Housing Finance Bank v Kiganda Jalia (Miscellaneous Cause No. 12 of 2025) [2025] UGHC 516 (14 July 2025)

## **THE REPUBLIC OF UGANDA**

## **IN THE HIGH COURT OF UGANDA AT WAKISO**

# **MISCELLANEOUS CAUSE NO. 0012 OF 2025**

| HOUSING FINANCE BANK | :::::::::::::::::: | APPLICANT | |----------------------|--------------------|------------| | | VERSUS | | | KIGANDA JALIA | :::::::::::::::::: | RESPONDENT |

## **BEFORE: HON. LADY JUSTICE GRACE FLAVIA LAMUNO**

#### **RULING**

This was an application brought under Order 52 Rule 1 and 3 of the Civil Procedure Rules (CPR); Section 98 of the Civil Procedure Act; and Section 33 of the Judicature Act for orders that:-

- (a)The Respondent grants vacant possession to the Applicant or the Applicant's authorized agents of the property that is the subject of mortgage security dated 27th March 2018 securing the Respondent's outstanding loan with the Applicant to wit land and developments comprised in Busiro Block 322 Plot 175 at Kapeka – Buloba in Wakisio District, and developments thereon. - (b) That should the Respondent refuse or decline to handover vacant possession, the Applicant is at liberty to evict the Respondent and occupants of the properties comprised in Busiro Block 322 Plot 175 at Kapeka – Buloba in Wakisio District. - (c) Costs of this application be provided for.

The application was supported by the affidavit of Kenneth Engola, the litigation and recovery officer with the Applicant, which lays out the grounds of the application. Briefly, the grounds were that:

- 1. The Applicant advanced to the Respondent, a loan facility of up to UGX 180,000,000= to purchase a home vide a letter/agreement dated March 23, 2018. - 2. The Applicant's loan facility to the Respondent was secured by a legal mortgage over property and developments comprised in

Busiro Block 322 Plot 175 at Kapeka – Buloba in Wakisio District registered in the name of the Respondent.

- 3. The Respondent defaulter on repayment of the loan and the loan was written off on 31st May 2024 at UGX 102,621,807.24=. - 4. The Applicant has made several demands to the Respondent for payment of the outstanding sum to no avail. - 5. The Applicant thereafter commenced foreclosure proceedings against the Respondent to recover the outstanding sums/money and thus issued the Respondent with a Notice of Default and later a notice of sale. - 6. The Respondent and her agents have refused to willingly hand over vacant possession of the said property to facilitate its sale and this has hindered the loan recovery efforts of the Applicants.

The Respondent opposed the application vide an affidavit sworn by herself whose averments are summarized below, namely that:

- a) The Respondent was advised by her advocates that the application was tainted with material falsehoods, illegalities, misconceived, incompetent, defective, frivolous, vexatious and an abuse of court process and a preliminary objection would be raised to strike out the application with costs. - b) Without prejudice to the above, the Respondent opposed, in substance, the averments in the said affidavit in support of the application, and stated that: - i) The contents of paragraph 1 of the aafidavit in support of the application was denied and she averred that the deponent had no capacity to swear the same - ii) Paragraph 2 was admitted to the extent that she obtained a credit facility. - iii) Paragraphs 3 and 4 are tainted with material falsehoods and denied and that she has paid the Applicant a total sum of UGX 350,000,000= and she has requested the Applicant on several occasions to avail her with her account statement but the Applicant has refused. - iv) Paragraphs 5 and 6 are tainted with material falsehoods and denied and as she has never been served with any demand nor have they ever been brought to her attention. - v) Paragraph 7 is tainted with material falsehoods and denied and that she has never been served with any such notice and it is also illegal.

- vi) The intended sale of her property is illegal, premature and misconceived as she has never been notified of any foreclosure. - vii) In reply to paragraph 10, the deponent of the affidavit in support is not a lawyer and does not have the capacity to depone the same. - viii) The intended recovery of mortgage is illegal as she is not indebted to the Applicant.

