Wakilii

Barclays Bank of Uganda v Musimami & Anor (Originating Summons 6 of 2011)

High Court · [2014] UGCOMMC 108 · 2014 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Originating summons by mortgagee bank seeking orders for foreclosure, sale of mortgaged property, and vacant possession following default on secured loan
Decision
Application granted in full; mortgagee bank entitled to foreclose, sell mortgaged property by private treaty, and obtain vacant possession with costs

Observed later treatment

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Holding

The High Court granted the mortgagee bank's application for foreclosure, sale and vacant possession. The court held that under CPR O.37 r.4, a mortgagee is entitled to foreclose and sell mortgaged property to recover principal debt, interest and incidental charges where the mortgagor has defaulted. The mortgage deed conferred statutory power of sale without further notice after default and demand. The bank was entitled to sell by private treaty as provided in the mortgage deed, and to receive vacant possession, particularly where the respondents had been served but failed to appear or respond.

Outcome

Application granted in full; mortgagee bank entitled to foreclose, sell mortgaged property by private treaty, and obtain vacant possession with costs

Facts

Barclays Bank advanced credit facilities of UGX 160,000,000 to the first respondent (mortgagor) and second respondent (principal debtor), secured by a mortgage over property comprised in LRV 3547, Folio 2, Plot 4134, land at Masajja. The respondents defaulted in repayment of principal and interest. The bank issued originating summons on 7 September 2011 seeking foreclosure, sale and vacant possession. Despite multiple adjournments and attempts at service, including service on the respondents' advocates and substituted service through newspaper advertisement in New Vision on 8 July 2014, the respondents failed to appear or file any response. The respondents' advocates withdrew stating they had no further instructions. The wife of the first respondent had consented to the mortgage. The matter proceeded ex parte under CPR O.9 r.1(a).

Issues

  1. Whether the applicant mortgagee is entitled to foreclose and sell the mortgaged property to recover principal debt, interest and other incidental charges.
  2. Whether the applicant is entitled to sell the mortgaged property by private treaty or public auction to recover the entire sum due together with costs and expenses.
  3. Whether the applicant is entitled to vacant possession of the mortgaged premises and to evict the first respondent and his agents or anyone claiming under him.

Orders

  • Application allowed.
  • Applicant bank entitled to foreclose and sell the mortgaged property comprised in LRV 3547, Folio 2, Plot 4134, land at Masajja.
  • Applicant entitled to sell the mortgaged property by private treaty to recover the entire sum due together with costs and expenses.
  • Applicant entitled to vacant possession of the mortgaged premises.
  • Applicant entitled to evict the first respondent and his agents or anyone claiming under him from the mortgaged premises.
  • Costs of the application awarded to the applicant.

Rules and key headnotes

Originating Summons — Mortgage Enforcement — Powers under O.37 r.4 CPR
Under CPR O.37 r.4, any mortgagee, whether legal or equitable, may take out an originating summons for relief including sale, foreclosure, and delivery of possession by the mortgagor, and such relief as the circumstances of the case may require.
Mortgage — Mortgagee's Remedies — Right to Foreclosure and Sale on Default
A mortgagee bank is entitled to foreclose and sell mortgaged property to recover all money due in respect of principal debt, interest and other incidental charges where the mortgagor has defaulted in repayment of the secured obligations.
Mortgage — Statutory Power of Sale — Exercise Without Further Notice
Where a mortgage deed confers upon the mortgagee statutory power of sale exercisable at any time without service of any other notice after payment has been demanded and the mortgagor has defaulted, the mortgagee may proceed to sale without further formalities once default is established.
Mortgage — Vacant Possession — Entitlement on Default and Sale Order
Where a court finds that a mortgagee bank is entitled to sell mortgaged property following default, it follows that the bank is also entitled to vacant possession of the mortgaged premises to facilitate the sale, even where the premises is a residential home and the spouse of the mortgagor consented to the mortgage.

Legislation cited (3)

  • Civil Procedure Rules O.37 r.4
  • Civil Procedure Rules O.37 r.8
  • Civil Procedure Rules O.9 r.1(a)

Full judgment

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Barclays Bank of Uganda v Musimami & Anor (Originating Summons 6 of 2011) [2014] UGCommC 108 (20 August 2014)
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.