Wakilii

Kajoba George William & Ors v Stephen Kisitu & Anor (HCT-00-CC-OS 5 of 2005)

High Court · [2005] UGCOMMC 54 · 2005 Judgment for Plaintiffs — Mortgage Enforced AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Originating summons for enforcement of equitable mortgage under Order 34 rules 3A and 7 CPR
Decision
Judgment for the plaintiffs with order for payment of UGX 27,000,000 plus costs within 21 days, failing which the mortgaged property to be sold by private treaty

Observed later treatment

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Holding

The High Court granted an originating summons for enforcement of an equitable mortgage. The court found that the defendants owed UGX 27,000,000 (principal UGX 20,000,000 plus 7 months interest at 5% per month) under a loan secured by deposit of title deed with the plaintiffs. The court declared the plaintiffs entitled to a charge on the mortgaged property and ordered sale by private treaty if payment was not made within 21 days of service.

Outcome

Judgment for the plaintiffs with order for payment of UGX 27,000,000 plus costs within 21 days, failing which the mortgaged property to be sold by private treaty

Facts

The plaintiffs, representatives of Enos Bagenda Foundation (a voluntary non-profit association), advanced a loan of UGX 20,000,000 to the defendants (members of the association) in three instalments between 14 September and 13 October 2004. The loan was secured by deposit of the defendants' certificate of title to land in Lubowa Estate. The loan terms required repayment in one lump sum within three months from receipt of the whole amount, interest-free for the first three months, but attracting 5% monthly interest thereafter. The final instalment was paid on 13 October 2004, making the loan due on 13 January 2005. The defendants defaulted on repayment. By the hearing date (30 September 2005), the defendants owed the principal sum plus 7 months interest at 5% per month. The defendants did not file any affidavit in reply or attend the hearing, which proceeded ex parte.

Issues

  1. Whether the plaintiffs as equitable mortgagees are entitled to payment of all money due and owing under the mortgage.
  2. Whether the plaintiffs are entitled to a charge on the mortgaged property and a right of access to it.
  3. Whether the court should order sale of the mortgaged property upon failure to pay the sum due within 21 days.

Orders

  • The defendants pay all the money due and owing to the plaintiffs under the mortgage in the sum of UGX 27,000,000, plus taxed costs of the application.
  • The plaintiffs as mortgagees are entitled to a charge on the mortgaged property (Freehold Register Volume 326 folio 1 Kyadondo Block 269 Plot 158 Lubowa Estate) and the mortgagees or their agents are granted a right of access to the mortgaged land.
  • In the event of failure to pay the sum due and owing, pursuant to the equitable mortgage and costs of the application within 21 days from the date of service of this order on the defendants, the mortgage be enforced by sale of the mortgaged property.
  • The sale shall be by private treaty.
  • The proceeds from the sale shall be used to pay: (a) costs and charges involved in the sale; (b) the sum due and owing pursuant to the mortgage plus costs of the application; (c) any balance to be passed over to the defendants.

Rules and key headnotes

Land & Property — Mortgages — Equitable Mortgages — Deposit of Title Deed as Security
Where a borrower deposits a certificate of title with a lender as security for a loan without executing a formal mortgage deed, an equitable mortgage is created by deposit of title deed.
Civil Procedure — Originating Summons — Order 34 CPR — Enforcement of Mortgages
Under Order 34 rule 3A of the Civil Procedure Rules, an equitable mortgagee may take out an originating summons for enforcement of the mortgage by sale, delivery of possession, or other relief appropriate to the circumstances.
Banking & Finance — Loan Agreements — Interest — Contractual Rate
Where parties agree that a loan shall be interest-free for a specified period and thereafter attract a specified monthly rate, the court will enforce the agreed interest rate from the date stipulated in the agreement.
Land & Property — Mortgages — Enforcement — Sale by Private Treaty
Upon default by a mortgagor, the court may order enforcement of the mortgage by sale of the mortgaged property, specifying the terms of sale including that it be by private treaty, with proceeds applied first to costs of sale, then to the mortgage debt and costs, with any balance paid to the mortgagor.

Legislation cited (2)

Full judgment

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

Kajoba George William & Ors v Stephen Kisitu & Anor (HCT-00-CC-OS 5 of 2005) [2005] UGCommC 54 (30 September 2005)
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.