The Applicant filed an affidavit in rejoinder deponed by Kenneth Engola in which he reiterated his earlier averments and stated that;

- a) He has the capacity to swear the affidavit in support of this Application as the Litigation and Recovery Officer of the Applicant with knowledge of facts pertaining to this matter. - b) The Respondent obtained a loan facility from the Applicant evidenced by a a loan offer letter dated March 23, 2018 which was duly signed and acknowledged by the Respondent who has actually benefited from the said loan. - c) The Respondent defaulted on the repayment of the loan and is indebted to the Applicant to the tune of UGX 102,621,807.24= - d) The Respondent's allegations and contentions in paragraphs 10 and 11 of the affidavit in reply are not accompanied with any evidence to support her contentions which are mere statements without evidentiary value. - e) The Applicant denied the contents of paragraphs 12, 13, 14, 15, 16, 17, 18, 19 and 20 and the Respondent shall be put to strict proof thereof. - f) The Application is premised on law and therefore competent to enable the Applicant to recover its outstanding sum against the Respondent.

# **Representation.**

When the case came up for mention before me on 17th June 2025, the Applicant was represented by Learned Counsel Opio Isaac Peter while the Respondent was represented by Learned Counsel Atuheire Hilda. Both counsel proceeded by way of written submissions. The submissions by both Counsel are on record and I will consider them in the course of resolution of the issues that are up for determination by the Court.

# **Preliminary objections**

Before considering the merits of this application, I will first deal with the preliminary matters raised by Counsel for the Respondent. In her affidavit in reply, the Respondent raised two preliminary objections to wit;

- 1. The Affidavit in support is deponed by Kenneth Engola without the requisite authority; - 2. The affidavit in support is tainted with material falsehoods.

Order 15 rule 2 of the CPR provides that; where issues both of law and of fact arise in the same suit, and the court is of opinion that the case or any part of it may be disposed of on the issues of law only, it shall try those issues first, and for that purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined. It is trite law as expounded in **Nakiryowa Majorie Kiddu & Anor. Vs. Maurie S. Serugo Kiddu & Anor. Civil Suit No. 587 of 2015**, Justice Henry I. Kawesa held thus; O.15 r. 2 Civil Procedure Rules dictates that once points of law are raised, Court has to resolve them first in a Ruling.

I shall address each preliminary objection sequentially.

*First Preliminary Objection: The Affidavit in support is deponed by Kenneth Engola without the requisite authority*

Counsel for the Respondent submitted inter alia that whereas Kenneth Engola purports to be a Litigation and Recovery Officer of the Applicant, there is no proof attached to the Applicant's suit that he is what he purports to be and has capacity to depone the same on behalf of the Applicant. In the case of **Black Market Records Versus Malinga Sulaiman Aka (Ugeboy Coins) And 3 Others, High Court Commercial Division MISC APPL NO. 2788 OF 2023** at page 7, it was held that 'Determination of the deponent's capacity to swear an affidavit on behalf of a company usually depends on attachment of proof to the same affidavit'. In the case of **Black Market Records Versus Malinga Sulaiman Aka (Ugaboy Coins) And 3 Others, High Court Commercial Division MISC APPL NO. 2788 OF 2023**, Court cited with approval in the case of **Najjuma Jesca and Others Vs Moses Joloba and Another Misc. Appln No. 770 of 2015** wherein the Court held; 'ln cases where an affidavit is sworn on one's behalf, there is need to prove that the other authorized the deponent to swear the affidavit on their behalf. Proof of such authorization is by a written document attached to the affidavit - **See Kalgana vs Dabo Boubou I986] HCB 59)**. Counsel for the Respondent submitted that in the instant case, there is no evidence of identification to show that Kenneth Engola is an employee of the Applicant and also there is no evidence of authorization for him to swear the said affidavit on behalf of the Applicant as such the affidavit in support of this application is illegal, incompetent and incurably defective.

Counsel for the Respondent submitted is also trite that an application has to be supported by affidavit evidence. Where there is one affidavit in support of the application and the affidavit is found to be invalid, Courts have observed that in such a case, the application is not supported by an affidavit and such an application cannot stand and it ought to be dismissed - **(see Ssali Samuel vs Gladys K. Rwamwamba, HCMA No. 514 of 2014**.

