Wakilii

Nakamya v DFCU Bank Limited and Another (Civil Appeal No. 105 of 2013)

Court of Appeal · [2021] UGCA 59 · 2021 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First appeal from High Court dismissal of a civil suit challenging a mortgagee's sale of mortgaged property
Decision
Appeal dismissed; trial court judgment upholding the mortgagee's sale confirmed

Observed later treatment

Cited — treatment unverified cited in 4 (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 4 times with no adverse treatment recorded; not yet tested on the merits. Citations rising — 4 citing cases on record, 4 in the most recent three data years. 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

The Court of Appeal dismissed the mortgagor's appeal, upholding the mortgagee's sale of foreclosed property. It held that a mortgage executed by a corporation under its common seal pursuant to section 132 of the Registration of Titles Act does not require attestation, and the mortgagor's signature was in Latin character, so the deed was valid. Applying Cuckmere Brick, the Court held that a mortgagee owes dual duties of good faith and reasonable care to obtain the true market value. Although advertisement was minimal, given the encumbrances (graves and squatters) and the appellant's own failed efforts to secure a buyer, there was no evidence the price obtained was less than the best reasonably achievable. Appeal dismissed with costs.

Outcome

Appeal dismissed; trial court judgment upholding the mortgagee's sale confirmed

Facts

The appellant mortgaged property at Bunamwaya (Kyadondo Block 265, plots 1861, 1862 and 5036) to DFCU Bank Limited as security for cumulative credit of UGX 15,000,000. She defaulted, and the Bank appointed the second respondent as receiver to realize the security. After serving several demand letters and advertising the property once in a local daily newspaper, the Bank and receiver sought buyers, including allowing the appellant to find one, over about a year. The property, which was encumbered with graves and squatters, was valued at UGX 75,000,000 open market and UGX 45,000,000 forced sale value. On or about 27 January 2005 the property was sold to Francis Iga for UGX 40,000,000. Proceeds cleared the outstanding debt and recovery costs, and the balance of UGX 8,446,371 was remitted to the appellant. Aggrieved by the manner and price of sale, she sued both respondents in the High Court, which dismissed the suit. She appealed.

Issues

  1. Whether the mortgage deed was validly executed under sections 115, 132, 147(1)(a) and 148 of the Registration of Titles Act.
  2. Whether the mortgagee's sale of the mortgaged property was lawful.
  3. Whether the mortgagee breached its duty to take reasonable care to obtain the true market value of the property, including whether the property was under-advertised and undersold.
  4. Whether the trial judge erred in rejecting the appellant's valuation and the Chief Government Valuer's stamp duty assessment.
  5. What remedies are available to the parties.

Orders

  • Appeal dismissed.
  • Costs of the appeal and in the trial court awarded to the Respondents.

Rules and key headnotes

Mortgages — Execution by a Corporation Under Common Seal — Attestation Requirements under the RTA
A mortgage executed by a corporation by affixing its common seal in lieu of signature under section 132(1) of the Registration of Titles Act does not require attestation under section 147(1), since a company cannot 'sign'; it need only comply with Regulation 113 of Table A to the Companies Act by being signed by a director and counter-signed by the secretary.
Mortgages — Validity — Signature of Mortgagor in Latin Character under RTA s.148
A mortgage deed is validly executed under section 148(a) of the Registration of Titles Act where the mortgagor signs under her name in Latin character; a signature so made complies with the statutory requirement and does not invalidate the deed.
Company Law — Corporate Acts — Presumption of Regularity (Rule in Turquand)
A person contracting with a company in good faith is entitled to assume that corporate acts, such as the authorization required for use of the common seal, have been duly and properly performed, so requisite corporate authorization may be presumed where the point was not put in issue.
Mortgages — Mortgagee's Power of Sale — Dual Duties of Good Faith and Reasonable Care
A mortgagee exercising its power of sale owes the mortgagor dual duties: to act in good faith and to take reasonable care to obtain the true market value of the mortgaged property at the date of sale; good faith alone is insufficient where there is negligence in obtaining a proper price.
Mortgages — Duty to Advertise — Sufficiency Determined on the Circumstances of Each Case
There is no absolute duty to advertise widely; what constitutes proper advertisement depends on the circumstances of each case, and a mortgagee is not liable in negligence unless it fraudulently, wilfully or recklessly sacrifices the mortgagor's interests.
Mortgages — Undervaluation — Burden of Proving Best Price Not Achieved
Where a mortgagor alleges undersale, the sale will not be impugned if there is no evidence on the balance of probabilities that the price obtained was less than the best price reasonably achievable, particularly where the property was encumbered and the mortgagor's own efforts to find a better buyer failed.
Valuation Evidence — Probative Value of Post-Sale Valuation and Stamp Duty Assessment
A valuation obtained by the mortgagor after the sale and a Chief Government Valuer's assessment made for stamp duty purposes without visiting the property carry limited probative value on the property's true market or forced sale value at the date of sale.

Legislation cited (9)

Cases cited (23)

  • Selle v Associated Motor Boat Co. (1968) EA 123
  • Makula International v Cardinal Nsubuga & Another (1982) HCB 11
  • National Social Security Fund and Another v Alcon International (Civil Appeal No. 15 of 2009)
  • General Parts (U) Ltd v Non-Performing Assets Recovery Trust (Civil Appeal No. 5 of 1999)
  • Fredrick J. K. Zaabwe v Orient Bank Ltd and 5 Others (Civil Appeal No. 4 of 2006)
  • Alwi Abdulrehman Saggaf v Abed Ali Algeredi (1961) 1 EA 767 (CA)
  • Royal British Bank v Turquand (1856) 6 E & B 327
  • Coast Brick Works v Raichand Ltd (1964) EA 187
  • Cuckmere Brick Finance Company v Mutual Finance Limited (1971) 2 All ER 633
  • Tse Kwong Lam v Wong Chit Sen (1983) 3 All ER 55
  • Meah v GE Money Home Finance Ltd, ChD (2013) EHC 20
  • Downsview Nominees Ltd & Another v First City Corporation Ltd & Another (1993) All ER 626
  • Kennedy v de Trafford (1897) AC 180
  • McHugh v Union Bank of Canada (1913) AC 299
  • Roger Michael & Others v Douglas Henry Miller & Another (2004) EWCA Civ 282
  • Standard Chartered Bank Ltd v Walker & Another
  • Epaineti Mubiru V Uganda Credit and Savings Bank [1978] HCB 109
  • Cuckmere Brick Co Ltd and Leslie Arthur Fawke V Mutual Finance Ltd [1971] EWCA Civ 9
  • Tomlin V Luce 41 Chancery Division 573 and 43 Chancery Division 191
  • Farrar y, Farrars Ltd. (40 Chancery Division 395)
  • Pandya v R [1957] EA 336
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Abdul Hameed Saif vs. Ali Mohamed Sholan (1955), 22 E. A. C. A. 270

Cases citing this judgment (4)

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

Nakamya v DFCU Bank Limited and Another (Civil Appeal No. 105 of 2013) [2021] UGCA 59 (23 August 2021)
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.