[1994] UGSC 45

IN THE SUPREME COURT OF UGANDA

Letter oly<br> AT MENGO<br> AT MENGO<br> AT MENGO<br> CORAM: ODOKI, J. S. C., ODER, J. S. C. & PLATT, J. S. C.

CIVIL APPEAL NO. 22 OF 1993

**BETWEEN**

HANNINGTON WASSWA $1.$

Letter Procedure

$e$ *dy*

SSEMUKUTU & CO. LTD $2.$

111111111111111111111 APPELLANTS

::::::::::::::::: RESPONDENTS

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In Odoki JSC

AND

MARIA ONYANGO OCHOLA ) $1.$

$2.$ CHARLES OCHOLA

3. MARTIN ONDOWA

4. FRANCIS X MALAWA

> (Appeal from the judgment and decree of the High Court of Uganda at Kampala (Mrs. Justice Kireju) given on the 7th une, 1993)

> > IN

## HIGH COURT CIVIL APPEAL NO. 8 OF 1993

## JUDGMENT OF PLATT, J. S. C.

Although learned Senior Counsel Dr. Byamugisha for the Appellant, and the learned Counsel for the Respondents Mr. Kateeba, addressed the Court with admirable ability, nevertheless the appeal is not easy to address. It would seem that a short history of what has occurred since 1971 would probably help to identify the really salient issues.

The learned Judge set out the steps in this story in this way. Nagji Textiles Ltd instituted a suit against the late James S. M. Ochola and Tororo Morden Wear in Mengo Civil Suit No 1459 of 1971. Consent judgment was recorded in the Chief Magistrate's Court on 16th February 1972 in favour of the Plaintiff for a total sum of Shs 23,133/-

Attempts by the judgment debtor to set aside the consent judgment, stay of execution or pay by instalments were refused by the Court. Consequently a warrant of attachment and sale notification were issued on 5th August 1972. On 28th August 1972 the judgment debtor's property namely Plot 15 Jinja Road was advertised for sale on 30th September 1972. Before that date, the judgment debtor paid Shs 10,000/as part payment, and deposited a post dated cheque for the balance. The Court Broker postponed the sale on 30th September 1972 and waited until 30th November 1972. Unfortunately, the cheque was dishonoured, and the Court Broker then advertised the sale on 4th December 1972 for the 14th December 1972. The property was sold on $14$ th December 1972 to Ssemukutu & Co. Ltd. The auction purchaser paid Shs17,500/for the building which was a three storey building comprising office accommodation on Jinja Road, Kampala near the Railway Station.

It was part of the background of this unfortunate affair, that Mr. Ochola, who was at one time a Minister, disappeared during the Amin regime. His estate is represented by administrators, who are the Respondents to this appeal. The Appellants are Hannington. Wasswa, the First Appellant, the Court Broker and Ssemukutu & Co, (a company in the hands now of the descendants of those who purchased the property) the Second Appellant. Counsel hoped that this appeal would be the end of all the litigation, that this auction purchase has engendered. However that may be, the problems facing the Administrators in trying to reclaim this property by setting aside the sale, have added to the difficulties in the proceedings.

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The Administrators brought a motion on notice seeking to declare the sale of the suit premises by Mr. Wasswa to Ssemukutu & Co. Ltd. null and void, to order repossession of premises; and cancellation of the registration of the lease in the name of Ssemukutu & Co. Rent and mesne profits were prayed for from 14th December 1972 up to the date of the order on the motion, general damages for the fraudulent sale and transfer of suit premises. The motion is dated 9th April 1984. The affidavit of Mr. Martin Ondowa dated 9th April 1984, asserted that Mr. Wasswa had complied with the execution order of that Court but sold the premises fraudulently to Ssemukutu & Co. The learned Chief Magistrate (as she then was) Concluded that the execution was not tainted by fraud. As the Chief Magistrate's Court had no power to cancel the registration of title after the sale, she found that there was no remedy that she could give. That decision is dated 29th November 1985.