In her submissions in reply, Counsel for the Respondent raised a number of matters concerning the competence of the application and, in the alternative, its lack of merit. Unfortunately, the Applicant's Counsel did not make any submissions in rejoinder and, as such, did not make any response to the preliminary objections raised in the submissions in reply. The Applicant had notice of these matters since they were contained in the affidavit in reply filed by the Respondent. I will therefore take it that the Applicant chose not to respond to the matters raised in the Respondent's affidavit and submissions in reply.

As already stated above, the Applicant's Counsel made no reply to this submission. The objection by Counsel for the Respondent on this point is based on lack of authority on the part of the deponent (Kenneth Engola) to swear an affidavit on behalf of the Applicant.

Counsel for the Respondent also questions the capacity of the deponent to swear the affidavit. According to the affidavit in support of the application sworn on 2nd April 2025 and filed in Court on 3rd April 2025, the deponent states in paragraph 1 thus: 'That I am a male adult Ugandan of sound mind the Litigation and Recovery officer of the Applicant duly authorized to swear this affidavit and do so in that capacity'. In paragraph 6 of the affidavit in rejoinder, the deponent states: 'That …. I have capacity to swear the affidavits in support of this application as the Litigation and Recovery Officer of the Applicant with knowledge of the facts pertaining to this matter'. From the above averments, it is clear that the deponent swore the affidavits in his capacity as an employee of the Applicant.

The other argument was that he did not indicate that he had authority to swear the affidavit on behalf of the Applicant and did not attach evidence of such authority in writing. The deponent of the affidavit in support states in paragraph 1 thus: 'That I am a male adult Ugandan of sound mind the Litigation and Recovery officer of the Applicant duly authorized to swear this affidavit and do so in that capacity'. The deponent clearly indicated that he was swearing the affidavit in his capacity as the Litigation and recovery officer duly authorized by the Applicant Bank.

The facts and circumstances of this case are in my view, distinguishable from the earlier discussed authorities cited by Counsel for the Respondent. Under the law, the rules governing conduct of court actions by corporations are different from those that govern individual persons. Under Order 29 Rule 1 of the CPR, in a suit by or against a corporation, any pleading may be signed on behalf of the corporation by the secretary or by any director or other principal officer of the corporation who is able to depose to the facts of the case. There is no evidence before the Court that as the litigation and recovery officer of the Applicant Bank carrying the mandate indicated in the affidavit in issue, the deponent thereof was not a principal officer of the Applicant Bank with capacity to depose to the facts of the case.

In the case of **Friecca Pharmacy Ltd vs Anthony Natif HC M. A No. 498 of 2019**, Ssekaana J., faced with the same scenario, held the view that 'it would be taking it too far to find that every employee of the company should have authorisation to swear on matters of the company. The law presumes that certain categories of employees have ostensible authority to act for the company'. In that case, the affidavit had been sworn by the Company Secretary which was found by the Court to be permissible under the law without need for special authorisation. I am in agreement with the above view expressed by Ssekaana J and I hold the view that in the present case, Mr. Kenneth Engola, the deponent of the affidavit in support herein, qualifies as a principal officer of the Applicant Bank with capacity to depose to the facts of the case. He therefore did not require to attach to his affidavit evidence of special authorization before deposing to the

facts herein. The affidavit is therefore properly before the Court and this point of objection is disallowed.

## *Second Preliminary Objection: The affidavit in support is tainted with material falsehoods*

Counsel for the respondent submitted that the affidavit in support of this application is fatally defective and incompetent as the same is tainted with material falsehoods and ought to be struck out. Specifically, it is submitted that the Applicant purports to have served the Respondent with the notice of default and Notice of sale marked as 'El' and 'E2' which the Respondent disputed as she states that she has never been served with the same. The said notices do not indicate the address of the respondent and the Applicant does not state where she purportedly served the respondent and when. This is a falsehood perpetrated by the Applicant to mislead this Honourable Court to get the remedy she seeks in the instant application.

