Court of appeal quashes Simbamanyo estates case, ordered to pay costs

By Samuel Muhimba

The Court of Appeal in Kampala has dismissed with costs, an application by administrators of Simbamanyo Estates Limite in which they wanted the auctioning of its prime properties in Kampala which was meant for Equity Bank Ltd to recover outstanding loans worth $10.8 million (Shs40 billion) to be halted.

According to Justice Christopher Madrama’s ruling , Simbamanyo Estates did not present to court acceptable grounds for court’s consideration to deny the bank legal costs incurred.

“…the respondent (Equity Bank) upon being served, instructed lawyers and the lawyers took action to oppose the application by filing the appropriate affidavits in reply, as well as written submissions,” he ruled.

Justice Madrama says stopping the sale would have been an infringement on the bank’s right to be heard as well as an inconvenience those who had prepared for the auction that was advertised on August 7 and 11.

“The application for withdrawal was not conceded to unconditionally but was on condition of payment of costs. In the circumstances therefore, the applicant (Simbamanyo Estates) application stands dismissed upon withdrawal and the only issue for consideration is whether should be payable,” Justice Madrama ruled.

The ruling comes few weeks after Simbamanyo Estates Limited filed an application seeking for express orders to stay the sale of its properties which took place on 8th October 2020.

Court records show that on the same day, the bank sold Simbamanyo building housing among others the ministry of gender on Lumumba Avenue and Afrique Suites Limited, a four-star hotel at Mutungo Hill, Nakawa Division on the same day.

Justice Madrama’s decision followed Simbamanyo Estates Limited’s notice of withdrawing the application with no order to costs which Equity Bank lawyers of AF Mpanga conceded to the withdrawal but demanded for the legal costs incurred.

Simbamanyo Estates Limited had petitioned the court to stop the sale and takeover its properties until determination of its appeal challenging the order for payment of 30 percent of the outstanding loan.

The two properties, Simbamanyo building and Afrique Suites in Mutungo Hill were staked as collateral when Simbamanyo Estates Limited was acquiring the disputed loan.

The High Court, Commercial Division has since dismissed pleadings in which the proprietors of Simbamanyo Estates Limited had sought to stop the sale.