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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF
UGANDA AT KAMPALA
(COMMERCIAL COURT
DIVISION)
HCT-00-CC-MA-0716 OF 2005
(Arising out of
HCT-00-CC-0S-05 of 2003)
THE COOPERATIVE BANK LTD
(IN LIQUIDATION) :::::::::::::
PLAINTIFF/JUDGMENT CREDITOR
VERSUS
MUGANWA SAJJABI MICHEAL
t/a MUGANWA ENTERPRISES
:::::::::::::: RESPONDENT/JUDGMENT DEBTOR
AND
GEOFREY KIGOZI & ORS :::::::::::::
APPLICANTS/OBJECTORS
BEFORE: THE HONOURABLE MR. JUSTICE
YOROKAMU BAMWINE
R U L I N G:
This is an
application by some 8 Objectors brought by a notice of motion under 0.19 rr 55
(1) and 57 and 0.48 rr 1 and 3 of the Civil
Procedure Rules (CPR). The
application is supported by the affidavit of one of them, Geofrey
Kigozi.
The undisputed facts as may be gathered from available records
are that one Muganwa Sajjabi Michael by a power of Attorney dated 18/11/97
from
a one Deziranta Kabanaku Sekabira obtained credit facilities from Co-operative
Bank Ltd, now in liquidation. The title deed
in respect of property comprised
in LRV 1137 Folio 17 plot 840 Block 203 Kyadondo was offered as security for the
loan. All reference
to suit property herein shall be reference to the above
described property.
On 18/4/2000, Bank of Uganda in its capacity as
liquidator of the said Co-operative Bank Ltd registered a caveat against the
said
title. Muganwa Sajjabi Michael failed to pay the debt. In February 2003,
the mortgagee moved Court under Civil Suit No. O.S 5 of
2003 for an order that
the mortgagor’s interest in the suit property be sold in execution of that
order. At the end of the
day, Court granted the order, upon which the property
was advertised for sale. On seeing the advertisement, the Applicants objected
to the sale and hence this Ruling.
Judging from the above account, it is
very clear that the Objectors were not party to the proceedings in which Court
ordered that
the suit property be sold in execution. For a while, the parties
were given opportunity to determine the way forward as regards
the suit
property. They failed to do so. The substance of Ms Cherotich’s argument
in support of the application is that the
Objectors are genuine owners of the
suit property in that they inherited it from their late father, one Sekabira.
As I have already
stated above, it is the widow of the late Sekabira and
therefore the presumed mother of the Applicants who donated a power of Attorney
to Sajjabi upon which the property was conveyed to the mortgagee. Counsel
contends that the Applicants have been at all material
time in control and
possession of the suit property. In short, counsel’s argument is that the
Applicants were not party to
C.S. O/S No. 5/2003 and they are not indebted to
the Judgment Creditor, the mortgagee. In any case, so continues the argument,
the
Judgment Debtor did not have any legal or proprietory interest in the
property against which the warrant of attachment and sale was
issued in the
sense that Deziranta Sekabira was a mere administrator of the estate with no
power or authority to convey the estate
under her administration to third
parties.
Her colleague, Mr. Moses Adriko representing the mortgagee does
not agree. He argues that under S.134 of the Registration of Titles
Act, RTA,
an administrator of an estate is deemed to be the proprietor of the estate.
That once an administrator deals with an estate
in that capacity, unless the
party impugning the transaction alleges fraud, he/she cannot succeed. In short,
Mr. Adriko’s
argument is that nothing short of an allegation of fraud can
stand in the mortgagee’s right to enforce its rights under the
mortgage.
I have addressed my mind to the able arguments of both counsel.
I think they are serious legal arguments.
0.19 r 55 under which the
application is brought provides that where any claim is preferred to, or any
objection is made to the attachment
of, any property attached in execution of a
decree on the ground that such property is not liable to such attachment, the
Court shall
proceed to investigate the claim or objection with the like power as
regards the examination of the Claimant or Objector, and in
all other respects,
as if he was a party to the suit.
An under rule 56, the Claimant or
Objector shall adduce evidence to show that on the date of the attachment he had
some interest in
the property attached.
Then under rule 57, where upon
the said investigation the Court is satisfied that for the reason stated in the
claim or objection
such property was not, when attached, in the possession of
the Judgment-Debtor or of some person in trust for him,
...........................
the Court shall make an order releasing the
property, wholly or to such an extent as it thinks fit, from
attachment.