Furthermore, Counsel for the respondent submitted that the Applicant purports that the Respondent is indebted to it as of 3lst May 2024 to the tune of UGX 102,621,807.241= and relies on annexture 'C' of the affidavit in support of her application which she purports to be the respondent's statement of account. The said annexture 'C' only reflects entries from lst April 2021 to 15th June 2024 with a final narration that the closing balance is 0 and clear balance as on l5th June 2024 to UGX 79,627,464.391=. That the two narrations on the said annexture 'C' for the same date 15th June 2024 does not only prove the falsehoods tainted in the affidavit in support of this application but also fraudulent claim which is disputed by the respondent who states that she is not indebted to the Applicant having paid back UGX 350,000,000/=. Counsel cited the case of **Rutuku Francis & Ors vs Eliphas Ndamagye CACA No.lll of 2017**, where Court Appeal cited with approval the case of **Eric Tibebaga vs Fr. Narsensio Bemugisa & Others, Civil Application No. lE of 2002** where it was held that 'It is trite law that an affidavit riddled with falsehoods cannot validly support an application before a court of law.' On the basis of the above, Counsel prayed that this Honorable Court finds that the affidavit in support of the instant suit is illegal, incurably defective, fatal, incompetent and strikes it out leaving the Notice of motion unsupported by any evidence and therefore incompetent as well.


Order 19 Rule 2(1) of the Civil Procedure Rules demonstrates that evidence in applications is given by way of affidavits. What this means is that in an application, an affidavit in support and in reply serves as both a pleading and evidence in the application.

The respondent raised a preliminary objection to the effect that the affidavit in support of the application is tainted with material falsehoods that this court needs to examine and further determine whether the affidavit in support of the application is competent before this court. The deponent of any affidavit may be crossexamined on its contents under Order 19 Rule 2 of the Civil Procedure Rules. Whether facts stated in the affidavit are a falsehood can only be determined by cross examination of the deponent of the said affidavit and in absence of that, the respondent cannot determine that a paragraph is tainted with falsehoods.

Order l9 Rule 3 sub-rule 1 of the civil procedure Rules provides: 'Affidavits shall be confined to such facts as the deponent is able of his or her own knowledge to prove, except on interlocutory applications, on which statements his or her belief may be admitted, provided that the grounds thereof are stated.' whereas knowledge is defined as 'information, understanding and skills that you gain through education or experience', belief on the other hand comes from the pure conviction of a person - **See DMK Capital versus Tezitta Fred Mukobe and Others, Miscellaneous Cause No: 0O54 of 2022.**

The Applicant stated clearly in paragraphs 12 & 19 of his affidavit in support and affidavit in reply that the information in the affidavit was based on his knowledge and in Paragraphs 1 of his affidavit in reply he stated that he is employed as the Litigation and Recovery Officer of the Applicant and is knowledgeable with the facts pertaining to this matter. In **Bankone Limited –vs - Simbamanyo Estates Limited HCMA No. 645 of 2020**, Court held that: - 'An affidavit may state only what a deponent would be permitted to state in evidence at a trial, except that if the source of the information is given, an affidavit may contain statements as to the deponent's information and belief, if it is made in respect of an application for an interlocutory order, or by leave of the court **(see Order 19 rule 3 (1) of The Civil Procedure Rules and The Co-operative Bank Limited v. Kasiko John [1983] HCB 72).**'

Therefore, it is permissible for a person, to swear an affidavit in support of the Applicant's case, provided that he or she bears knowledge of what is stated in the affidavit.

