[2023] UGHC 331

## **THE REPUBLIC OF UGANDA**

## **IN THE HIGH COURT OF UGANDA AT MASAKA**

## **CIVIL SUIT NO. 45 OF 2021**

# **JORY READY MIXED CONCRETE AND CONSTRUCTION CO. LTD (SUING THROUGH ITS LAWFUL ATTORNEY SUHEB ALFARES) …… PLAINTIFF**

## **VERSUS**

## **1. NSAJJA EDWARD**

- **2. KAKOOZA IBRAHIM KASIITA** - **3. COMMISSIONER LAND REGISTRATION.….……….………... RESPONDENT**

## **JUGDMENT**

*Hon. Lady Justice Victoria N. N. Katamba*

## **BACKGROUND**

The plaintiffs instituted the instant suit for an order of cancellation of title of the 2nd Defendant on Block 148 Plot 33 LRV MSK 384 folio 9, a permanent injunction restraining the 1st and 2nd Defendants from claiming ownership of the suit property among other reliefs.

The Plaintiff's complaint is that the 1st and 2nd Defendant, in collusion with the 3 rd Defendant's officials fraudulently transferred its land into their names. The Plaintiff stated that upon discovery of the fraud, it instituted a complaint at police. That police arrested the 1st and 2nd Defendants, later released them on police bond and they have since disappeared.

When summons to file a defence were issued the Plaintiff's agents on record made an attempt to effect service on court process on the 1st and 2nd Defendants in vain thus they served the said summons by substituted service. They still did not file a defence. The 3rd Respondent was served with the pleadings but opted not to file a defence and suit proceeded ex parte against the three defendants.

### Representation

The Plaintiff was represented by **M/s Adsum Advocates**.


#### **PLAINTIFF'S SUBMISSIONS**

# **1. Whether the 1st and 2nd defendants' acquisition of the suit property was marred with fraud?**

The Plaintiff adopted the definition of fraud under **KAMPALA BOTTLERS LTD VS DOMANICO (U) LTD SCCA NO.22** of 1992 "*that it denotes any act of dishonesty"*

The plaintiff further submitted that as per the witness statement of **MEJWEL A. M. A ALDAIHANI** who is the chief executive officer of the plaintiff, the company bought and acquired a lease of 99 years over the suit property in 2017 from the registered proprietor **Hajji Kibuuka Saidi Mubiru.** The Plaintiff thereafter took possession of the suit property, it's directors left the company documents including land titles and management with some company staff to wit Kibazo Nasser among others while they had flown back to Kuwait in 2019. The directors of the Plaintiff later learnt that the titles were lost and reported a case at Jinja road police station vide **CRB NO.131/2021**. *See paras 1,2,3,4,7,8,9.*

The Plaintiff also submitted that Pw1 testified that the plaintiff is a registered company in Uganda. That change in proprietorship of the suit land herein was effected based on forged company resolutions as well as forged signatures on the transfer form purporting to have been executed by the plaintiff company directors whereas not since they were out of the country at the time. The Plaintiff referred this court to **paras 10-11** wherein it adduced evidence contained in passport/travel records, forensic report and police report confirming the same in addition to the impugned board resolution as seen in exhibits **PE.1, PE.7. PE.2, PE.3, PE.4 PE.5**.

The Plaintiff also submitted that to protect its interest in the suit land, it lodged a caveat on the suit to prohibit any further transfers or dealings in the same. The Plaintiff adduced a search report as **PE.9 and PE.10.**

In addition to the above, the Plaintiff submitted that the Defendants omissions to make necessary inquiries from the Plaintiff who is in possession is also a fraudulent omission. The Plaintiff cited the authority of **Nabanoba Desiranta & Anor Vs Kayiwa Joseph & Anor HCCS No.496/2005**


## **quoting UP & TC VS ABRAHAM KATUMBA [1997] IV KALR 103 in which it was held thus;**

*"Further in the cases cited above it was held that the law as now stands, a person who purchases an estate which he knows to be in occupation and use of another other than the vendor without carrying out due inquiries from the persons in occupation and use commits fraud."*

The Plaintiff argues that as testified by PW1, none of the defendants ever took possession of the suit land since their alleged purchase. The land has remained in possession of the Plaintiff.