From this decision, the Administrators appealed to the High Court, giving notice at once to the Chief Magistrate. The appeal was received in November 1992. The result of the appeal was that the irregularities in the way the sale was conducted went beyond mere irregularities and crossed the boundary into fraud. The case against the Court Broker was not barred by limitation. The case against the Company, Ssemukutu & Co., was that it was fraudulent on their part to pay such a low price that they could not be protected by Section 184 of the Registration of Titles Act. Fraud had caused damage. The orders were that:-

- a) the sale was declared null and void as it was riddled with fraud and illegularities; - b) the Administrators were entitled to immediate possession;

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- $c$ ) the registration of the premises in the name of Ssemukutu & Co. would be cancelled; - Shs $631,516/50$ must be paid as mesne profits; $d)$

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- general damages of shs 2,000,000/- would be awarded for fraud; $e)$ - the Chief Registrar of Titles was directed to cancel the $f$ ) certificate of entry in the register and replace Ssemukutu & Co. with the names of the Administrators; - the company was given 30 days to surrender possession. $g$ )

Interest and costs were also awarded.

From this decision the Company in particular has appealed. It is said that the Court Broker cannot be found; but his name is on the record and there is one important question to be answered in his case.

This is a second appeal and as such Section 74 of the Civil Procedure Act applies. It provides for an appeal to lie to the Court of Appeal (Supreme Court) from every decree passed in appeal by the High Court on any of the following grounds, namely that:-

- "a) the decision is contrary to law $\ldots$ ......... - the decision has failed to determine some material issue $\mathbf{b})$ of law ............ - a substantial error or defect in the procedure provided by $c)$ the Act or by any other law for the time being in force, has occurred which may possibly have produced error or defect in the decision of the case upon the merits."

With this in mind, it must be noticed that the High Court in its appellate jurisdiction was subject to the provisions of Section $81(2)$ of the <u>Civil Procedure Act</u>.

> "(2) Subject as aforesaid, the appellate Court shall have the same powers and shall perform as nearl $\chi$ y as may be the same duties as are conferred and imposed by this Act on Courts of original jurisdiction in respect of suits instituted therein."

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The learned Judge was therefore bound to deal with the appeal within the same powers as those of the Chief Magistrate. If it was not within the jurisdiction of the Chief Magistrate to upset the registration of this land under Sections 184 and 185 of the Registered Titles Act for fraud, then the High Court on appeal had no such power either.

It appears that Section 184 (c) provides that there shall be no ejectment or recovery of land except in the case of a person deprived of land by fraud as against the person registered as proprietor of such land through fraud. Then Section 185 of the Act provides:-

> "Upon the recovery of any land, estate or interest by any proceeding from the person registered as proprietor thereof, it shall be lawful for the High Court in any case in which such proceeding: is not herein expressly barred, to direct the Registrar to cancel any certificate of title or instrument or any entry or menorial in the Register Book, relating to such land, estate or interest, and to substitute such certificate of title or entry as the circumstances of the case require; and the Register shall give effect to such order."

It follows that the learned Chief Registrar was right. By virtue of Section 81(2) of the Civil Procedure Act the learned Judge could only exercise the powers of the Magistrate and not the High Court's powers. Hence orders, b), c), f), and g) could not have been granted.

This point leads on to the legal framework of this appeal:-

- a) was the suit time-harred against Court Bailiff Wasswa? - was the ruling of Justice Manyindo correct in/ $1978$ case so $\mathbf{b}$ ) that the suit before him was correctly brought in point of law, and more appropriately brought in point of procedure? - c) Can the findings of the Judge in this case be justified in law?

the

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It is instructive to consider the judgment of Windham J. A., who, with his usual throughness has explained how it is that a court broker could be covered by wording such as we find in Section 3(No 20 of 1969) - See S. FIGUEIREDC & CO VS PANAGOPAULOS (1959) EA 756 at pp 763 et sec. That suit (from Uganda) depended upon the wording of Section 4 of the Suits by or against the Government Ordinance (Cap 7). Section 4 commences:-

> 14. No suit shall be instituted against the Government, or against a public officer in respect of any act done in pursuance, or execution or intended execution ..."

The rest of the section is in exactly the same terms as Section 3 of Act No. 20 of 1969. The great difference is that the words "a public officer" have been omitted. The effect is to widen the ambit of Section 3 to those persons who have public duties to perform without necessarily being remunerated by the Government. Windham J. A. refers to the description of a "public officer " in $R$ V WHITAKER (1914) 3 K. B. 1283 where at p 1286 one is defined as:-

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MAn officer who discharges any duty in the discharge of which the public are interested, more clearly so if he is paid out of a fund provided by the public."

Windham J. A.'s conclusion was:-

$V$ A court broker, while executing judicial processes would in my view undoubtedly fall within the defenition

in WHITAKER.