I have looked at all the paragraphs of the affidavit in support of the application and in rejoinder sworn by Kenneth Engola, the Litigation and Recovery Officer of the Applicant, I find that Mr. Kenneth Engola only speaks to circumstances surrounding the transaction between the Applicant and the Respondent. Majority, if not all of his averments are based on his knowledge as a Litigation and Recovery Officer of the Applicant and I find that whatever is included therein are facts within his knowledge by virtue of his position, and he can ably prove them since none of them are his personal beliefs. His assertions are therefore justified by this, and are not material falsehoods as the Respondent claims. It is also not ground enough to determine Mr. Kenneth Engola's affidavit as fatal and strike it off, because it speaks to only those facts within Mr. Kenneth Engola's knowledge as a Litigation and Recovery Officer of the Applicant. Therefore, I find that the affidavit in issue is not in any way in contravention of order 19 Rule 3 of the civil procedure Rules. Subsequently, the second objection equally has no merit and is also overruled.

# **Determination of the merits of the Application.**

The background to this Application is mainly contained in the Affidavit evidence attached to the application deposed to by Litigation and Recovery Officer of the Applicant, Mr. Kenneth Engola. The Respondent obtained a loan facility of UGX 180,000,000/= from the Applicant. This relationship is evidenced by annexure 'A' being a loan offer letter/agreement dated 23rd March 2018 duly executed by the Applicant and Respondent. The Applicant's loan facility to the Respondent was secured by a legal mortgage over the mortgaged or suit property to the Applicant and the Applicant was duly registered on the title deed. The title deed is annexure 'A' in the affidavit in rejoinder and proves that the mortgage which is annexure 'B1' in the affidavit in support in favour of the Applicant Bank was registered under instrument No WAK00165892 at 3:53 PM on the on 4th April, 2018.

The affidavit of Kenneth Engola, the Litigation and Recovery Officer of the Applicant further deposes to the following facts. That the Applicant made several demands to the Respondent for payment of the outstanding loan sum to no avail and refers to annexture 'D' to prove the same which unfortunately is not attached to the affidavit. The Applicant in her affidavit in support avers that due to the neglect to heed to the demand notice, the Applicant served the Respondent with a notice of default dated 31st May 2023 and Notice of sale dated 18th October 2023 and these are attached to the pleadings as annextures 'E1' and 'E2' respectively. Following the continuous neglect by the Respondent to comply with the requisite notices, the Applicant advertised the suit property on 27th December 2023. The Respondent has refused to willingly hand over vacant possession of the said property to facilitate its sale and this has hindered the loan recovery efforts of the Applicant.

The Respondent in her affidavit in reply asserts that with the help of her lawyers, she read and understood the affidavit of Mr. Kenneth Engola in support of the application. She has paid the Applicant a total sum of UGX 350,000,000= and it is not true that the Respondent owes any money or that she is indebted to the Applicant as alleged. It is not true that any demand notice or alleged documents were ever served on the Respondent as alleged. That the purported advertisement and intended sale of her property is illegal. Lastly she deposes that the averment of Mr Kenneth Engola that whatever he had stated is true and correct to the best of his knowledge and belief at paragraphs 4, 5, 6, and 7 of the affidavit in support of the application are false. On the basis of the above deposition, the Applicant's application is illegal, incompetent, frivolous, vexatious and abuse of court process and ought to be dismissed with costs to the Respondent.

The questions for determination in the Application are:

- 1. Whether the Applicant is entitled to an order of vacant possession of the mortgaged property comprised in Busiro Block 322 Plot 175 at Kapeka – Buloba in Wakisio District? - 2. What remedies are available to the parties.

## **Issue 1:**

## **Whether the Applicant is entitled to an order of vacant possession of the mortgaged property comprised in Busiro Block 322 Plot 175 at Kapeka – Buloba in Wakisio District?**

In order for the Mortgagee to exercise his power of sale under Section 25 of the Mortgage Act, there must be a mortgage under which the mortgagor has defaulted on his obligations, and remains in default after the time allowed to rectify in the default notice under Section 18 (3) of the same Act. In addition, a notice of sale, must have been served on the mortgagor and the property should not be sold before the expiry of 21 working days from the date of service.

In essence, the mortgagee must prove default/indebtedness of the mortgagor and compliance with the notice requirements under the Mortgage Act.

