Shumuk Properties Ltd v Guaranty Trust Banks (U) Ltd (Civil Application No. 220 of 2018)

Court of Appeal · [2019] UGCA 188 · 2019 Application Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Application for a temporary injunction to stay a condition imposed on an earlier High Court temporary injunction pending appeal

Decision

Application for temporary injunction dismissed with costs

The full judgment

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Holding

The Court of Appeal dismissed an application for a temporary injunction to stay a High Court condition requiring the applicant to deposit 30% of the outstanding balance or forced sale value of mortgaged property. The applicant failed to disclose a prima facie case as no memorandum of appeal or trial decision was attached, and the notice of appeal was deemed withdrawn under rule 84 for failure to file the appeal in time. The applicant showed no irreparable damage, the respondent being a financial institution able to atone in damages, and the balance of convenience favoured the respondent. Having defaulted for over two years, the applicant sought equitable relief with 'dirty hands', making a stay a mockery of justice.

Facts

The applicant borrowed an overdraft facility of UGX 500,000,000 and a term loan of UGX 968,000,000 from the respondent under a facility agreement dated 31 January 2017, secured by the applicant's property at Block 192, Nganda, Kyaggwe, Mukono. The applicant defaulted on repayment. The respondent issued a notice of default recalling the facilities, then a notice of sale and advertised the property for sale. The applicant filed HCCS No. 264 of 2018 and obtained a temporary injunction restraining the sale, but on condition that it deposit 30% of the outstanding balance or forced sale value within 30 days. Dissatisfied with the condition, the applicant filed a notice of appeal and sought from the Court of Appeal a temporary injunction to stay that condition pending appeal. The applicant did not attach a memorandum of appeal or the trial decision, and there was no proof it served the respondent with the request for proceedings or filed the appeal within the prescribed 60 days.

Issues

Whether the applicant established a prima facie case with a probability of success to warrant a temporary injunction staying the condition for deposit.
Whether the applicant would suffer irreparable damage incapable of being atoned by damages.
Whether the balance of convenience favoured grant of the injunction.
Whether the notice of appeal was deemed withdrawn under rule 84 for failure to file the appeal within time.

Orders

Application dismissed with costs to the respondent.

Key headnotes

Civil Procedure — Temporary Injunctions — Conditions for Grant

Before granting a temporary injunction a court must be satisfied that the applicant has a prima facie case with a probability of success and might otherwise suffer irreparable damage not adequately atoned in damages; where in doubt, the court decides on the balance of convenience.

Civil Procedure — Temporary Injunction Pending Appeal — Prima Facie Case Requires Memorandum of Appeal

An applicant seeking a temporary injunction pending appeal must attach the intended memorandum of appeal and the trial court's decision so the court can assess whether triable issues arise; failure to do so means no prima facie case is disclosed.

Civil Procedure — Notice of Appeal Deemed Withdrawn — Rule 84

Where an applicant fails to prove service of the request for proceedings under rule 83(3) and does not file the memorandum of appeal within 60 days of lodging the notice of appeal, the notice of appeal is deemed withdrawn under rule 84, rendering an application dependent on it unsustainable.

Land & Property — Mortgages — Adjournment of Sale Conditional on 30% Deposit (Mortgage Regulation 13(1))

Under regulation 13(1) of the Mortgage Regulations a mortgagor seeking to adjourn a sale by public auction must pay a security deposit of 30% of the forced sale value or outstanding amount; an injunction stopping a sale is unavailable to a mortgagor in breach of that provision.

Banking & Finance — Equitable Relief — Clean Hands Doctrine in Loan Default

Equitable relief such as a temporary injunction may be denied to an applicant who approaches the court with 'dirty hands'; a mortgagor who has for years failed to honour its contractual repayment obligations cannot obtain a stay of a condition it is required to meet under the mortgage laws.

Legislation cited (12)

Judicature Act Cap 13 s.10
Judicature Act Cap 13 s.12
Judicature (Court of Appeal) Rules r.2
Judicature (Court of Appeal) Rules r.6(2)(b)
Judicature (Court of Appeal) Rules r.12(2)
Judicature (Court of Appeal) Rules r.43
Judicature (Court of Appeal) Rules r.83(2)
Judicature (Court of Appeal) Rules r.83(3)
Judicature (Court of Appeal) Rules r.84
Mortgage Regulations reg.11
Mortgage Regulations reg.13(1)
Financial Institutions Credit Classification Regulations r.11(1)-(6)

Cases cited (4)

Margaret Kato and Joel Kato v Nuulu Nalwoga (Civil Application No. 1 of 2011)
Ganafa Peter Kisawuzi v DFCU Bank (Civil Application No. 64 of 2016)
Ganafa Peter Kisawuzi v DFCU Bank (Civil Application No. 64 of 2016)
Anifa Kawooya v Attorney General (Miscellaneous Application No. 46 of 2016)

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