Mitegyeko v Bank of Africa Uganda Limited (Civil Suit No. 322 of 2013) [2015] UGHCLD 258 (19 November 2015)

Full Case Text

## THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA; AT KAMPALA

(LAND DIVISION HRIS C. K. NOOZIREHO CIVIL SUIT No. 322 OF 2013 AD COMMISSIONER AOR OATH. P. O. BOX 6690, KAMPANA - UGAN.

JANET MITEGYEKŐ }.

# .... PLAINTIFF

#### *VERSUS*

...,..... DEFENDANT BANK OF AFRICA (U) LIMITED } ......

BEFORE: - THE HON. MR. JUSTICE ALFONSE CHIGAMOY OWINY - DOLLO

### **JUDGMENT**

The Plaintiff has brought this suit against the Defendant, for Court to review the moltgage of the land comprised in Kyadondo Block 243 Plots 1329 and 1330, Luzira, Kampala District, (hereinafter the suitproperty), registered in the name of her husband Sezi Mitegyeko; and a declaratory order that the mortgage is illegal and void. She also seeks orders for general damages, and costs of the suit. She avers that her husband obtained credit facilities from the Defendant, for Kayonza Distributors Ltd., on the security of the suit property; but this, without her requisite spousal consent. This, she contends, contravenes the provisions of section 38 of the Land Act, as they derive their sustenance from this property, and, she and her husband hid agreed on his property to be their matrimonial property.

The Defendant in its written statement of defence, has refuted her caim; contending that the suit property is not matrimonial property, but, as a matter of prudence and good practice, it obtained the Plaintiff's voluntary spousal consent before executing the mortgage; and for this, in relies on the rule of estoppel against her. It further

contends that on several occasions since 2009, Kayonza Distributors Ltd., through Board Resolutions made by the Plaintiff and her husband as directors thereof, obtained credit facilities from the Defendant on the security of the suit property. It also contends that the Plaintiff and her husband have always executed personal guarantees for those credit facilities. It is its contention that it has disbursed the contested facilities on the Plaintiff's representation.

The Defendant further contends that it granted the contested facility on the strength of a power of attorney the Plaintiff's husband had given to company Kayonza Distributors Ltd., wherein the Plaintiff and her husband are shareholders, to secure the credit facility with the suit property. It contends further that the Plaintiff signed the mortgage deed for the credit facility it granted the company on the strength of the said power of attorney. The Defendant then contends that the Plaintiff gave her express spousal consent for the suit property to secure the facilities of 2011 and 2012 from the Defendant when she signed the Board Resolution, Credit Facility Offer Letters, Mortgage Deed, and Personal Guarantees. Furthermore, as a director of the company, the Plaintiff signed for the facilities disbursed by the d a citity Defendant to the company on the suit security. road ind 受闘しのし is (Clark of Clinical) **The Elicit** The parties filed a Joint Scheduling Memorandum wherein they ag on the following facts

The Plaintiff is the wife of Mr. Sezi Mitegyeko who is the $(i)$ registered proprietor of the suit property.

The Plaintiff and Mr. Mitegyeko are directors in $(ii).$ Distributors Ltd.

$\sqrt{2}$

- ii). M/s Kayonza Distributors Ltd., borrowed money from the Defendant; and, Mr. Mitegyeko pledged titles for the suit property as security for the loan. - iv). The Defendant registered a mortgage on the suit land in 2011. - v). The Defendant advertised the suit property, in the New Vision Newspaper of 24th June 2013, for sale, pursuant to the mortgage.

The issues the parties agreed on, for determination by Court, are the following: -

- Whether, or not, the Plaintiff gave spousal consent for the $1.$ mortgage of the suit property to the Defendant. - Whether, or not, the mortgage entered on the suit property in 2. favour of the Defendant is valid. - What remedies are available to the parties? 3.

At the commencement of the hearing, the parties agreed on the admission in evidence, without the need for further proof, of certain documents on both sides; which should have constituted part of the agreed facts. These are: -

## PLAINTIFF'S ADMITTED DOCUMENTS

Copy of the New Vision Newspaper of 24th June 2013; marked as $(i)$ Exh. P1.

