Wakilii

Ojiambo v Centenary Rural Development Bank Limited (Miscellaneous Application 197 of 2022)

Industrial Court · [2023] UGIC 69 · 2023 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for interim injunction arising from pending labour dispute reference concerning unfair termination and loan liability
Decision
Application dismissed on preliminary points of law; main labour dispute reference to proceed expeditiously

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court dismissed the application for an interim injunction restraining sale of mortgaged property. The court held that under Order 50 Rule 3A(3) of the Civil Procedure (Amendment) Rules 2019, interim relief requires a pending substantive application with likelihood of success, which was absent. Additionally, Regulation 13(1) of the Mortgage Regulations 2012 mandates deposit of 30% of the forced sale value before a court may adjourn or stay sale of mortgaged property, a requirement the applicant failed to satisfy.

Outcome

Application dismissed on preliminary points of law; main labour dispute reference to proceed expeditiously

Facts

The applicant, a former employee of the respondent bank, filed a labour dispute reference challenging his termination and liability for a staff loan of UGX 224,000,000 secured by mortgage over his property. He had paid UGX 282,370,894 with UGX 75,000,000 outstanding in interest. The respondent commenced sale proceedings on the mortgaged property. The applicant sought an interim injunction to restrain the sale pending determination of the labour dispute, arguing the property was his family and matrimonial home. The respondent opposed, contending the application was procedurally defective and that the applicant had not complied with statutory requirements for injunctive relief on mortgaged property.

Issues

  1. Whether the application for interim injunction is properly before the court in the absence of a pending substantive application as required by Order 50 Rule 3A(3) of the Civil Procedure (Amendment) Rules 2019.
  2. Whether the applicant complied with Regulation 13(1) of the Mortgage Regulations 2012 requiring deposit of 30% of the forced sale value before seeking injunctive relief on mortgaged property.
  3. Whether the applicant established a prima facie case with a probability of success.
  4. Whether the applicant would suffer irreparable injury not compensable in damages if the injunction is not granted.
  5. Where the balance of convenience lies between the parties.

Orders

  • Application dismissed.
  • No order as to costs.
  • Hearing of the main Labour Dispute Reference No. 284 of 2019 to be expedited.

Rules and key headnotes

Civil Procedure — Interim Injunctions — Requirement of Pending Substantive Application
Under Order 50 Rule 3A(3) of the Civil Procedure (Amendment) Rules 2019, a court shall only consider an application for interim relief where there is a pending substantive application with a likelihood of success. An application for unlimited interim relief in the absence of a substantive application is not tenable.
Banking & Finance — Mortgages — Statutory Requirements for Injunctive Relief
Regulation 13(1) of the Mortgage Regulations 2012 requires an applicant seeking to adjourn or stay the sale of mortgaged property to deposit 30% of the forced sale value before the court may grant such relief. This statutory requirement overrides traditional considerations for the grant of a temporary injunction involving mortgaged property.
Banking & Finance — Mortgages — Exception for Spousal Applications
The only exception to the requirement to deposit 30% of the forced sale value under Regulation 13(1) of the Mortgage Regulations 2012 is when an application for injunctive relief is brought by a spouse under Regulation 13(6), which permits the court to take into account spousal and familial considerations.
Employment & Labour — Industrial Court Jurisdiction — Loan Liability Disputes
Where a labour dispute reference includes questions of liability for a loan advanced by an employer to an employee, evidence must be taken on the loan agreement to determine liability. A mortgage between employer and employee may constitute a purely commercial transaction falling under the jurisdiction of the Commercial Division of the High Court, but the Industrial Court may hear evidence on the matter where it is intertwined with employment termination issues.
Civil Procedure — Costs in Employment Disputes — General Rule
The grant of costs in employment disputes is the exception rather than the rule. Barring misconduct on the part of the unsuccessful party, the successful party is not entitled to costs.

Legislation cited (11)

Cases cited (21)

  • Mooli Grace v Paul Mooli & Anor (Civil Revision No. 009 of 2012)
  • Ganafa Peter Kisawuzi v DFCU Bank Ltd (Civil Application No. 64 of 2016)
  • Nakato Margaret v Housing Finance Bank Ltd & Anor (Civil Appeal No. 687 of 2021)
  • Alcon International Ltd v The New Vision Printing and Publishing Co Ltd and Another (Supreme Court Civil Appeal No. 04 of 2010)
  • Hwang Sung Industries Ltd v Tajdin Hussein (Supreme Court Civil Appeal No. 19 of 2008)
  • Mutumba Zaitun v Crane Bank Ltd (In receivership)
  • Joseph Kalule v GIZ (Labour Dispute Reference No. 902 of 2020)
  • ELT KIYIMBA KAGGWA v ADBUL NASSER KATENDE [1985] HCB 43
  • American Cynnamide v Ethicon [1975] 1 ALL ER 504
  • Vision Empire Ltd v Uganda Communications Commission (High Court Miscellaneous Application No. 1141 of 2020)
  • E. Kabugo Nanyunja v Kana Nakayima Nsubuga (High Court Miscellaneous Application No. 536 of 2002)
  • Settaba Fulugensio v Kizito Musoke & Anor (Civil Appeal No. 452 of 2021)
  • Herbert Kabunga Traders v Stanbic Bank (U) Ltd (High Court Miscellaneous Application No. 159 of 2012)
  • Mutumba Zaituni v Crane Bank Ltd & 2 Ors (High Court Miscellaneous Application No. 1536 of 2017)
  • Commodity Trading Industries v Uganda Maize Industries & Anor [2001-2005] HCB 118
  • Sekitoleko v Mutabaazi & Ors [2001-2005] HCB 79
  • Robert Kavuma v Hotel International Ltd (Supreme Court Civil Appeal No. 8 of 1990)
  • Stanbic Bank (U) Ltd v Constant R. Okou (Court of Appeal Civil Appeal No. 60 of 2020)
  • Asaph Ruhinda Ntengye & Linda Lilian Tumusiime Mugisha v Attorney General (Constitutional Petition No. 33 of 2016)
  • Mugisha Musimenta Rogers v Equity Bank Ltd (Miscellaneous Application No. 167 of 2018)
  • Francis X. Kayumba v Equity Bank Ltd (Miscellaneous Application No. 32 of 2017)

Full judgment

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

Ojiambo_v_Centenary_Rural_Development_Bank_Limited_(Miscellaneous_Application_197_of_2022)_[2023]_UGIC_69_(3_April_2023)
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