power of Attorney" that purported to appoint M/S Group Procurement Limited (hereinafter "the company") as his lawful attorney and to act on his behalf with respect to the property in question. Signing powers of attorney in favor of the company conferred upon them the authority "to exercise the

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Procurement Limited to borrow money and even to encumber the property in question via a mortgage or other instrument so as to securitize re-payment ("And ! authorize the said Attorney to borrow from any bank upon such terms as . . . my Attorney shall think fit and for purposes of securing the repayment of any such monies to sign and deliver a mortgage or charge upon the said land . . . ."). The respondent testified to not having any knowledge whatsoever of such events ("! don't know about Group Procurement Ltd."). rights in the interest of the land in question . ." Furthermore, Mr. Were Muhwana authorized M/S Group

Another agreement entitled "Mortgage" was entered into on 0210211993 between The Libyan Arab Uganda Bank for Foreign Trade & Development and three sureties: Christopher Were Muhwana, Nathan Nabeta, and Dr. Fred Kanyuka. On 0410211993, the agreement was lodged in the Ministry of Lands as lnstrument No. 255985. Such document requested the bank to make advances to the company, a limited liability company

incorporated in Uganda and having its registered office situated in Jinja Uganda, at P. O. Box 1520, Spire Rd.

Apparently the interests of The Libyan Arab Uganda Bank for Foreign Trade & Development in the property as mortgagee passed to the appellant, Tropical Africa Bank Ltd. However, this fact was not ascertained by either the learned trial judge or learned counsel for the parties. Hereinafter, assuming the two banks are the same entity, we shall refer to both as "the bank."

On 2810811995, the appellant served Mr. Were Muhwana with a notice of default for failing to repay his debts to the appellant pursuant to the mortgage agreement. On 2410411997, the respondent discovered a notice printed in the New Vision newspaper. lt alerted readers that Kabu Auctioneers & Court Bailiffs, pursuant to instructions from the appellant, planned to auction the land in question on 2610511997 unless the debt was fully paid within thirty days of the date of the notice. Upon showing her husband the notice, "he told her not to worry."


However, the respondent alleges that it was "only after I had discovered the advert that my husband said he had given the title to a friend."

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Only later, after the husband alerted the respondent that the property WAS being auctioned, did the respondent visit the Registry of Lands and Surveys and discovered that the plot had been mortgaged. Accordingly, on 2310611997, the respondent lodged a caveat with the Registrar of Titles, claiming "an equitable interest in the . . . land as the wife of the Registered Proprietor." As such, she sought to "forbid the registration of any person as transferee or Proprietor of land or any instrument affecting the said estate or interest unti! after notice of such registration is given to me or unless ^I consent in writing . . ."

ejected from her home by auctioneers. The home was sold to Afzal Kifan and Hassan Somji, who were registered as owners on Nonetheless, the respondent alleges that on 2810911997, she was

1111211998, brrt "the house is not yet occupied because of the caveat."

With the caveat in place, the respondent subsequently filed this suit in the High Court against both the appellant and her husband. The trial Court decided the case in favour of the respondent. lt held that she had proved her equitable interest in the suit property. The sale of the suit property could not succeed because there was no valid mortgage in place and hence nothing to foreclose. The sale of the property was irregular and without any support. The learned trial judge held that the purported eviction of the respondent was unlawful and could not be left to stand.

Aggrieved by the judgment of the trial court, the appellant lodged this appeal to this Court on the three grounds contained in the memorandum of appeal below.

However, it should be noted that the appellant opted to appeal against the respondent alone. Her husband who was a second

defendant in the High Court was not joined as a party to this appeal.

# Grounds of Appeal

Appellant's appealwas based on the following three grounds: -

- that the suit property was irregularly mortgaged to the Appellant. 1. The Learned Trial Judge erred in law and in fact in holding - 2. The Learned Trial Judge erred in law and in fact in holding that the suit property was not validly sold by the Appellant. - 3. The Learned Trial Judge erred in law and in fact in holding that the Appellant unlawfully evicted the Respondent from the Suit property.

Court was prayed to allow the appeal and award costs to the appellant.

The appellant was represented by Mr. Siraji Ali, whilst Mr. Bosco Ssozi appeared for the respondent. Both Counsel for the parties argued all the three grounds of appeal together.

