Uganda Development Bank Ltd v Alley Route Ltd (High Court Miscellaneous Application No. 618 of 2007) [2007] UGCommC 96 (29 November 2007)

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\li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 \fs24\lang2057\langfe1033\cgrid\langnp2057\langfenp1033 {\b\insrsid4088238\charrsid8224042 THE REPUBLIC OF UGANDA

\par \par IN THE HIGH COURT OF UGANDA AT KAMPALA \par (COMMERCIAL COURT DIVISION) \par }{\b\insrsid555434\charrsid8224042 \par }{\b\i\insrsid4088238\charrsid8224042 HCT-00-CC-MA- 0618OF 2007 \par (Arising }{\b\i\insrsid8224042\charrsid8224042 from HCT}{\b\i\insrsid4088238\charrsid8224042 -00-CC-CS- 553 & MA-634 of 2006) \par }{\b\i\insrsid3241712\charrsid8224042 \par }{\b\insrsid4088238\charrsid8224042 \par UGANDA DEV. BANK LTD \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85APPLICANT \par }{\b\insrsid3241712\charrsid8224042 \par }{\b\insrsid4088238\charrsid8224042 VERSUS \par \par ALLEY ROUTE LTD\'85\'85\'85\'85\'85\'85\'85\'85\'85..\'85..\'85\'85RESPONDENT \par \par BEFORE: }{\b\ul\insrsid4088238\charrsid8224042 HON. MR. JUSTICE LAMECK N. MUKASA}{\b\insrsid4088238\charrsid8224042 \par \par }{\b\ul\insrsid4088238\charrsid8224042 RULING}{\b\insrsid4088238\charrsid8224042 : \par }{\b\insrsid7479373\charrsid8224042 \par \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 {\insrsid9380967\charrsid8224042 This is an application brought by Notice of Motion under Order 52 of the Civil Procedure Rules and Section 98 of the Civil Procedure Act for orders that:}{\insrsid4088238\charrsid8224042 \par }{\insrsid9380967\charrsid8224042 \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid4355775\charrsid8224042 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard \qj \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin1080\itap0\pararsid8224042 {\insrsid4355775\charrsid8224042 T}{\insrsid16266524\charrsid8224042 he temporary injunction issued by thi s Court in Miscellaneous Application No. 634 of 2006 be vacated}{\insrsid9380967\charrsid8224042 \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid16266524\charrsid8224042 \hich\af0\dbch\af0\loch\f0 (b)\tab}}{\insrsid16266524\charrsid8224042 Costs of this application be provided for. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 {\insrsid16266524\charrsid8224042 \par The grounds for the application are that:- \par \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid16266524\charrsid8224042 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-570\li930\ri0\sl360\slmult1\widctlpar \jclisttab\tx930\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin930\itap0\pararsid8224042 {\insrsid16266524\charrsid8224042 The Respondent have failed to file an inventory of all assets, machinery and equipment at its plant on Plot }{ \insrsid13071571\charrsid8224042 612 Block 17 Rubaga as ordered by the Court on the 1}{\super\insrsid13071571\charrsid8224042 st}{\insrsid13071571\charrsid8224042 of February, 2007.}{\insrsid16266524\charrsid8224042 \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid8224042\charrsid8224042 \hich\af0\dbch\af0\loch\f0 2.\tab}}{\insrsid8224042\charrsid8224042 The}{\insrsid13071571\charrsid8224042 Respondent has nothing to safeguard the Applicant\rquote s rights as mortgagee. \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid13071571\charrsid8224042 \hich\af0\dbch\af0\loch\f0 3.\tab}It is just and equitable that the temporary injunction issued by the Court in Misc. App. No. 634 of 2006 be vacated. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 {\insrsid13071571\charrsid8224042 \par In Misc. Application No. 634 of 2006, the Respondent (now) had sought an order for a temporary injunction restraining the Applicant (now) from disposing or selling or in any other way interrupting the Respondents }{\insrsid14173366\charrsid8224042 use and enjoyment of the premises }{\insrsid3693921\charrsid8224042 comprised in}{\insrsid14173366\charrsid8224042 Plot No. 612 Block 17 Rubaga and Plot 307 Block 148 Singo. In opposing that application }{\insrsid3693921\charrsid8224042 the Applicant}{ \insrsid14173366\charrsid8224042 expressed fears that i}{\insrsid4355775\charrsid8224042 