[2025] UGCommC 35

| 5 | THE REPUBLIC OF UGANDA | | | |----|-------------------------------------------------------------------------------------------------------|---|------------| | | IN THE HIGH COURT OF UGANDA AT KAMPALA<br>[COMMERCIAL DIVISION]<br>CIVIL REVISION<br>No. 0009 OF 2023 | | | | | | | | | | | | | | | (Arising Out of Miscellaneous Application No. 0069 OF 2023, Kasangati Chief | | | | 10 | Magistrate's Court) | | | | | | | | | | YAKO BANK UGANDA LIMITED | ] | APPLICANT | | | VERSUS | | | | 15 | | | | | | GIDUDU BADRU W. | ] | RESPONDENT | | | | | | | | Before: Hon. Justice Ocaya Thomas O. R | | | | 20 | RULING | | | | | Introduction: | | | | | This is an application under Sections 83 and 98 of the Civil Procedure Act and Order 5 Rules | | | | | 1, 2, and 3 of the Civil Procedure Rules.<br>The Application seeks the following orders: - | | | | 25 | | | | | | 1.<br>The orders of temporary injunction issued by Her Worship Kainza Beatrice issued on the | | | | | 6th day of September, 2023 at Kasangati Chief Magistrate's Court be revised and set aside. | | | | | 2.<br>Costs of the application be provided for. | | | | 30 | Background to The Application Per the Applicant | | | | | This Application is supported by the Affidavit of Mushabe Sarah, a Branch Manager of the | | | | | Applicant company, and the background is that: - | | |

On the 14th day of June 2022, Tusingwire Eliab Elikanah obtained a loan from the Applicant

35 worth UGX 60,0000,000/=, and a loan agreement was signed to that effect secured by land comprised in Block 121 plot 932 at Nangambo measuring approximately 0.400 Ha in the names of Tusingwire Eliab Elikanah, and a mortgage was created to that effect. That the said

# Ruling CR-0009-2023

5 Tusingwire Eliab Elikanah defaulted in payment of the loan and by the date of instituting the suit, he was indebted to UGX 56,526,665/= to the Applicant which entitled the Applicant to sell off the mortgaged property to recover the unpaid amount.

When the Applicant commenced the process of recovering the loan from the Mortgaged 10 property, the Respondent instituted Civil Suit No.21 of 2023 a suit against the Tusingwire Eliab Elikanah and the Applicant to frustrate the process of recovering the loan amount under the Mortgage Act. The said suit was for cancellation of the mortgage agreement entered between the Applicant & Tusingwire Eliab Elikanah among others.

- 15 That the said Mortgage was created on Block 121 Plot 932 at Nangambo measuring approximately 0.400 Ha which was pledged as security and the land was valued at UGX 85,000,000/= as the forced sale value. That the Respondent further instituted Miscellaneous Application No. 09 of 2023 for Temporary Injunction. - 20 When the said application came up for hearing, the Applicant raised a preliminary point of law that the court had no pecuniary jurisdiction to determine the said application as it had no jurisdiction to determine the main suit. That the learned Chief Magistrate overruled the said preliminary point of law and granted the temporary injunction. - 25 That the Applicant was informed by their lawyers of Newmark Advocates that: - a. The learned Chief Magistrate exercised jurisdiction not vested in her by determining a matter whose subject matter is above UGX. 50,000,000/= which is above her pecuniary jurisdiction - 30 b. The learned Chief Magistrate exercised jurisdiction illegally & with material irregularity & injustice by proceeding to hear and determine an application for a temporary injunction when she had no pecuniary jurisdiction to determine the main suit.

- 5 c. The learned Chief Magistrate continues to exercise her jurisdiction illegally and with material irregularity & injustice by continuing to hear the main suit which has been fixed on the 17th day of November, 2023. - d. The learned Chief Magistrate exercised her jurisdiction illegally and with material 10 irregularity & injustice by failing to order the Respondent to pay 30% of the forced sale value of the mortgaged property or the value of the loan.

That because of the actions of the learned Chief Magistrate, the Applicant has suffered grave injustice as it is stopped from getting the fruits of its mortgage in exercising its rights under 15 the Mortgage Act without justifiable cause.

The Respondent filed an affidavit in reply sworn by himself where he denied the contents of the Applicant's affidavit, in reply he contended and averred that the applicant's application was an abuse of court process and brought this application in bad faith.

The Respondent stated that his cause of action was based on the value of his equitable interest on the mortgaged property that he purchased at UGX 40,200,000/= and the claim is only limited to the interest measuring 65ft by 86 ft by 54ft and nothing else.

