Equity Bank (U) Limited v Rubahimbya (Civil Appeal 19 of 2023)
Observed later treatment
No later-treatment classification is recorded for this judgment.
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Holding
The High Court held that where a mortgagee has commenced steps to exercise its power of sale under Section 26 of the Mortgage Act by issuing statutory notice, a court order stopping the sale constitutes an adjournment or stoppage under Regulation 13(1) of the Mortgage Regulations 2012, which mandates payment of 30% security deposit. The Deputy Registrar erred in waiving this requirement as the respondent did not fall within the statutory exception for spouses under Regulation 13(6). The injunction granted without enforcing the deposit requirement was improper.
Outcome
Deputy Registrar's ruling set aside; matter remitted for compliance with Regulation 13(1) deposit requirement
Facts
On 27 August 2020, the appellant bank granted the respondent a loan facility of UGX 900,000,000. The respondent defaulted, with outstanding debt of UGX 991,254,129. On 10 January 2023, the appellant issued statutory notice under Section 26 of the Mortgage Act to sell the mortgaged property. On 2 February 2023, the respondent filed suit seeking specific performance. On 6 June 2023, the respondent obtained a temporary injunction restraining sale of the property. The Deputy Registrar granted the injunction without requiring the 30% security deposit stipulated in Regulation 13(1) of the Mortgage Regulations 2012, ruling that the respondent's case fell within provisions allowing waiver of the deposit. The appellant appealed this ruling.
Issues
- Whether the Learned Deputy Registrar erred in law and fact when she ruled that the respondent's case falls within the provision of the law where the payment of 30% security deposit can be waived.
- Whether the respondent should pay security deposit of 30% of the outstanding amount as a condition for the grant of temporary injunction under Regulation 13(1) of the Mortgage Regulations 2012.
Orders
- Appeal allowed.
- The Deputy Registrar's ruling in Miscellaneous Application 25 of 2023 waiving the 30% deposit requirement set aside.
- Costs of the appeal awarded to the appellant.
Rules and key headnotes
Legislation cited (7)
Cases cited (3)
- Mutegeki v Mutabazi & 2 Others (Miscellaneous Application No. 109 of 2016)
- Nakayaga v Fina Bank Ltd & Another (High Court Miscellaneous Application No. 471 of 2014)
- Ganafa Peter Kisawuzi v DFCU Bank Ltd (Court of Appeal Civil Application No. 64 of 2016)
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.