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M.P Electronics Limited & Another v DFCU Bank Limited & 4 Others (Miscellaneous Application 510 of 2023)

High Court · [2023] UGCOMMC 217 · 2023 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application to set aside consent judgment and for temporary injunction arising from High Court civil suit concerning mortgage charges
Decision
Application dismissed with costs to the respondents; suit against applicants discontinued with costs to the applicants

Observed later treatment

Cited — treatment unverified cited in 1 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 1 time with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Held: the application was dismissed. The advocate-witness rule requires actual necessity of testimony, not mere possibility — M/s MMAKS Advocates' disqualification was not warranted as the firm had no unique testimony material to the issues. A consent judgment may be signed between necessary parties without involving proper parties whose presence is required only for completeness. The consent judgment was valid: the 2nd respondent acted on the Attorney General's binding legal opinion; the applicants were proper parties only, not necessary parties; and no fraud, collusion or bad faith was established. The suit was discontinued as against the applicants with costs.

Outcome

Application dismissed with costs to the respondents; suit against applicants discontinued with costs to the applicants

Facts

The 1st applicant borrowed USD 3,000,000 and UGX 3,000,000,000 from Crane Bank Limited in 2014, secured by mortgages over land registered in the 2nd applicant's names. Following default, Crane Bank Limited issued default notices from June 2015. In October 2016, Bank of Uganda placed Crane Bank Limited under statutory management for insolvency, and in January 2017 placed it under receivership. On 25th January 2017, Bank of Uganda as Receiver sold and assigned Crane Bank Limited's loan portfolio and mortgage securities to DFCU Bank (1st respondent) including the applicants' loans and mortgages. Multiple suits ensued challenging the validity of the assignment and the mortgages. In August 2022, following a petition by the 2nd applicant, the Minister of Lands directed the Commissioner Land Registration (2nd respondent) to cancel the Crane Bank mortgages on the ground that Crane Bank no longer existed. The 2nd respondent issued a notice under Land Act section 91 proposing to cancel the mortgages. The 1st respondent filed suit challenging this. On 12th April 2023, the 1st and 2nd respondents signed a consent judgment recognising DFCU's assignment of the mortgages, recalling the cancellation notice and vacating the caveat. The applicants filed this application objecting to the consent judgment, alleging fraud and collusion. The properties were subsequently transferred to the 3rd, 4th and 5th respondents as purchasers.

Issues

  1. Whether the 1st respondent's advocates are disqualified from representing that party in these proceedings under Regulation 9 of The Advocates (Professional Conduct) Regulations
  2. Whether the suit should be struck out for non-disclosure of a cause of action, for being barred by law and for perpetrating an illegality
  3. Whether the consent judgement entered into by the 1st and 2nd respondents and endorsed by the Court on 13th April 2023 should be reviewed and set aside
  4. Whether the 1st respondent's intended withdrawal of the suit against the applicants should be allowed
  5. Whether a temporary injunction should issue restraining the 3rd, 4th and 5th respondents from alienating or transferring the suit properties pending determination of the main suit
  6. Whether a temporary injunction should issue restraining the 3rd, 4th and 5th respondents from taking possession of or evicting the applicants from the suit properties pending determination of the suit

Orders

  • The application is dismissed.
  • Costs of the application awarded to the respondents.
  • The suit against the applicants is discontinued or struck out with costs to the applicants.

Rules and key headnotes

Advocates (Professional Conduct) — Advocate-Witness Rule — Test for Disqualification
The advocate-witness rule prohibits counsel from serving as advocates in cases in which they will be required to testify. Disqualification operates only when the advocate will be required as a witness to give evidence whether verbally or by affidavit. Disqualification cannot be ordered upon an opponent's mere representation that the advocate is a necessary witness or will be called as a witness — the possibility of being required as a witness must be a real one, and not merely fanciful or theoretical. The party objecting must clearly establish the adverse testimony the advocate-witness will offer.
Advocates (Professional Conduct) — Advocate-Witness Rule — Disqualification of Law Firm by Imputation
It is not a correct legal proposition that where an advocate in a firm is a witness or potential witness in a matter that the entire firm is thereby conflicted. A law firm is disqualified by imputation only where another advocate in the firm is likely to be called as a witness on a significant issue on behalf of the client or an adversary, and it is apparent that the testimony may be prejudicial to the objector.
Consent Judgments — Validity — Necessary and Proper Parties
A consent judgment may be signed between the necessary parties to a suit without involving those joined as proper parties. There are two tests for determining whether a particular party is a necessary party to a consent judgment: (a) whether the plaintiff has a right of relief against such a party in respect of the matters involved in the suit; and (b) whether the Court would be in a position to pass an effective decree in the absence of such a party. Parties from whom no relief is sought are not necessary parties.
Consent Judgments — Setting Aside — Fraud and Collusion
Collusion in judicial proceedings is a secret arrangement between two persons that the one should institute a suit against the other in order to obtain the decision of Court for some sinister purpose. To determine whether fraud or collusion exists, the Court looks to whether the settlement terms are unreasonable and whether the negotiations were conducted in bad faith. The test is whether: (i) the parties committed conscious and deliberate dishonesty; and (ii) the dishonest conduct was material, i.e. it was an operative cause in bringing about the consent judgment.
Attorney General — Legal Opinions — Binding Effect on Government Institutions
An attorney general's opinion is a written interpretation of existing law. By virtue of article 119(3) and 4(a) of The Constitution of the Republic of Uganda 1995, the opinion of the Attorney General as authenticated by his own hand and signature regarding the laws of Uganda and their effect or binding nature on any agreement, contract or legal transaction should be accorded the highest respect by government and public institutions and their agents. The legal opinion of the Attorney General is generally binding on government and public institutions, save for independent institutions which are constitutionally insulated.
Land Registration — Registrar's Powers under Land Act Section 91 — Scope of Powers
Under section 91 of The Land Act, the Registrar of Titles has the power to correct errors on the Register occasioned by endorsement or alteration or cancellation of certificates of title for the purpose of: (a) correcting a mistake; (b) bringing the register up to date; or (c) giving effect to any estate, right or interest excepted from the effect of registration. There will have been a mistake where the Registrar makes or fails to make an entry which he would not have made or would have made had he known the true state of affairs at the time. The Registrar's power is limited to correcting mistakes on the Register and does not extend to determining substantive questions of mortgage validity or assignment.