High Court (Commercial Div.) Originating Summons No. 3 of $(ii)$ 2013 between the Defendant herein, Kayonza Distributors Ltd., Sezi Mitegyeko, and the Plaintiff herein; marked as *Exh. P2*.

Credit facility letter dated 17th-July 2012, from the Defendant (iii) to Kayonza Distributors Ltd., (Annexture $B_4$ in the Defendant's compilation); marked as *Exh. P3*.

$(iv)$

$(v)$

Credit facility letter dated 22nd August 2012, from the Defendant to Kayonza Distributors Ltd., (Annexture $B_1$ in the Defendant's compilation); marked as *Exh. P4*.

Copy of the Consent Form for the mortgage; dated $2^{nd}$ August 2012; marked as *Exh. P5*.

DEFENDANT'S ADMITTED DOCUMENTS

Except for the two guarantees attached to Grace Nabukenya's witness statement, and collectively marked (by marker pen) as 'B6', which have to be proved by evidence, the rest of the documents annexed to the said witness statement are admitted in evidence. Accordingly, the following are the admitted documents: -

Offer letter dated 14th April 2009; marked as $Exh.$ DI (i)

Offer letter dated 3rd November 2009; marked as $Exh. D1_{(n)}$ .

Offer letter dated 25th May 2010; marked as *Exh. D1*

Offer letter dated 19th May 2011; marked as $Exh.$ D1(a).

Offer letter dated 9th November 2010; marked as *Exh. D1*

Spousal consent dated 10th November 2010; marked as *Exh. D2*. $(ii)$

Board Resolution dated 20th May 2011; marked as Exh. D3(a) $\rm (iii)$

Board Resolution dated 3rd November 2009; marked as $Exh. D3$

Board Resolution dated 18th July 2011; marked as *Exh. D3*.

- Power of attorney by Sezi Mitegyeko to Kayonza Distributors $(iv)$ Ltd., dated 27th August 2011; marked as *Exh. D4*. - Certificate of title to land comprised in Kyadondo Block 243 Plot $(v)$ 1329; marked as Exh. D5. - Certificate of title to land comprised in Kyadondo Block 243 Plot $(vi)$ 1329; marked as Exh. D6. - (vii) Mortgage Deed dated 10th June 2011; marked as *Exh. D7*. - (viii) Standard Terms and Conditions of Loan dated 18th July 2012; marked as Exh. D8. - Affidavit by the Plaintiff, in reply, dated 27th June 2013; marked $(ix)$ as Exh. D9fal $\cdots$

Allidavil by Sezi Milegyeko, in reply, dated marked as $Exh. D9$ .

Affidavit by Plaintiff, in support of application, dated 22nd July 2013; marked as Exh. D9.

Affidavit by the Plaintiff, in support of application, with annextures, dated 19th July 2013; marked as *Exh. D9*, $\mu$ .

Whether, or not, the Plaintiff gave spousal consent for the mortgage of the suit property to the Defendant.

The Defendant's contention is that there was no need to obtain spousal consent with regard to the suit property, and that it only obtained the consent out of practice and prudence. In the light of this, it was incumbent on the Plaintiff to adduce evidence on a balance of probability that the property was indeed one for which such consent was a legal requirement. This burden lay on her in keeping with the requirement of section 106 of the Evidence Act (Cap. 6; 2000 Edn.)

which is exclusive to civil proceedings, and places the burden of proving a matter especially within a person's knowledge, as follows: -

Burden of proving, in civil proceedings, facts especially within knowledge.

In civil proceedings, when any fact is especially within the knowleage of any person, the burden of proving that fact is upon that person."

$M^{M-1}$ ? of 2009, and the Land Act (Cap. 227, Laws of Uganda, 2000 Edn.) as amended by section 19 or the Land (Amendment) Act of 2004, respectively accord equal protection to matrimonial home, and family land; in that they both provide for requisite spousal consent, before either of the spouses can dispose of such property, Section 2 of the Mortgage Act, 2009, define-'matrimonial home' as follows:-

building or part of a building in which a husband and a wife or, as the case may be, wives, and their children, if any, ordinarily reside together and includes $\cdot$

