Wakilii

Grindlays Bank (U) Limited v Boazi (Civil Appeal 23 of 1992)

Supreme Court · [1992] UGSC 20 · 1992 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court judgment in a mortgage suit concerning the validity of a receiver's appointment and sale of mortgaged property
Decision
Appeal dismissed; the purported sale held null and void, the property remains with the respondent, and the High Court judgment stands

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Supreme Court dismissed the bank's appeal. Under the Mortgage Deed and the Mortgage Decree 1974, a receiver had to be appointed in writing by the bank's manager or officer; the bank could not delegate that power to its advocates, and an appointment not made in writing was void. A written demand for repayment was also required under sections 115 and 116 of the Registration of Titles Act, and notice of sale did not amount to such demand. Because no valid receiver was appointed and no demand made, the purported sale, conducted by private treaty rather than public auction, was null and void and passed no title to the purchaser. The property rightly remained with the respondent.

Outcome

Appeal dismissed; the purported sale held null and void, the property remains with the respondent, and the High Court judgment stands

Facts

In 1976 Joe Mayanja obtained a loan of shs.250,000 from Grindlays Bank. The respondent, Edward Boazi, guaranteed the loan and secured it by mortgaging his leasehold property (Register Volume 693 Folio 19) at Najjanankumbi, Entebbe Road, under a mortgage deed executed on 24 February 1976. The mortgage was registered under the Registration of Titles Act. When Mayanja defaulted, the bank treated the loan as recalled. The bank verbally instructed its advocates to appoint a receiver, who in turn instructed a court broker, Sempala Musoke, to advertise and sell the property. The property was sold in July 1979 to one Kyaluzi. No written instrument appointing a receiver was produced, and no direct written demand for repayment was made to either the borrower or the mortgagor. After an advertised auction was stayed, the property was disposed of by private treaty rather than re-advertised public auction. The respondent sued in 1984 for the return of his property and damages, contending no valid receiver was appointed and the sale was null and void.

Issues

  1. Whether a receiver was validly appointed in respect of the mortgaged property as required by the Mortgage Deed and the Mortgage Decree.
  2. Whether there was a valid sale of the mortgaged property by the receiver.
  3. Whether a written demand for repayment was required and made before the appointment of a receiver.
  4. Whether the respondent was liable for the conduct of the person who sold the property.
  5. Whether title to the property passed to the purchaser.

Orders

  • Appeal dismissed with costs to the respondent, here and in the court below.

Rules and key headnotes

Mortgages — Appointment of Receiver — Requirement of Writing and Non-Delegability
Where a mortgage deed and the Mortgage Decree require a receiver to be appointed in writing by the mortgagee's manager or officer, the mortgagee may not delegate that power to its advocates, and an appointment of a receiver not made in writing is void and of no effect.
Mortgages — Realisation of Security — Requirement of Written Demand
Under sections 115 and 116 of the Registration of Titles Act, a mortgagee must make a written demand for repayment before appointing a receiver, and a mere notice of sale does not amount to a demand within the meaning of those provisions or the mortgage deed.
Mortgages — Sale by Invalidly Appointed Receiver — Effect on Title
A sale of mortgaged property by a person not validly appointed as a receiver, and conducted by private treaty rather than by public auction, is null and void and passes no title to the purchaser.
Mortgages — Registration of Receiver's Appointment — Not Required
Neither the Registration of Titles Act nor the Mortgage Decree requires the appointment of a receiver under a mortgage to be registered with the Registrar of Titles.

Legislation cited (5)

Full judgment

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

Grindlays Bank (U) Limited v Boazi (Civil Appeal 23 of 1992) [1992] UGSC 20 (1 December 1992)
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.