The Plaintiff also argues that the signatures on both the resolution and transfer forms were forged per the information contained in the forensic report marked and passport that clearly show the plaintiff's CEO was never in Uganda at the time of alleged purchase. This amounts to illegality that cannot be sanctioned by court. *See Makula International Ltd Vs Cardinal Nsubuga 1982 HCB 11.*

The Plaintiff also referred this court to *the case of SINBA K LTD & 4 OTHERs vs UBC SCCA NO.3 OF 2014, where it was held that an illegality vitiates the transfer of title with the result that the sold property remains the property of its owners. (herein the 1st and 2nd defendants having committed acts of illegality that do not only intend to outlaw the plaintiff's right to property under Art.26 of the Constitution but also frustrates investment and taints the country's image to the outside world in regard to other investors, its only justifiable that this issue be resolved in the affirmative).*

The Plaintiff also submitted that the transfer from the 1st to 2nd defendant was **instantaneous occurring within the same timelines** in space of minutes. The 1st defendant got registered on the **28th July 2020 @ 10:47 am under instrument MSK 00030471 and the 2nd defendant on the 28th July 2020 @ 10:56am under instrument MSK 00030472.** The Plaintiff maintains that these impute fraud on the said of the defendants. The Plaintiff cited the authority of **DAVID SEJJAKA NALIMA VS REBECCA MUSOKE SCCA N0.12** of **1985** cited with approval in *SINBA K LTD & 4 OTHERs vs UBC SCCA NO.3 OF 2014, in which it was held that instantaneous transfers point to fraud.*


The Plaintiff also submits that the Defendants undervalued the land to defraud government of its revenue. The Plaintiff referred this court to a valuation report **PE.11** to prove the actual cost of the suit land at the time of the alleged purchase which the 1st and 2nd defendants concealed ought to have been **UGX 504,000,000/=** instead of the UGX. 280,000,000/=

The Plaintiff then fortified its submissions with the case of **Mubiru & Anor Vs Byensiba & Anor [1985]** HCB 106 in which *it was held that under declaration of stamp duty aimed at cheating government revenue is by its self against public policy and illegal which tantamount to fraud/voids the transaction as one cannot be allowed to benefit from an illegality*. *Also approved by the supreme court in* **Betty Kizito vs David Kizito Kanonya & Others SCCA NO.8 OF 2018.** In conclusion, the Plaintiff submitted that this court to answer the issue in the affirmative for the above reasons and position of the law.

## **2. Whether the 1st and 2nd defendants took the necessary diligence in acquiring the suit property?**

The Plaintiff submitted that in the case of **John Bageire vs Ausi Matovu CACA No.7 of 1996 and Hajji Nasser Katende vs Vithalidas Halidas & Co. Ltd CACA No.84 of 2003 it was held thus,** "*that land is of eminent value and thorough investigations must be carried out before purchase as lands are not vegetables that are bought from unknown vendors"*

The plaintiff submitted that as per its evidence through pw1, it was confirmed to this court that it has been in possession since purchase of the suit land from the initial owner to wit **Hajji Kibuuka Saidi Mubiru** and it per took different works on the land. The Plaintiff referred this court it's witness statement.

The Plaintiff also reiterated part of its earlier submissions on the first issue to support its arguments on this issue.

### **3. Whether the plaintiff is the lawful owner of the suit property?**

The plaintiff submitted that having already led evidence of ownership of the suit property from the previous owners to wit Mponye Joshua and Kagenyi Daniel as contained in the sales agreement marked PE NO.3.


The Plaintiff submitted that it had proved having possession of the suit land. It also submitted that it had proved fraud against the defendants of forged board resolution, transfer forms, forensic report, passport among others under **PE NO.7, PE NO.9 PE NO.2**. It concluded that for the above reasons, it is only justifiable that this issue be resolved in the affirmative as the evidence led was uncontroverted by the defendants.

### *4. What remedies are available to the parties?*

*The Plaintiff submitted that this court, under 0.2 Rule 7 of the Civil Procedure Rules, is empowered to grant declaratory orders as maybe sought by a party to a suit.* The Plaintiff invited this court to grant the reliefs, it sought in filing this suit.

The Plaintiff submitted that the registered proprietor is protected by law from ejectment save for cases of fraud as is in the instant case and referred this court to **sections 64,176(c),177 of the Registra**tion of Titles Act.

## **General damages**;

The plaintiff argued that it's witness led evidence to demonstrate that it had been subjected to financial loss to wit legal fees, transport and lodging fares for its directors to fly in and out of the country in a bid to testify among others in a bid to recover the suit land **per paras 21 of the witness statement hence we pray that the same be granted.**

The Plaintiff relied on the case of **Storms vs Hutchison (1905) A 515 "***where it was held that damages are the direct possible consequence of the act complained of and are aimed at putting a party who has been injured or suffered a wrong in the same position, he or she would have been had the wrong not occurred".*

The plaintiff prayed that this court be pleased to award it the damages sought for the inconvenience suffered with interest at 25% per annum.


#### **Injunction**

The Plaintiff prayed that this court issues an injunction restraining the defendants from claiming ownership of the suit property.

The Plaintiff also prayed that this court reimburses it for the costs incurred in instructing counsel to institute the suit.

#### **DETERMINATION BY COURT**.

I have carefully examined the Plaintiff's pleadings, evidence and submissions and below are my findings and reasons for the same.