- 25 That the purported valuation produced by the Applicant in respect to the legal interest comprised in Kyadondo Block 121, Plot 932 land at Nangabo and not his equitable interests measuring only 65ft by 86 ft by 54ft on the land comprised in Kyadondo Block 121, Plot 932 in Nangabo. - 30 That the learned Chief Magistrate exercised her jurisdiction legally when she proceeded to hear and determined the application for a temporary injunction since the value of his equitable interest in the suit land was UGX 40,200,000/= and that subject matter whose pecuniary value does not exceed UGX 50,000,000/= is within the jurisdiction of the Chief Magistrate.

- 5 Further that the learned Chief Magistrate exercised her jurisdiction legally and with material regularity and justice by not ordering the respondent to pay 30% of the forced sale value of the mortgaged property since the respondent was not a party to the impugned mortgage executed between the Applicant and Tusingwere Elikanah. - 10 That the Applicant's intended sale of the mortgaged land would deprive him of his vested equitable interest.

## **Representation:**

The Applicant was represented by the law firm of M/s Newmark Advocates while the 15 Respondent was represented by M/s Sanywa, Wabwire, and Co. Advocates.

## **Evidence and Submissions:**

The Applicant led evidence by way of an affidavit in support deponed by their Branch Manager, Mushabe Sarah. The Respondent led evidence by way of an affidavit in reply 20 deponed by himself.

The parties were instructed by the Court to file written submissions, the Applicant filed its written submission while the Respondent did not file nor make an oral submission. Nonetheless, the Court has also considered the Respondent's affidavit in Reply and the

25 evidence therein while evaluating this application.

#### **Issues:**

I will resolve this application under the following issues:

- 1. Whether this is a proper case for revision by this Court? - 30 2. What remedies are available?

## **Decision:**

Whether this is a proper case for revision by this Court?

35 Counsel for the Applicant submitted that the Respondent's cause of action in paragraphs 5(iv), (v), and (vi) as contained in the plaint was that the 2nd Defendant (now the Applicant)

$$\mathcal{B}^{\cdot}$$

# Ruling CR-0009

- 5 throughout their alleged dealings in the subject land has been in total disregard of the Plaintiff's prior existing equitable interest on the suit land and that the 2nd Defendant throughout their alleged dealing in the subject land intentionally and willfully avoided and or/or failed to take due diligence on the purported subject land before advancing the purported loan facility to the company and lastly that, the Defendant's dealing in the subject - 10 land was done secretly without the knowledge notice, consent or authority of the plaintiff and the local council one chairperson of the area therefore the mortgage created on the subject land on which the plaintiff's prior existing kibanja interest situate in subject land is null and void for fraud and illegalities hence null and void. - 15 Further that, the Respondent alleges particulars of fraud, illegalities, and fraudulent misrepresentations by the 2nd Defendant which all point to the cancellation of the mortgage created on the suit land.

That the Plaintiff/Respondent prayed for declaration in the Defendants' dealing and or 20 transactions in respect of the land comprised in Kyandondo Block 121, Plot 932 land at Nangabo, that an order for cancellation of the mortgage agreement, any dealing and or transaction in respect of the Plaintiff's equitable interests on the suit land, that an order for cancellation of the mortgage agreement, any dealing and or transaction in respect of the plaintiff's equitable interests situate in the land comprised in Kyadondo Block 121 Plot 932

25 land at Nangabo.

Counsel submitted that the above facts all point to only one conclusion that the subject matter that establishes a cause of action against the Applicant is the illegal mortgage which ought to be canceled and the main contention is that the said subject matter is above the

- 30 pecuniary jurisdiction of the Chief Magistrate's Court as Respondent acknowledges that a one Tusingwire Eliab Elikanah is indebted to the Applicant and acknowledges that the mortgaged property is up for sale as stated in paragraph 5(iii) and annexure F of the plaint. That the above points to the fact that the subject matter which is the mortgage agreement automatically falls under a contract and the fact that the Respondent seeks to cancel such a - 35 contract, regard has to be made to the subject matter which ought to be cancelled.


5 That the subject matter is derived from the loan agreement, the mortgage deed, and default and demand notices under the Mortgage Act. That the loan agreement was for UGX 60,000,000/= and the outstanding balance at foreclosure is UGX 56,526,665/=.

That therefore, the mortgage transaction which the Respondent seeks to cancel is above the 10 pecuniary jurisdiction of the Chief Magistrate's Court.

