Wakilii

Housing Finance Bank v Lugayizi Japheth (Miscellaneous Cause No. 14 of 2025)

High Court · [2025] UGHC 763 · 2025 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for vacant possession of mortgaged property following default on loan secured by legal mortgage
Decision
Respondent ordered to deliver vacant possession of mortgaged property to Applicant; eviction order to issue in default

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court granted the mortgagee bank's application for vacant possession of mortgaged property following the mortgagor's default on a loan of UGX 215,000,000. The court held that the mortgagor was bound by the loan agreement's interest rate and default provisions, having signed the agreement with opportunity for independent legal advice. The mortgagor's belated challenges to the interest rate, claims of substantial repayments without evidence, and arguments that the five-year loan term had not expired could not override express default provisions triggered by failure to pay instalments. The bank complied with statutory notice requirements under the Mortgage Act by serving notices of default and sale, and no separate notice of possession was required once foreclosure was initiated. Valuation prior to advertisement was not required, only prior to actual sale.

Outcome

Respondent ordered to deliver vacant possession of mortgaged property to Applicant; eviction order to issue in default

Facts

Housing Finance Bank granted Lugayizi Japheth a loan of UGX 215,000,000 on 15 April 2021, secured by a legal mortgage over property comprised in Busiro Block 332 Plot 74 at Kakungube, Wakiso District. The loan agreement provided for interest at 20.3% per annum plus 5% penalty interest on arrears. The respondent defaulted on instalment payments. The loan was written off at UGX 272,235,603.47 on 29 June 2023. The bank served a notice of default on 28 October 2021 requiring payment within 45 days, which expired on 12 December 2021 without compliance. The bank then served a notice of sale on 15 March 2022 and advertised the property for sale on 16 June 2022. The respondent refused to hand over vacant possession, prompting the bank to seek a court order for possession.

Issues

  1. Whether the Applicant is entitled to an order of vacant possession of the mortgaged property comprised in Busiro Block 332 Plot 74 land at Kakungube, Wakiso District?
  2. What remedies are available to the parties?

Orders

  • The Respondent is hereby ordered to deliver vacant possession to the Applicant or the Applicant's authorized agents of the property that is the subject of mortgage security dated 20th April 2021 securing the Respondent's outstanding loan with the Applicant to wit land and developments comprised in Busiro Block 332 Plot 74 land at Kakungube, Wakiso District, and developments thereon.
  • In default thereof, an eviction order doth issue against the Respondent in favour of the Applicant in respect of the property comprised in Busiro Block 332 Plot 74 land at Kakungube, Wakiso District.
  • Costs of this Application are awarded to the Applicant.

Rules and key headnotes

Mortgage — Affidavit in Support — Authority of Deponent — Principal Officer
A litigation and recovery officer of a bank qualifies as a principal officer with capacity to depose to facts in a mortgage enforcement application without requiring special written authorisation, as the law presumes that certain categories of employees have ostensible authority to act for the company.
Contract — Validity — Consent — Interest Rates — Unconscionability
Where a borrower signs a loan agreement containing clear interest rate provisions and performs under the contract for a substantial period without objection, the borrower cannot later challenge the interest rate as unconscionable after defaulting, absent evidence of fraud, coercion, or misrepresentation at the time of contracting.
Contract — Validity — Legal Representation — Independent Advice
Where a loan agreement expressly advises the borrower to seek independent legal advice and the borrower signs a declaration confirming receipt of requisite explanations and absence of undue influence, the borrower cannot subsequently challenge the validity of the agreement on grounds of lack of legal representation, absent credible evidence of fraud, coercion, or misrepresentation.
Contract — Breach — Default on Instalments — Acceleration Clause
Where a loan agreement provides that failure to pay one or more instalments constitutes an event of default entitling the lender to demand immediate payment of all outstanding amounts, the borrower's argument that the overall loan term has not expired cannot override the express default provisions triggered by non-payment of instalments.
Contract — Performance — Duty to Communicate Difficulties — Modification of Terms
A party to a contract who experiences difficulty in performing contractual obligations has a duty to reach out to the contractual counterpart to negotiate modification of terms. A party who fails to communicate difficulties and unilaterally ceases performance remains liable under the original terms and cannot rely on willingness to pay as a defence after prolonged default.
Mortgage — Foreclosure — Statutory Notices — Notice of Possession
Where a mortgagee has served a notice of default under section 18 of the Mortgage Act and a notice of sale under section 25 which expressly states that auctioneers have been instructed to take possession, no separate statutory notice of possession is required. The notice of sale constitutes sufficient notice to the mortgagor to deliver vacant possession once the foreclosure process has been properly initiated.
Mortgage — Foreclosure — Valuation — Timing Requirement
Regulation 11 of the Mortgage Regulations requires a mortgagee to conduct valuation of mortgaged property prior to sale, not prior to advertisement of sale. Where an advertisement has been issued but no sale has yet taken place, the mortgagee cannot be faulted for failing to attach a valuation report, as the requirement only crystallises when the sale is imminent.

