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Haruna Enterprises (U) Limited & Another v Diamond Trust Bank (U) Limited & Another (Civil Application 1271 of 2023)

Court of Appeal · [2024] UGCA 93 · 2024 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application before a single Justice of the Court of Appeal for a temporary injunction pending the determination of an appeal
Decision
Temporary injunction granted restraining sale of the suit property until determination of Civil Appeal No. 1553 of 2023

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A single Justice of the Court of Appeal granted a temporary injunction restraining the respondent banks from selling mortgaged property pending appeal. The court overruled two preliminary objections: the application need not first be filed in the High Court because the underlying suit had been dismissed and no pending suit existed there, and the injunction sought enforcement restraint, not a stay of the negative dismissal order. Applying the established conditions, the court found a prima facie case (the suit was dismissed under O.17 r.4 without a merits hearing, raising a fair-hearing question), irreparable damage, and a balance of convenience favouring the applicant in possession.

Outcome

Temporary injunction granted restraining sale of the suit property until determination of Civil Appeal No. 1553 of 2023

Facts

The first applicant was the registered proprietor of properties at Block 12 Plots 538, 826 and 898 at Mengo, developed with a market. The applicants had sued the respondent banks in High Court Civil Suit No. 42 of 2020 seeking, among other things, cancellation of a Security Realization Agreement of 2 November 2019 said to have been fraudulently executed. After timelines were set for filing witness statements and trial bundles, the applicants obtained leave to amend their plaint and filed an amended plaint, and the respondents later sought further and better particulars. On 29 November 2023 the trial Judge dismissed the suit with costs under Order 17 Rule 4 of the Civil Procedure Rules for failure to file within time. The applicants filed a notice of appeal. The respondents, asserting indebtedness under the mortgage, sent brokers to advertise the property for sale. The applicants sought a temporary injunction to preserve the status quo pending appeal.

Issues

  1. Whether the application for a temporary injunction was incompetent for not having first been filed in the High Court under Rule 42(1).
  2. Whether the application impermissibly sought to stay a negative order of dismissal incapable of being stayed.
  3. Whether the applicants satisfied the conditions for the grant of a temporary injunction restraining sale of the mortgaged property pending appeal.

Orders

  • An order of a temporary injunction is hereby issued restraining the respondents, their agents, representatives, nominees, assignees and/or successors in title from selling, transferring, alienating, evicting, dealing with or in any way interfering with the applicant's interest and possession of the properties comprised in Block 12 Plots 538, 826 and 898 at Mengo until the termination of Civil Appeal No. 1553 of 2023.
  • Costs shall abide the outcome of the appeal.

Rules and key headnotes

Civil Procedure — Temporary Injunctions — Concurrent Jurisdiction — Requirement to File First in High Court
The requirement under Rule 42(1) of the Court of Appeal Rules to first apply in the High Court does not apply to an application for a temporary injunction where the underlying suit has been dismissed, because there is then no pending suit in which the High Court could entertain such an application.
Civil Procedure — Injunctions — Distinction from Stay of a Negative Order
An application seeking to restrain enforcement of a mortgage and interference with possession pending appeal is an application for a temporary injunction and not a stay of a negative order of dismissal, and is therefore competent notwithstanding the rule that a negative order cannot be stayed.
Civil Procedure — Temporary Injunctions — Conditions for Grant
A temporary injunction will issue where the applicant shows a prima facie case with a probability of success, that he would otherwise suffer irreparable damage not adequately compensable in damages, and, where the court is in doubt, that the balance of convenience favours granting it.
Civil Procedure — Irreparable Damage — Dismissal Without Hearing on the Merits
Where a suit is dismissed under Order 17 Rule 4 without a hearing on the merits, an applicant who risks being condemned unheard contrary to the non-derogable right to a fair hearing under Articles 28(1) and 44(c) of the Constitution may be found to face irreparable damage justifying a temporary injunction.
Banking & Finance — Mortgages — Deposit of Forced Sale Value — When Regulation 13 Engaged
The requirement under the Mortgage Regulations to deposit a percentage of the forced sale value does not arise where the applicant is not seeking an adjournment of a sale but a temporary injunction preserving the suit property pending appeal.

Legislation cited (11)

  • Judicature (Court of Appeal Rules) Directions r.2(2)
  • Judicature (Court of Appeal Rules) Directions r.43
  • Judicature (Court of Appeal Rules) Directions r.44
  • Judicature (Court of Appeal Rules) Directions r.42(1)
  • Judicature (Court of Appeal Rules) Directions r.6(2)(b)
  • Judicature (Court of Appeal Rules) Directions r.76
  • Civil Procedure Rules O.41 r.1
  • Civil Procedure Rules O.17 r.4
  • Mortgage Regulations 2012 reg.13(1)
  • Constitution of the Republic of Uganda art.28(1)
  • Constitution of the Republic of Uganda art.44(c)

Cases cited (6)

  • Kare Distribution Ltd and Karegeya Geoffrey v NCBA Bank (Civil Application No. 100 of 2023)
  • Ganafa Peter Kisawuzi v DFCU Bank Ltd (Civil Application No. 0064 of 2016)
  • Robert Kanyuma v Hotel International (Civil Appeal No. 8 of 1990)
  • Gashumba Maniraguha v Sam Nkuliye (Civil Application No. 24 of 2015)
  • Stanley Kang'ethe Kinyanjui v Tony Ketter & 5 Others [2013] eKLR
  • Jayndrakumar Devechand Devani v Haridas Vallabhdas Bhadresa & Anor (Civil Appeal No. 21 of 1971)

Full judgment

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

Haruna Enterprises (U) Limited & Another v Diamond Trust Bank (U) Limited & Another (Civil Application 1271 of 2023) [2024] UGCA 93 (19 April 2024)
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.