Kisembo v Bundibugyo Energy Co-operative Society Limited and Another (Civil Appeal 2 of 2022) [2024] UGHC 222 (19 April 2024)

#### **THE REPUBLCI OF UGANDA**

# **IN THE HIGH COURT OF UGANDA AT FORT PORTAL** 3 **CIVIL APPEAL NO. 002 OF 2022 (ARISING FROM Civil Suit No. 41 of 2021) KISEMBO DAVID BAKASIMA :::::::::::::::::::::::::::::::::::::: APPELLANT**

#### 6 **VERSUS**

## **1. BUNDIBUGYO ENERGY CO-OPERATIVE SOCIETY LTD (BECS) 2. ATTORNEY GENERAL :::::::::::::::::::::::::::::: RESPONDENTS** 9 **BEFORE: Hon. JUSTICE VINCENT WAGONA**

#### **JUDGMENT**

#### **Introduction:**

- 12 The appellant being aggrieved with the decision of *His Worship Arinaitwe Elisha*, Magistrate Grade One Bundibugyo in Misc. Application No. 28 of 2021 appealed against the same to this court with a prayer that the same be set aside with costs in 15 this court and in the court below. - **Background:**

The appellant filed civil suit No. 41 of 2021 under a specially endorsed plaint under Order 36 of the Civil Procedure Rules against the 1st 18 Respondent seeking to recover his unpaid NSSF savings to the tune of shs 15,303,600/= which accumulated while he was working with the 1st Respondent as a manager. The 1st Respondent did not

21 file an application for leave to appear and defend and a default judgment was entered against her on 2nd June 2021 and a decree extracted on the same date. The appellant was awarded a sum of shs 15,303,600/= as the decretal sum at an interest of 25% from the time of judgment till payment in full and costs of the suit. A bill was filed, taxed and allowed at shs14,00,000/=

- 3 The appellant later applied for execution by way of issuance of a garnishee order which was issued and a sum of shs 2,600,000/= was recovered from the Bank account of the 1st Respondent. He later applied for attachment and sale and the 6 money recovered was not enough to settle the debt. He later applied for attachment and sale of motor vehicle Reg. No. UG 0331 K. A warrant of attachment and sale of - at shs 7,200,000/= to Tibawerwayo Muhamudu on 5 9 th November 2021.

The 2nd Respondent late filed an application for objector proceedings contending that the said motor vehicle was wrongly attached and sold and asked court to have the

the said motor vehicle was issued by the trial magistrate and the property was sold

- execution and sale set aside. The 2nd 12 Respondent contended that the said motor vehicle was property of Government of the Republic of Uganda who was not a party to the suit and was wrongly attached and sold. The learned trial Magistrate agreed - with the 2nd 15 Respondent where he set aside the execution and sale of the said motor vehicle in a ruling dated 23rd December 2021.

The appellant being aggrieved with the said ruling lodged this appeal to this court 18 contesting the ruling and orders issued by the trial court and prayed that the same be set aside with costs.

#### **Grounds of appeal:**

- 21 The appellant framed 11 grounds of appeal to wit; - **(1)That the learned trial Magistrate erred in law and fact when he misdirected himself regarding the law and evidence on setting aside** 24 **execution which had been completed and execution report filed in court.**

- **(2)That the trial Magistrate erred in law and fact by holding that Motor Vehicle Registration No. UG0331K was not attachable by Court.** - 3 **(3)That the learned trial Magistrate erred in law when he failed to address his mind on the law governing judicial sale.** - **(4)That the learned trial Magistrate erred in law and fact in finding that the** - **2** 6 **nd Respondent had no legal and equitable interest in the attached Motor VehicleReg No. UG0331K at the time of attachment.** - **(5)That the learned trial Magistrate erred in law and fact in finding that** 9 **there were irregularities in execution whereas not thereby reaching a wrong decision that occasioned a miscarriage of justice.** - **(6)That the learned trial Magistrate erred in law and fact in finding that the 2** 12 **nd Respondent had no legal and or equitable interest in the attached motor vehicle Reg. No. UG033K at the time of attachment.** - **(7)That the learned trial Magistrate erred in law and fact by failing to** 15 **evaluate the evidence of transfer of ownership and usage from Rural Electrification Agency and the 1st Respondent thereby reaching a wrong decision.** - 18 **(8)That the learned trial Magistrate erred in law and fact in finding that the 2 nd Respondent was not in possession of the said motor vehicle at the time of attachment and sale.** - 21 **(9)That the learned trial Magistrate erred in law and fact in find that at the time of attachment and sale, the said motor vehicle was not a scrap thereby reaching a wrong decision.** - 24 **(10) That the learned trial Magistrate erred inlaw and fact in condemning the 2nd Respondent who had full knowledge of ownership of the said motor vehicle, in possession and usage and a party to the proceedings of the court** - 27 **unheard.**

### **(11)That the learned trial Magistrate erred in law and fact in canceling a judicial sale against the interest of the third party unheard.**

3 This case was fixed on a number of occasions to have the same progressed by way of filing of written submissions but both parties did not comply. I have thus decided to consider the appeal on the basis of the memorandum of appeal filed in 6 court and the record of the lower court:

#### **Representation:**

The memorandum of appeal was filed by Mr. Kisembo David of Kisembo D. B &

- 9 Co. Advocates. The Respondent was represented by Atumanyise Racheal a State Attorney in the office of the Attorney General Fort Portal Office. Both counsel did not file their written submissions in support or opposition of the appeal. I thus 12 considered the memorandum of appeal and the record of appeal in arriving at the - findings herein.

