Wakilii

Sammy J Company and 2 Others v Opportunity Bank U Limited and Another (Miscellaneous Application 185 of 2021)

High Court · [2022] UGHCCD 323 · 2022 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for temporary injunction arising from pending civil suit concerning mortgage validity and loan repayment
Decision
Temporary injunction granted restraining sale of mortgaged property pending determination of main suit

Observed later treatment

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Holding

Held that a temporary injunction should be granted to restrain the sale of mortgaged matrimonial property pending determination of the main suit concerning mortgage validity and loan repayment. The court applied the three-part test from Kiyimba Kaggwa and found: (i) a prima facie case existed due to triable issues regarding spousal consent, marriage status, and whether the loan was fully repaid; (ii) irreparable injury would result as the applicants would lose their home and become homeless; (iii) balance of convenience favoured the applicants as they were in possession and the main suit would become nugatory if the property were sold before determination.

Outcome

Temporary injunction granted restraining sale of mortgaged property pending determination of main suit

Facts

The 1st applicant (Sammy J Company) obtained a loan of UGX 153,000,000 from the 1st respondent (Opportunity Bank) secured by a mortgage over matrimonial property comprised in Plot 1 Volume 4460 Folio 12 land at Okille Road Soroti belonging to the 2nd and 3rd applicants. The 3rd applicant allegedly did not consent to the mortgage. After a loan reschedule, the 1st applicant claimed to have finalized payment totaling UGX 309,000,000. Despite this, the respondent advertised the property for sale in the Monitor Newspaper. The applicants filed a main suit (Civil Suit No. 44 of 2021) challenging the mortgage's validity for want of spousal consent and seeking an audit of the loan account. The respondent denied the claims, stating that the 2nd and 3rd applicants approved the mortgage as directors of the company, and that the loan remained outstanding, prompting the exercise of the legal remedy of selling the mortgaged property. The applicants then sought a temporary injunction to restrain the sale pending determination of the main suit.

Issues

  1. Whether the applicant is entitled to grant of a temporary injunction?

Orders

  • Application allowed.
  • Temporary injunction granted restraining respondents, its employees, servants, agents and workmen from selling, dealing in and or interfering with the Applicant's property comprised in Plot 1 Volume 4460 Folio 12 land situated at Okille Road Soroti until final disposal of the main suit.
  • Costs to abide the outcome of the main suit.

Rules and key headnotes

Temporary Injunctions — Three-Part Test — Prima Facie Case
A prima facie case with probability of success for purposes of granting a temporary injunction means no more than that the court must be satisfied that the claim is not frivolous or vexatious and that there is a serious question to be tried. An applicant is required to show that a prima facie case with probability of success is available but not success itself.
Temporary Injunctions — Status Quo — Definition and Determination
The status quo for purposes of a temporary injunction is purely a question of fact and simply denotes the existing state of affairs existing before a given particular point in time. The relevant consideration is the point in time at which the acts complained of as affecting or likely to affect or threatening to affect the existing state of things occurred. The purpose of a temporary injunction is to preserve the status quo in respect of the matter in dispute until determination of the whole dispute.
Temporary Injunctions — Mortgage Regulations — Application of Deposit Requirement
The requirement under Regulation 13 of the Mortgage Regulations 2012 for deposit of 30% of the forced sale value or outstanding amount before court can adjourn or stop a sale does not apply where the parties are not in agreement over whether there is an outstanding balance. It would be unjust to direct applicants to make such a deposit before court determines whether the loan was serviced or not.
Temporary Injunctions — Irreparable Injury — Loss of Matrimonial Home
Applicants will suffer irreparable injury justifying a temporary injunction where they are in possession and occupation of suit property as their matrimonial home and if evicted and the property sold they would be left homeless and have to start afresh, which cannot be adequately compensated in damages.
Temporary Injunctions — Balance of Convenience — Person in Possession
The balance of convenience for purposes of granting a temporary injunction favours the person in possession of land. Where triable issues exist and denial of the injunction would render the main suit nugatory because the property would be sold and disposed of before determination of the legality of the mortgage, the balance of convenience tilts in favour of the applicants.

Legislation cited (8)

Cases cited (11)

Full judgment

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Sammy J Company and 2 Others v Opportunity Bank U Limited and Another (Miscellaneous Application 185 of 2021) [2022] UGHCCD 323 (8 June 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.