Wakilii

Shikeley v Abdulla (Civil Appeal No. 10-1935.)

East African Court of Appeal · [1935] EACA 105 · 1935 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from dismissal of money recovery suit on grounds that appellant was unregistered moneylender
Decision
Matter remitted to Supreme Court for determination of remaining defences

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court held that a person who lends money exclusively on mortgage security, and not on other forms of security, falls within the exception in section 2(1)(b) of the Moneylenders Ordinance 1932 as a person bona fide carrying on the business of lending money on mortgage, and is therefore not required to register as a moneylender.

Outcome

Matter remitted to Supreme Court for determination of remaining defences

Facts

The appellant sued to recover three sums secured by registered charges on immovable property, executed between July and August 1934, with interest at 30% per annum. The respondent pleaded that the appellant was an unregistered moneylender and the contracts were void under the Moneylenders Ordinance 1932. The appellant admitted lending money on mortgage four or five times in 1933-34, stating it was his job. He earned Sh. 500-600 per month from rents, exceeding his interest income, and engaged in no other business. The trial judge dismissed the action, holding that while the transactions exceeded occasional loans, there was no bona fide business within the exception. The appellant appealed.

Issues

  1. Whether a person who lends money exclusively on mortgage security constitutes a moneylender required to register under the Moneylenders Ordinance 1932
  2. Whether the appellant fell within the exception in section 2(1)(b) as a person bona fide carrying on the business of lending money on mortgage

Orders

  • Appeal allowed with costs.
  • Case remitted to the Supreme Court for decision on the other issues raised by the pleadings.
  • Costs in the Supreme Court to abide the result.

Rules and key headnotes

Moneylending — Registration requirement — Statutory exception for lending on mortgage
A person who confines his moneylending business exclusively to lending on mortgage security is a person bona fide carrying on the business of lending money on mortgage within section 2(1)(b) of the Moneylenders Ordinance 1932 and is therefore not a moneylender required to register under the Ordinance.
Statutory interpretation — Bona fide — Meaning in context of moneylending exception
The words 'bona fide' in section 2(1)(b) of the Moneylenders Ordinance mean carrying on one of the businesses mentioned in the exception quite separately from a general business of moneylending.
Moneylending — Carrying on business — Distinction from isolated transactions
The words 'carrying on the business' in the context of moneylending mean that there is some consistency or continuity in the operations carried on for profit, and do not include isolated acts or the acts of a private investor who prefers lending on mortgage to other forms of security.
Moneylending — Definition — What constitutes business of moneylending
What must be examined is whether the person who lends money has done so in the course of carrying on his business as a moneylender. The business carried on, and not the particular loan transaction, is the criterion for determining whether a person is a moneylender within the Ordinance.

Legislation cited (1)

  • Moneylenders Ordinance 1932 s.2(1)(b)

Cases cited (9)

  • Nauhria Ram v Dewa Singh (2 E.A.L.R. Part 1, 42)
  • Quinn v Leathern [1901] AC 495
  • National Phonograph Co v Edison Bell Co [1908] 1 Ch 335
  • Furber v Fieldings (1907) 23 TLR 362
  • Lester v Torrens (1877) 2 QBD 403
  • R v Kent JJ (1889) 24 QBD 181
  • Newton v Pyke (1908) 25 TLR 127
  • Smith v Anderson (1880) 15 Ch D 258
  • Edgelow v MacElwee [1918] 1 KB 205

Full judgment

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

Shikeley v Abdulla (Civil Appeal No. 10-1935.) [1935] EACA 105 (1 January 1935)
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.