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As a preliminary matter, counsel for the respondent raised objection to the competence of the appeal, which he pointed out had been filed out of time.

the defect had been cured by grant of leave for extension of time. The objection was withdrawn when the court was informed that

# Submissions bv Gounsel for the appellant

After a recitation of the facts, the gist of the submissions of the learned counsel for the appellant was that the learned trial judge improperly ruled that there was no mortgage and, therefore, no loan. The mortgage document between Mr. Were Muhwana as surety and the appellant properly complied with all the requirements of a valid mortgage as set forth in Section 1 of the Mortgage Act. Counsel for the appellant, citing Essays in African Banking Law and Practice, noted that the mortgage instrument was properly signed by the registered proprietor of the land. The Registration of Titles Act, and was identical in format to the security that the appellant could have seized for re-payment of the proprietor was, moreover, properly registered pursuant to the

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document set forth in Schedule 11 of the Registration of Titles Act. On a related note, subsequent to execution of the mortgage instrument, the same was properly stamped and registered, and the appropriate fees were paid.

However, counsel for the appellant disputed the learned trial judge's conclusion that the mortgage agreement between the parties was not a mortgage because some of the parties to the agreement were described as sureties. The learned trial judge held that one could not sign as a surety and mortgagor in the same document. Learned counsel cited specific language in the mortgage agreement to argue that the relationship between the parties was that of principal debtor and mortgagee. Counsel contented that it was possible to be both a surety and mortgagor in the same agreement.

lf the learned trial judge had properly evaluated the mortgage document at issue, he would have found the existence of a mortgage and upheld the subsequent foreclosure and sale of the

property. Accordingly, counsel for the appellant prayed that the appeal be allowed.

ln reply, Mr. Ssozi opposed the appeal. First, the respondent established an equitable interest in the property. The respondent's equitable interest was not in dispute, as evidenced by the testimony of PW2 before the learned High Court judge. Therefore, Mr. Were Muhwana could neither enter into an agreement conferring powers of attorney as to the premises or mortgage the suit property. The proper mortgagor would have been M/S Group Procurement Limited, the borrower of the money, not the respondent's husband.

ln that vein, learned counsel for the respondent argued that the completed a loan application, and received powers of attorney from the respondent's husband. Counsel argued that the document purporting to be a mortgage was signed by Mr. Were Muhwana, but he did not actually receive any of the proceeds mortgage was irregularly signed and sold. The company

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the company did. The mortgage was, therefore invalid, for one cannot be both a guarantor and a borrower.

Moreover, learned counsel for the respondent submitted that even if the respondent's husband had the right to mortgage the property, he could not have signed the mortgage deed. The three sureties mentioned did not sign for the company. Furthermore, there was no compliance with proper witnessing requirements. Signing should have been done in the presence of two officials. Referring to learned counsel for the appellant's authorities, learned counsel for the respondent noted that the mortgagor must sign the mortgage deed. On that ground alone, counsel for the respondent stated that the learned trial judge properly held that foreclose upon or sell the property. Accordingly, counsel prayed that the court dismiss the appeal. there was no mortgage to a borrower, and thus no right to

ln rebuttal, learned counsel for the appellant stated that it was incorrect to assert that the mortgagor was M/S Group

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Procurement Limited. The mortgage deed clearly stated the proper relationship of the parties as principal debtor and lender. Counsel also referred court to case law, noting that agreements between one spouse and a third party. Moreover, at the time of execution of the mortgage, the requirement of spousal consent had not come into force. The appellant is a third party so far as the equitable interest is concerned, and such an interest cannot appellant reiterated his earlier submissions and prayers. between husband and wife as to property do not affect mortgages serve to defeat the registered interest of the appellant. The

We listened to the submissions of both Mr. Siraji Ali, learned counsel for the appellant, and Mr. Bosco Ssozi, learned counsel for the respondent, and considered the arguments advanced by both sides. I now proceed to evaluate the evidence adduced before the trial court and to determine the appeal. I propose to adopt the same approach as counsel for both parties and consider the three grounds together. The issues raised in this appeal are mainly governed by the Land Act, which came into force on 2'd July 1998. The relevant provisions are under Section 39 and read as follows: -

(1) No person shal!-

(a) sell, exchange, transfer, pledge, mortgage or lease any land;

(b) enter into any contract for the sale, exchange, transfer, pledging, mortgage or lease of any land; or

(c) give away any land inter vivo, or enter into any transaction in respect of land -

(i) in the case of land on which the person which they derive their sustenance, except with the prior written consent of the spouse . . . ordinarily resides with his or her spouse and from

(2) Subsection (1) shall not apply to any transfer of land by a mortgagee in exercise of powers under the mortgage.