On indebtedness, Counsel for the Applicant submitted that the Respondent got a loan facility vide letter of offer dated March 23, 2018 and marked as annexture 'A' to the affidavit in support and the loan was secured by a legal mortgage over the suit property. This is not denied by the Respondent vide paragraphs 6 and 8 of the affidavit in reply and under S.57 of the Evidence Act require no further proof.

Counsel for the Applicant further submitted that the Respondent's denial of the offer letter yet she signed it amounts to approbation and reprobation which is a practice prohibited by courts of law – **see Simbamanyo Estates Limited Vs Equity Bank Uganda Limited & 2 Others M. A 414 of 2022** where Court citing with approval the **English case of Express Newspapers plc Vs News (UK) ltd [1990] 1 WLR 1320** court stated that 'there is a principle of law of general application that it is not possible to approbate and reprobate. That means you are not allowed to blow hot and cold water in the attitude that you adopt. A man cannot adopt two inconsistent attitudes towards another. He must elect between them and having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance…'

Counsel for the Applicant submitted that the Respondent denies being indebted to the Applicant and states that she has paid a total of UGX 350,000,000= to the Applicant but attached no evidence to support her contention. Counsel for the Applicant submitted that the Respondent's denial of the offer letter amounts to approbation and reprobation which should not be accepted by this court and prayed for court to find that that the Applicant advanced the loan to the Respondent and that the letter of offer was also valid.

The affidavit of Jalia Kiganda at paragraph 6 thereof deposes that paragraph 2 of the affidavit in support is admitted to the extent that she obtained the credit facility. In paragraph 10, she avers that she has paid the Applicant a total sum of UGX 350,000,000= which is not reflected on the purported account statement marked as annexture 'C'. she further deposes that she has on several occasions requested the Applicant to avail her with her account statement from 2018 when she got the loan to no avail. In her submissions, the Respondent argues that the said annexture 'C' only reflects entries from 1st April 2021 to 15th June 2024 with a final narration that the closing balance is zero and clear balance as at 15th June 2024 is UGX 79,627,464.39=. That these two narrations on the said annexture prove falsehoods and the fraudulent claim which is disputed by the Respondent who states that she is not indebted to the Applicant having paid back UGX 350,000,000=.

Counsel for the Respondent cites the case **of DMK Capital versus Tezitta Fred Mukobe and Others, Miscellaneous Cause No: 0O54 of 2022**, where Court held that, 'l find that whereas the Applicant may have proved that there is default, the extent of liability is contentious, therefore this application fails and is hereby dismissed'.

Counsel for the Respondent submitted that in the instant case not only is the liability contentious but also the default and prayed that this Honourable Court dismisses this application as both the liability and default are contentious.

I have carefully gone through annexure 'C' which is a bank statement printed on 15th June 2024 for the period 01st April 2021 to 15th June 2024 and comprises of a statement of account for Miss Kiganda Jalia. From a reading of annexture 'B1', the Respondent requested the Applicant in writing on 31st March 2021 to reduce the outstanding mortgage facility following her exit from NSSF which the Applicant agreed to and reduced the facility to UGX 99,046,815= vide memorandum of variation dated 5th May 2021. I presume this is why annexture 'C''s start period is 1st April. The statement ends at page 5 indicating at the end of the statement that by 15th June 2024 the clear balance was UGX 79,627,464.39= while closing balance is 0.00=. At page 4 of the statement on 31st May 2024, there is an entry "OBJECTIVE LOAN WRITE OFF" of UGX 102,621,807.24=.

There is a controversy based on the bank statement marked Annexure 'C' which gives the indebtedness of the Respondent. There are three conflicting figures of UGX 102,621,807.24=, UGX 79,627,464.39= and UGX 0.00= that need to be sufficiently explained. These three figures have not been clearly explained in any affidavit in support or rejoinder.

None of the Counsel applied to cross examine any of the deponents and the court was addressed in written submissions. The Applicant relies on the statement of account while the Respondent disputes its accuracy and argues that she has paid the Applicant upto UGX 350,000,000=. There is no attachment of any kind to the affidavit of Jalia Kiganda to support this claim.