From the above, it is clear to me that when the Court is
invited to investigate the issue of the attached property under the provisions
of 0.19 r 55, it is more concerned with the possession of the property rather
than as to who has title over the property. Some three
authorities:
Chotabhai M. Patel –Vs- Chotabhai M. Patel & Anor 1958 EA 743;
Harilal & Co. –Vs- Buganda Industries [1960] EA 318; and
Uganda Mineral Waters Ltd -Vs- Piran and Another [1994-95] HCB 87, are
very clear on this point.
In all the above cases, the issue of possession
was emphasized. What is crucial in terms of rule 56 is the requirement that the
Objector
shows that he has an interest in the property other than possession.
Therefore, in the conduct of the investigation before me, I
find it pertinent to
decide:
1. Whether the Applicants/Objectors have adduced evidence to show
that at the time of the attachment they had some interest in the
suit
property.
2. Whether they have adduced evidence to show that at the time of
attachment, they were in possession.
3. Whether the Applicants were or are
in possession on their own account or on account of the Judgment Debtor,
Sajjabi.
In short, the sole question to be investigated is one of
possession. Questions of legal right, equitable right and/or title are
irrelevant,
except when they may affect the decision as to whether the
possession is on account of or in trust of the Judgment Debtor or some
other
person.
The evidence on which I must base the decision on those questions
is by way of affidavits filed by both the Applicants and the Respondent
together
with any documents annexed to the respective affidavits.
The Applicants
have adduced evidence that the suit property has been advertised for sale. This
is not disputed by the Respondent.
It is therefore an admitted fact. The
Applicants have also adduced evidence to show that at the time of attachment,
and even as
I deliver this Ruling, they are in possession of the suit property.
This is contained in the affidavit of Kigozi and it has not
been challenged by
way of another affidavit showing a contrary position. In an application
proceeding by evidence supplied by affidavit,
where there is no opposing
affidavit, the application stands unchallenged: Makerere University
–Vs- St. Mark Education Institute Ltd & Others HCCS No. 378/93
reproduced in [1994] V KALR 26.
True the unchallenged evidence
must intrinsically be tenable on its own. The Applicants have in the instant
case said that they are
children of the late Sekabira whose widow, upon getting
letters of administration donated a Power of Attorney to Sajjabi who in
turn obtained a loan from the bank on the strength of that power. It was argued
by Mr. Adriko that they have not
adduced birth certificates to show that they
are children of late Sekabira. I think this was not necessary for purposes of
this
application. They were never asked to do so nor did the Respondent at any
stage of these proceedings bring the issue of their parentage
in issue. Whether
they are children of late Sekabira, biological or otherwise, are matters of fact
which can be investigated and
remedied after Court has upheld their right to be
heard in the matter. For purposes of this application, the Applicants have
shown
to the satisfaction of Court the fact of being in actual possession and
having interest in the suit property. The nature of the
application is such
that at this point in time, Court is not being asked to make any declaration
concerning rights of the parties.
What Court is being requested to decide is
whether on the facts put before it the Respondent is entitled to go ahead and
sell the
suit property in accordance with the Court order. My understanding of
the law is that such issues of rights should only be dealt
with after the
decision of this Court has been made known as regards the application. Such
issues of rights can be determined under
the provisions of rule 60. It
provides:
“Where a claim or an objection is preferred, the party against whom an order is made may institute a suit to establish the right which he claims to the property in dispute, but, subject to the result of the suit, if any, the order shall be conclusive.”
In other words, the order
made under rules 55, 56 and 57 is of an interlocutory nature, subject to another
anticipated action by an
aggrieved party for final determination of the rights
of the parties under rule 60.
This in my view is a fair enough procedure
that admits of no controversy. Accordingly, whether Deziranta Sekabira had
power to act
as she did or whether as between the Applicants and the Respondent
the Respondent has a better title to the suit property than the
Applicants or
whether the provisions of the Succession Act can oust those of the RTA are all
matters that cannot be resolved herein
but in a suit filed in accordance with
0.19 r 60, if any party aggrieved by a decision such as the one herein so
wishes.
When all is said and done, Court finds that the Applicants have
established to the satisfaction of Court that at the time of the attachment,
they had legally protectable interest in the suit property. The application is
accordingly allowed with costs to the Applicants.
The suit property is to be
wholly released from attachment subject to any other course the Respondent may
wish to pursue as by law
established.
I so order.
Yorokamu
Bamwine
J U D G E
08/05/2006
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.RTF of original document