THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 211 OF 2012

(ARISING FROM HCCS NO 165 OF 2012)

AYEBAZIBWE RAYMOND} .................................................................                                                                                            APPLICANT

 VS

BARCLAYS BANK UGANDA LIMITED} .............................................                                                                                           RESPONDENT

BEFORE HON JUSTICE CHRISTOPHER MADRAMA

RULING

The applicant’s application was filed under order 41 rules 1, 2, 3 and 9 of the Civil Procedure Rules and other enabling laws not specified for a temporary injunction to restrain the respondent, it’s servants, workman, representatives and/or agents from trespassing on the person of the applicant and/or causing the arrest and imprisonment of the applicant, interfering with the applicant’s rights and or forcefully attaching and selling the applicant/plaintiff’s property on account of an alleged debt and accruing interest the subject of the suit or tampering with the applicants bank accounts or property in whatsoever way pending the disposal of the main suit or until any further orders of this honourable court.  It is also for an order that a temporary injunction issues restraining the respondent, its agents, servants, workman, representatives from forcefully attaching, selling, transferring or alienating the applicants property comprised in plot 1785 Kyadondo block 228 in any way till disposal of the main suit or until any further orders of this honourable court.  Finally it is for orders that costs be provided for.  The grounds of the application are contained in the affidavit of the applicant sworn at Kampala on the 26^th of April 2012.

The gist of the grounds are that in the year 2007 the respondent advanced to the applicant a salary loan of shillings 17,000,000 which was comprehensively insured pursuant to which a loan account number 580-193-1458 was created with the respondent.  The applicant further deposited his title deeds for plot 1785 Kyadondo block 228 land at Mbalwa in Kampala measuring approximately 0.060 hectares.  It was an agreement that this money would be recovered directly from the salary and the private account of the applicant.  The respondent used to deduct the monthly payment and accrued interest from the private account of the applicant and transfer it to the loan account for repayment of the loan.  The applicant avers that the deposited property is worth over Uganda shillings 200,000,000 and has since appreciated in value.  In February 2008 the applicant’s employment with the respondent was terminated.  The respondent continued to make deductions from the applicant’s private accounts and other accounts and the applicant complains that he doesn’t have any updates from the respondent on the accounts.  Particularly the applicant complains that he does not know the fate of the insurance cover he paid premium for.  The respondent has taken possession of his property and advertised it for sale.  That the respondent allows third parties to trespass on his property without giving him any notice.  The applicant avers that the respondent has threatened to cause his arrest and detention and attach his property unless he pays the monies owed.  That unless the respondent is restrained it will sell or transfer or alienate the applicants property on account of an alleged debt and accruing interest the subject of the suit which will greatly prejudice the applicant and cause financial loss that cannot be atoned for by way of damages.  Finally the applicant avers that the balance of convenience is in his favour as he is about to lose his constitutionally guaranteed liberty and property against the respondent who can always await the outcome of the court investigation and resume its actions if it is found in its favour.

The affidavit in rebuttal is filed by the Agency Manager of Barclays Bank Uganda Ltd., Mr. Stanslus Kabuyaga hereinafter referred to as the respondents agency manager.  He deposes that the supporting affidavit of the applicant contains falsehoods intended to mislead the court.  He avers that the applicant while an employee of Nile bank LTD which was taken over by the respondent was on the 29^th of May, 2007 granted a loan of Uganda shillings 31,500,000/= secured by a certificate of title for land comprised in Kyadondo block 228 plot 1785 by Nile Bank Uganda Ltd.  Nile bank registered a legal mortgage on the 6^th of July, 2007 according to instrument number KLA 344602.  After the respondent took over the assets and liabilities of the Nile Bank Ltd the applicant while in the employment of the respondent applied for and was on the 23^rd of October, 2007 granted a staff unsecured loan of Uganda shillings 17,000,000/=.  The loan was not insured and no insurance money was charged on the applicant for any of the loans.  In February 2008 the applicant voluntarily resigned from the employment of the respondent.  The outstanding balance on the loans advanced to the plaintiffs amount to Uganda shillings 46,152,447/=.  The applicant was obliged to make a monthly repayment of Uganda shillings 785,119.32.  The respondent avers that the applicant was in fundamental breach of the contract by defaulting on the monthly repayment schedule even after several demands from the respondent.  The respondent consequently advertised and sold the property in exercise of her right as a legal mortgagee.  The respondent was always ready to provide information to the applicant if he had sought for the same.  That because the respondent had sold the applicant’s property the applicant’s application has been overtaken by events.

That the applicant does not stand to suffer any irreparable damage which cannot be atoned for by an award of damages and does not have a Prima facie case before the court.  The respondent maintains that the applicant should be held accountable for his own acts.

When the application came for hearing the applicant was represented by Dr. James Akampumuza while the respondent was represented by counsels Sempala David and Obonyo Richard Caesar.  Counsels opted to file written submissions.

I have had the benefit of reading of the written submissions of learned counsels for both parties.  I have also perused the pleadings on record and the affidavits for and against the application.  In the written submissions of learned counsel for the respondents a preliminary point of law arises as to whether an injunction can be granted to maintain the status quo where the property the subject matter of the application has been sold to a third party.  The question of whether the property has been sold to the third-party is a question of fact. The question of fact is yet to be tried.

Learned counsels for the respondents wrote that from the pleadings on record that the status quo to be stayed is that the respondent has sold the property and there is therefore no question for investigation put forward by the applicant to the application in the main suit.  They contend that the suit property was sold by the respondent bank to recover an outstanding loan amount and the balance is available for transmission to the applicant.  In their submission on the question of maintaining the status quo, learned counsels submit that the status quo had already changed and the application was overtaken by events.  They referred to paragraph 19 of the affidavit in reply or rebuttal.  This paragraph is to the effect that the suit property had been sold to a third party who is not a party to the application.  Learned counsel contended that the court cannot issue orders in vain.  Consequently the allegation of the property being wasted is legally untenable.  Learned counsels for the respondents further referred to the written statement of defence and reply to the amended plaint where it is averred that the property had already been sold and a copy of the sale agreement was attached.

