Wakilii

Anisuma Traders Ltd v Golf Course Holdings Ltd (Miscellaneous Application No. 36 of 2016)

High Court · [2016] UGCOMMC 33 · 2016 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction arising from civil suit
Decision
Temporary injunction granted with conditions; goods released to applicant pending determination of the main suit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a temporary injunction should issue restraining the respondent from selling the applicant's goods. The court found serious triable issues existed, including whether a landlord can levy distress on a third party's property to satisfy a tenant's rent arrears. The applicant demonstrated prima facie ownership of goods held under a specialty agreement with Uchumi, and the property should not be sold pending determination of ownership. Balance of convenience favoured the applicant as goods would be unavailable as evidence if sold and applicant stood to lose more than the respondent.

Outcome

Temporary injunction granted with conditions; goods released to applicant pending determination of the main suit

Facts

The applicant operated an outlet for its electronic products and home appliances within Uchumi Supermarkets at Garden City Mall under a specialty agreement dated 5 July 2013. The agreement provided that the applicant's goods would be sold through Uchumi's system with Uchumi acting as agent and remitting proceeds less a market access fee. The goods remained the applicant's property throughout. In late 2015, Uchumi closed business and went into liquidation owing the respondent landlord over US$400,000 in rent arrears. The respondent instituted distress proceedings against Uchumi and seized all goods in the supermarket, including the applicant's property valued at UGX 317,546,573. On 11 January 2016, the respondent advertised the goods for sale by public auction. The applicant sought a temporary injunction to prevent the sale, claiming the goods were its property and not Uchumi's. The respondent contended it was unaware of any arrangement between the applicant and Uchumi, that any subletting would have been illegal without the landlord's consent, and that the applicant's claim should be pursued against Uchumi in the liquidation proceedings.

Issues

  1. Whether the applicant established a prima facie case with a probability of success
  2. Whether the specialty agreement between the applicant and Uchumi was illegal and unenforceable
  3. Whether the applicant's claim disclosed a cause of action against the respondent
  4. Whether the applicant would suffer irreparable injury that cannot be adequately compensated by damages
  5. Whether the balance of convenience favoured the grant of a temporary injunction
  6. Whether the respondent had the right to levy distress for rent against goods belonging to a third party (the applicant)
  7. Whether goods of a third party should be sold to satisfy debts of a tenant

Orders

  • A conditional temporary injunction issues restraining the Respondent's servants and/or agents or entity claiming title or interest in the Applicant's home appliances and products situated on the Respondent's premises at Garden City Mall, Kampala from selling or dealing with them in any way until final disposal of the main suit.
  • The goods shall be released to the Applicant on condition that the Applicant shall account for the proceeds of sale to the court and is liable to indemnify the Respondent should the suit be resolved against the Applicant.
  • The costs of this Application shall abide the outcome of the main suit.

Rules and key headnotes

Temporary Injunctions — Grant — Conditions
For a temporary injunction to be granted, the applicant must show: (i) a prima facie case with a probability of success (i.e. serious questions to be tried and the action is not frivolous or vexatious); (ii) irreparable injury which cannot be adequately compensated by damages; and (iii) if the court is in doubt, the balance of convenience favours the applicant.
Distress for Rent — Third Party Property — Protection
Property of a third party should not be sold to recover money to clear the debts of another person. Where a third party claims ownership of goods subject to distress for rent, the court should protect such property from sale pending determination of ownership, consistent with the principles underlying objector proceedings to attachment and sale.
Distress for Rent — Landlord and Tenant Relationship Required
Distress for rent under the Distress for Rent (Bailiffs) Act can only be levied where there is a relationship of landlord and tenant. A landlord cannot levy distress against a person with whom there is no landlord-tenant relationship.
Illegal Contracts — Specialty Agreements — Effect on Third Party Property Rights
A breach by a tenant of a tenancy agreement (such as failure to obtain landlord's consent for subletting or sharing possession) may not necessarily rob a third party of its property rights. Questions of illegality of a tenancy arrangement may lead to claims for mesne profits but do not automatically result in forfeiture of third party property held on the premises.
Injunctions — Balance of Convenience — Sale of Property as Evidence
In determining balance of convenience for grant of an injunction, the court must consider that if goods are sold, there would be no evidence of them available to try the question of ownership. Title may pass to bona fide purchasers, rendering the action nugatory and depriving the court of primary evidence.
Injunctions — Jurisdiction — Section 37(1) Judicature Act
The High Court's power to grant an injunction under section 37(1) of the Judicature Act is wide and should not be restrictively applied. It is exercisable according to the facts and circumstances of each case where the dictates of justice demand, and may be granted unconditionally or on such terms as the court thinks just.
Agency — Commission Agent — Possession of Principal's Goods
Where one party acts as a commission agent or outlet for another's products under an agreement that goods remain the property of the principal, the mere possession of goods by the agent on leased premises does not make the goods subject to the landlord's distress for the agent's rent arrears. The principal's property rights are distinct from the agent's tenancy obligations.

Legislation cited (10)

Cases cited (21)

  • American Cyanamid Company v Ethicon Limited (1975) 1 All ER 504
  • Kiyimba Kaggwa v Hajji Abdu Nasser Katende (1985) HCB 43
  • MTN Uganda Ltd v Three Ways Shipping Group Ltd (High Court Civil Suit No. 503 of 2012)
  • Bonny Katatumba and Hotel Diplomat Ltd v Shumuk Springs Development Ltd and Another (High Court Miscellaneous Application No. 193 of 2009)
  • Francis Kayanja v Diamond Trust Bank of Uganda Ltd (High Court Miscellaneous Application No. 300 of 2008)
  • Makula International v Cardinal Nsubuga Wamala (1982) 2 HCB 11
  • Active Automobile Spare Limited v Crane Bank Limited and another (Supreme Court Civil Appeal No. 21 of 2001)
  • Broadways Construction Company v Musa Kasule and 2 others (Court of Appeal Civil Appeal No. 39 of 1977)
  • Erukana Kuwe v Isaac Patrick Matovu and another (High Court Civil Suit No. 177 of 2003)
  • Tororo Cement Limited v Frokina International Limited (Court of Appeal Civil Appeal No. 1 of 2001)
  • Auto garage & Another v Motokov (no.3) (1971) EA 514
  • Kakooza Abdullah v Stanbic Bank (U) Ltd (High Court Miscellaneous Application No. 614 of 2012)
  • NAS Airport Services Limited v The Attorney General of Kenya (1959) 1 EA 53
  • Montgomery v Montgomery [1964] All E.R. 22
  • Harilal & Company v Buganda Industries Ltd [1960] 1 EA 318
  • John Verjee and Another v Simon Kalenzi (Court of Appeal Civil Appeal No. 71 of 2000)
  • C. Baguma v Highland Agricultural Export Ltd (High Court Miscellaneous Application No. 655 of 2001)
  • Curtis v Maloney [1951] 1 K.B. 736
  • Dyal Singh v Kenyan Insurance Ltd [1954] 1 ALL ER 847
  • Goodlock v Cousins [1897] 1 Q.B. 558
  • Joy Tushabe & Anor v Ms Anglo - African Ltd & Anor (Supreme Court Civil Appeal No. 7 of 1999)

Full judgment

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Anisuma Traders Ltd v Golf Course Holdings Ltd (Miscellaneous Application No. 36 of 2016) [2016] UGCommC 33 (1 April 2016)
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.