Legislation cited (20)

Cases cited (52)

  • Hirani v Kassam [1952] EA 131
  • Attorney General v James Mark Kamoga (Supreme Court Civil Appeal No. 8 of 2004)
  • Brooke Bond Liebeg (T) Ltd v Mallya [1975] EA 266
  • Babigumira John v Hoima Council [2001-2005] HCB 116
  • Pavement Civil Works Ltd v Andrew Kirungi (High Court Miscellaneous Application No. 292 of 2002)
  • Mubiru Karoli v Kayiwa Edmond [1979] HCB 212
  • Jonesco v Beard [1930] AC 298
  • de Lasala v de Lasala [1980] AC 546
  • Jet Holdings Inc v Patel [1990] 1 QB 335
  • Jubilee Estates Ltd v Zion Construction Ltd (High Court Miscellaneous Cause No. 38 of 2018)
  • Scott v Scott [1913] AC 417
  • Rup Chand Gupta v Raghuvanshi Private Limited (1964) AIR 1889
  • Bank of Uganda v Banco Arabe Espanol (Supreme Court Civil Appeal No. 1 of 2001)
  • Gordon Sentiba v Inspector of Government (Supreme Court Civil Appeal No. 6 of 2008)
  • Kabagambe Asol v Electoral Commission (Constitutional Petition No. 1 of 2006)
  • Norwich and Peterborough Building Society v Steed [1993] Ch 116
  • NRAM Ltd v Evans [2018] 1 WLR 1563
  • Attorney General v Major General Tinyefuza (Constitutional Petition No. 1 of 1997)
  • Cooke v Gull LR 8 EP 116
  • Read v Brown 22 QBD 31
  • Kebirungi v Road Trainers Ltd [2008] HCB 72
  • Auto Garage v Motokov (No 3) [1971] EA 514
  • Joseph Mpamya v Attorney General [1966] II KALR 121
  • Elly B Mugabi v Nyanza Textile Industries Ltd [1992-93] HCB 227
  • Onesforo Bamuwayira v Attorney General [1973] HCB 87
  • Nagoko v Sir Charles Turyahamba [1976] HCB 99
  • Enoth Mugabi v Palm Developments (U) Ltd (High Court Miscellaneous Application No. 1 of 2016)
  • J B Kohli v Bachulal Popatlal [1964] 1 EA 219
  • Fox v Star Newspaper Company [1898] 1 QB 636
  • E A Industries v Trufoods [1972] EA 420
  • Fellowes and Son v Fisher [1976] 1 QB 122
  • American Cyanamid Co v Ethicon Limited [1975] AC 396
  • Geilla v Cassman Brown Co Ltd [1973] EA 358
  • GAPCO Uganda Limited v Kaweesa (High Court Miscellaneous Application No. 259 of 2013)
  • Godfrey Sekitoleko v Seezi Peter Mutabazi [2001-2005] HCB 80
  • Nsubuga v Mutawe [1974] EA 487
  • Saggu v Roadmaster Cycles (U) Ltd [2002] 1 EA 258
  • City Council of Kampala v Donozio Musisi Sekyaya (Court of Appeal Civil Application No. 3 of 2000)
  • Kakooza Abdullah v Stanbic Bank (High Court Miscellaneous Application No. 614 of 2012)
  • Miao Huaxian v Crane Bank Ltd (High Court Miscellaneous Application No. 76 of 2016)
  • Murray v. Metropolitan Life Ins. Co., 583 F.3d 173 (2d Cir. 2009)
  • Stones v Byron 4 Dowl & L 393
  • Uganda Development Bank v Kasirye Byaruhanga & Co Advocates (Supreme Court Civil Appeal No. 35 of 1994)
  • Yunusu Ismail v Alex Kamukama (Supreme Court Civil Appeal No. 7 of 1987)
  • Law Development Centre v Hon Mabikke (High Court Miscellaneous Application No. 203 of 2021)
  • British American Investment Company (K) Limited v Njomaitha Investment Limited [2019] eKLR
  • Dorothy Seyanoi Moschioni v Andrew Stuart [2014] eKLR
  • Henry Kaziro Lwandasa v Kyas Global Trading Co Ltd (High Court Miscellaneous Application No. 865 of 2014)
  • Hajji Sulaiman Kizito v Kampala Financial Services Ltd (High Court Civil Suit No. 30 of 2016)
  • Hussein Mohammed v Mayanja (High Court Civil Suit No. 0178 of 2009)
  • Quality Uganda Limited v Uganda Performing Rights Society (High Court Civil Suit No. 444 of 2019)
  • Uribe Bros. Corp. v 1840 Wash. Ave. Corp. 26 Misc.3d 1235(a), 2010 WL 918432

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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M.P Electronics Limited & Another v DFCU Bank Limited & 4 Others (Miscellaneous Application 510 of 2023) [2023] UGCommC 217 (10 November 2023)
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.