f}{\insrsid14173366\charrsid8224042 an injunction is granted the assets at Plot 612 Block 17 Rubaga, which formed the security for }{ \insrsid3693921\charrsid8224042 the loan}{\insrsid14173366\charrsid8224042 granted to the Respondent by the Application stand a risk of alienation or cannibalisation or being hidden under cover of an injunction thereby leading the Applica}{ \insrsid4355775\charrsid8224042 n}{\insrsid14173366\charrsid8224042 t to irreparable loss. }{\insrsid13071571\charrsid8224042 \par }{\insrsid14173366\charrsid8224042 \par }{\insrsid4355775\charrsid8224042 The prima purpose }{\insrsid14173366\charrsid8224042 o}{\insrsid4355775\charrsid8224042 f}{\insrsid14173366\charrsid8224042 a temporary injunction is to preserve the statu s quo pending the disposal of the main suit. An order of }{\insrsid8224042\charrsid8224042 temporary injunction}{\insrsid14173366\charrsid8224042 binds both parties. Each party is bound by the order to preserve the status quo as at the time of the order. The order in Misc. App. No 634}{\insrsid12124572\charrsid8224042 of 2006 was made on 1}{\super\insrsid12124572\charrsid8224042 st}{ \insrsid12124572\charrsid8224042 February 20 07. Each party was under a duty to preserve the status quo of the premises and all assets, machinery and equipment thereat in the state they were as of that date. To ensure compliance, Court while granting a temporary injunction also ordered that:-}{ \insrsid14173366\charrsid8224042 \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid8224042 {\insrsid12124572\charrsid8224042 \par \'93}{\insrsid4355775\charrsid8224042 A}{\insrsid12124572\charrsid8224042 n inventory of all the assets, machinery and equipment at the plaint at plot 612 Block 17 Rubaga be jointly taken by the }{\insrsid420110\charrsid8224042 officials of the Applicant and of the Respondent and a copy thereof, signed by the respective parties\rquote officials and lawyers be filed in Court within 7 days from the date hereof\'94 \endash i.e. 1}{\super\insrsid420110\charrsid8224042 st}{ \insrsid420110\charrsid8224042 February 2007.}{\insrsid12124572\charrsid8224042 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 {\insrsid420110\charrsid8224042 \par It is an indisputable fact that by the time of filing and hearing this application no inventory had been filed. Thus the Applicant\rquote s application that the temporary injunction be vacated for non-compliance with the order to file an inventory. }{ \insrsid4261693\charrsid8224042 In her affidavit in support of the application Mrs Priscilla Mugisha, the Bank Secretary of the Applicant, states that the Applicant Bank se}{\insrsid4355775\charrsid8224042 n}{\insrsid4261693\charrsid8224042 t a team to do the inventory }{\insrsid4355775\charrsid8224042 as ordered by the Court and the }{\insrsid4261693\charrsid8224042 Respondent undertook to file the inventory but that the Respondent has never filed the inventory. In the Respondents affidavit in reply,}{\insrsid4355775\charrsid8224042 deponed to by Samuel Mayanja, t}{\insrsid4261693\charrsid8224042 h}{ \insrsid4355775\charrsid8224042 e}{\insrsid4261693\charrsid8224042 Managing Director of the Respondent, it is stated:-}{\insrsid420110\charrsid8224042 \par }{\insrsid4261693\charrsid8224042 \par }\pard \qj \li1440\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin1440\itap0\pararsid8224042 {\insrsid4261693\charrsid8224042 \'935}{\insrsid8224042\charrsid8224042 . THAT}{\insrsid4261693\charrsid8224042 the inventory was ta ken of the assets, machinery and equipment }{\insrsid4614513\charrsid8224042 of the Respondents plant at Rubaga on 21}{\super\insrsid4614513\charrsid8224042 st}{\insrsid4614513\charrsid8224042 February, 2007 jointly and th}{ \insrsid4355775\charrsid8224042 e}{\insrsid4614513\charrsid8224042 reat the Respondent was represented by Wambi Tonny Wabuyi, Sam Mugambe and myself, and the Applicant by Gabriel Otunda Etou.}{\insrsid4261693\charrsid8224042 \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid4614513\charrsid8224042 \hich\af0\dbch\af0\loch\f0 6.