In civil litigation, whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he or she asserts must prove that those facts exist see S. 101(1) of the Evidence Act. Consequently, in the absence of any explanation about the statement by both parties, there is a very unsatisfactory state of affairs. It is apparent that in the submissions of both Counsel there are contested facts based on affidavit evidence which facts cannot be resolved without cross examination. Subsequently, I find that whereas the Applicant may have proved that there is default, the extent of liability is contentious.

I now turn to whether the Applicant fulfilled the requirements under Section 18 of the Mortgage Act. I have considered submissions about compliance with the provisions of the Mortgage Act, Cap 239 on the question of whether the statutory requirements for a demand notice were met.

Powers of a Mortgagee are provided for under Part V of the Mortgage Act. Section 18 (1) of the said Act stipulates that where money secured by a mortgage is made payable on demand, a demand in writing shall create a default in payment. Secondly under section 18 (2) where the Mortgagor is in default of any obligation to pay the principal sum on demand or any interest or other relief payment or part of it under a mortgage, or in the fulfilment of any common condition, express or implied in the mortgage, the Mortgagee may serve to the Mortgagor notice in writing of the default and require the Mortgagor to rectify the default within 45 working days. However,


the notice has to be in the prescribed form under section 18 (3) of the Mortgage Act.

The remedy of a Mortgagee includes under section 19 of the Mortgage Act upon default of the Mortgagor to comply with the notice, issued and served under section 18, the right to require the Mortgagor to pay all monies owing on the mortgage; appoint a receiver of the income of the mortgaged land; lease the mortgaged land; enter into possession of the mortgaged land or sell the mortgaged land.

Section 25 of the Mortgage Act provides that where the Mortgagor is in default of his or her obligations under the mortgage and remains in default after expiry of the time provided for the rectification of the default stipulated in the notice served on him or her under section 18, a Mortgagee may exercise his or her power of sale of the mortgaged land.

The remedy of foreclosure under section 19 (e) of the Mortgage Act which gives the Mortgagee powers of sale as a remedy as well as making provision for the mortgages power of sale under section 25 of the Mortgage Act cannot be exercised in the absence of evidence of fulfilment of the requirements of section 18 (1) and (3). A default has to be established and time of 45 days given for rectification of the default. This supposes evidence of service of the prescribed notice in a prescribed form.

Where a Mortgagee chooses to exercise the option of selling the mortgaged land, he has to prove that the Mortgagor is in default of his or her obligations and that the Mortgagor remained in default at the expiry of the time provided for the rectification of the default in the notice served on him or her under section 18 (3) of the Mortgage Act.

Counsel for the Applicant in her written submissions argues that under section 19 of the Mortgage Act, where a mortgagor is in default of any obligation to pay the principal sum on demand, the mortgagee is required to serve on the mortgagor a notice of default in writing requiring the mortgagor to rectify the default in 45 working days. Further that Clause 12 of the letter of offer specifically under clauses 12.1 and 12.2 it provides that failure to comply with any of the obligations including payments on any instalments amounts to a

default. Clause 13 of the letter of offer provides for consequences of default and clause 13.2 gives the mortgagee the liberty to exercise its rights as a mortgagee.

The Applicant in her affidavit in support avers that the Applicant served the Respondent through her address given on the offer letter with a notice of default dated 31st May 2023 and Notice of sale dated 18th October 2023 and these are attached to the pleadings as annextures 'E1' and 'E2' respectively but the Respondent failed to pay the outstanding amount.

Counsel for the Applicant in her written submissions further argued that S.20(e) of the Mortgage Act, allows a mortgagee to sell the mortgaged property where the mortgagor is in default of the notice served on him/her. The Respondent was in default and the Applicant went ahead to foreclose and advertised the suit property on 27th December 2023. Counsel for the Applicant in her written submissions argued that S.24 of the Mortgage Act allows the mortgagee to enter possession after serving a notice of not less than five working days on the mortgagor. The Respondent has still refused to give vacant possession of the suit property to date.

