Wakilii

Masiko v Equity Bank Limited (Miscellaneous Application No. 204 of 2022)

High Court · [2022] UGCOMMC 13 · 2022 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application by letter from counsel for ex-parte interim order restraining sale by mortgagee, reviewed by court under inherent jurisdiction
Decision
Ex-parte interim order restraining mortgagee sale set aside

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court exercised its inherent jurisdiction to set aside an ex-parte interim order restraining a mortgagee sale. The Deputy Registrar acted illegally by granting the order without imposing the mandatory condition under Regulation 13 of The Mortgage Regulations 2012 requiring a 30% deposit of the outstanding amount or forced sale value. The special statutory provisions for mortgage sales override general temporary injunction requirements.

Outcome

Ex-parte interim order restraining mortgagee sale set aside

Facts

Counsel for the applicant, M/s Katende, Sempebwa and Co. Advocates, sought an ex-parte interim order restraining the respondent bank from undertaking a sale by mortgagee advertised to take place on 17th March 2022. On 15th March 2022, the Deputy Registrar issued the interim order. The court noted that the applicant was not required to make the mandatory 30% deposit of the outstanding amount, the order was issued to frustrate the debt recovery process, and the applicant sought judicial intervention at the last moment despite being aware of the situation for some time.

Issues

  1. Whether the Deputy Registrar exercised jurisdiction illegally or with material irregularity when granting an ex-parte interim order restraining a sale by mortgagee without requiring the mandatory 30% deposit under Regulation 13 of The Mortgage Regulations 2012.
  2. Whether the court should exercise its inherent powers under section 98 of The Civil Procedure Act to review and set aside the Deputy Registrar's order.

Orders

  • The ex-parte interim order issued on 15th March 2022 is vacated.
  • The costs of this proceeding shall abide the outcome of the suit.

Rules and key headnotes

Mortgage Regulation — Mandatory Deposit Requirement — Applications to Restrain Mortgagee Sale
Regulation 13 of The Mortgage Regulations 2012 requires the court to impose a condition that an applicant deposit 30% of the forced sale value of the mortgaged property or the outstanding amount before granting any order that has the effect of stopping or adjourning a sale by mortgagee.
Inherent Jurisdiction — Review of Registrar's Orders — Material Irregularity
Under section 98 of The Civil Procedure Act and Order 46 rule 1(1)(b) of The Civil Procedure Rules, the court may exercise its inherent jurisdiction to review and set aside a Registrar's order where the Registrar has exercised jurisdiction not vested in law, failed to exercise vested jurisdiction, or acted illegally or with material irregularity or injustice.
Special Statute vs General Statute — Mortgages and Temporary Injunctions
Where a general statute and a specific statute relating to the same subject matter cannot be reconciled, the special or specific statute prevails. Regulation 13 of The Mortgage Regulations 2012, being special legislation governing stoppage or adjournment of mortgagee sales, prevails over the general requirements for temporary injunctions under Order 41 of The Civil Procedure Rules.
Legislative Intent — Mischief Rule — Pay Now Argue Later Principle
Regulation 13 of The Mortgage Regulations 2012 enacts a 'pay now, argue later' principle designed to restrict the ability of mortgagors to use litigation vexatiously to delay realisation of money due to mortgagees, reduce frivolous objections to sales, and balance the competing interests of the mortgagee in realising security and the mortgagor's right to have their day in court.
Mortgage Regulation — Amount Outstanding — Interpretation
For purposes of the 30% deposit requirement under Regulation 13(1) of The Mortgage Regulations 2012, 'amount outstanding' means the amount as claimed by the mortgagee at the time the suit is filed, and a mortgagor's dispute over the legality of the mortgage, the procedure of its enforcement, or the amount outstanding does not defeat the deposit requirement.
Mortgage Regulation — Valuation — Forced Sale Value for Deposit Purposes
For purposes of the 30% deposit under Regulation 13(1) of The Mortgage Regulations 2012, the value of the property at the time of execution of the mortgage suffices as the pre-dispute value agreed upon by the parties; the requirement in Regulation 11(2) for a valuation report not more than six months before the date of sale is specific to the value at the time of sale by the mortgagee, not for purposes of adjournment or postponement.

Legislation cited (6)

Cases cited (11)

  • Haji Birije Kisuule and another v Housing Finance Bank Ltd and two others (Miscellaneous Application No. 67 of 2013)
  • Guaranty Trust Bank (U) Ltd v Ankole Riverline Hotel Ltd (Civil Appeal No. 28 of 2014)
  • Peacocks Enterprises Ltd and others v Stanbic Bank (U) Ltd (Miscellaneous Application No. 1113 of 2014)
  • Willis International Engineering and Contractors Ltd and another v DTB Bank (Miscellaneous Application No. 1000 of 2015)
  • Miao Huaxian v Crane Bank Limited and another (Miscellaneous Application No. 035 of 2015)
  • Ganafa Petey Kisawuzi v DFCU Bank Ltd (Civil Application No. 64 of 2016)
  • Escoigne Properties Ltd v Inland Revenue Commissioners [1958] 1 All ER 406 (HL)
  • River Wear Commissioners v Adamson (1877) 2 App Cas 743
  • Eastman Photographic Materials Co v Comptroller-General of Patents [1898] AC 571
  • Heydon's case (1584) 3 Co Rep 7a
  • Whitney v Commissioner of Inland Revenue [1926] AC 37

Full judgment

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Masiko v Equity Bank Limited (Miscellaneous Application No. 204 of 2022) [2022] UGCommC 13 (16 March 2022)
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.