## **Issue 1**; **Whether the 1st and 2nd defendants' acquisition of the suit property was marred with fraud?**

Fraud was defined by *Katureebe JSC, in the case of FJK Zaabwe v. Orient Bank & 5 O' rs, S. C. C. A. No. 4 of 2006 (at page 28 of the lead judgment) himself relying on the definition of "fraud" in Black's Law Dictionary, (6th Ed) at page 660, which goes as follows;*

*"An intentional perversion of truth for purposes of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. A false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations or by concealment of that which deceives and is intended to deceive another so that he shall act upon it to his legal injury. Anything calculated to deceive, whether by a single act or combination or by suppression of truth or suggestion of what is false, whether it is by direct falsehood or innuendo by speech or silence, word of mouth or look or gesture… A generic term embracing all multifarious means which human ingenuity can devise and which are resorted to by one individual to get advantage over another by false suggestion or by suppression of truth and includes all surprise, trick, cunning dissembling and any unfair way by which another is cheated. "Bad faith" and fraud are synonymous and also synonymous of dishonesty, infidelity, faithlessness, perfidy, unfairness etc. As distinguished from negligence, it is always positive intentional. It comprises all acts, omissions and concealments involving a breach of a legal or equitable duty and resulting in damage to another. And includes anything calculated to deceive whether it be a single act or combination of circumstances, whether the suppression of truth or*

 ## *the suggestion of what is false whether it be by direct falsehood or by innuendo by speech, or by silence by word of mouth or by look or gesture".*

According to Pw1, the 1st and 2nd Respondents employed divers schemes ranging from forging a board resolution to sell the suit land, to forging the Plaintiff's directors' signatures on transfers to vest the land in their names.

According to PEX14 which is a police report and scene of crime report, the signatures on the board resolution dated 25th November 2019, and a certified transfer that was used to transfer the land from the Plaintiff's name when compared with the known specimen signatures of the Plaintiff's officials, the former were found to be at contrast with the later.

In their findings, the handwriting experts, Ms. Chelangat Sylvia and Mr. Erisa Sebuwufu deducted that the signee of the sample signatures of the known signatures of the Plaintiff's agents did not sign the impugned signatures on the board resolution and the transfer form.

The above state of affairs demonstrates that the impugned board resolution and certified transfer are well within the meaning of misrepresentation which is a craftsmanship of negative human ingenuity for purposes of cheating. Simply put, the impugned documents were never authored by the persons from whom they were misrepresented to have originated and this is fraud.

The Supreme Court in the case of *Kampala Bottlers Vs Damanico (U) Ltd Supreme Court Civil Appeal No. 22/92 Wambuzi CJ held, "Fraud must be attributable to the transferee. I must add here that it must be attributable either directly or by necessary implication. By this I mean the transferee must be guilty of some fraudulent act or must have known of some act by somebody else and taken advantage of such act"*

Having found that the impugned documents that were used to transfer the suit land from the Defendants were fraudulently procured, what remains is to confirm on as to whether or not the Plaintiffs successfully imputed this fraud to the Defendants.

The 1st Defendant relied on the impugned documents to transfer the land to the 2nd Defendant. There is no way, the 1st Defendant could have claimed ownership as to even pass title to the 2nd Defendant without first having possession of the impugned documents in his custody. In the


absence of any direction to the contrary, this possession of the impugned transfer documents directly imputes fraud on the 1st Defendant.

The next question is how is the fraud complained against attributed to the 2nd Defendant? The Plaintiff has argued that the fact that the transaction of transfer from the 1st to the 2nd Defendant were instantaneous, only taking place apart from each other in a matter of minutes alludes to fraudulent cooperation between the 1st and 2nd Defendant.

The Supreme Court has offered us wisdom and guidance on this matter in the landmark **David Sejjaka Nalima vs Rebecca Musoke SCCA N0.12** of **1985 decision** cited with approval in *SINBA K LTD & 4 OTHERs vs UBC SCCA NO.3 OF 2014, in which it was held that instantaneous transfers point to fraud.*

I have perused the transfers on the title and confirmed that indeed the 1st defendant got registered on the **28th July 2020 @ 10:47 am under instrument MSK 00030471 and the 2nd defendant on the 28th July 2020 @ 10:56am under instrument MSK 00030472.**

The two transactions were only nine (9) minutes apart. There is no way, the 2nd Respondent could have taken his transfer for valuation and paid stamp duty and presented his transfer and title for lodgment in a matter of nine minutes.

The Plaintiff also adduced on court record exhibit PEX11 which is a valuation report of the suit property that was executed on the 25th June 2020 by RSU Boaz Tukahirwa. This report stated the value of the suit property to be UGX. 504,000,000/= This valuation is nearly double the sum that was declared by the 1st Defendant and relied on by the 2nd Defendant in the application for consent to transfer.

