Luyimbazi v Stanbic Bank Uganda Limited (Civil Appeal 2 of 2019)

Supreme Court · [2022] UGSC 24 · 2022 Appeal Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second civil appeal to the Supreme Court from the Court of Appeal, the matter having begun as a first-instance civil suit in the High Court.

Decision

Appeal dismissed; judgment of the Court of Appeal upheld; costs awarded to the respondent in this Court and the courts below.

The full judgment

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Holding

The Supreme Court dismissed a guarantor's second appeal challenging the mortgagee bank's sale of his mortgaged property. On grounds 1 and 2 the Court held that, although the appellant made general averments challenging the sale, he never pleaded or substantiated at trial the specific complaint that the property was sold without re-advertisement under section 28(2) of the Mortgage Act; raising it for the first time on appeal offended the cardinal rule that a party is bound by their pleadings and the rules barring new grounds on appeal without leave. On ground 3 the Court declined to disturb the two lower courts' concurrent finding that fraud was not proved, there being no wrong principle of law. Appeal dismissed with costs.

Facts

The appellant, Luyimbazi Sulaiman, was a guarantor for J.W. Victoria Agro Industries on a UGX 10 million overdraft facility from the respondent bank. The facility was secured by a mortgage over the appellant's house at Makindye. The company defaulted. The appellant, who chaired the local Local Council II office through which the default notice passed, came to know of the default and offered to settle the outstanding sum by cheques over six months. The bank rejected the offer as too long and counter-offered an immediate cheque of UGX 2 million with the balance cleared within seven days; the appellant failed to abide by this schedule. On 2 June 1999 the appellant received a letter dated 14 May 1999 stating that the mortgaged land had been sold on 30 April 1999. He sued the bank claiming the mortgage was improperly executed and null and void and that the sale was fraudulent, praying for mesne profits and general damages. The High Court upheld the validity of the mortgage and dismissed the suit with costs, and the Court of Appeal dismissed his appeal.

Issues

Whether the issue that the suit property was not validly sold was raised at the trial or in the appellant's pleadings.
Whether the Court of Appeal erred in upholding the trial Judge's finding that the property was advertised and valued before sale on evidence said to be unsubstantiated.
Whether the appellant proved the particulars of fraud or bad faith alleged against the respondent bank.

Orders

Appeal dismissed.
Judgment of the Court of Appeal upheld.
Respondent granted the costs of this appeal and the costs in the courts below.

Key headnotes

Civil Procedure — Pleadings — Party bound by pleadings

A party is bound by their pleadings, and it is not open to a court to base its decision on an unpleaded issue; even where there is discordance between what is pleaded and the evidence or submissions, so that the evidence or submissions cover up a defect in the pleadings, the cardinal rule still applies.

Civil Procedure — Appeals — New ground or argument requires leave

A new ground or argument cannot be raised on appeal except with the leave of court, and a party may not depart from its original pleadings.

Evidence — Fraud — Burden and standard of proof

The burden of proving fraud lies on the party who asserts it, and the standard of proof is above a balance of probabilities though not beyond reasonable doubt; mere suspicion or speculation that fraud occurred is insufficient.

Civil Procedure — Appeals — Concurrent findings of fact

An appellate court should not interfere with the concurrent findings of fact of two lower courts except where the finding is premised on wrong principles of law.

Land & Property — Mortgages — Sale by mortgagee — relief must be pleaded

A court cannot grant relief impugning a mortgagee's sale for want of re-advertisement under section 28(2) of the Mortgage Act where the specific ground was neither pleaded nor substantiated at trial but raised only on appeal.

Legislation cited (4)

Mortgage Act s.28(2)
Rules of the Supreme Court r.98
Court of Appeal Rules r.102
Civil Procedure Rules Order 6 rule 7

Cases cited (9)

John Bwiza v Patrick Yowasi Kadama (Civil Appeal No. 16 of 2018)
Kifamunte Henry v Uganda (Criminal Appeal No. 1 of 1995)
Yakobo M.N. Senkungu & 4 Ors v Cresensio Mukasa (Civil Appeal No. 17 of 2014)
Fredrick J.K. Zaabwe v Orient Bank Ltd & Others (Civil Appeal No. 141 of 2006)
Kampala Bottlers Ltd v Damanico (U) Ltd (Civil Appeal No. 22 of 1992)
Erisafani Mudumba v Wilberforce Kuluse (Civil Appeal No. 9 of 2002)
Lutaaya v Attorney General (Civil Appeal No. 10 of 2002)
Milly Masembe v Sugar Corporation and Another (Civil Appeal No. 1 of 2000)
Banco Arabe Espanol v Bank of Uganda (Civil Appeal No. 8 of 1998)

Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.