Section 39(a) of the Land Act goes on to state that "where the transaction is entered into by a purchaser in good faith and for value without notice that subsection (1) has not been complied with, the transaction shall be void; but the purchaser shall have the right to claim from any person with whom he or she entered into the transaction any money paid or any consideration given by him or her in respect of the transaction."

Notice can be "actual or constructive notice." Land Act Section 39(9Xa). Furthermore, a "purchaser" means ^a mortgagee . . . or any other person who acquires an estate or an interest or right in the land." Land Act Section 39(9Xb).

Moreover, under Section 39(7) of the Land Act, "the spouse . . ., not being the owners of any land to which subsection (1) applies, may lodge a caveat on the certificate of title or certificate of customary ownership of the person who is the owner of the land to indicate that the property is subject to the requirement of consent under subsection (1)."

As to the concept of a mortgage, a "mortgage" means any mortgage, charge, debenture, loan agreement or other encumbrance, whether legal or equitable which constitutes a charge over an estate or interest in land in Uganda or partly in Uganda and partly elsewhere and which is registered under the Act . . ." The Mortgage Act Section 1.

Related to the above, the Registration of Titles Act (1924) defines a "proprieto/' as the "owner . . . whose name appears or is entered as the proprietor of the land . . . or mortgage in the Register Book. . . ." Registration of Titles Act Section 1(7)(l). signing a mortgage of the land in the Form of the Eleventh Schedule to this Act." Registration of Titles Act Section 115. The mortgagor covenants that he "wil! pay the principal money on the day appointed in the mortgage . . . ." Registration of Titles Act Section 118. "The proprietor of any land . . . may mortgage that land by

The Registration of Titles Act further provides that "an equitable mortgage of land may be made by deposit by the registered proprietor of his . . . certificate of title . . . ." Registration of Titles Act Section 129. An equitable mortgage shall "be deemed to create an interest in land," and "shall cause ^a caveat to be entered . . . ." Registration of Titles Act Section 129(1), (3). As to such a caveat, "any person claiming any . . . registration of . . . any instrument affecting that . . . interest until after notice of the intended registration or dealing is given to the caveator . . . ." Registration of Titles Act Section 139. interest in land . . . may lodge a caveat . . . forbidding the

The court is aware that a 2009 bill acted "to repeal and replace the Mortgage Act . . . ." The Mortgage Act, 2009, Section 1. Section 5(1) of the Mortgage Act, 2009, notes that "notwithstanding section 39 of the Land Act, a mortgage of a matrimonial home, including a mortgage on customary land of a matrimonial home is valid if - (a) any document or form

used in applying for the mortgage is signed by or there is evidence from the document that it has been assented to by the mortgagor and the spouse or spouses of the mortgagor living in that matrimonial home . . . ."

Furthermore, the Mortgage Act, 2009, section 5(2)(a), (b) outlines duties of the mortgagor and the mortgagee:

For the purposes of subsection (1) -

(a) an intending mortgagee shall take reasonable steps to ascertain whether an intending mortgagor is married and whether or not the property to be mortgaged is a matrimonial home;

(b) an intending mortgagor shall make full her marital status and whether or not the property to be mortgaged comprises the matrimonial home . disclosure to the intending mortgagee as to his or

The ttlortgage Act, 2009, contains further provisions outlining what constitutes proper consent by the mortgagor's spouse. However, the Mortgage Act, 2009, as well as the Land Act, 1998, do not apply to the dispute at hand as the mortgage deed was signed in 1993, prior to the enactment of both acts. Although repealed in 2009, The Mortgage Act was the relevant law applicable at the material time.

