Wakilii

Twase & 3 Ors v Attorney General & Anor (Civil Suit No. 421 of 2002)

High Court · [2013] UGCOMMC 101 · 2013 Suit Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit challenging sale of mortgaged property by NPART
Decision
Suit dismissed; mortgagee's sale upheld as lawful

Observed later treatment

Cited — treatment unverified cited in 2 (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 2 times with no adverse treatment recorded; not yet tested on the merits. 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 High Court dismissed the plaintiffs' challenge to NPART's sale of mortgaged property. The court held that UDB did not breach the staff loan contract by terminating the borrower's employment, as the loan facility and employment were separate contracts. The mortgagor breached the mortgage by failing to repay despite multiple notices. NPART conducted the sale lawfully in accordance with the Registration of Titles Act and Mortgage Act. The sale price of UGX 34,400,000 was within an acceptable margin of error compared to the valuation of UGX 43,000,000 and did not constitute undervaluation.

Outcome

Suit dismissed; mortgagee's sale upheld as lawful

Facts

In 1995, Twase Sulaiman obtained a housing loan of UGX 31,000,000 from his employer, Uganda Development Bank (UDB), secured by a legal mortgage over his property in Bukoto. Following UDB's restructuring in 1998, Twase lost his job. His terminal benefits of UGX 5,377,272 were applied to the loan, leaving UGX 27,865,216 outstanding. The parties executed a mortgage deed allowing Twase to submit a repayment proposal within 18 months from February 1998. Twase submitted a proposal but subsequently breached it. The debt, which had accumulated to UGX 29,399,217, was transferred to the Non-Performing Assets Recovery Trust (NPART) in August 2001. NPART notified Twase and demanded payment within 15 days. After Twase failed to pay despite further demands, NPART advertised the property for sale in January 2002. The property was sold by public auction on 26 February 2002 to the second defendant for UGX 34,400,000. Twase paid UGX 1,000,000 the day before the sale and UGX 980,000 on the day of sale. He later wrote to NPART in May 2002 undertaking to withdraw the suit and pay UGX 35,000,000 to redeem the property but did not fulfill this undertaking. Twase subsequently died and his administrators continued the suit challenging the sale.

Issues

  1. Whether there was breach of the staff loan contract by UDB.
  2. Whether the mortgagor breached the mortgage agreement.
  3. Whether NPART sold the property wrongly.
  4. Whether the property was sold at an undervalued sum.
  5. Whether the plaintiffs are entitled to any remedies.

Orders

  • Suit dismissed with costs.

Rules and key headnotes

Staff Loan Facilities — Relationship with Employment Contract
A staff loan facility extended by an employer to an employee constitutes a separate contract from the employment contract and does not guarantee continued employment for the duration of the loan. Termination of employment does not constitute breach of the loan agreement where the loan facility was a privilege taken at the employee's own risk with property given as security.
Mortgage — Notice Requirements under Registration of Titles Act
Under sections 116 and 117 of the Registration of Titles Act, a mortgagee must serve written notice on the mortgagor to pay the money owing before proceeding with sale. Where the mortgage makes money payable on demand, a demand in writing pursuant to the mortgage is equivalent to the notice required by section 116 and no other notice is required to create default in payment.
Mortgage — Power of Sale Without Recourse to Court
Where a mortgage gives power expressly to the mortgagee to sell without applying to court and the mortgagor consents to sale by public auction or private treaty upon default, the mortgagee does not require leave of court to realise its security once the terms of the mortgage are satisfied. The clause allowing sale without recourse to court does not oust the jurisdiction of court but is sanctioned by statute.
Mortgage — Valuation and Acceptable Margin of Error
A mortgagee exercising the power of sale acts reasonably if the assessment of market value falls within an acceptable margin of error. Where two valuations conducted at similar times produce figures that do not show wide disparity, the mortgagee's valuation will not be found to breach the duty to obtain true market value. Valuation is not an exact science and different valuers may arrive at different figures.
Mortgage — Exercise of Power of Sale in Good Faith
If a mortgagee exercises the power of sale in good faith for the purpose of protecting its security, it is not liable to the mortgagor even though it might have obtained a higher price and even though the terms might be regarded as disadvantageous to the mortgagor. Good faith and delay in exercising the power of sale to allow the mortgagor opportunity to pay demonstrates proper conduct.

Legislation cited (6)

Cases cited (5)

  • Eriyazali Senkuba v Uganda Credit Savings Bank [1965] EA 624
  • Barclays Bank of Uganda v Katende (Civil Appeal No. 22 of 1993)
  • Mubiru v Uganda Credit and Savings Bank (HCCS No. 567 of 1965)
  • Roger Micheal and others v Douglas Henry Miller and Another [2004] EWCA Civ 282
  • Downsview Nominee Ltd and another v First City Corp Ltd and another [1993] 3 All ER 626

Cases citing this judgment (2)

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.

Twase & 3 Ors v Attorney General & Anor (Civil Suit No. 421 of 2002) [2013] UGCommC 101 (28 May 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.