- where a building and its curtilage are occupied primarily for $(a)$ residential purposes, that curtilage and outbuildings on it; and - where a building is on or occupied in conjunction w. (b). agricultural land or pastoral land, any land allocated by one spouse to his or her spouse or in the case of a husband, to $\pi$ spouses for his, her, or their exclusive use;

The Plaintiff was the sole witness for her case, and testified as PW1. She stated that they acquired the suit property ten years before this trial; and it is the only land, which the family has. They used the building; they found on it, for trading; before demolishing it. It is therefore quite evident from her testimony that the Plaintiff's family does not at all - leave alone ordinarily - reside in the suit property

The suit property is neither a curtilage nor an outbuilding on a Similarly, it is not property occupied in residential building. conjunction with agricultural land or pastoral land. The suit property is, therefore, not matrimonial property within the meaning assigned to it by the Mortgage Act; hence, the spousal consent provided for under the Mortgage Act, did not cover the suit property.

While the aforementioned position is so, the Land Act also protects a certain category of property; and requires consent of the other spouse. before a spouse can lawfully use such property as security for any facility. In this regard, while the Mortgage Act protects property it refers to therein as matrimonial property, the Land Act (Cap. 227), as amended by section 19 of the Land (Amendment) Act of 2004, protects property it refers to therein as family land. The protection accorded the category of properties provided for in the Mortgage Act is equal to the protection accorded the category of properties provided for in the Land Act (Cap. 227), as amended. Section 38A (4) of the Land Act, amended, provides that family land is that: -

on which is situated the ordinary residence of a family. $(a)$

- on which is situated the ordinary residence of the family and $(b)$ from which the family derives sustenance. - which the family freely and voluntarily agrees shall be treated to $(c)$ qualify under paragraphs (a) and (b) or $\frac{1}{2}$

which the family voluntarily agrees shall be treated to qualify or $(d)$ which is treated as family land according to the norms, culture, $(e)$ customs, traditions or religion of the family.

The same section then defines 'ordinary residence as follows:

$\overline{7}$

"the place where a person resides with some degree of continuity apart from accidental or temporary absences; and a person is ordinarily resident in a place when he or she intends to make that place his or her. home for an indefinite period."

Furthermore, it defines 'land from which a family derives sustenance', to mean:

land which the family farms; or "(a)

land which the family treats as the principal place which provides (b) the livelihood of the family; or

land which the family freely and voluntarily agrees, shall be-(c) treated as the family's principal place or source of income for food.'

The Plaintiff testified that her family derived its sustenance from the rental money obtained from the incomplete building the family is constructing on the suit land. She conceded that the Defendant is the sole tenant in the building; as the rest of it is not yet ready for occupation. She disclosed that she has no knowledge of the rental amount paid by the Defendant. She claimed that for a long time, the Defendant has not paid the rent; but did not know the last time it paid, as it dealt with her husband only. She further stated that Kayonza Distributors Ltd., of which she is a shareholder and director. and as well the Company Secretary, used to pay her a salary out of which she paid fees for her children; but that the company no longer makes profit, so they now survive on their working children.

Neither did the Plaintiff join her husband as a Defendant to the suit, nor did she call him as a witness although he attended Court throughout the hearing of the case. He could have corroborated the

- 8 her assertion that they had 'freely and voluntarily agreed that the suit property shall be treated as the family's ordinary place of abode 'with some degree of continuity apart from accidental or temporary absences'; or, that they had intended 'to make that place [their] home for an indefinite period'; or that it was property from which the family derives sustenance', as is required under the provisions of the Land Act, cited above. The Plaintiff revealed that she and her husband got married in 1976; and that her family acquired the suit property only ten years before this trial. Since it is her evidence that the building on the suit property is not yet ready for occupation save for the part rented out to the Defendant, her family must have then ordinarily resided elsewhere since 1976 when she got married.

The Plaintiff disclosed that when they bought the suit land, there existed a building on it, which they used for trading purposes, but later broke it down. She further testified that the building now undergoing construction on the suit land is for commercial use; hence, their renting it out to the Defendant for banking business. Thismeans, at the very least, only part of the building could possibly serve for residential purposes; as the other part is commercial. Accordingly then, it is only that part of the building that could be used for residential purposes, which would enjoy protection under the law either as matrimonial or family property. This accords with the provision of section 2 of the Land Act, which is that a matrimonial home is a 'building or part of a building in which a husband and a wife ... ordinarily $\mathcal{F}$ eside together'.

