Wakilii

Lweza Clays Ltd & Anor v Tropical Bank Ltd & Anor (Civil Application 31 of 2018)

Supreme Court · [2019] UGSC 12 · 2019 Preliminary Objections Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application before a single Justice of the Supreme Court for an interim order maintaining the status quo pending a temporary injunction/stay application; ruling on three preliminary objections raised by the respondent
Decision
Preliminary objections dismissed; application ordered to proceed to hearing on its merits

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Sitting as a single Justice on three preliminary objections, the Court held that Rules 2(2) and 6(2)(b) of the Supreme Court Rules give the Court discretion to entertain an application not first filed in the Court of Appeal, so the matter could not be defeated under Rule 41(1); applying Mukisa Biscuit, such a discretionary matter could not properly be raised as a preliminary objection. Regulation 13(1) of the Mortgage Regulations was inapplicable because the application sought to stay a retrial, not to adjourn a sale of mortgaged property. A single Justice has jurisdiction under Rules 2(2) and 6(2) to grant an interim order preserving the status quo. All three objections were dismissed and the application ordered heard on its merits.

Outcome

Preliminary objections dismissed; application ordered to proceed to hearing on its merits

Facts

The first respondent bank extended facilities to the first applicant clay-products company, secured by mortgage and debenture. Asserting default, the bank placed the company into receivership in 2008 and appointed a receiver/manager. The applicants sued (HCCS No. 300 of 2008) and, by Miscellaneous Application No. 99 of 2009, obtained a High Court ruling declaring the mortgage and debenture null and void for non-payment of stamp duty, with damages and costs. On the bank's appeal, the Court of Appeal set aside that ruling (3 September 2018) and ordered HCCS No. 300 of 2008 and the application to be retried de novo before another judge, each party bearing its own costs. The applicants appealed to the Supreme Court (Civil Appeal No. 15 of 2018) and applied for an interim order to maintain the status quo pending a substantive stay application (Civil Application No. 30 of 2018). The respondent raised three preliminary objections to the interim-order application.

Issues

  1. Whether the application was incompetent for not having first been made to the Court of Appeal under Rule 41(1) of the Rules of the Supreme Court.
  2. Whether the applicants were required to deposit security of 30% of the forced sale value under Regulation 13(1) of the Mortgage Regulations 2012 before the application could be heard.
  3. Whether a single Justice of the Supreme Court has jurisdiction to hear and determine the application for an interim order.

Orders

  • The three preliminary points of objection are dismissed.
  • The application is to be heard on its merits.
  • The costs of the dismissal shall abide the outcome of the application.

Rules and key headnotes

Civil Procedure — Concurrent Jurisdiction — Discretion to Entertain Application Not First Made to the Court of Appeal
Although Rule 41(1) of the Supreme Court Rules requires an application that may be made either to the Supreme Court or the Court of Appeal to be made to the Court of Appeal first, Rules 2(2) and 6(2)(b), read together, confer on the Supreme Court a wide discretion to entertain such an application to safeguard the right of appeal notwithstanding that no prior application was made to the Court of Appeal.
Civil Procedure — Preliminary Objections — Pure Point of Law Requirement
A preliminary objection raises a pure point of law argued on the assumption that the facts pleaded by the other side are correct; it cannot be raised where a fact must be ascertained or where what is sought is the exercise of judicial discretion, and an objection to a matter falling within the court's discretion must be struck out.
Banking & Finance — Mortgages — Scope of Regulation 13(1) Security Deposit Requirement
The 30% security deposit required by Regulation 13(1) of the Mortgage Regulations 2012 applies only where an application seeks to adjourn or stop a sale of mortgaged property; it has no application to an interim order staying the retrial of a suit where no sale of property is in issue.
Civil Procedure — Interim Orders — Jurisdiction of a Single Justice
A single Justice of the Supreme Court has jurisdiction, under Rules 2(2) and 6(2) of the Supreme Court Rules, to entertain and grant an interim order maintaining the status quo pending the hearing of a substantive stay application by the full Court.

Legislation cited (7)

  • Judicature (Supreme Court Rules) Directions r.41(1)
  • Judicature (Supreme Court Rules) Directions r.41(2)
  • Judicature (Supreme Court Rules) Directions r.2(2)
  • Judicature (Supreme Court Rules) Directions r.6(2)(b)
  • Judicature (Supreme Court Rules) Directions r.50
  • Judicature (Supreme Court Rules) Directions r.72
  • Mortgage Regulations 2012 reg.13(1)

Cases cited (10)

  • Ganafa Peter Kisawuzi v DFCU Bank Limited (Civil Appeal No. 64 of 2016)
  • Lawrence Musiitwa Kyazze v Eunice Busigye (Supreme Court Civil Appeal No. 18 of 1990)
  • Kyambogo University v Prof Isiah Omolo Ndiege (Court of Appeal Civil Appeal No. 341 of 2013)
  • Theodore Sekikubo and Others v Attorney General and Others (Constitutional Application No. 6 of 2013)
  • Francis Drake Lubega v Attorney General, Commissioner of Land Registration and Horizon Coaches (Miscellaneous Application No. 13 of 2015)
  • Hassan Basajjabalaba v Attorney General (Miscellaneous Application No. 4 of 2018)
  • Patrick Kaumba Wiltshere v Ismail Dabule (Civil Application No. 3 of 2018)
  • Mukisa Biscuit Manufacturing Co Ltd v West End Distributors Ltd [1969] EA 691
  • Yakobo M Sekungu and Others v Cresensio Mukasa (Civil Application No. 5 of 2013)
  • Giuliano Gargio v Claudio Casadio (Civil Application No. 3 of 2013)

Full judgment

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Lweza Clays Ltd & Anor v Tropical Bank Ltd & Anor (Civil Application 31 of 2018) [2019] UGSC 12 (19 February 2019)
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.