The written submissions of the applicant in rejoinder do not answer whether the property had been sold to a third party.  Paragraph 10 of the affidavit in rebuttal avers as follows:

“That the applicant fundamentally breached the terms of the loan agreement by defaulting on the loan repayments despite several demands from the respondent and as a result, the respondent commenced the foreclosure process as was entitled and advertised and sold the property in the exercise of her right as legal mortgagee.

Copy of the plaintiffs bank account statement, the Final Demand Notice, the statutory notice, the postage receipt, the advertisement and the land sale agreement are attached hereto and marked as annexure “D”, “E”, “F” , “G”, “H” and “I” respectively.”

The affidavit in rejoinder by the applicant paragraph 6 thereof avers that annexure “I” attached to the affidavit in rebuttal was made long after the court action challenging the respondent’s threats to sell and alienate the applicants property after an interim order of injunction was issued by this honourable court in the presence of counsel for both parties.  Furthermore in paragraph 8 of the affidavit in rejoinder, the applicant deposes that his lawyers have advised him that the respondents actions are illegal and in contempt of court and deliberately targeted to disposes him of his land and deny him court protection. The applicant’s rejoinder was filed on 5^th of June 2012.

However in miscellaneous application number 283 of 2012 the applicant has applied for orders for compensation or imprisonment of certain persons named in the application for contempt of court. Ground three of that application avers that the first respondent's managing director and legal officer disobeyed a court order by proceeding to sell the applicants property. This application is on the court file and was filed on the 24^th of May 2012. On 19 June 2012 the record shows that the registrar ruled that the matter be placed before the trial judge. On 6 June 2012 when this application for a temporary injunction came for hearing the court requested the parties to file written submissions because of pressure of time. The parties prayed for an interim order to be extended until the ruling of the court. The interim order of injunction was extended until the ruling of this court on the application for an injunction.

I have carefully considered the evidence that is on the court record. Annexure "I" to the affidavit in rebuttal does not have the page which has the citations and the date on which the agreement was executed. The last page containing the signature of the parties does not indicate when it was executed. The interim order of the registrar is dated the 17th of May 2012. Another interim order which is annexed to the original plaint is dated the 9th of May 2012. The third defendant’s written statement of defence avers that the property was sold on the 7th of May 2012. This written statement of defence was filed on the court record on the 29^th of May 2012. The defence also attaches annexure "D" which is the agreement between Barclays Bank of Uganda Ltd and Mr Balondemu David dated 7th of May 2012. Finally the amended plaint of the plaintiff was filed on court record on the 18th of May 2012 paragraph 6 thereof is suing inter alia for a declaration that the purported sale of the plaintiffs land is illegal, null and void and of no legal effect and for an order of cancellation of transfer of the suit land to the third defendant, a declaration that the actions of the second, third and fourth defendants were fraudulent and in contempt of court. In the particulars of fraud it is averred that the property was sold in contempt of court after an interim order had been issued restraining the defendants from dealing in the property. Last but not least the application for a temporary injunction was filed on the court record on 26 April 2012 and issued by the registrar on the 4th of May 2012. The fact of sale of the property is averred in the affidavit in reply filed on the 29th of May 2012.

The issue of whether the property has been sold in contempt of court is a subject matter for determination by this honourable court. The application for a temporary injunction cannot be properly determined without prejudice to the application or action with regard to the issue of contempt of court. However it is a question of fact that the property has been sold hence proceedings commenced by the applicant to have the respondents censored for contempt of court. That being the case, the status quo is that the property has been sold to a third party and the order sought in the chamber summons particularly regarding plot 1785, being the suit property as described in the order sought in paragraph (b) of the chamber summons cannot be granted and has been overtaken by events.

Secondly and in theory, the applicant cannot on the ground of non-payment of the debt owing to the respondent be arrested because the respondent alleges that the money the subject matter of recovery proceedings by the respondent has been paid for and recovered by the alleged sale and that the applicant should go and collect his balance. I see no prejudice to the respondent if an order is made granting a temporary injunction restraining the respondent, its servants, workmen, representatives and/or agents from trespassing on the person of the applicant and/or causing the arrest and imprisonment of the applicant, interfering with the applicants rights and or tampering with the applicants bank account or any other property in whatsoever way pending the disposal of the main suit and contempt proceedings or until any further orders of this honourable court.

The respondent’s interest is to recover an alleged debt which by its pleadings and submissions it has already recovered. However the controversy remains whether there was an outstanding debt and whether the sale or alleged sale of the applicant’s property was lawful. In those circumstances, there is no need for me to consider the arguments of counsel in support of the facts and grounds for or against the grant of a temporary injunction as prayed for in the chamber summons. Without prejudice to the contempt proceedings a temporary injunction is issued restraining the respondent, its servants, workmen, representatives and/or agents from trespassing on the person of the applicant and/or causing the arrest and imprisonment of the applicant, on account of an alleged debt and accruing interest the subject of the main suit or tampering with the applicants bank accounts or other property not sold in whatsoever way pending the disposal of the main suit or until such further orders of this honourable court. Costs shall abide the outcome of the main suit.

Ruling delivered in open court this 29^th day of June 2012.

Hon. Justice Christopher Madrama

Ruling delivered in the presence of:

David Sempala for the Respondent

Applicant’s counsel not in court

Patricia Akanyo Court recording Assistant IT

Hon: Justice Christopher Madrama

28^th of June 2012