\tab}}\pard \qj \fi-495\li1575\ri567\sl360\slmult1\widctlpar \jclisttab\tx1575\aspalpha\aspnum\faauto\ls1\ilvl1\adjustright\rin567\lin1575\itap0\pararsid8224042 {\insrsid4614513\charrsid8224042 THAT the said G abriel Otunda Etou prepared the Report of the joint exercise and later sent the same to the Respondent but he }{\insrsid4355775\charrsid8224042 d}{\insrsid4614513\charrsid8224042 id not sign it and neither did their advocates but on our part we signed. \'94 \par }\pard \qj \li0\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin0\itap0\pararsid8224042 {\insrsid4614513\charrsid8224042 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 {\insrsid4614513\charrsid8224042 Annexture D of the affidavit is a }{\insrsid4355775\charrsid8224042 J}{\insrsid4614513\charrsid8224042 oint Report entitled \'93Register of Assets of Alley Route Ltd as of 21}{\super\insrsid4614513\charrsid8224042 st}{\insrsid4614513\charrsid8224042 February 2007.\'94 It is neither signed by the said Gabriel Otunda Etou nor }{ \insrsid8224042\charrsid8224042 by the}{\insrsid4614513\charrsid8224042 Applicant}{\insrsid4355775\charrsid8224042 \rquote }{\insrsid4614513\charrsid8224042 s lawyers. \par }{\insrsid12520524\charrsid8224042 \par The averments on oath in paragraphs 5 and 6 of Samuel Mayanja\rquote s affidavit above are neither denied nor rebutted. On the authority of }{\i\ul\insrsid12520524\charrsid8224042 Massa Vs Achen (1978) HCB 297}{\insrsid12520524\charrsid8224042 the presumption is that they are admitted as true facts. In fact Priscilla Mugisha in her affidavit avers that each party sent a team to do the inventory. She is however silent as to whether the inventory was signed by the Applicant\rquote s officials who ha}{\insrsid4355775\charrsid8224042 d}{\insrsid12520524\charrsid8224042 participated in the exercise and /or by the Applicant\rquote s lawyer. \par \par The exercise of taking the inventory was undertaken on 21}{\super\insrsid12520524\charrsid8224042 st}{\insrsid12520524\charrsid8224042 February 2007 long after the seven days within which it should have been undertaken from the date of the order \endash i.e. from 1}{\super\insrsid12520524\charrsid8224042 st}{\insrsid12520524\charrsid8224042 February 2007. Both parties had violated the order in that regard. The inventory as set to the }{\insrsid4988035\charrsid8224042 Respondent had}{ \insrsid12520524\charrsid8224042 not been signed by the Applicant}{\insrsid4355775\charrsid8224042 \rquote }{\insrsid12520524\charrsid8224042 s officials and lawyer as had been ordered. Therefore, it could not be filed in that state. The }{ \insrsid4988035\charrsid8224042 Ap}{\insrsid12520524\charrsid8224042 plicant had violated the order in that regard. The order as to the filing of an inventory was intended to address the Applicant\rquote s concern and interests. Despite that the Applicant failed to ensure compliance with the order. In vie}{\insrsid4988035\charrsid8224042 w of the failures of the Applic}{\insrsid12520524\charrsid8224042 ant indicated above I am unable to fault the Respondent only for non \endash compliance with the order. Each party must come to Court with clean hands. \par \par In the result the application}{\insrsid4988035\charrsid8224042 to }{\insrsid7831490\charrsid8224042 vacate the}{\insrsid4988035\charrsid8224042 temporary injunction issued in Misc. App. No. 634 of 2006 fails and }{\insrsid4355775\charrsid8224042 is }{ \insrsid4988035\charrsid8224042 accordingly dismissed with costs. }{\insrsid12520524\charrsid8224042 \par }{\insrsid7831490\charrsid8224042 \par To ensure justice to all it is again ordered that the inventory conducted be verified jointly by the officials of the Applicant and the Respondent and a verified copy sign ed by the officials and lawyers of the respective parties be filed in Court within 7 days fr}{\insrsid4355775\charrsid8224042 om}{\insrsid7831490\charrsid8224042 the date hereof. \par \par \par \par \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 {\insrsid7831490\charrsid8224042 Hon. Mr. Justice Lameck N. Mukasa \par }{\b\insrsid7831490\charrsid8224042 Judge \par }{\insrsid7831490\charrsid8224042 30/11/2007 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 {\insrsid4614513\charrsid8224042 \par \par \par \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8224042 {\insrsid6754790\charrsid8224042 \par }}