On the first ground the pertinent question to consider is whether as surety and the appellant. Counsel for the appellant criticized the trialjudge for holding that the document in question was not a mortgage agreement as stated in his judgment that ("A proper construction of exhibit 'D3' shows clearly that this document cannot be passed for a mortgage. lf any thing it is a surety deed."). High Court Judgment, p. 5. ln conclusion, the learned trial judge stated that "there being no mortgage there was nothing the [appellant] could have foreclosed." High Court Judgment, p. 5. there was a proper mortgage between the respondent's husband

I now proceed to examine the relevant language of the purported mortgage agreement dated 021021 1993, titled "MORTGAGE ," and its first words are that 'THIS LEGAL MORTGAGE is made the 2ND day of FEBRUARY . . . ." The agreement is made between appellant. The sureties "are registered as a proprietor of the lands . . . ." The three plots of land are listed in the agreement only one is the land relevant to the current dispute. lmportantly, the agreement states that "sureties have requested the Bank to make advances to M/S GROUP PROCUREMENT LIMITED . . . by way of a loan by permitting the company to overdraw its current account with the Bank or by giving to the Company other financial accommodation from time to time to an amount not exceeding shillings 50 Millionl= . . . ." sureties - one of whom is Christopher Were Muhwana - and the

Further, as rightly argued by the learned counsel for the appellants, the mortgage agreement between the sureties and the bank conforms to the requirements of the Registration of Titles Act, specifically the form set forth in the Eleventh Schedule.

Mirroring the schedule, the sureties are initially identified as registered proprietors of the land, and the land is identified as security for the mortgage. Furthermore, the document has been signed by the registered proprietors of the land pursuant to the authority cited by counsel for the appellant. See Grace Patrick Tumwine-Mukubwa, Essays in African Banking Law and Practice ("The mortgage must be signed by the registered proprietor ."). Additionally, the document is correctly stamped, properly lodged for registration, and all appropriate fees have been paid to the Ministry of Land, Housing, and Urban Development.

The aforesaid not withstanding, the critical question regarding the nature of the mortgage agreement is whether one can act both as a surety and a mortgagor in the instrument itself. To the learned counsel for the respondent one cannot.

On the contrary to the respondent the proper mortgagor should have been the company, the actual borrower of the funds. This

was upheld by the learned trial judge and it led him to the conclusion that a proper construction of the agreement "shows clearly that this document cannot be passed for a mortgage. lf any thing it is a surety deed." High Court Judgment, p. 5. The learned trialjudge then noted that a "surety is a person who binds himself, usually by deed, . . . to satisfy the obligation of another person, if the latter fails to do so. ln other words ^a surety is a guarantor." High Court Judgment, p. 5.

At first glance, it is tempting to conclude that the mortgage document is simply ^a surety agreement, obligating the surety/guarantor to pay in the event the company failed to satisfy its obligations to the appellant. Turning to the agreement itself, sureties covenant to "pay to the Bank . . . all moneys which are now or at any time hereafter may be due and owing by the Company to the Bank . . . ." Be that as it may, in determining whether a mortgage exists, we must also analyze the sureties promise to pay in connection with their obligations under Paragraph 4(i) of the agreement. lt states, in relevant part, that

while "as between the Company and the Surety the Surety is a Surety only for the Company yet as between the Surety and the Bank the Surety shall be a principal debtor and the mortgaged properties shall be a principal security for the money . . . ." ln other words, for the purposes of the agreement, the sureties are to be considered the mortgagors, and the bank the mortgagee. Pursuant to the plain text of the agreement, Mr. or principal debtor, as to the appellant. Consequently, I find that the respondent's husband could be identified as a surety in the mortgage agreement and still assume the role of principal debtor, or mortgagor. Were Muhwana is a surety as to the company, and a mortgagor,

Having concluded that there was a proper mortgage, I next turn to the issue of whether the appellant could properly foreclose upon the mortgaged premises which the learned trialjudge ruled out in his judgment that "there being no mortgage in place there is nothing the appellant could have foreclosed. !t follows, therefore, that the sale of the property . . . was irregular and

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without legal support." High Court Judgment, p. 5. However, in my view, a valid mortgage existed. A related question, therefore, we have to ask is whether the mortgage agreement property, and whether the appellant properly exercised such right. gave the appellant the right to foreclose upon and sell the

The mortgage instrument provides that upon demand for payment by the bank and subsequent default in payment by the sureties, the bank could, at the appropriate time, exercise the statutory power of sale. This would allow the bank to "sell the mortgaged property either by private treaty or by public auction . . . after payment of the moneys hereby secured has been demanded or has become payable and the Surety has made default in paying the same." Accordingly, when the company disbursed Muhwana, the principal debtor, the appellant "served him notice of default dated 28/08/1995. The notice was addressed to Mr. Were Muhwana and copied to Group Procurement. The bank was demanding 101 ,228,7751=. The customer was notified of funds to the company that were not repaid by Mr. Were

the likely action. He was given f4 days after which the property was to be sold."

