Wakilii

Kibuuka Musoke v Tour & Travel Centre Ltd (High Court Miscellaneous Application No. 603 of 2008)

High Court · [2009] UGCOMMC 18 · 2009 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application arising from underlying civil suit for leave to deposit security and release mortgaged title deed
Decision
Application dismissed with costs to the respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed an application by a mortgagor seeking leave to deposit a bank guarantee to secure his obligation under a legal mortgage and obtain release of his title deed. The court held that a plaintiff who is a defendant to a counterclaim must bring such applications under Order 27 Rule 9, not Rule 1, which applies only to defendants in the main suit. More fundamentally, the court ruled that Order 27 contemplates actual payment of money into court, not deposit of alternative security such as a bank guarantee, and that the mortgagee has the right to choose the form of security. The application failed because the relief sought fell outside the scope of Order 27.

Outcome

Application dismissed with costs to the respondent

Facts

The applicant Kibuuka Musoke executed a legal mortgage dated 30 June 2003 over his property in favour of the respondent Tour & Travel Centre Ltd as security for repayment of Shs 15,000,000 and USD 47,780. The applicant subsequently filed a suit alleging he executed the mortgage under duress and seeking to have it set aside. The respondent filed a counterclaim seeking payment of USD 48,080. The applicant repaid the Uganda shillings component and then brought this application seeking leave to deposit a bank guarantee for USD 47,780 to discharge his mortgage obligation and have his title deed released. The respondent opposed the application on procedural grounds and on the basis that substitution of security would be prejudicial.

Issues

  1. Whether an applicant who is a plaintiff in the main suit but a defendant to a counterclaim can bring an application under Order 27 Rule 1 of the Civil Procedure Rules for payment into court.
  2. Whether the court can permit deposit of a bank guarantee as substitute security for a mortgaged property in lieu of payment of money into court under Order 27.
  3. Whether the procedural irregularity of citing the wrong rule can be cured under Article 126(2)(e) of the Constitution.

Orders

  • Application dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Civil Procedure — Payment into Court — Order 27 Rule 1 — Application Limited to Defendants
Order 27 Rule 1 of the Civil Procedure Rules, which permits payment into court in satisfaction of a claim, applies only to defendants in a suit and not to plaintiffs.
Civil Procedure — Payment into Court — Counterclaims — Order 27 Rule 9
A plaintiff who is a defendant to a counterclaim may pay money into court in satisfaction of the counterclaim under Order 27 Rule 9 of the Civil Procedure Rules, subject to the like conditions as apply to defendants under Rule 1.
Civil Procedure — Payment into Court — Scope of Order 27 — Deposit of Security Distinguished
Order 27 of the Civil Procedure Rules contemplates actual payment of money into court in satisfaction of a claim, not deposit of substitute security such as a bank guarantee. Deposit of security for payment of money is not equivalent to payment of money into court and falls outside the scope of Order 27.
Land & Property — Mortgages — Right to Choose Security
A mortgagee has the right of choice as to the form of security to be deposited. The court will not order substitution of a certificate of title with a bank guarantee as security over the objection of the mortgagee.
Civil Procedure — Procedural Irregularities — Curing Defects — Article 126(2)(e)
Procedural defects may be cured under Article 126(2)(e) of the Constitution where the irregularity is not so serious as to prevent the court from hearing the application on its merits and where non-observance of the procedural rule would not lead to injustice. However, before invoking inherent powers under section 98 of the Civil Procedure Act, the matter must first have been brought to court in the manner prescribed by law.

Legislation cited (5)

Cases cited (7)

  • Pethras Shah v Queenland, Mohanlal Insurance Company Ltd (1962) EA 269
  • Adongkara v Kamanda (1968) EA 210
  • Peragio Munyangira v Andrew Mutayitwako (High Court Miscellaneous Application No. 37 of 1993)
  • Kibuuka Musoke v Travobase Centre Ltd (High Court Miscellaneous Application No. 308 of 2008)
  • Intraship (U) Ltd v G. M. Combine (U) Ltd (1994) VI KALR 42
  • Alcon International v Kasirye, Byaruhanga & Co Advocates (1995) III KALR 91
  • Salume Namukasa v Yosefu Bulya (1966) EA 433

Full judgment

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

Kibuuka Musoke v Tour & Travel Centre Ltd (High Court Miscellaneous Application No. 603 of 2008) [2009] UGCommC 18 (4 February 2009)
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.