Wakilii

Remodel Enterprises Limited v Matovu and 4 Others (Civil Suit No. 405 of 2011)

High Court · [2013] UGHCLD 401 · 2013 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of loan, foreclosure and attachment, with consent judgment entered against defendants 1–4 and contested defence by defendant 5
Decision
Judgment entered for the plaintiff; the 1st defendant's property ordered to be foreclosed, attached and sold to recover the loan and damages; 5th defendant ordered to vacate; his title to be cancelled.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the plaintiff had a valid mortgage over the suit property executed on 28 July 2011 as security for a loan to the 1st defendant; the purported sale agreement dated 20 July 2011 to the 5th defendant was fraudulent and backdated, lacking spousal consent and executed after the mortgage; the 5th defendant knowingly connived with the 1st defendant to defeat the plaintiff's interest; judgment entered for the plaintiff, granting foreclosure, attachment, and sale of the mortgaged property, an order that the 5th defendant vacate the premises, and cancellation of the 5th defendant's names on the title.

Outcome

Judgment entered for the plaintiff; the 1st defendant's property ordered to be foreclosed, attached and sold to recover the loan and damages; 5th defendant ordered to vacate; his title to be cancelled.

Facts

The 1st defendant borrowed Ugx 70,000,000 from the plaintiff company on 28 July 2011, guaranteed by the 2nd, 3rd, and 4th defendants, and secured by a mortgage of his house at Ochieng Zone, Nansana, Wakiso District. The 1st defendant defaulted, and by the time of suit the loan stood at Ugx 112,000,000. The 1st defendant disappeared and did not file a defence. The 5th defendant applied to be joined to the suit, claiming he purchased the house on 20 July 2011, six days before the mortgage. The plaintiff, 2nd, 3rd, and 4th defendants entered a consent judgment confirming the mortgage was valid and unencumbered. The 5th defendant took possession in September 2011. The plaintiff alleged the purported sale was fraudulent and backdated to defeat its mortgage interest.

Issues

  1. Whether the plaintiff has a cause of action against the 1st and 5th defendants.
  2. Whether at the time the house in dispute was mortgaged to the plaintiff, it had been sold to the 5th defendant by the 1st and 2nd defendants.
  3. Remedies.

Orders

  • The plaintiff is awarded Ugx 112,000,000/= being the loan amount due and owing from the 1st defendant.
  • The plaintiff is awarded Ugx 20,000,000/= as general damages.
  • Interest of 20% per annum on the above awards is granted from the date of judgment till payment in full.
  • Order for attachment and sale of the 1st and 2nd defendants' property at Ochieng zone, Nansana (Block 83 Plot 487, Mengo land, Katalemwa, approximately 0.047 hectares) within 30 days from the date of judgment.
  • Declaration that the 5th defendant fraudulently connived with the 1st defendant to enter into a sale agreement and took possession to defeat the plaintiff's interest.
  • The 1st defendant's house in Ochieng zone, Nansana (the suit land) is subjected to foreclosure, attachment, and sale by the plaintiff to recover the moneys due, damages and costs.
  • The 5th defendant is ordered to immediately vacate the suit premises.
  • The Commissioner Land Registration is directed to cancel the 5th defendant's names on the certificate of title and entries in the Register Book within 14 days.
  • Costs of the suit are awarded to the plaintiff as against the 1st and 5th defendants.

Rules and key headnotes

Civil Procedure — Cause of Action — Essential Elements
A cause of action consists of three essential elements: (1) the plaintiff enjoyed a right, (2) the right has been violated, and (3) the defendant is liable.
Civil Procedure — Amended Pleadings — Effect of Amendment
Once a plaint has been amended, it speaks from the commencement of the action; the amended plaint becomes the original commencement of the action and supersedes the original pleadings.
Contract Law — Consent Judgment — Setting Aside
A consent judgment is passed on the terms of a new contract between the parties and must be upheld unless vitiated by fraud, mistake, misapprehension, duress, undue influence, or contravention of public policy.
Land & Property — Fraud — Knowledge of Unregistered Interest
Although mere knowledge of an unregistered interest cannot be imputed as fraud under the Registration of Titles Act, where such knowledge is accompanied by a wrongful intention to defeat the existing interest, that amounts to fraud.
Land & Property — Fraud — Failure to Inquire
If it is shown that a buyer's suspicions were aroused and the buyer abstained from making inquiries for fear of learning the truth, fraud may properly be ascribed to that buyer.
Land & Property — Family Land — Spousal Consent Requirement
Under section 39 of the Land Act as amended, no person shall sell, transfer, pledge, mortgage or lease family land without the prior written consent of his or her spouse; in the absence of written spousal consent, the transaction is void.
Evidence — Section 92 of the Evidence Act — Contradicting Written Documents
Where the terms of a contract required by law to be in writing are reduced to a document, no oral statement shall be admitted to contradict, vary, add to or subtract from its terms, but evidence may be proved of any fact that would invalidate the document due to fraud, intimidation, illegality, or mistake in fact or law.

Legislation cited (7)

Cases cited (20)

  • Auto Garage and others v Motokov (No. 3) [1971] 1 EA 514
  • Olal Bosco v Nsereko Lucky & Avon Africa Investments Ltd (Civil Suit 00-Cc-0113-2011)
  • Ismail Serugo v Kampala City Council and the Attorney General (Constitutional Appeal No. 2 of 1998)
  • Major General David Tinyefunza v Attorney General of Uganda (Constitutional Appeal No. 1 of 1997)
  • Eastern Radio Service and another v R J Patel t/a Tiny Tots and another [1962] 1 EA 818
  • Al Hajji Nasser N. Sebbagala v AG & others (Constitutional Petition No. 1 of 1999)
  • A.G and Uganda Land Commission v James Mark Kamoga and James Kamala (SCCA No. 8 of 2004)
  • Lawrence Musebeni Baguma v Namugala David & Another (Civil Appeal No. 40 & 41 of 2010)
  • David Sejjaka Nalima v Rebecca Musoke (SCCA No. 12 of 1985)
  • John Kafarikawe v William Katwiremu & Anor (Civil Suit No. 2 of 1973)
  • Luswese v Kasule (Civil Suit No. 1010 of 1983)
  • Fredrick Zaabwe v Orient Bank, Mars Trading Co. Ltd, Allan Shonubi, Martin Nkufu, Tito Twijukye and Renzigye Byaruhanga (SCCA No. 4 of 2006)
  • Oywello Ceaser v Pader District Local Government (HCT-02-CV-CS-009-2007)
  • Alice Okiror & Michael Okiror v Global Capital Save 2004 Ltd & Ben Kavuya (HCCS No. 149 of 2010)
  • Busonya Mary, Byebye Jude & Golodo Joseph v Asuman Ebeke & Fatuma Ebeke (HCT-04-CV-CA-0104-2009)
  • Stroms v Hutchison [1905] AC 515
  • Uganda Telecom Ltd v Tanzanite Corporation (SCCA No. 17 of 2004)
  • Premchandra Shenoi & Anor v Maximov Oleg Petrovich (SCCA No. 9 of 2003)
  • Sietco v Noble Builders (U) Ltd (SCCA No. 31 of 1995)
  • Ebuneiri Waisswa Kafuko, Deceased (HC Misc. Application No. 81 of 1993)

Full judgment

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

Remodel Enterprises Limited v Matovu and 4 Others (Civil Suit No. 405 of 2011) [2013] UGHCLD 401 (19 September 2013)
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.