The Land Act protects a 'building', or 'part of a building'. To me, the reference to *part of a building*, as an alternative provision, envisages occupation of part of a building only. For that, the matrimonial home would strictly be limited only to that part of the building so occupied.

This is worthy of note. Had section 2 of the Land Act referred to $a$ building, or a building part of which, a husband and a wife ... ordinarily, reside together, it would have had a different import; namely, that even where only part of a building is so occupied, that partial occupation would make the whole building a matrimonial home. This is the import of the provision of section 2 of the Mortgage Act, 2009, that occupation even of part only of a building, such as a room out of the main house, or the guest wing or servants' quarters of the main house, makes the whole building a matrimonial home.

It is therefore manifest that the Plaintiff's family is neither ordinarily resident in the suit property, nor is it the place where it principal' derives its sustenance, for the suit property to fall under the definition of family property under the law. Although the suit property generated rental income for the Plaintiff's family, it has not been their principal source of sustenance since they only used the rental income to service the loan, which their family company Kayonza Distributors Ltd., borrowed from the Defendant. The Plaintiff's evidence is that her family derived its sustenance from Kayonza: Distributors Ltd., where she and her husband $a$ : shareholders and directors; and which paid her a salary from which she catered for her children's education.

The income the family got from Kayonza Distributors Ltd., according to her, however ceased when the company stopped doing profitable business. Her evidence, as is pointed out above, is that she never personally collected rent from the Defendant for the suit property. The evidence adduced for the Defendant is that it utilised the rent for suit property to service the loan obligation on kayonza the Distributors Ltd. In the face of this uncontroverted evidence, I find no justification to find that the suit property is either matrimonial or

family property, within the meaning assigned to such property by the Mortgage Act and Land Act respectively, for it to enjoy protection under the provisions of the two legislations. The Defendant was therefore under no obligation whatever to obtain the Plaintiff's consent for the suit property to secure the facilities in issue.

I do appreciate the Defendant's contention that the spousal consent it demanded was out of prudence and good practice; just in case there was information regarding the status of the suit property, relevant under the Mortgage Act or Land Act, which the mortgagor may not have disclosed. The Defendant's exercise of due diligence, could not thereby place the suit property in either of the categories of properties protected by the Mortgage Act, or Land Act, when used as security for a loan facility, or sale. Properties protected under the Mortgage Act, and the Land Act, are clearly stipulated under the provisions of those laws. Since such protection is a creature of the law, the exercise of due diligence beyond the requirement of the law\* does not make such exercise of diligence mandatory.

However, had it been that the suit property enjoyed protection under the provisions of the Mortgage Act, or Land Act, then the Plaintiff's prior spousal consent would have been mandatory. The Plaintiff concedes having consented to the use of the suit property to secure some of the facilities; but denies that she gave her consent for the facility granted on $17th$ July 2012. The Defendant, however, contends that the Plaintiff willingly and freely consented to the use of the suit property to secure this facility as well. Notably, the Mortgage Act of 2009 came into force on $2^{nd}$ September, 2011; vide the Mortgage Act. 2009 (Commencement) Instrument 2011. Thus, the facilities granted on 2nd June 2009, 29th December 2010, and 7th July 2011, were done

under the Mortgage Act (Cap. 229); which did not require spousal consent for use of a matrimonial home as security for a loan.

Instead, the spousal consent for those facilities was a requirement under the provisions of section 39 of the Land Act (Cap. 227, 2000 Edn.), as amended by section 19 of the Land (Amendment) Act of 2004, by creating section 38A of the Land Act. This new section refers to such property as family land. However, the facility granted by the Defendant to Kayonza Distributors Ltd., on 17th July 2012, on the security of the suit property, is governed by the Mortgage Act No. 8 of 2009; which was already in force. It is this facility, which the Plain $f$ vehemently contends she never granted. Her spousal consent for. Section 5 of the Mortgage Act No. 8 of 2009, which is the relevant applicable law, provides for spousal consent for mortgage of matrimonial home, as follows: -

"5. *Mortgage of matrimonial home.*

INDEWILLISTUITION SCIENCE DD of the Bank ..... $\overline{11}$ matrimonial home, including mortgage on customary land of a matrimonial home is valid if –

- (a) any document or form used in applying for the mortgage: signed by or there is evidence from the document that it ha been assented to by the mortgagor and the spouse or spouses $\tau$ the mortgagor living in that matrimonial home; - any document or form used to grant the mortgage is signed k (b) or there is evidence that it has been assented to by the mortgage and the spouse or spouses of the mortgagor living in the matrimonial home."

