Wakilii

Global Trust Bank Ltd v Mugisha (HCT-00-CC-OS 5 of 2012)

High Court · [2013] UGCOMMC 126 · 2013 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application by originating summons for foreclosure and sale of mortgaged property
Decision
Foreclosure granted; mortgaged property to be sold; defendant to deliver vacant possession

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The court held that a mortgagee may exercise its right of foreclosure under section 8(1) of the Mortgage Act where the mortgagor breaches the covenant to pay and fails to remedy the default despite notice. Where the defendant admitted obtaining a loan secured by mortgage, failed to make agreed monthly installments for two years, and failed to prove an alleged partial payment, the court found this a proper case for foreclosure and ordered sale of the mortgaged property.

Outcome

Foreclosure granted; mortgaged property to be sold; defendant to deliver vacant possession

Facts

On 9 February 2011, the defendant obtained a loan of UGX 80,000,000 from the plaintiff bank and mortgaged land on Block 395 Plot 1692 at Sekiwunga Busiro as security. The mortgage was registered on the certificate of title. Under the credit facility agreement, the defendant undertook to effect monthly payments of UGX 4,269,772. By 4 October 2012, the defendant had defaulted and owed the plaintiff UGX 126,173,356. The plaintiff served a default notice on the defendant, but payment was not made. The defendant admitted obtaining the loan and mortgaging his home but claimed to have paid UGX 45,000,000 in April 2013 through the plaintiff's lawyers and sought restructuring of loan payment terms. The plaintiff denied receiving this payment and the defendant provided no receipt or acknowledgement.

Issues

  1. Whether the plaintiff may exercise its right of foreclosure.
  2. What are the remedies available.

Orders

  • The plaintiff exercises its rights of foreclosure.
  • The property mortgaged is to be sold to realize the amount due.
  • The defendant delivers vacant possession of the security or mortgaged property.
  • Costs of the application to the plaintiff/Applicant.

Rules and key headnotes

Banking & Finance — Mortgages — Right of Foreclosure — Conditions for Exercise
Under section 8(1) of the Mortgage Act Cap 229, a mortgagee may apply to court to foreclose the right of the mortgagor to redeem the mortgaged land at any time after breach of the covenant to pay, and if the mortgagor fails to pay, the court shall order foreclosure and that the land be offered for sale.
Banking & Finance — Mortgages — Effect of Foreclosure
Foreclosure makes the mortgagee the absolute owner of the property given as security, and the right to foreclose arises when repayment has become due at law, when the legal date for redemption has passed, or when the mortgagee has made the money fall due on breach of any term of the mortgage.
Civil Procedure — Mortgage Proceedings — Originating Summons
Under Order 37 rule 4 of the Civil Procedure Rules, a mortgagee may take out as of course an originating summons returnable to a judge in chambers for relief including sale, foreclosure, or delivery of possession by the mortgagee.
Evidence — Proof of Payment — Burden on Party Asserting Payment
A defendant asserting payment of a sum to the plaintiff's lawyers must prove the payment with receipts, acknowledgements, or reflection in the bank's ledger showing the outstanding loan balance; failure to provide such evidence and failure to depose to the alleged payment on oath renders the claim unproved.

Legislation cited (4)

Cases cited (1)

  • How v Vigures (1628) 1 Ch Rep 32

Full judgment

↓ Download PDF

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

Global Trust Bank Ltd v Mugisha (HCT-00-CC-OS 5 of 2012) [2013] UGCommC 126 (27 June 2013)
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.