The judgment then continues to distinguish between acts done in pursuance of a public duty or authority and acts of a court broker done in a private capacity, and that part of the judgment is not pertinent to the present inquiry. Here Mr. Hannington Wasswa was executing an execution warrant from the Chief Magistrates Court, and in fact seeking from the sale of the suit property a fund with

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which to liquidate the judgment debt, and pay off the mortgagees. He was pre-eminently carrying out a public duty and his position at that time was spelt out in the Court Brokers' Rules (S. I.1 $41 - 8$ ) made under the Court (Rules) Act Cap 41. In these rules the Court, is appointed under Rule 10. Rule 12 shows that the Court Broker so appointed could be an officer of Government serving "whole time." Arrangements were made for his remuneration, and payment of fees (etc) into the Government funds, if he was fully paid. It is clear that by the nature of his appointment, remuneration and work in 1972, the Court Broker was a public officer. The position now is that he is called a Court Bailiff under the Court Bailiffs Rules 1987. But the position is not really different.

Windham J. A. had to deal with the Court Broker under the Distress for Rent (Bailiff's) Ordinance (Cap 116). That case is less strong than this case under the Court Brokers' Rules.

The Court Broker or Court Bailiff has consequently been declared by the Courts in Uganda as an agent of the Court and not of the parties. Mr. Wasswa was undoubtedly carrying out a public duty and if he neglected or acted wrongfully he had the protection of Section 3.

A Court Bailiff has had immunity under Section 46 of the Judicature Act so long as he acts lawfully.

It might be construed from Mr. Kateeba's remarks that it is unwise to grant a Court Bailiff (as he now is) protection. The purpose of the protection given to public authorities and persons carrying out public duties, was not to sweep disgrace under the carpet, but to make sure that public time was not wasted in defending old cases, the records nuight of which thought be difficult to collect together. Take this very case, the Court Bailiff's action was in 1972. It was to be inquired

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into in 1978. Two motions were brought one in 1982 and another in 1984. Judgment was given in 1985. This appeal commenced (after other appeals) in 1992. Now the whereabouts of the Court Bailiff are not known, the original parties are dead, and successors have taken over. Would any one worthy of the cause wish to be embroiled in such proceedings? It is necessary to put some time limit on such actions. It will be recalled that even in the case of seeking certiorari to quash an order it must be sought within 6 months, and while that period might be adjusted, there should be some time limit. The next aspect of this problem is the introduction of fraud.

Section 5 of the Act 20 of 1969 provides as follows:-

"5. Where, in the case of any action for which a period of limitation is prescribed by the Act, either,

- the action is based upon the fraud of the $a)$ defendant .......; or - the right of action is concealed by fraud of such person as is mentioned in paragraph $b)$ (a) of the section or - <pre>c)( not applicable)</pre>

the period of limitation shall not begin to run until the plaintiff has discovered the fraud ...... or could with reasonable diligence have discovered it.

Provided that nothing in this section shall enable any action to be brought to recover, or enforce any charge against or set aside any transaction affecting any property which,

(1) in the case of fraud, has been purchased for valuable consideration by a person who was not a party th the fraud and did not at the time know or have reason to believe that any fraud had been committed; . . . . . .

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$-9-$ The action must then be commenced within six months of the fraud being discovered. It is not $know_j$ when Mr. Ondowa or others made the discovery. But the suit before Mr. Justice Manyindo concerned fraud. The Chief Magistrate explained the learned Judge's ruling as follows:-

> "In the case between the present parties Civil Suit No 981 of 1978 which was struck out by Mr. Justice $\textsc{M}_\textit{anyindo}\xspace$ in the High Court of Uganda, the learned Judge held<br>inter alia that "The position is this. Under Section 35(1) of the Civil Procedure Act all matters relating to the execution must be taken for determination by the Court which passed the decree." The explanation continued that according to the commentary by Woodroffe and Mathew in their book entitled "Civil Procedure in British India" 2nd Ed. on p. 252 it was clearly stated that where the judgment itself is being impeached on the ground that it was obtained by fraud then the matter must come by way of a separate suit, and that an objection to a sale of property in execution of a decree on the ground of fraud is a question to be determined exclusively by the Court that passed the decree, even though the purchaser was no party to the decree. This, Mr. Justice Manyindo said, includes. a Court Broker."