Section 6 of the Mortgage Act provides as follows: -

Consent to mortgage of matrimonial home.

Where a matrimonial home is subject to an application for a $(1)$ mortgage, a mortgagee shall satisfy himself or herself that the consent a spouse referred to in section 5 is an informed and genuine consent and that duty is deemed to have been complied with if -

$(a)$ The mortgagee has -

$".6.$

1949年1月1日,1月1日,1月1日,1月1日,1月1日,1月1日,1月1日,1月1日

同時に

- (i) explained to the spouse or spouses of an applicant for a mortgage in the presence of an independent person, the terms and conditions of the mortgage which is being applied for; or - in writing, advised the applicant for a mortgage that he or she (ii) should ensure that his or her spouse or spouses receive independent advice on the terms and conditions of the mortgage which is being applied for; or

the spouse or spouses, as the case may be, provide a signed and $(b)$ witnessed document to the effect that they have received independent advice on the mortgage which is being applied for and have understood and assented to the terms and conditions of the mortgage or that they have, notwithstanding the advice from the mortgagee, waived their right to take independent advice.

(2) In this section an 'independent person' means any officer of the Government, a Justice of the Peace, an Advocate, a Notary Public, bank manager, a minister of any religion authorised to celebrate marriages, a medical practitioner, and any other person authorised in that behalf $by$ the Minister by Statutory instrument.

A mortgagee may take such other steps in addition to the steps set (3) out in this section as he or she considers necessary and desirable to

satisfy himself or herself that the assent of the spouse or spouses is informed and genuine."

The evidence on record, which the parties hereto admitted by consent, shows that all the facilities granted by the Defendant, and are referred to herein, were not to the Plaintiff's husband; but instead, to Kayonza Distributors Ltd., - the Plaintiff's family company - of which the Plaintiff and her husband are both shareholders and directors. The evidence admitted in Court by consent of the parties clearly shows that for the facilities the Defendant granted to Kayonza Distributo Ltd., on the security of the suit property, for which the Plaintiff admits she gave her consent, are as follows: -

The credit facility dated 14th April 2009; marked as $Exh. D1_{(a)}$ . (i) Offer Jetter dated 3rd November 2009; marked as *Exh. D1*(b) $(ii)$ Offer letter dated 25th May 2010; marked as $Exh.$ D1co. $(iii)$ Offer letter dated 19th May 2011; marked as $Exh. D1_{cd}$ . $(iv)$

(v)

Offer letter dated 9th November 2010; marked as Exh. DI

The credit facilities offers, each of which the Plaintiff and her husband duly signed in acceptance as directors of Kayonza Distributors Ltd., and to which the Plaintiff admits having willingly and knowingly given her consent, named the suit property as the security therefor. They each provided, inter alia, for a Board Resolution by the directors of the company, sanctioning the borrowing; as is evidenced by resolutions dated 20th May 2011, 3rd November 2009, and 18th July 2011 (exhibits $D_{3(a)}$ , $D_{3(b)}$ and $D_{3(c)}$ respectively) for example. The Plaintiff's husband Sezi Mitegyeko also gave powers of attorney to the company to use the suit property as

Security for each of the facilities; and example of which is dated 27th August 2011; marked as Exh. D4.

Attached to each of these offers was a 'Standard Credit terms and conditions', containing the same terms and conditions found in the offer the Plaintiff and her husband had accepted. The Plaintiff and her husband duly signed these 'Standard Credit terms and conditions' as well, in acceptance, as is evidenced by exhibit $\underline{D}_{100}$ for instance; and this she admits she willingly and knowingly did so. However, neither did any of the offer letters, nor did any of the 'Standard Credit terms and conditions' forms provide for spousal consent. Yet, as for instance, is evidenced by the spousal consent form dated $10'$ November 2010 (*exhibit* $D$ ) the Defendant obtained the Plaintiff's consent for use of the suit property to secure each of these facilities.