Legislation cited (17)

Cases cited (23)

  • Nakiryowa Majorie Kiddu and Another v Maurie S. Serugo Kiddu and Another (Civil Suit No. 587 of 2015)
  • Black Market Records v Malinga Sulaiman Aka (Ugeboy Coins) and 3 Others (Miscellaneous Application No. 2788 of 2023)
  • Ssali Samuel v Gladys K. Rwamwamba (High Court Miscellaneous Application No. 514 of 2024)
  • Friecca Pharmacy Limited v Anthony Natif (Miscellaneous Application No. 498 of 2019)
  • Equity Bank (U) Ltd v Buyinza John (Miscellaneous Cause No. 33 of 2018)
  • William Kasozi v DFCU Bank Limited (High Court Civil Suit No. 1326 of 2000)
  • Foster V Mackinnon (1869) L.R. 4 C.P. 704
  • Felthouse V Bindley (1862) 11 C.B. (N.S.) 869
  • Chikkam Ammiraju V Chikkam Seshamma (1917) 41 Mad. 33
  • Inche Noriah V Shaik 5 Allie Bin Omar (1929) A.C. 127
  • Ward V Hobbs (1878) A.C. 13
  • Collen V Wright (1857) E. and B. 647
  • Tumusiime v Idringi (Civil Suit No. 321 of 2018)
  • SBI International Holdings (U) Ltd v COF International Co. Limited (Civil Appeal No. 194 of 2014)
  • Kyarimpa Sarah v Harreit Nassozi Hewet (High Court Civil Suit No. 793 of 2016)
  • Fenghua Limited v Modena MN Group Construction (U) Limited and Others (High Court Civil Suit No. 735 of 2022)
  • Barclays Bank of Uganda v Musimami and Another (Originating Summons No. 6 of 2011)
  • Stanbic Bank Uganda Limited v Dahable Uganda Limited and Another (Miscellaneous Cause No. 93 of 2023)
  • Guaranty Trust Bank Uganda Limited v Dokwals Uganda Limited and Dokwal Rupesh Kumar (Civil Suit No. 1 of 2021)
  • Steel Rolling Mills Ltd and 2 Others v Standard Chartered Bank (U) Ltd (High Court Miscellaneous Application No. 829 of 2015)
  • Herbert Kabunga Traders v Stanbic Bank (U) Ltd (High Court Miscellaneous Application No. 159 of 2012)
  • Uganda Development Bank Ltd v Ringa Enterprises Co. Ltd and Another (High Court Miscellaneous Application No. 12 of 2015)
  • Uganda Development Bank Vs Muganga Construction Co. Ltd (1981) H.C.B 35

Full judgment

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Housing Finance Bank v Lugayizi Japheth (Miscellaneous Cause No. 14 of 2025) [2025] UGHC 763 (4 August 2025)
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.