Thereafter, a 30 days' notice was placed in the New Vision newspaper stating that "unless the bank debt is fully paid within thirty (30) days from the date hereof." lt was subsequently followed by the auctioning of the property to Auctioneers & Court Bailiffs who "were registered as owners on 11t12t1998."

The sale of the mortgaged property at issue is, therefore, at first glance, not irregular. The appellant, having not been timely repaid by the principal debtor, by all appearances seemed to have acted within its power under the mortgage agreement to sell the property.

On the validity of the sale of the suit property the proper determination of this issue requires examination of the respondent claim to the mortgage property.

entered into on 0210211993, the respondent is not afforded the protections offered by The Land Act (1998) and The Mortgage Act (2009). Both statutes provide protection to a husband or wife holding an interest in real property whose spouse has encumbered the same without his or her knowledge and consent. statutes as the transaction took place before their existence. She, (PW1) testified to an agreement with her husband to purchase land and erect a matrimonial home thereon. She contributed about 45% to the acquisition of the plot. As alluded to previously, because the mortgage agreement was The respondent cannot take refuge under the above mentioned

Furthermore, as to the structure itself, the respondent testified that she "contributed the materials that built the house. She noted that "my husband was supervising the workers and she was paying wages." Evidence of her contribution was supported by PW2 who transported the materials. The respondent paid her contributions to her husband, who purchased Contribution to the building was about 75% of the total cost."

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the materials and kept the necessary records in his office. PW2, respondent "paid me for my services" of transporting sand, blocks, and other construction materials to the land in question. Though he met the respondent's husband, PW2 testified that he "thought the land belonged to the respondent." Neither the appellant nor the respondent's husband contested such testimony. ln the premises the appellant is estopped from challenging the respondent's equitable claim. supporting the respondent's testimony, detailed how the

Clearly as the evidence stands before Court, the conduct of the respondent's husband raises issues that border on fraud. The learned trial judge briefly commented on its possibility but summarily dismissed its relevancy in the following observation: "Counsel for the first defendant submits that this is ^a conspiracy, to defraud the First Defendant. This could as well be."). To the contrary, "an allegation of fraud needs to be particularly where it is alleged that a person lost his property fully and carefully inquired into. Fraud is a serious matter, $\frac{1}{2}$

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as a result of fraud committed upon him by others." Fredrick J. K. Zaabwe vs Orient Bank Ltd and 5 Others (Civil Appeal No.4 of 2006), [20071UGSC 21.

ln the instant case although not specifically pleaded, the appellant cannot turn round and question the respondent on her claim of equitable interest. I am mindful of the fact that the title is only in the name of her husband. That again is not detrimental to her claim. She explained how that came about and no objection was raised by the appellant. As an equitable tenant in common her right to the suit property had to be protected against sale. She, therefore caveated the suit land when she discovered the encumbrances

Caveats were lodged by her, in her capacity as the wife of the respondent, the registered proprietor and claimed "an equitable interest" in the property. She explained why registration was in the sole name of her husband. lt was a matter of convenience.


"There was no written arrangements between her and her and her husband knew about the arrangements they had agreed upon with respect to ownership of the property. The respondent prayed to the court at the High Court trial to declare her "an equitable tenant in common" and to cancel the sale of the property. husband concerning the property." Nobody but the respondent

Obviously, the appellant would not have had notice of the caveat, because the mortgage agreement was executed in 1993. The notice of default in payment was served upon Mr. Were Muhwana on 2810811995, and the auction notice was placed in the newspaper on 2410411997. Presumably the date of sale occurred on 2610511996, as that is the date set forth in the newspaper notice of auction. The notice thus was printed prior to the date of the filing of the caveat. As the appellant testified, she was evicted from the home by auctioneers on 2910811997, which is subsequent to the filing of the caveat. I cannot conclude that a caveat filed post-auction of the mortgaged premises gives

adequate notice to the mortgagee or prospective buyers of the wife's equitable interest in the land.

