Wakilii

Mityana Diocese Development Trust & Another v Namugenyi (Originating Summons 13 of 2023)

High Court · [2023] UGCOMMC 153 · 2023 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Originating Summons seeking vacant possession of mortgaged property following default and sale
Decision
Defendant ordered to deliver vacant possession of the mortgaged property to the Plaintiffs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that where a mortgagee exercised its power of sale following the mortgagor's default, and the property was lawfully sold and transferred to a purchaser, the purchaser as registered proprietor is entitled to vacant possession. The court granted the order for delivery of vacant possession, finding that the Defendant's continued occupation after sale and transfer was unlawful. Costs followed the event.

Outcome

Defendant ordered to deliver vacant possession of the mortgaged property to the Plaintiffs

Facts

On 10 July 2019, Equity Bank granted the Defendant a credit facility of UGX 120,000,000 secured by a leasehold property at Mityana. The Defendant defaulted on repayment obligations. Despite notices and a final demand, the outstanding amount of UGX 130,338,402 remained unpaid. The Bank's recovery agents advertised the property, which was sold to the 1st Plaintiff (Mityana Diocese Development Trust). The property was transferred to the 1st Plaintiff on 5 January 2023. The Defendant refused to vacate the premises and did not challenge the sale. The Defendant could not be traced for service and did not enter any reply or appearance after substituted service was effected.

Issues

  1. Whether the Plaintiffs are entitled to delivery of vacant possession of the mortgaged property by the Defendant?
  2. Whether the Plaintiffs are entitled to the costs of the suit?

Orders

  • The Defendant is hereby ordered to deliver to the Plaintiffs vacant possession of the mortgaged land.
  • Costs of the suit are awarded to the Plaintiffs.

Rules and key headnotes

Mortgage Law — Mortgagee's Power of Sale — Right to Vacant Possession Following Lawful Sale
A purchaser who acquires mortgaged property through a lawful exercise of the mortgagee's power of sale and becomes the registered proprietor is entitled to an order for delivery of vacant possession against the former mortgagor who refuses to vacate.
Registration of Title — Conclusiveness of Certificate of Title
Under section 59 of the Registration of Titles Act, a certificate of title is conclusive evidence that the person named as proprietor is possessed of the estate or interest described, and the registered proprietor is entitled to ownership and quiet possession of the land.
Mortgage — Purchaser's Title — Protection Against Inquiry into Default
A purchaser in a sale effected by a mortgagee acquires good title and is not obliged to inquire whether there has been default by the mortgagor or whether proper notice was given, except in cases of fraud, misrepresentation, or dishonest conduct of which the purchaser has actual or constructive notice.
Originating Summons — Mortgagee's Remedy for Vacant Possession
Order 37 rule 4 of the Civil Procedure Rules permits a mortgagee or purchaser to take out an originating summons for delivery of possession by the mortgagor where the property has been lawfully sold.

Legislation cited (9)

Cases cited (4)

  • Guaranty Trust Bank (U) Ltd v Dokwals (U) Ltd & Another (Originating Summons No. 1 of 2021)
  • Diamond Trust Bank (U) Ltd v Semakula Joseph Herman & Another (Originating Summons No. 1 of 2019)
  • Miller v Minister of Pensions [1947] 2 All ER 372
  • Uganda Development Bank v Muganga Construction Co. Ltd (1981) HCB 35

Full judgment

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

Mityana Diocese Development Trust & Another v Namugenyi (Originating Summons 13 of 2023) [2023] UGCommC 153 (11 December 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.