Wakilii

Damiano Ssekiziyivu v Banyonyi Finances & Investment Co Ltd & 12 Ors (Civil Suit No. 108 of 2011)

High Court · [2015] UGCOMMC 121 · 2015 Preliminary Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Ruling on preliminary objection to plaint in a civil suit for recovery of monies paid to redeem mortgaged property
Decision
Preliminary objection overruled; substantive suit to proceed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a plaintiff who granted a power of attorney over his property to secure a loan has a cause of action to recover monies paid to redeem that property after the donee defaulted. The donee acts as agent for the donor, and the donor retains the right to redeem property under threat of sale. The plaint disclosed that the plaintiff enjoyed a right which was violated, and the defendants are liable. Preliminary objection overruled.

Outcome

Preliminary objection overruled; substantive suit to proceed

Facts

The plaintiff granted the 1st defendant company and its directors a power of attorney over his property at Plot No. 10-12 Mutagwanya Lane, Mubende, for a period of five years to secure a loan from DFCU Bank Ltd. The defendants borrowed UGX 140,000,000 using the property as security. The defendants defaulted on the loan and also failed to pay rent of UGX 3,600,000 for occupation of the property. When the property was threatened with sale, the plaintiff redeemed it by paying UGX 70,340,437 as the outstanding loan amount and interest. The plaintiff then sued to recover the redemption monies and rent arrears. The defendants raised a preliminary objection that the plaint disclosed no cause of action because the plaintiff had no contractual right to be refunded the sums he paid to DFCU Bank.

Issues

  1. Whether the plaint discloses a proper cause of action.
  2. Whether the plaintiff has a right to sue the defendants on a contract that he is not privy to.

Orders

  • Preliminary objection overruled.

Rules and key headnotes

Civil Procedure — Preliminary Objections — Cause of Action — Test for Disclosure
A plaint discloses a cause of action where it shows that the plaintiff enjoyed a right, that right has been violated, and that the defendant is liable.
Contract Law — Agency — Power of Attorney — Legal Relationship Between Donor and Donee
The donee of a power of attorney acts as agent of the donor and for the donor. A legal relationship of principal and agent exists between the donor and the donee.
Land & Property — Power of Attorney — Redemption — Donor's Right to Redeem Property Under Threat of Sale
Where a donor grants a power of attorney to use land as security for a loan and the donee defaults, the donor retains the right to redeem the property when it is under threat of sale, notwithstanding that the power of attorney conferred on the donee a power to redeem.
Civil Procedure — Preliminary Objections — Cause of Action — Plaintiff's Right to Sue for Recovery of Monies Paid to Redeem Property
A plaintiff who grants a power of attorney over his property to secure a loan and subsequently pays to redeem that property after the donee's default has a cause of action to recover those monies from the donee, even where the loan contract was between the donee and a third-party lender.

Legislation cited (2)

Cases cited (4)

  • Attorney General of Kenya v Independent Medical Legal Unit (East African Court of Justice Appeal No. 1 of 2011)
  • Auto Garage v Motokov (No.3) [1971] EA 514
  • Tororo Cement Co Ltd v Frokina International Ltd (Court of Appeal No. 2 of 2001)
  • Fredrick JK Zaabwe v Orient Bank & 4 Others (Court of Appeal No. 4 of 2006)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Damiano Ssekiziyivu v Banyonyi Finances & Investment Co Ltd & 12 Ors (Civil Suit No. 108 of 2011) [2015] UGCommC 121 (14 May 2015)
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.