# Ground two: **That the learned Chief Magistrate exercised her jurisdiction illegally and with material irregularity and Injustice by failing to order the Respondent to pay 30% of the forced sale value of the mortgaged property or the value of the loan.**

Counsel submitted that not only did the Chief Magistrate lack jurisdiction to hear the matter but it also, went ahead and granted the temporary injunction without requiring the Respondent to pay 30% of the forced sale value of the mortgaged property or the value of the loan.

Counsel submitted that Regulation 13 of the Mortgage ACT Regulations provides for adjournment or stoppage of sales as was discussed in Shumuk Properties Ltd v Guaranty Trust Bank (U) Ltd HCMA no. 231 of 2018, that: -

*The court may on the application of the mortgagor, spouse, and agent of the mortgagor or any*

- 25 *other interested party and for reasonable cause, adjourn a sale by public auction to a specified date and time upon payment of a security deposit of 30% of the forced sale value of the mortgaged property or outstanding amount. Notwithstanding sub-regulation (1) where the application is by the spouse of a mortgagor, the court shall determine whether that spouse shall pay the thirty percent security deposit. Where a sale is adjourned under this regulation for a* - 30 *period longer than fourteen days, a fresh public notice shall be given by regulation 8 unless the mortgagor consents to waive it.*

*Regulation 13 (1) gives the court discretionary powers. Secondly, it deals with the adjournment or stoppage of the sale. In this particular case, the actual outstanding amount is in dispute. How*

35 *will the 30% of the outstanding amount be determined? The regulation provides for the payment of a deposit of 30% of the forced sale value or the outstanding amount. For the*

 - 5 *moment the outstanding amount is in dispute and the two positions of the parties cannot be reconciled without considering this suit on the merits. Secondly, there are serious questions that arise as to how the amounts in annexure D being the loan account of the Applicant were arrived at and whether there was compliance with the law and contract.* - 10 That the above law is very clear & mandatory and therefore, without prejudice to the foregoing, even the Chief Magistrate was found to have jurisdiction to grant the temporary injunction, grating the same without ordering for the payment of the *30% of the forced sale value of the mortgaged property or outstanding amount amounts exercising* jurisdiction illegally and with material irregularity & injustice hence the decision is a nullity & ought to 15 be revised & set aside.

As stated earlier, the Respondent did not file submissions in this matter but the affidavit in reply was considered as earlier reproduced herein. There is no need to reproduce the same.

20 It is trite law that a decision made by a Court without Jurisdiction renders the entire proceedings a nullity because the allocation of jurisdiction or its lack thereof is a creature of statute. See *Baku Raphael Obudra and Another v Attorney General, SCCA No. 1 of 2005* and *Ajuna Jackson Francis and 2 others v Lake View Enterprises & Another, HCMC No. 02 of 2019.*

The powers of this Court to exercise the right of revision is embedded in Section 83 of the Civil Procedure Act provides that:

*The High Court may call for the record of any case which has been determined under this Act by any magistrate's court, and if that court appears to have—*

- 30 *(a) exercised a jurisdiction not vested in it in law;* - *(b) failed to exercise a jurisdiction so vested; or* - *(c) acted in the exercise of its jurisdiction illegally or with material irregularity or injustice, the High Court may revise the case and may make such order in it as it thinks fit, but no such power of revision shall be exercised—*

5 *(d) unless the parties shall first be given the opportunity of being heard; or (e) where, from lapse of time or other cause, the exercise of that power would involve serious hardship to any person.*

## See *Kibalama Mugwanya v Butebi Investment Enterprises Ltd, CACA No. 190 of 2013.*

10 Section 4 of the CPA provides that: -

Except insofar as is otherwise expressly provided, nothing in this Act shall operate to give any court jurisdiction over suits the amount or value of the subject matter of which exceeds the pecuniary limits, if any, of its ordinary jurisdiction.

- 15 The gist of the Respondent/ Plaintiff's cause of action in Civil Suit No. 0021 of 2023, is that it has interest on the mortgaged land in Kyandondo Block 121, Plot 932 land at Nangabo, which was a subject of foreclosure in a defaulted mortgage agreement between the Applicant and a one, Tusingwere Elikanah, who defaulted on the mortgage. That the mortgage parties entered into their arrangement in disregard of his equitable interest in the suit land which - 20 the Respondent/Plaintiff valued at UGX 40,200,000/= and calls for the declaration of the fraudulent transaction by the mortgage parties and eventual cancellation of the mortgage because the default, by Tusingwere Eliakanah, affects his (Respondents) interest on top of being an illegal transaction. The Respondent's response to this Application is in his argument that his equitable interest in the mortgaged land is valued at UGX 40,200,000/= which does 25 not exceed the pecuniary jurisdiction of the Chief Magistrate's Courts of UGX 50,000,000/= - Under Section 207(1) a.

