Wakilii

Kahsay & Sons General Trading v Goldmine Finance Ltd & Anor (Miscellaneous Application No. 502 of 2018)

High Court · [2018] UGCOMMC 21 · 2018 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to review and vary prior interlocutory orders made in Misc. Application 427 of 2018 (arising from Civil Suit 256 of 2018) relating to attachment of sugar containers
Decision
Sugar released to the Applicant. Warrants of arrest issued against three respondents for failure to comply with undertaking to deposit security.

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Holding

The court varied its prior attachment order to release sugar containers to an innocent third party purchaser who bought and paid for the goods before the attachment order was made. The court held that any lien had ceased to operate in circumstances inconsistent with its continuance. The court issued warrants of arrest against respondents who undertook to deposit USD 40,000 security but failed to comply, finding their conduct demonstrated an intention to abscond and frustrate proceedings.

Outcome

Sugar released to the Applicant. Warrants of arrest issued against three respondents for failure to comply with undertaking to deposit security.

Facts

The 2nd Respondent imported sugar into Uganda and obtained a loan of USD 73,320 from the 1st Respondent to clear customs. After the goods were cleared for re-export, the 1st Respondent demanded repayment, which the 2nd Respondent refused. The 1st Respondent sued the 2nd Respondent and others in Civil Suit 256 of 2018 to recover the loan. Unknown to the 1st Respondent, the 2nd Respondent sold the sugar to the Applicant on 24 May 2018, with payment effected through KCB on 25 and 28 May 2018. On 30 May 2018, Uganda Revenue Authority released the goods for re-export naming the 2nd Respondent as exporter and the Applicant as consignee. Upon learning of the sale, the 1st Respondent obtained an order in Misc. Application 427 of 2018 attaching the remaining sugar containers. The Registrar ordered that three containers could be released upon deposit of USD 40,000. The 2nd Respondent and co-defendants undertook to deposit this sum but failed to do so despite multiple extensions.

Issues

  1. Whether the court's prior order attaching sugar containers should be reviewed and varied to release containers purchased by an innocent third party purchaser.
  2. Whether a lien claimed over goods sold before court attachment can continue to operate against a bona fide purchaser.
  3. Whether warrants of arrest should issue against respondents who undertook to deposit security but failed to comply.

Orders

  • The order of stay preventing the Applicant from accessing the sugar is set aside.
  • The sugar be released to the Applicant.
  • The above order does not absolve the 2nd Respondent of any damages that the Applicant may prove should he wish to lodge any claims.
  • Mwesigye Cornelius, Mariam Goreti and Serumaga Ishaq shall furnish security totaling USD 73,200 as ordered on 14th June 2018.
  • Warrants of arrest issue against Mwesigye Cornelius, Mariam Goreti and Serumaga Ishaq to bring them to Court to show cause why they should not be committed to Civil Prison under Order 40 rule 4 of the Civil Procedure Rules in default.
  • The 2nd Respondent shall bear the costs of this application.

Rules and key headnotes

Lien — Effect of Sale to Third Party — Circumstances Inconsistent with Continuance
A lien over goods ceases to operate when the position of the parties and circumstances of the case become inconsistent with the future continuance of the lien, including where goods are sold to a bona fide third party purchaser before any court attachment order is made.
Attachment Before Judgment — Protection of Innocent Purchaser
An order attaching property before judgment cannot operate to prevent an innocent third party purchaser from accessing goods which were purchased and paid for before the attachment order was made, particularly where the purchaser had no notice of any dispute affecting the goods.
Security for Appearance — Warrant of Arrest — Grounds
A warrant of arrest may issue under Order 40 rule 4 of the Civil Procedure Rules to compel defendants to furnish security where they have undertaken to deposit security but failed to comply, removed proceeds of sale from the jurisdiction, and demonstrated conduct indicating an intention to abscond or frustrate proceedings.

Legislation cited (1)

Cases cited (1)

  • Hill and Sons v London Central Markets Cold Storage Company Ltd (1910) 102 LT 775

Full judgment

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

Kahsay & Sons General Trading v Goldmine Finance Ltd & Anor (Miscellaneous Application No. 502 of 2018) [2018] UGCommC 21 (11 July 2018)
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.