The transfer form that was executed in favor of the 2nd Defendant has a provision for declaration of the consideration. This provision was left blank by the 2nd Defendant. This does not point to forthrightness. It all points to a lawful intention to deprive government of its revenue.

Lastly, the Plaintiff also testified that whereas the Defendants registered themselves on the title through allegedly purchasing it, they have never acquired possession of the suit land. I agree with the Plaintiff that this also points to the 2nd Defendants omission to make inquiries from the Plaintiff who has been in possession to date. This conduct amounts to fraud attributable to the 2nd Defendant. *See Nabanoba Desiranta & Anor Vs Kayiwa Joseph & Anor HCCS No.496/2005 quoting UP & TC VS Abraham Katumba [1997] IV KALR 103*


In conclusion, therefore, this court is inclined to agree with the plaintiffs that 1st and 2nd Defendants acquisition of the suit property was marred with fraud which is attributable to the said Defendants.

# **Issue No.2 Whether the 1st and 2nd defendants took the necessary diligence in acquiring the suit property?**

They did not. This issue has been resolved in the negative while resolving issue 1.

#### **Issue No.3; Whether the plaintiff is the lawful owner of the suit property?**

Having resolved issue 1 in the affirmative with the finding that the 1st and 2nd Defendant's acquisition of the suit property was marred with fraud, the ownership of the suit property did not pass. The suit land remained the property of the Plaintiff.

#### **Issue No. 4; What remedies are available to the parties?**

**S.177 of the Registration of titles Act Cap.230 provides that upon recovery of any land, estate or interest by any proceedings from the person registered as proprietor thereof, the High court may direct the Registrar to cancel any certificate of title and to substitute such certificate of title as the circumstances may require.**

Having found that the 1st and 2nd Defendant's entries on the suit land were marred with fraud, I hereby order the 3rd defendant to cancel the 1st and 2nd defendants' registration on the registered certificate of title comprised in Block No. 148 Plot 33 MSK 384 folio 9.

In addition to the above, I order the 3rd Defendant to register the Plaintiff as registered proprietor to the suit land.

I also declare that the 1 st and 2nd Defendants are trespassers on the suit land.

An injunction issues restraining the 1st and 2nd Defendants from registering a lease on the suit land. The Plaintiff also prayed for an award of general damages at 25% per annum.

General damages are the direct possible consequences of the act complained of and are intended to put a party injured in the same position they were at before the wrong complained of see **Uganda**

### **Commercial Bank Vs Kigozi (2002(1EA 305.**

In the circumstances of this case, I will award general damages for the inconvenience suffered to the Plaintiff, payable by the 1st and 2nd defendants of UGX. 50,000,000/=

I find the interest prayed for of 25% per annum very high, I will award an interest of 15% per annum.


The Plaintiff is also awarded costs of this suit.

While writing this Judgment, this court's attention was also brought to an ex parte Miscellaneous Application No. 30 of 2023 seeking an order against D/AIP Andama Joseph to deposit the title to the suit land in court for safe custody. The Plaintiff/Applicant seeks audience of this court to direct the above stated agent of the state to perform his duty of assisting court in exercise of its functions. *Article 128(3) of the Constitution of Uganda enjoins agencies and organs of the state to render assistance to the courts in the exercise of their duties.* I believe that the police officers of this country are aware of their constitutional mandate to assist the courts of law. I therefore find that it was not necessary to file the above application. I will nevertheless grant the orders sought therein, in passing, in the spirit of S.33 of the Judicature Act Cap. 16.

In conclusion, Judgement in this matter is hereby entered in favor of the Plaintiff and against the defendant with the orders below;

- 1. The 3rd defendant is hereby ordered to cancel the 1st and 2nd defendants' registration on the certificate of title comprised in Block No. 148 Plot 33 MSK 384 folio 9. - 2. The 3rd Defendant shall register the Plaintiff as registered proprietor to the suit land. - 3. The 1st and 2nd Defendants are trespassers on the suit land. - 4. An injunction issues restraining the 1st and 2nd Defendants from registering a lease on the suit land again. - 5. The Plaintiffs are awarded UGX. 50,000,000/= in general damages. - 6. The award in (5) above shall attract an interest of 15% per annum from the date of Judgment till payment in full. - 7. The Plaintiffs are awarded costs of this suit. - 8. The D/AIP Andama Joseph is hereby directed to deposit the owner's duplicate certificate of title to Block 148 plot 33 Folio 9 land at Lutente with the Registrar of this court for onward transmission to the Plaintiff.

I so order.

Dated this 20th day of March 2023

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**HON. LADY JUSTICE VICTORIA NAKINTU NKWANGA KATAMBA**

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