Wakilii

Irene Namusoke v Centenary Rural Development Bank Limited [2020] UGHCCD 237

High Court · 2020 Judgment for Defendant on Counterclaim AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Counterclaim proceeding ex parte after plaintiff failed to file reply to counterclaim
Decision
Judgment entered for defendant/counterclaimant on counterclaim with award of outstanding loan balance, general damages, and interest

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that where a borrower defaults on a loan secured by mortgage and the mortgaged property is sold but proceeds are insufficient to discharge the debt, the lender is entitled to recover the outstanding balance. The court found that unchallenged evidence established an outstanding debt of UGX 77,685,203 after application of sale proceeds, and awarded this sum plus general damages for financial loss caused by the borrower's continued default.

Outcome

Judgment entered for defendant/counterclaimant on counterclaim with award of outstanding loan balance, general damages, and interest

Facts

On 4 July 2012, Centenary Bank advanced a loan of UGX 90,000,000 to Irene Namusoke, secured by a mortgage over land in Mityana. The loan was repayable in 24 monthly instalments of UGX 4,939,965. Namusoke defaulted, prompting the bank to recall the loan in February 2013. Initial foreclosure was stopped by interim order in March 2013. After dismissal of Namusoke's suit, the mortgaged property was advertised again in August 2018 and sold in October 2018 for UGX 90,000,000 to Hajji Sserwadda Muhammed. At the time of sale, the outstanding balance was UGX 137,258,615. After deducting advertising costs, auctioneers' fees, and other charges, UGX 75,000,000 was applied to the loan, leaving a balance of UGX 62,258,615. With accrued interest, the total outstanding amount reached UGX 77,685,203. Namusoke filed no reply to the counterclaim and the matter proceeded ex parte.

Issues

  1. Whether there are any outstanding sums due from the counterclaim-defendant to the counterclaimant

Orders

  • Plaintiff to pay UGX 87,372,311 to the counterclaimant
  • General damages of UGX 10,000,000 awarded
  • Interest at 15% per annum on decretal sum from date of filing suit until payment in full
  • Counterclaim-defendant to pay costs of the counterclaim

Rules and key headnotes

Banking & Finance — Loan Recovery — Deficiency After Mortgage Sale — Right to Sue for Balance
Where a mortgaged property is sold in foreclosure but the proceeds are insufficient to discharge the secured debt, the lender is entitled to recover the outstanding balance from the borrower.
Evidence — Unchallenged Testimony — Weight and Effect
Evidence not challenged in cross-examination is taken to have been admitted by the opposite party, but the burden remains on the party adducing evidence to make out their case even where no reply is filed.
Damages & Quantum — General Damages — Financial Loss from Loan Default
A financial institution that suffers loss due to a borrower's default and refusal to repay is entitled to general damages to compensate for financial loss and damage, assessed with regard to the nature of the institution's business and the economic inconvenience suffered.

Legislation cited (1)

Cases cited (7)

  • Altica Sea Carriers Corporation v Ferrostoal Poseidon Bank Reederei GMBH [1976] 1 Lloyd's Rep 250
  • Barclays Bank of Uganda Limited v Howard M Bakojja (Civil Suit No. 53 of 2011)
  • Muyimbwa Paul v Ndejje University (Labour Dispute Reference No. 222 of 2015)
  • Management Committee of Rubaga Girls School v Bwogi Kanyerezi (Civil Application No. 34 of 1999)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305
  • Stanbic Bank Limited v Hajji Yahaya Sekalega T/A Sekalega Enterprises (Civil Suit No. 185 of 2009)
  • Southern Engineering Company v Mutia [1985] KLR 730

Full judgment

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

Irene Namusoke v Centenary Rural Development Bank Limited 2020 UGHCCD 237 (18 December 2020)
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.