preclude a laMul mortgage entered into between another interest counsel for the appellant relied upon case law in relevant part stating the following: I next examine whether the appellant's equitable interest can holder in the property, the mortgagor, and the appellant. Learned

"ln my opinion the rights of husband and wife regarding the matrimonial property must be regarded as purely personalinter se and that these rights as a matter of law do not affect third parties. ln the instant case, the respondent is not a deserted spouse and no evidence was adduced that her husband is unable to maintain her and her children or that he cannot find alternative accommodation forher...."

Edward Mulindwa v. Sara Kalanda, HCMCA 763/96 (19/02/1996) (Byamugisha, J.) (emphasis added).

However, such case law - besides not being binding on this court - can be distinguished. When filing a declaration in support of ^a caveat, the spouse claiming an interest "did not disclose the nature of that interest whether legal or equitable . . . ." Edward Mulindwa v. Sara Kalnda, HCMCA 763/96 (19/02/1996) (Byamugisha, J.). The instant case, however, is distinguishable in that the respondent clearly stated the nature of her interest in the suit property. The case relied on is irrelevant.

ln the matter at hand, the court cannot let the husband go behind his wife and encumber the matrimonial property without her knowledge and consent. The husband usurped the wife's valuable interest in the home by entering into an agreement with the appellant of which the respondent was absolutely clueless. As the respondent testified, "! did not have any reason to suspect my husband of any foul ptay. I had no reason to scrutinize his documents. I trusted him." The respondent and her husband decided that the husband would take charge of record-keeping as to the premises, and the respondent relied

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upon him to safeguard her valuable interest in the property. Mr. Were Muhwana failed to do so.

The function of this Court is to decide whether the decision in been no miscarriage of justice. lt is the duty of this Court to see that justice is done in any case brought before it for the ends of justice. issue was made according to the law and to ensure that there had

It is for the aforesaid reasons that courts of law are given inherent powers. For example Rule 2 r 2 o'f the Judicature, Court of Appeal Rules (Directions) and section 98 of the Civil Procedure Act give powers to the Court of Appeal and the High Court respectively to make orders that may be necessary for the ends of justice. Further, Article 126 (2Xe) of 1995 of the Constitution emphasizes that substantive justice be administered without undue regard to technicalities.

question would take away the respondent's hard-earned equitable interest in that property. lt would also allow her husband, who Clearly, upholding the foreclosure and sale of the property in

failed to re-pay the mortgage proceeds, to avoid responsibility. The husband acted without the respondent's knowledge, let alone consent, first in conferring Powers of Attorney to the company and secondly in mortgaging the matrimonial home. This eventually led to the unlawful eviction of the respondent from their matrimonial home.

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As the evidence stands before court, the husband's conduct in this case is suspect and high handed. I am mindful of the requirement to plead fraud which was not done in this case. However, that cannot stop this Court from taking into account the conduct of the respondent's husband to defend her claim.

Acting within the inherent powers in the interest of justice, ^I conclude that while the property was properly mortgaged, the appellant cannot sue for enforcement of the mortgage through foreclosure of the property because of the respondent's interest in the matrimonial home and the caveat lodged thereon. Further, in my view, the agreement entered into by the appellant and Mr.

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Were Muhwana was indeed a mortgage, thus not precluding recourse against Mr. Were Muhwana for the debt outstanding.

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ln the result, I would dismiss the appeal in-part and uphold the trialjudge's finding on the 3'd ground of appeal.

Since Kavuma J. A also agrees, the appeal is dismissed in-part.

The decision of the trial court on ground 3, namely that, the each of the parties is awarded one half of the costs of the lower court. appellant unlawfully evicted the respondent from the suit property is upheld. The respondent is awarded the costs of the appeal and

Dated at Kampara thi"...9.4 ^v a.fu{u!......, 2010.

L. E. M. Mukasa-Kikonyogo DEPUTY CHIEF JUSTICE HEAD OF COURT OF APPEAL & PRESIDENT OF THE CONSTITUTIONAL COURT