Wakilii

Housing Finance Bank Limited v Mayanja T A Mat Hotel and Leisure Centre (Originating Summons 6 of 2021)

High Court · [2022] UGCOMMC 169 · 2022 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Originating summons for foreclosure, eviction and sale of mortgaged property following default on loan facility
Decision
Defendant foreclosed of right to redeem mortgaged property; eviction ordered; mortgagee permitted to sell property to recover outstanding debt

Observed later treatment

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Holding

The court granted foreclosure, eviction and permission to sell mortgaged property where the mortgagor defaulted on a UGX 236,000,000 loan facility secured by land comprised in Block 261 Plots 939 and 942 at Lukuli. The mortgagor failed to respond to required notices or file a defence. The mortgagee was granted free access to inspect and revalue the property and awarded costs, with outstanding debt established at UGX 258,953,301.

Outcome

Defendant foreclosed of right to redeem mortgaged property; eviction ordered; mortgagee permitted to sell property to recover outstanding debt

Facts

On 9 September 2013, the plaintiff bank advanced UGX 236,000,000 to the defendant under a loan facility agreement repayable in 10 years at 20.5% per annum. The loan was secured by mortgage over land comprised in Block 261 Plots 939 and 942 at Lukuli, registered in the defendant's name. The defendant also executed a deed of assignment agreeing to bank all business sale proceeds into a specified account. The defendant defaulted on loan payments. Despite service of required statutory notices, the defendant failed to clear the indebtedness. As of 16 September 2021, the outstanding amount including interest and charges stood at UGX 258,953,301. The defendant blocked the plaintiff from accessing the mortgaged property for inspection and valuation. Service of the originating summons was effected through publication in the Monitor newspaper on 1 April 2022, but the defendant failed to file a reply.

Issues

  1. Whether the Defendant should be foreclosed of his right to redeem the mortgaged properties.
  2. Whether the Defendant should be evicted from the mortgaged property.
  3. Whether the Defendant should give free access to the Plaintiff/Mortgagee to enter, inspect and revalue the mortgaged property.
  4. Whether the Plaintiff/Mortgagee should be permitted to sell the mortgaged property.
  5. Whether the Plaintiff/Mortgagee should be granted costs of this suit.

Orders

  • An Order that the Defendant gives free access to the Plaintiff to enter, inspect, and revalue the mortgaged property.
  • An Order of eviction against the Defendant from the mortgaged property.
  • An Order that the Plaintiff sells the mortgaged property.
  • Costs of this suit are granted to the Plaintiff.

Rules and key headnotes

Mortgage Foreclosure — Mortgagee's Remedies on Default
Under section 20 of the Mortgage Act 2009, where a mortgagor is in default and does not comply with notice served under section 19, the mortgagee may require payment of all monies owing, appoint a receiver, lease the mortgaged land, enter into possession of the mortgaged land, or sell the mortgaged land.
Mortgage Law — Effect of Mortgage as Security
Under section 8(1) of the Mortgage Act 2009, a mortgage has effect as a security only and does not operate as a transfer of any interest or right in the land from the mortgagor to the mortgagee, but the mortgagee has all the powers and remedies in case of default by the mortgagor.
Default — Failure to File Defence — Effect
Failure to file a defence raises a presumption or constructive admission of the claim made in the plaint and the plaintiff's story must be accepted as the truth.
Costs — Discretion of Court — Costs Follow the Event
Costs are in the discretion of the court, and costs follow the event unless for justified reasons the court otherwise orders. A successful party can only be denied costs if it is proved that, but for their conduct, the action would not have been brought; costs will follow the event where the party succeeds in the main purpose of the suit.

Legislation cited (15)

Cases cited (3)

  • Housing Finance Bank Limited v Seninde Margaret & Anor (Originating Summons No. 7 of 2021)
  • United Building Services Limited v Yafesi Muzira T/A Quickset Builders and Co (HCCS No. 154 of 2005)
  • Uganda Development Bank v Muganga Construction Co Ltd (1981) HCB 35

Full judgment

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

Housing Finance Bank Limited v Mayanja T A Mat Hotel and Leisure Centre (Originating Summons 6 of 2021) [2022] UGCommC 169 (30 August 2022)
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.