Wakilii

David Mpanga & Anor v Roliat Property Agency Ltd (Civil Suit No. 7 of 1998) (Civil Suit No. 7 of 1998)

High Court · [1999] UGHC 10 · 1999 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application under s.352 of the Companies Act for directions by a court-appointed receiver in relation to performance of receivership functions
Decision
Application granted with orders directing respondent to cease obstruction of receivership, submit claims through proper channels, retract damaging publication, and pay costs

Observed later treatment

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Holding

Held that the preliminary objection challenging the validity of the debenture failed. No evidence of fraud or forgery was proved, and the certificate of registration issued by the Registrar of Companies under s.99 of the Companies Act was conclusive evidence that registration requirements were satisfied. The respondent landlord lacked standing to challenge the receivership and must submit its claim as a creditor to the receiver rather than obstruct receivership operations. The respondent was ordered to retract its damaging newspaper publication and pay costs.

Outcome

Application granted with orders directing respondent to cease obstruction of receivership, submit claims through proper channels, retract damaging publication, and pay costs

Facts

The first applicant was appointed receiver of Beaton Bakery & Confectionery Ltd by DFCU under a mortgage debenture. The second applicant owed rent arrears to the respondent landlord. The respondent held property of the company under receivership and denied the receiver access to it. The receiver advised the respondent to submit its claim as a creditor. Instead, the respondent published a notice in the New Vision newspaper alleging irregular circumstances and challenging the receivership. The receiver applied for court directions under s.352 of the Companies Act. The parties initially signed a consent order on 11 November 1998 whereby the respondent undertook not to obstruct the receivership and to present its claims to the receiver. At the full hearing, the respondent raised a preliminary objection alleging the debenture was defective because the word April appeared to have been cancelled and replaced with July, suggesting fraudulent backdating to avoid registration time limits under s.96 of the Companies Act.

Issues

  1. Whether the debenture pursuant to which the first applicant was appointed receiver was defective and the appointment therefore unlawful.
  2. Whether the respondent landlord should be restrained from obstructing the receiver's management of the company under receivership.
  3. Whether the respondent should be ordered to retract allegedly false statements published in a newspaper concerning the receivership.

Orders

  • The respondent shall submit its claims to the receiver for settlement pursuant to the rules governing receivership.
  • The respondent shall desist from interfering with the work of the receiver.
  • The respondent is ordered to retract its publication in the New Vision newspaper in a very distinct space of the same newspaper.
  • The respondent shall pay the costs of these proceedings to the first applicant.

Rules and key headnotes

Receivership — Court Directions — Scope of s.352 Companies Act
A receiver appointed under powers in a mortgage instrument may apply to court under s.352 of the Companies Act for directions in relation to any particular matter arising in connection with the performance of receivership functions, and the court may give such directions or make such order declaring the rights of persons as it thinks just.
Debentures — Registration — Conclusiveness of Certificate under s.99 Companies Act
A certificate of registration of a charge or mortgage issued by the Registrar of Companies under s.96(1) of the Companies Act is conclusive evidence that the requirements of the Act as to registration have been complied with.
Pleadings — Fraud and Forgery — Requirement of Special Pleading and Proof
Allegations of fraud or forgery must be specially pleaded and specifically proved by evidence. Where a party alleges that alterations to a document were made to avoid statutory requirements, this constitutes an allegation of fraud which must be specially pleaded and proved, and failure to do so is fatal to the objection.
Receivership — Standing to Challenge — Rights of Third Party Creditors
A landlord holding property of a company under receivership lacks locus standi to challenge the validity of the debenture or receivership appointment in the absence of challenge by the Registrar of Companies or the company itself. The landlord's remedy as a creditor is to submit its claim to the receiver for settlement according to receivership rules.
Consent Orders — Binding Effect — Bar to Reneging
Where a party has signed a consent order undertaking to submit claims to a receiver and not to obstruct the receivership, that party cannot be allowed to renege on its consent and must be held to its undertaking.

Legislation cited (5)

Full judgment

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David Mpanga & Anor v Roliat Property Agency Ltd (Civil Suit No. 7 of 1998) (Civil Suit No. 7 of 1998) [1999] UGHC 10 (3 February 1999)
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.