Wakilii

Greenland Bank Ltd v Westmont Land (Asia) (CIVIL SUIT NO. 309 OF 1999)

High Court · [1999] UGHC 46 · 1999 Preliminary Objection Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Preliminary objection to plaintiff's locus standi in a civil suit for debt recovery
Decision
Preliminary objection dismissed; matter to proceed to full hearing

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

Held that when the Central Bank takes possession of a financial institution under the Financial Institutions Statute, the institution does not cease to exist as a corporation sole. The Central Bank assumes management and control but must sue or be sued in the name of the seized institution, not in its own name. The expression 'in its name' in section 52(2)(e) refers to the name of the financial institution, not the Central Bank. The Board of Directors appointed by the Central Bank had authority to instruct counsel, and counsel's authority was validly given. Preliminary objection overruled with costs.

Outcome

Preliminary objection dismissed; matter to proceed to full hearing

Facts

Greenland Bank Ltd brought a suit to recover money advanced as credit facilities to Westmont Land (Asia) Bhd. The defendant raised a preliminary objection that counsel for the plaintiff lacked authority to institute the suit because Greenland Bank had been closed and taken over by the Bank of Uganda under section 51 of the Financial Institutions Statute 1995 and was due for liquidation. The defendant contended that the Central Bank, having assumed exclusive management and control, should have sued in its own name rather than in the name of Greenland Bank, and that the new Board of Directors appointed by the Central Bank had only an advisory role and could not authorise legal proceedings. Counsel for the plaintiff argued that the bank retained its corporate personality and that the Board had been validly authorised by the Central Bank to instruct counsel.

Issues

  1. Whether the plaintiff bank, having been taken over by the Central Bank under the Financial Institutions Statute, ceased to be a corporation sole capable of suing and being sued.
  2. Whether the Central Bank must sue in its own name or in the name of the seized financial institution.
  3. Whether counsel for the plaintiff had authority to institute the suit on behalf of the bank after it had been seized by the Central Bank.
  4. What is the meaning of the expression 'in its name' in section 52(2)(e) of the Financial Institutions Statute 1995.

Orders

  • Preliminary objection overruled.
  • Costs awarded to the plaintiff.
  • Defendant granted leave to appeal against the interpretation of section 52(2)(e) of the Financial Institutions Statute.

Rules and key headnotes

Banking & Finance — Financial Institutions Statute — Seizure of Financial Institution — Effect on Corporate Personality
When the Central Bank takes possession of a financial institution under section 51 of the Financial Institutions Statute 1995, the institution does not cease to exist as a corporation sole capable of suing and being sued. The Central Bank assumes the roles of management and control previously exercised by the Board of Directors and depositors, but the institution retains its corporate character until liquidation.
Statutory Interpretation — Financial Institutions Statute — Meaning of 'In Its Name'
The expression 'in its name' in section 52(2)(e) of the Financial Institutions Statute 1995, which provides that the Central Bank may 'initiate, defend and conduct, in its name, any action or proceeding to which the financial institution may be a party', means in the name of the financial institution, not in the name of the Central Bank. The Central Bank sues or is sued as representative of the seized institution, not as if it had become the institution itself.
Banking & Finance — Financial Institutions Statute — Authority of Counsel — Seized Institution
Where the Central Bank has seized a financial institution and appointed a new Board of Directors under section 52(2)(c) of the Financial Institutions Statute 1995, that Board has authority to instruct counsel to institute legal proceedings on behalf of the institution, provided the Board has been authorised by the Central Bank. A press release stating that the Board's role is advisory does not override the statutory powers of the Board as appointed staff of the Central Bank.
Civil Procedure — Locus Standi — Challenge to Counsel's Authority — Proof
When an advocate who institutes a suit holds a valid practising certificate, the presumption is that he has been authorised by the client. Where counsel's authority is challenged in the defence, counsel should respond by disclosing the authority. However, failure to formally plead or list a letter of authority before a preliminary objection does not extinguish valid authority. It would be a mere technicality to disqualify counsel on grounds of non-disclosure where the authority was validly given and occasions no miscarriage of justice.

Legislation cited (6)

  • Financial Institutions Statute 1995 s.51
  • Financial Institutions Statute 1995 s.52
  • Financial Institutions Statute 1995 s.52(2)(e)
  • Public Enterprises Reform and Divestiture Statute 1993 s.20
  • Public Enterprises Reform and Divestiture Statute 1993 s.21
  • Public Enterprises Reform and Divestiture Statute 1993 s.25

Cases cited (1)

  • Peoples Transport Company Ltd v Afric Co-operative Society Ltd (High Court Civil Suit No. 467 of 1995)

Full judgment

↓ Download PDF

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

Greenland Bank Ltd v Westmont Land (Asia) (CIVIL SUIT NO. 309 OF 1999) [1999] UGHC 46 (25 August 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.