#### **Duty of the first appellate Court:**

- 15 This being a first appeal, my duty as a first appellate court under section 80 of the Civil Procedure Act is to subject the evidence of the lower court to a fresh and exhaustive scrutiny and draw fresh and independent inferences and conclusions. In - 18 doing so, I will apply the law strictly and consider the evidence adduced in the lower court. I will bear in mind the fact that I did not have the opportunity to see the witnesses testify and I will therefore make the necessary due allowance in that - 21 regard. *(See PandayVs R (1967) E. A 336 and NarsensioBegumisa& 3 others Vs. Eric Kibebaga, SCCA NO. 17 of 2002*.

#### 24 **Consideration by Court:**

## The appeal can be resolved under one issue: W*hether the learned trial Magistrate erred when he set aside execution and the resultant sale of motor vehicle Reg No.* 3 *UG033K?*

It is relevant to consider the law relating to a judicial sale and execution. It is trite that any person whose immoveable property has been attached and sold in execution

- 6 of a decree of court may apply to the Court to set aside the sale on the ground of a material irregularity involved in the process leading to the sale (see: *Allen NsubugaNtananga v. Micro Finance Ltd and others H. C. Misc. Civil Application* - 9 *No. 426 of 2006***).** For that matter, a judicial sale, unlike a private one, is not complete immediately it takes place. It is liable to be set aside on appropriate proceedings. If no such proceedings are taken or if taken and are not successful, the sale will then - 12 be made absolute (see**:** *Lawrence Muwanga v. Stephen Kyeyune, S. C Civil Appeal 12 of 2001***).** Whereas an absolute sale is one where no application to have the sale set aside is made and where if such an application is made, it has been disallowed - 15 (see: *Bancroft and another v. City Council of Nairobi and Another [1971] 1 EA 151***and** *Sam Kaggwa v. Beatrice Nakityo [2001- 2002] 2 HCB 120*), no irregularity in the process leading up to the sale should vitiate the sale unless the applicant proves 18 to the satisfaction of the Court that he or she has sustained substantial injury by reason of such irregularity.

In *Muwanga vs. Stephen Kyeyune (Legal Representative of Christine Kisamba* 21 *(deceased) SCCA No. 2 of 2001*, citing *Chitaley and Rao's Code of Civil Procedure,* guided that a judicial sale, unlike a private one, is not complete immediately it takes place but until the person challenging it has taken appropriate 24 proceedings. If no such proceedings are taken or they are taken and are not successful, the sale will then be complete and made absolute.

In the present suit, the 2 nd Respondent took out objector proceedings contending that the sale of motor vehicle Reg No. UG033K was irregular and illegal since the said 3 motor vehicle was property of The Government of the Republic of Uganda and not the 1 st Respondent. The 2nd Respondent presented a log book and a memorandum of understanding between Government and the 1st Respondent where after termination 6 of their dealings, the said property would revert back to Government. That the appellant signed on the memorandum of understanding as the manager and he was aware the property was not for the 1st Respondent. Court ageed with the 1st 9 Respondent and set aside the sale.

I have considered the evidence and the law applicable. Whereas the sale took place on 5 th November 2021, the said sale was not complete and was liable to be challenged by the 1st 12 Respondent or any person who claimed interest in the said motor vehicle. In this case, the 2nd Respondent filed an application objecting to the sale and seeking an order to have it set aside on 15th December 2021 barely before 15 lapse of a month after the sale. Therefore, it is not the correct position of the law as asserted by the appellant that after a judicial sale a party cannot challenge the same. Such sale is challengeable within a reasonable time and after passage of time, it 18 deemed absolute. In this case the application challenging the sale was made before

- the expiry of a month. The 1st Respondent filed the same within time and the said sale was not absolute at the time Misc. Application No. 28 of 2021 was filed. - 21 In addition, the applicant contended that the motor vehicle which was attached and sold was not property of the 1 st Respondent as such not available to be attached. I have read and internalized the an agreement dated 11th July 2016 between the - 24 Government of the Republic of Uganda represented by the Rural Electrification Board of the Ministry of Energy and Mineral Development and Bundibugyo Energy Cooperative Society. In the agreement, the motor vehicle in issue was handed over

to the 1st Respondent for purposes of facilitating its activities on behalf of government as a private contractor. No title was passed over to the 1 st Respondent 3 and this informs the fact that the logbook remained registered in Energy and Mineral Development ministry and was not handed over to the 1st Respondent. The spirit in the handover agreement as can be discerned from its clauses was that title in the 6 vehicles remained with the Energy Ministry and this is supported by clause 7 which is to the effect that upon termination, the said motor vehicles including the one in issue were to be returned to the Board that represented the ministry of energy in the 9 transaction.

This agreement was signed by the appellant as the authorized representative of the 1 st Respondent and being an advocate, I am inclined to believe that he knew the 12 contents thereof. Therefore, the appellant applied for attachment and sale of the motor vehicle in issue with full knowledge that it was property of Government. Further, it is legally inconceivable in the absence of evidence to the contrary how 15 property of government could be sold to pay debts incurred by a private contractor. I agree with the findings of the learned trial Magistrate that the attachment was illegal and ought to be set aside. The appeal fails at this stage.

18 I therefore dismiss this appeal with no orders as to costs since it was not defended by the Respondents. I so order.


21 Vincent Wagona **High Court Judge / Fortportal Date: 19/04/2024**