In addition to the execution of the documents shown above, the Plaintiff and her husband, in their joint capacity of directors of Kayonza Distributors Ltd., the company borrowing the funds from the Defendant, signed the mortgage deed accepting or consenting to the use of the suit property as security for the credit facilities; as is evidenced by the mortgage deed dated 10th June 2011 (*exhibit D*.). With regard to the loan facility of 17th July 2012, which the Plaintiff denies giving her spousal consent for, it was executed on the same footing with the earlier ones. The Plaintiff and her husband, as directors of Kayonza Distributors Ltd., signed the Defendant's offer to the company (*exhibit* $P_3$ ) in acceptance of the offer on the terms and conditions set out therein.

They then endorsed the Standard Credit terms and conditions (exhibit $D$ ) in adceptance of the loan offer. Thereafter, they passed a Board Resolution (*exhibit* $D_{36}$ ) for the company to use the suit property as security for the facility upon grant of a fresh power of attorney to be

made by the Plaintiff's husband to that effect. The Plaintiff's husband, then, as the registered proprietor of the suit property granted a power of attorney (*exhibit* $D$ ) to the company to use the suit property as security for the facility. In addition to the mortgage of the suit property, the Plaintiff and her husband also executed individual personal guarantees, as directors of the company, for the repayment of the loan facility. The texts of all these documents are the same as the ones the Plaintiff and her husband had executed for the grant of the earlier facilities; and with which the Plaintiff has no quarrel.

Indeed, the offer letter (*exhibit* $P$ ) states that following a request fro the company, the Defendant 'is agreeable to the renewal of the credit facilities to the company; and that offer letter further states that t. Defendant already held the suit property as security for the earlier loan. Except for the power of attorney, which the Plaintiff's husband executed alone as the registered proprietor of the suit property, the Plaintiff otherwise endorsed all these documents; and, indeed, she expressly admits this. That notwithstanding, the Plaintiff contends that she never consented to the use of the suit property to secure the facility in issue; and for this, she relies on the endorsement made c the spousal consent form ( $\frac{exhibit P_3}{}$ ).

She contends that unlike the consent she granted on 10th Novem1 2010 (exhibit $D_2$ ), wherein the 'DO NOT CONSENT' provision in the consent form is clearly crossed out, and the space against the 'DO CONSENT' provision is ticked, signifying consent, the tick mark in the contested spousal consent form (*exhibit* $P_2$ ), is placed in the space next to the 'DO NOT CONSENT' provision. I have to point out that this contested spousal consent is dated 2nd August 2012; which was the very day the Plaintiff signed her personal guarantee, for the repayment of the loan facility. More important, the Plaintiff signed the contested spousal consent form after she had already, willingly and knowingly, executed the documents referred to herein above signifying her acceptance of the use of the suit property as security for the loan facility.

These documents are, the offer letter (*exhibit* $P_3$ ) dated 17th July 2012, the Standard Credit terms and conditions (*exhibit* $D_8$ ) dated 18th July 2012, and the Board Resolution (exhibit $D_{3(2)}$ ) also dated 18th July 2012. Accordingly then whether the Plaintiff signed the contested form to signify her refusal to grant her consent as she asserts, or not, should be considered in the light of her earlier acts of acquiescence. I should point out here that I did observe during the trial, and noted it down in writing for the record, that when she was being cross-examined on the issue of her consent for the suit property to be used as security, she was shaky and exhibited an unreliable and wanting demeanour. On this, I find it difficult to believe her.

In construing the contested document, I am inclined to use the purposive approach as well as applying the doctrine of estoppel. The reason for reaching this is, first, that she admits willingly and knowingly having signed the other documents, which all provided for the use of the suit property as security for the loan; and were themselves prerequisites for the conclusion of the loan agreement. It was a clear term of the loan offer that before the execution of these documents; the Defendant would not disburse the loan in issue. Second, neither the 'DO CONSENT' nor the 'DO NOT CONSENT' provisions on the contested spousal consent form are cancelled out. Instead, the mark on the contested document is a slash in the space against the DO NOT CONSENT' provision.

