Bisangwa Kasimba and Another v Diamond Trust Bank Uganda Limited (Civil Appeal No. 347 of 2019)

Court of Appeal · [2021] UGCA 92 · 2021 Appeal Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

First appeal from a High Court (Commercial Division) order granting a conditional temporary injunction

Decision

Appeal dismissed; conditional temporary injunction upheld with appellants required to pay the Shs. 50,000,000 balance to keep the injunction effective

The full judgment

Read the complete, verbatim text of this judgment.

Cited — treatment unverified cited in 1 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions — always read the source judgment before relying on it.

Holding

On a first appeal against a conditional temporary injunction, the Court of Appeal held that an appellate court will not interfere with a trial court's exercise of discretion to grant or refuse an injunction unless the discretion was exercised on wrong principles of law or a material factor was disregarded. The trial Judge properly considered the appellants' acknowledged indebtedness and proposed repayment plan, and the risk of dilatory tactics, in requiring a deposit. Issues of valuation and statutory notice related to the main suit, not the injunction application. The Court declined to apply Fuelex on fair-hearing grounds and declined to rule on the constitutionality of the Mortgage Regulations. Appeal dismissed.

Facts

In 2016 the second appellant, a company managed by the first appellant, secured a contract with Kampala Capital City Authority requiring performance bonds. The respondent bank issued two performance bonds totalling over Ug. Shs. 1.28 billion, secured by mortgaged properties belonging to the first appellant. After the second appellant failed to perform, KCCA called on the bonds on 17 October 2018, and the respondent paid Ug. Shs. 1,164,726,535. The respondent then moved to sell the mortgaged properties to recover under the mortgage. The appellants disputed the amount owing and alleged that the respondent breached the law in the manner of sale, including failure to serve statutory notice and to update the property valuation. The appellants filed Civil Suit No. 429 of 2019 and sought a temporary injunction to restrain the sale pending its determination. The trial Judge granted a conditional injunction requiring deposit of Ug. Shs. 550,000,000 within 30 days. The appellants paid only Ug. Shs. 500,000,000 and appealed.

Issues

Whether the trial Judge erred in holding that the appellants admitted indebtedness of Ug. Shs. 1,100,000,000 to the respondent.
Whether the trial Judge exercised his discretion judiciously in ordering the appellants to deposit Ug. Shs. 550,000,000 as a condition for grant of the temporary injunction.
Whether requiring deposit of a percentage of a disputed mortgage debt fetters the constitutional right to a fair hearing.

Orders

Appeal dismissed.
Decision of the learned trial Judge upheld.
Appellants to pay the balance of Shs. 50,000,000 being the outstanding part of the Shs. 550,000,000 condition precedent so that the injunction is not lifted.
Costs of this appeal and those in the court below awarded to the respondent.

Key headnotes

Temporary Injunctions — Conditions for Grant — Order 41 rule 1 CPR

A temporary injunction is granted in the exercise of judicial discretion to preserve the status quo pending trial, where the applicant shows on a balance of probabilities a prima facie case, that irreparable injury would result not adequately compensable in damages, and, in doubt, where the balance of convenience favours the applicant.

Appeals — Interference with Discretion — Temporary Injunctions

An appellate court will not interfere with a trial court's exercise of discretion to grant or refuse a temporary injunction unless the discretion was based on wrong principles of law, or the court failed to take into account some material factor.

Temporary Injunctions — Conditional Orders — Deposit of Disputed Sum

Where a mortgagor seeking to restrain a sale has acknowledged indebtedness and proposed repayment, a court may, in its discretion, grant a conditional temporary injunction requiring deposit of part of the disputed sum to guard against dilatory tactics, and such a condition does not amount to disregard of a material factor.

Mortgages — Valuation and Statutory Notice — Relevance to Injunction Application

Issues concerning a mortgagee's compliance with statutory notice and valuation requirements before sale are matters for determination in the main suit, and are not material factors in the determination of an application for a temporary injunction to restrain the sale.

Legislation cited (7)

Civil Procedure Rules S.I 71-1 Order 41 rule 1(a)
Mortgage Regulations 2012 reg.11(2)
Mortgage Regulations 2012 reg.18(5)
Court of Appeal Rules rule 30(1)(a)
Constitution of Uganda 1995 Article 28
Constitution of Uganda 1995 Article 44(c)
Constitution of Uganda 1995 Article 21

Cases cited (9)

Ganafa Peter Kisawuzi v DFCU Bank Ltd (Civil Application No. 64 of 2016)
Fuelex (U) Ltd v Uganda Revenue Authority (Constitutional Petition No. 13 of 2009)
Godfrey Ssebanakitta v Fuelex (U) Ltd (Civil Appeal No. 4 of 2016)
Omer Farming Co. Ltd v Rehoboth Agricultural Management Services Ltd (Miscellaneous Application No. 21 of 2019)
Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
Kiyimba Kaggwa vs. Katende [1985] HCB 23
American Cyanamid Co vs. Ethicon Ltd [1975] 1 ALLER 504
Crown Beverages v Sendu Edward (Civil Appeal No. 1 of 2005)
Livingstone Kakooza v Uganda (Criminal Appeal No. 17 of 1993)

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