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It follws that by 1978 the fraud was known. But in fact it was or could reasonably have been known from the day of the sale or shortly afterwards. What are the indications alleged of fraud? They are that the sale was not effected through a public auction, and that the price was undully low at Shs 17,500/-. Was the Judge debtor or his representatives present on that day? If it not stated. Very soon after allegelly that the building was/rented for Shs 64,000/-; and the registration took place in 1973 without properly looking after the interest of the second mortgageo. That supposing-that taking into account the disappearance of Mr. Ochola as alleged (although that was not dated, and it is not at all sure that the judgment debtor was unaware of what had happened), and supposing the Administrators had pieced together

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the facts to bring Suit No. 981 of 1978 before Manyindo J., the latter struck out the proceedings as incompetent on 14th May 1981. Allowing all this time as being necessary to ascertain, the fraud - a luxurious notion, the motion on notice should have been brought within 6 months of 14th May 1981 namely 14th November 1981. The first motion was only brought on 29th September, 1982 and the present motion 9th April 1984. Thichever one is taken, it is out of time. Hence supposing the worst against the Court Bailiff, the motion was out of time. It may be added that the Affidavit of Martin Ondowa, on which the whole case rested, did not state when the fraud was discovered so that the period of limitation could be extended. But there is enough on the record to show that in any event the motion was out of time. The appeal on this ground

must be allowed.

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The next inquiry is whether the direction given by Mr. Justice Manyindo is correct and should continue to be followed. This is a declaratory decision, it being conceded that on the strength of GILBERT VS ENDEAN (878) IX Ch. Div. 259, the parties having chosen to move the Court on notice rather than appeal against Manyindo J's judgment, they must be bound by their decision. Dr. Byamugisha asked this Court to rule on this problem for future guidance.

The argument concerned grounds 1 & 2 of the memorandum of appeal. without wishing to demean the argument, it may be put simply thus. Where fraud is alleged a high standard of proof is required and that

is best attained by calling evidence in a suit so that witnesses may be cross-examined, on the issues arising for trial. Mr. Kateeba did not dissent from that view, but he maintained that it was not open to the Appellants here to complain. It would seem that the Appellants did not avail themselves of the opportunity of calling evidence,

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which the Chief Magistrate very properly offered them. Bound as the Chief Magistrate was by Manyindo J's ruling, she sought to hear the Court Broker give evidence, to ascertain what happened at the sale. The Court Broker never came, and the motion was heard on affidavit and documentary evidence. She could have called the administrators.

The position seems to be this. Manyindo J. followed the strong authority of Woodroffe and Mathew, and the decisions they relied upon, to enlarge the scope of disputes properly brought under Section 35 of the Civil Procedure Act, to include fraud. This disputed fraud may be inquired into by the executing court. Bearing in mind Section 35(2) the court is empowered, subject to any objection as to limitation or jurisdiction, to treat a proceeding under this section as a suit, or a suit as a proceeding. The section therefore caters for evidence to be called apart from the affidavits which would have been filed to support the motion. The Court can treat the proceeding as a suit, and this call for further affidavits in the nature of statements of claim and defence, in order to clarify the exact issues. The trial of the issue may be widened beyond mere affidavit allegation and counter allegation, which might well be inadequate.

It is now established that the wording of Section 35 covering "the parties to the suit, or their representatives" would cover auction purchasers, for the reason that title has passed to the purchaser from the judgment debtor. But in the case of Court Bailiffs the better practice is to sue them separately. It is difficult to see that the agent of the Court for some matters, can suddenly be a representative of the parties for other matters.

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The purpose of Section $55$ is to save time and expense. If a suit is drawn out of the proceedings under Section $35(2)$ of the <u>Civil</u> Procedure Act, it is difficult to see why time and expense are -saved. The practice, as Dr. Byamugisha has stated from the bar, and as we have observed in several suits reaching this Court on appeal, is to sue the Court Bailiff in a suit outside Section 35, and that practice has proved satisfactory, and should continue.

A further reason why a separate suit should be taken is that if the Magistrates' Court is the executing court, then as that court has no jurisdiction to entertain proceedings to set aside registration for fraud, a suit in the High Court having jurisdiction to deal with this problem, must be seen as a statutory exception to the operation of Section 35 as far as the Magistrates' Courts are concerned. Indeed Section 35(2) provided for objections as to jurisdiction.