Unfortunately, the person who made the contested slash mark against the 'DO NOT CONSENT' provision in the contested spousal consent

form, was not called to explain its meaning. However, the subsequent endorsement 'N/A' (meaning Not Applicable), made against the requirement to give reason for refusing to consent, makes sense when construed as a grant of consent. This is because if the Plaintiff had declined to grant her consent as she claims, she would have certainly given the reason therefor. The Plaintiff does not persuade me by her claim that she is an illiterate woman who signed all the documents tendered in evidence without understanding them; but did so, because they were placed before her with instructions to do so. There is ample evidence to controvert this assertion.

First, as the Company Secretary for Kayonza Distributors, she signed numerous documents whose texts are in the English language. This includes Board Resolutions referred to herein above authorising the company to use the suit property on the strength of powers of attorney from her husband, to secure the several loan facilities; and which she does not contest. She also signed on the various offer letters from the Defendant to the company for the various facilities the Defendant intended to extend to the company, together with the Standard Conditions and terms attached to each of them; thus signifying the company's acceptance of the offer. She also appended her signature on a number of spousal consent forms, which she does not contest, for the suit property to secure the several loan facilities.

Second, in High Court (Commercial Division) Civil Suit (Originating Summons) No. 3 of 2013, where the Defendant herein such her together with her husband and the company (exhibits $P_2$ and $D_{g(a)}$ ), she deponed in her affidavit therein that she is illiterate. However, she signed the English deposition without the requisite Jurat required by law to explain that she, as an illiterate did so after it was first explained to her. Again, in Miscellaneous Applications Nos. 663 of

3013, 664 of 2013, and 672 of 2013, arising from the suit herein, which sought a Court order of temporary injunction *(collectively exhibit-JD^,* she deponed in her affidavits; but without any Jurat needed for someone who is illiterate. She similarly signed the Particulars of Directors and Secretaries form *(exhibit D10),* and the Account Opening form with its terms and conditions *(exhibit DJh*

-t'

All the above instances.lead me to reach only one conclusion; that, in fact, the Plaintiff willingly and knowingly appended her signature on the contested, spousal consent form, signifying her consent for the use'of the suit.property as security for the loan facility granted by the Defendant'to the company. Her denial is an afterthought borne out of the reality that the suit' property is now threatened with disposal by sale for the failure of the company managed by the Plaintiff and her husband, to meet its obligation under the terms and conditions of the facility now in dispute. It is for this, that the Plaintiff thought it unwise to either join her husband, as a Defendant, or call him her witness to corroborate her claim that she never gave consent for the use of the suit property as security for the facility in issue.

Accordingly then, the facility which the Defendant granted to the Plaintiff's company on 17th July 2012, which the Plaintiff vehemently contends she.'never gave her spousal consent for, has to be looked at against the hackdrop of the earlier transactions between the Plaintiff and her husband on the one part, and the Defendant on the other, **' Jr** ,j; referred to,'Herein above. I believe that in providing for mandatory spousal consent, the mischief the Mortgage Act and the Land Act seek to avert is ha situation where one of the spouses either sells or mortgages property, which the family depends on as a family home or for its sustenance. The two legislations therefore seek to prevent any -

**4 19**

**\$**

spouse from going behind the other, and disposing of the protected family property by way of sale or mortgage; to the family's detriment. However, even if it were that she did not give the requisite spousal consent as she contends, the facts of this case would still militate against her. Her husband also, pursuant to the Board Resolution dated 18th July 2012(*exhibit* $D_{3(c)}$ ), endorsed the various documents referred to herein above, granted the company powers of attorney (exhibit D) dated 27th August 2012, to use the suit property as security for the facility in issue. It was only after this that the Defendant du disbursed this facility to the company. The Plaintiff, as a director of the company, cannot claim that she had no knowledge of $t'$ a disbursement. She however never objected to, or raised any concern about it. It was one year after the disbursement of the facility, when she came up contending that she had not given her consent for the use of the suit property as security; and this was after the Defendant had advertised for the sale of the suit property (*annexture to exhibit* $D_{(a)}$ following the company's defaulting in meeting its loan obligation.

