Samuel Frobisher Owori v N.P.A.R.T (Civil Application No. 32 of 1997)

Court of Appeal · [1997] UGCA 12 · 1997 Application Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Application under Rule 5(2)(b) for an injunction restraining sale of mortgaged property pending disposal of appeal

Decision

Application for injunction dismissed; property already sold by private treaty

The full judgment

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Holding

The Court of Appeal dismissed an application for an injunction to restrain sale of mortgaged property pending appeal. The respondent sold the property by private treaty under powers conferred by the mortgage, the Registration of Titles Act, the Mortgage Decree 1974 and the NPART Statute and Regulations. The court held the contract of sale was complete once part of the purchase price was deposited; it was immaterial that the full price had not been paid or possession not yet taken, as the purchaser had acquired an equitable interest. Section 50 of the Civil Procedure Act, relating to court sales in execution, did not apply. As the property had already been sold, ordering a stay would be futile and unenforceable.

Facts

The applicant borrowed a large sum from Uganda Commercial Bank ten years earlier. The loan was not repaid and was treated as non-performing, then transferred to the respondent Trust. In 1996 the applicant sued before the Non-Performing Assets Recovery Tribunal seeking a declaration that the loan was performing and an order to redeem the mortgage on his property at Plots 6 and 4, Martyrs Garden, Ntinda. The tribunal dismissed the suit and allowed the respondent's undisputed counterclaim for Shs.357,945,008. The respondent advertised the property for sale and the tribunal refused a stay. The applicant applied to the Court of Appeal for an injunction pending appeal. When the application was lodged on 29 August 1997 the property was intact, but on 1 September 1997 it was sold by private treaty for Shs.185,000,000, with a down payment of Shs.40,000,000 made and the balance payable within six months.

Issues

Whether the sale of the mortgaged property was complete or merely a process of sale that could be restrained by injunction.
Whether the court should grant an injunction restraining the sale pending the disposal of the applicant's appeal.
Whether section 50 of the Civil Procedure Act applied to a sale conducted under the mortgage and NPART regime.

Orders

The application is dismissed with costs to the respondents.

Key headnotes

Mortgages — Sale of Mortgaged Property — When Contract of Sale Complete

A contract for the sale of mortgaged property is complete once part of the purchase price is deposited; it is immaterial that the full price has not been paid or that the purchaser has not taken possession, since on entering the contract the purchaser acquires an equitable interest in the property.

Injunctions — Stay of Sale Pending Appeal — Futility Where Sale Already Effected

A court will not grant an injunction to restrain a sale that has already been completed, as an order staying the sale would be futile and incapable of enforcement.

Statutory Interpretation — Section 50 Civil Procedure Act — Application to Mortgagee Sales

Section 50 of the Civil Procedure Act, which provides that an order for sale becomes absolute only on payment of the full purchase price, applies to sales in execution of a decree and does not govern a sale by private treaty conducted under the powers of a mortgage.

Legislation cited (6)

Civil Procedure Act s.50
Registration of Titles Act
Mortgage Decree 1974
Non-Performing Assets Recovery Statute 1994
NPART Regulations 1995 reg.7
Rules of the Court of Appeal r.5(2)(b)

Cases cited (2)

Erinford Properties Ltd v Cheshire County Council [1974] 2 All ER 448
Lawrence Musitwa Kyazze v Eunice Busingye (Civil Application No. 18 of 1990)

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