He relied on the case of **Barclays Bank of Uganda Vs Musimami & anor OS No. 6 of 2011** where the court found that since the bank was entitled to sell the property, it was entitled to vacant possession of the mortgaged premises. Counsel for the Applicant submitted that the Respondent got a loan from the Applicant which was secured by the suit property, she has defaulted and the Applicant is entitled to vacant possession and prayed for court to grant the Applicant vacant possession.

It is the evidence of the Respondent that she has never been served with any notice. Further the purported notices do not indicate the address of the respondent and the Applicant does not state where she purportedly served the respondent and when. The respondent further argues that the advertisement of her property was done illegally as the applicant ought to have first complied with section l8 of the Mortgage Act Cap 239 which the applicant did not comply with. Counsel for the Respondent submitted that the Respondent in her affidavit in reply has proved to this honourable court that she was never served with any notice and that she is not indebted to the Applicant as such the Applicant cannot sell her property and such a sell without complying with Section l8 of the mortgage Act will be illegal. Counsel for the Respondent submitted that that the grant of this application is at odds with proper administration of justice, equity and fairness and does not pass this test for the grant of vacant possession to the mortgagee.

Section 101 of the Evidence Act, Cap. 8 is to the effect that whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he or she asserts must prove that those facts exist - **(See also Sections 102, 103 and 104 of the Evidence Act and the case of Sebuliba Busuulwa Vs Cooperative Bank Ltd [1982] HCB 129).**

A mortgagee is under obligation to the court to prove entitlement under the Mortgage Act by proving that it has complied with the statutory provisions provided for under sections 18 and 25 of the Mortgage Act.

In the present case, the Applicant claims to have issued a notice of default to the Respondent pursuant to Section 18 of the Mortgage Act. However, there is no evidence on record to show that this notice was ever acknowledged by the Respondent in any way. In addition, the various demands that the Applicant alleges to have made to the Respondent for repayment of the outstanding loan through her address given in the offer letter and mortgage deed are not annexed to the application.

In the absence of clear and verifiable proof of service of the default notice and the accompanying demands, the Applicant falls short of demonstrating compliance with the mandatory procedural requirements under the Mortgage Act. The law requires not just the issuance, but proof of actual service on the mortgagor failing which, the exercise of the power of sale becomes legally questionable.

I am unable to grant the order for vacant possession at this stage because the amount alleged to be in default has not been clearly established, and there is insufficient evidence to show full compliance with the procedural requirements of the Mortgage Act, particularly with respect to the issuance and service of the notice of default and notice of sale. Until these statutory safeguards are satisfied and the default amount is made certain, the remedy of vacant possession cannot be justly or lawfully granted.

## **What remedies are available to the parties**

In my opinion the matters raised in the affidavits contain insufficient facts to grant the remedies prayed for in the suit. On the basis of the facts and controversies raised, as well as the submissions of Counsel, the suit is not appropriate for disposal in a summary manner. It is evident from the submissions of both Counsel that there are disputed factual issues arising from the affidavit evidence, which cannot be adequately resolved without subjecting the deponents to cross-examination.

The High Court has the power to grant any appropriate remedy legal or equitable—based on the claims properly brought before it, in order to fully resolve all issues between the parties and avoid multiple legal proceedings see S.37 Judicature Act. It is trite that this Court has inherent powers to pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court see S.98 CPA.

In the interest of justice, rather than dismissing the application outright for non-compliance with the procedural requirements under the Mortgage Act, I find it appropriate to allow the parties an opportunity to clarify the contested issues. Accordingly, the parties are directed to appear before this court on 1st September 2025 at 3:00P. M for purposes of cross-examination of the respective deponents on their affidavits. This will allow the Court to assess the veracity of the affidavit evidence, resolve any inconsistencies, and enable each party to substantiate their claims and responses more satisfactorily. Only after this process can the Court be in a proper position to make a just and informed decision regarding the orders prayed for in this application.

Costs of the application incurred thus far are costs in the cause.

Ruling delivered in open court the 14th day of July 2014

## **I SO ORDER**

**GRACE FLAVIA LAMUNO AG. JUDGE 14th JULY 2025**