Certainly, the company and the Plaintiff's family benefited from the facility, which she now contends she never gave her consent for the use of the suit property as security. Yet she approved of this facility as with the others before, by appending her hand to the many uncontested documents shown above. Since she allowed the company to benefit from the facility for one year, she had accordingly waived the legal protection accorded the suit property by law against transactions such as the contested one; and thus forfeited it. She should therefore not be allowed to turn round to hide behind the provision of spousal consent for the use of the suit property to secure the facility. To hold otherwise would surely offend against the

principle of equity, which this Court is enjoined by law to uphold; and has done so in numerous cases, to meet the interest of justice.

This proposition of law, was indeed well elucidated in the case of Kammins Ballrooms Co. Ltd vs Zenith Investments (Torquay) Ltd [1970] 2 All ER .871, where Lord Diplock - in a passage reproduced in extenso, with approval, by Katureebe JSC (as he then was) in SCCA No. 2 of 2011, Charles Lubowa & Others vs Makerere University - stated at p. 893, as follows: -

"On the purposive approach to statutory construction, this is the reason why in a statute of this character a procedural requirement imposed for the benefit or protection of one party alone is construed as subject to the implied exception that it can be 'waived' by the party for whose benefit it is imposed, even though the statute states the requirement in unqualified and unequivocal words. In this context, 'waived' means that the party has chosen not to rely on the non-compliance of the other party with the requirement, or has disentitled himself from relying on it, either by agreeing with the other party not to do so, or because he has so conducted himself that it would not be fair to allow him to rely on the non-compliance.

This is the construction, which has been uniformly applied by the Courts to the unqualified and unequivocal words in statutes of limitation whi9ch prohibit the bringing of legal proceedings after the lapse of a specified time. The rule does not depend on the precise words of prohibition, which are used. They vary from statute to statute. In themselves, they contain no indication that any exception to the prohibition was intended at all. It is thus impossible to arrive at the terms of the relevant exception by the literal approach. This can be done only by the purposive approach, viz imputing to Parliament an intention not to impose a prohibition

・ ・ ・

inconsistent with the objects, which the statute was designed to achieve, though the draftsman has omitted to incorporate in express words any reference to that intention." (emphasis added).

It therefore follows that in a situation such as the one before me, where the Plaintiff had knowledge of her husband's intention to give powers of attorney to a company to use the suit property as security to obtain a loan facility, but nevertheless failed to raise her hand to avert the transaction, and instead unequivocally acquiesced in it by signing the board resolution, and as a director, she knowingly a willingly took the full benefit of the facility so granted, then in the absence of fraud or some misrepresentation committed on her in $t$ $\ge$ execution of the transaction, it would be unjust to allow her to turn round to challenge the transaction. Even if she had not consented to the use of the suit property to secure the facility in issue, she certainly waived her right to enjoy the protection accorded by law; and is therefore estopped from raising it at this stage.

Whether, or not, the mortgage entered on the suit property in favour of the Defendant is valid.

'I should point out that it was not the Plaintiff's husband as the registered proprietor of the suit property, who mortgaged the su property. Rather, it was Kayonza Distributors Etd., who did so. It seems to me that upon the Plaintiff and her husband, as directors of Kayonza Distributors Ltd., freely and willfully by their Board Resolution, endorsing the use of the suit property to secure the facility in issue, pursuant to which the Plaintiff's husband granted a power of attorney to the company, the mortgaging of the suit property was lawful and valid. It would be utterly wrong to state otherwise. In any case, Kayonza Distributors Ltd., the mortgagor, has $\quad\text{not}\quad$ challenged the mortgage transaction at all.

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## What remedies are available to the parties? $3.$

Having found that the mortgage transaction in issue did not require the spousal consent of the Plaintiff, and if it did then it was in fact duly given, I am left with no other alternative but to dismiss this suit with costs to the Defendant; as I hereby do. The Defendant is thereby entitled to proceed to exercise its rights as it is set out under the mortgage transaction complained of by the Plaintiff in this suit.

Alfonse Chigamoy Owing - Dollo **JUDGE**

$19 - 11 - 2015$