Section 207(1)(a) of the Magistrate's Court Amendment Act 2007 provides for the pecuniary jurisdiction of a Chief Magistrate as not having jurisdiction to entertain civil matters whose

30 subject matter exceeds UGX. 50,000,000/=.

The trial Court Chief Magistrate in the ruling in Miscellaneous Application No. 0069 of 2023, the temporary injunction application from which this application arose stated that: - *In the instant facts, the value of the matter is UGX 45,000,000/= shillings. This gives this court*

35 *both the pecuniary and geographical jurisdiction because the value of the property in issue is*


5 *below 50 million shillings and it arose within the court area. Thus, the Applicant is only protecting his equitable interest in the specific plot that he purchased not the whole land in its entirety.*

From the foregoing, whereas the pecuniary of the suit in Civil Suit No. 0021 of 2023, is UGX

- 10 45,000,0000/= which is clearly within the Chief Magistrates Court's jurisdiction, However, the prayers sought to be entertained and granted by the Chief Magistrate's Court involve, cancellation of the Mortgage agreement entered into for a loan facility of UGX 60,000,000/= and the outstanding balance upon default which ignited the Respondent/Plaintiff's Court redress in both the main suit and the Temporary Injunction application is UGX 56,526,665/=. - 15

Section 207 (5) gives emphasis to jurisdictional powers and provides that: -

*A Magistrate's Court may grant any relief which it has the power to grant under this Act or under any written law in respect of any case or matter before the Court.*

- 20 The above provision means that the Magistrate can only grant what it has the power to grant, the Chief Magistrate only has the power to declare illegally or fraudulently and eventually cancel any contract that is below UGX 50,000,000/=. In this case, regardless of the fact that the Plaintiff's value of the subject suit is within the jurisdiction of the Chief Magistrates Court, however, it is a different matter when the prayers sought or the eventual outcome of the - 25 matter exceeds the jurisdiction of the trial magistrate or is not entirely within its jurisdiction.

The nullity and futility of entertaining any matter without jurisdiction is a settled law and in *Owners of Motor Vessel Lillian v. Caltex Oil Kenya Limited [1989] KLR 1*, where the Court stated that: -

- 30 *By jurisdiction, it meant the authority which a Court has to decide matters that are before it or take cognizance of matters presented in a formal way for its decision. The limits of this authority are imposed by statute, charter, or commission under which the Court is constituted and may be extended or restricted by the like means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A Limitation may be either as to the kind and nature of the* - 35 *actions and matters which the particular Court has cognizance of or as to the area over which the jurisdiction shall extend, or it may partake both these characteristics. If the jurisdiction of*


## Ruling CR-0009- CR-000 --

- 5 *an inferior Court or tribunal depends on the existence of a particular state of facts, the Court or tribunal must inquire into the existence of the facts to decide whether it had jurisdiction, but, except where the Court or tribunal has been given the power to determine whether the facts exist. Where the Court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before Judgment is given*. - 10

The Court went on to hold that: -

*Jurisdiction is everything. Without it; a Court has no power to make one more step. Where a Court has no jurisdiction there would be no basis for continuation of proceedings pending other evidence. A court of law downs its tools in respect of the matter before it the moment it holds*

15 *the opinion that it is without jurisdiction*.

In this instant case, it goes without saying that the Chief Magistrate's Court had no jurisdiction to entertain the main suit for the nature of prayers sought which includes cancellation of contracts and the subsequent injunction on sale of a property valued at over

20 its Jurisdiction.

The Chief Magistrate should have downed her tools the moment she noticed the prayers sought and have the matter transferred to the High Court, which is the Court with Jurisdiction herein. The Chief Magistrate's failure to do so, set it on a futile journey because

25 its decision amounted to nothing but a nullity.

Having found that the trial Court had no jurisdiction, I do not find it necessary to consider the other grounds because to do so would be to subject them to a nullity.

30 Accordingly, the Application is allowed.

## **In Conclusion:**

- 1. The orders of temporary injunction issued by Her Worship Kainza Beatrice issued on the 6th day of September, 2023 at Kasangati Chief Magistrate's is set aside for lack of 35 jurisdiction. - 2. The Applicant is awarded the Costs of this Application.


5 I so order.

Delivered Electronically this\_\_\_\_\_\_\_\_\_\_\_\_day of\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_2025 and Uploaded on ECMISS. 18th February

10 **Ocaya Thomas O. R Judge,**

**18th February, 2025**