Wakilii

Lucky and Lucky Co. SMC Limited and Caleb Mwesigye Kashugyeera v The Micro Finance Support Centre Ltd and Others (Miscellaneous Appeal No. 28 of 2024)

High Court · [2025] UGCOMMC 357 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from the ruling of the Assistant Registrar dismissing an application for a temporary injunction to restrain eviction and further alienation of mortgaged land
Decision
Appeal dismissed. The ruling of the Assistant Registrar refusing the temporary injunction was upheld.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the appellants failed to establish a prima facie case for a temporary injunction where the mortgaged land had already been sold and title transferred to a bona fide purchaser for value. The second respondent as registered proprietor had a protected legal interest under section 59 of the Registration of Titles Act. The appellants did not adduce sufficient evidence of fraud against the purchaser nor demonstrate irreparable injury. The balance of convenience favoured the respondents. Appeal dismissed.

Outcome

Appeal dismissed. The ruling of the Assistant Registrar refusing the temporary injunction was upheld.

Facts

The first appellant obtained a loan of UGX 300,000,000 from the first respondent secured by a mortgage over land belonging to the second appellant. The appellants defaulted on the loan. After issuing statutory notices including demand notices, notice of default, notice of sale and advertising in the Daily Monitor on 12 July 2023, the first respondent sold the mortgaged property to the second respondent for UGX 620,000,000 on 3 October 2023. The title was transferred to the second respondent on 2 November 2023. The appellants then filed a civil suit challenging the legality of the sale and sought a temporary injunction to restrain eviction and further alienation. The Assistant Registrar dismissed the injunction application on the ground that there was no status quo to maintain since the land had been sold and title transferred. The appellants appealed.

Issues

  1. Whether the learned Assistant Registrar erred in dismissing the application for a temporary injunction on the ground that there was no status quo to maintain.
  2. Whether the appellants established a prima facie case with a probability of success.
  3. Whether the appellants would suffer irreparable injury not adequately compensable by damages.
  4. Whether the balance of convenience favoured granting a temporary injunction.

Orders

  • Appeal dismissed with costs to the Respondents.

Rules and key headnotes

Interlocutory Injunctions — Conditions for Grant — Prima Facie Case, Irreparable Injury, Balance of Convenience
For a temporary injunction to be granted, the applicant must establish three conditions: firstly, a prima facie case with a probability of success; secondly, that the applicant might otherwise suffer irreparable injury which would not adequately be compensated by an award of damages; and thirdly, if the court is in doubt, the balance of convenience must favour the applicant.
Registered Titles — Protection of Bona Fide Purchaser for Value — Section 59 Registration of Titles Act
A certificate of title is conclusive evidence of ownership by the person named as proprietor. A bona fide purchaser for value without notice of any defects to the title is protected by law, and his interests can only be impeached in the case of fraud, misrepresentation, or other dishonest conduct of which the purchaser had actual or constructive knowledge.
Interlocutory Injunctions — Status Quo — Definition and Application
The phrase 'status quo' denotes the existing state of affairs existing before a given particular point in time. In the case of land, status quo is a question of fact, and the relevant consideration is the point in time at which the acts complained of as affecting or likely to affect the existing state of things occurred. The purpose of granting an injunction is to preserve the status quo until the question to be investigated in the suit can finally be disposed of.
Mortgages — Power of Sale — Exercise Following Default
It is foreseeable that upon default on loan obligations, a mortgagee will exercise its power of sale and sell the mortgaged property pledged as security. A mortgagor contemplates that upon default to repay borrowed sums or breach of covenants under the mortgage deed, the mortgagor stands to lose the property to the mortgagee.
Interlocutory Injunctions — Proof of Fraud — Standard Required
To succeed in an action based on fraud, the applicant must attribute the fraud to the transferee and show that the transferee is guilty of some dishonest act or must have known of such act by somebody else and taken advantage of it. Affidavit evidence in an injunction application is not sufficient to prove fraud to the required standard.

Legislation cited (9)

Cases cited (22)

Full judgment

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Lucky and Lucky Co. SMC Limited and Caleb Mwesigye Kashugyeera v The Micro Finance Support Centre Ltd and Others (Miscellaneous Appeal No. 28 of 2024) [2025] UGCommC 357 (30 Septem
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.