However as Dr. Byamugisha conceded that he was bound to accept the procedure adopted, there is no challenge that the learned Judge was wrong in accepting the proceedings as they were recorded. But nevertheless he doubted whether the learned Judge had sufficient evidence to make findings leading to the awards of damages that she made. Behind this comment lies a great deal of experience in Court procedures by analogy with the originating summons. This will be illustrated in Kenya Commercial Bank Ltd Vs Csebe (1932 - SS) Kenyan Appeal Reports Vol.1 p 48 at p 51, where it was held that there was no power to award damages on an originating summons (Order 36 in Kenya; Order 34 in Uganda). The Court of Appeal in Kenya followed KULSUHBHAI VS ABDULHUSSIN (1957) E. A. 701; BHARI 75 KHAN (1965) E. A. 101: OFFICIAL RECEIVER VS SUKHDEV (1970) E. A. 243,

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relying upon English cases cited therein. At p 51 of Osebe's case (above) HANCOX J. A. stated:-

> "In my view the question whether the sale was at an undervalue, and whether it was mismanaged, are matters of fact which, if disputed, as they are in this case should not be resolved on affidavit evidence

This opinion is referred to $\overline{f_0}$ illustrate how in other branches of the civil procedure, affidavit evidence has been found too limited in scope to give rise to satisfactory decision. Order $34$ and Section 35 cover different areas, but as sale by auction crops

up or may crop up in both areas, it is clear that the experience of operating Order $34$ is pertinent to the operation of Section 35. In my judgment detailed questions of fact leading to damages for fraud or neglect at an auction ordered \_by the Court dealt with in a suit.

Can the findings of the Judge be justified in law or proper $c)$ procedure?

The Appellant complains in ground 4 to 11 that the affidavit evidence and annexures did not support the findings of the Judge.

The live issue is whether Ssemukutu & Co acted fraudulently.

It may be stated at once that whatever happened to the interest of the Second Morgagee, solely concerned the plight of those persons who lost their interest in land and had to leave this country. That did not affect the sale to Ssemukutu & Co of Ochola's property, and whatever the Second Mortgagee can now claim, is for him to decide.

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As far as the Respondent Administrators are concerned, they alleged fraud and had to prove it to a high standard of proof. The plight of the Administrators is that apparently not being aware of the Court sale they knew nothing of what happened. They do not know on what terms sale was postponed after payment of Shs 10,000/-, and after the cheque for the balance was dishonoured. It was possible for the judgment debtor to have waived a fresh notice of 30 days (Order 19 Rule 65 (2)). It was possible for a reserve price to have been agreed, but it is not known what it was. It is not exactly known whether a public or private sale took place. All these matters led to speculation but no proof. The sale became absolute and the property was registered. The representative of Ssemukutu & Co who bought the land is dead. Wasswa cannot be found. The affidavit of Martin Ondowa relied on two affidavits sworn by Ssemukutu and Wasswa for the purpose of the transfer, and not to deal with the issues in this case. They were not dealing with the full details of the sale. The result is that what happened at the sale cannot be exactly determined.

The rest of the evidence concerns what happened afterwards. Was the property leased to Government for Shs 64,000/- rent per annum? The report of Katuramu & Co says so. Statements in affidavits put forward as proof in a trial of issues of fact are still subject to the rules of evidence. The existence of that 1973 lease must have been tendered in evidence. It will be answered that no objection was taken to these statements. No answer needs to be given to hearsay evidence which is inadmissible. What were the rents in 1972? What happened in the lease of 1970 when the property was sold? Did it continue or did it fall through? All these matters had to be proved.

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There is then Katuramu's opinion given in $197S$ of the value in 1972. On what factors is that opinion based? What were the values of similar buildings in 1972 at that difficult time? What was the drop in value since the land was encumbered? The learned Chief Magistrate felt that all these matters were left open. The learned Judge was dissatisfied with the price paid, and indeed it would seem to have been low. But there does not seem any way now to find out what happened at the time of this sale. Twenty years had passed and it was not possible to send the record back for further or additional evidence. The result was that the learned Judge was left in the realm of speculation. The High istandard of proof required in cases of fraud depends upon trustworthy evidence which proves fraud. Suspicion is not proof.

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Accordingly I would allow the appeal, set aside the judgment and orders of the High Court and restore the decree of the Chief Magistrate with costs here and in the High Court.

Delivered at Mengo this ....... day of ......... 1994.

## H. G. Platt

Justice of the Supreme Court