[1991] UGSC 26

THE REPUBLIC OF UGANDA CIVIL APPEAL NO OF 1990 IN THE SUPREME COURT OF UGANDA AT MENGO 1

(CORAM: MANYINDO, D. C. J., PLATT, J. S. C., SEATON, J. S. C.) RONALD DONATO KANYARA APPELLANT V E R S U S HASSAN ALI AHMED RESPONDENT

(Appeal from the decision and judgment of the Il/C of Uganda at KAMPALA. (Mr. Justice Karokora) dated 12/7/1989 in H. C. C. S. No.396/87).

⁵ *ort ,* JUDGMENT *O?*

This is an appeal against a decision of the High Court. The present respondent was the plaintiff and the present appellant It will be convenient in this judgment to refer to them as "The Plaintiff" respec tively. and "The Defendant" was the defendant in the High Court proceedings.

resident of Tororo and a transporter by vocation. The defendant resides in the invest in some property. He saw a plot of land which he liked. It was about 100 feet square and had four buildings on it. Two of the buildings were residental, semi-permanent and roofed with iron sheets. ^A third building, also roofed with iron sheets was ^a butchery. The fourth building, roofed with tins,was a kitchen. On the plot were also banana stems, oranges, pawpaw and mango trees, coffee trees and sugar canes. The plaintiff is a same town and is a motor

Controlling Authority and had full power to grant estates and (create rights or interests, manage, or dispose of it under S.17 As the plot (or "kibnnja", as it was sometimes called) was within the area of the town, the Tororo Town Council was the

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of the Public Lands Act. One Abdulni was in 1959 authorised by the Town Council to occupy that plot, which was on the Register of the Town Council as Plot, 1, Zone 12, Maguria Village.

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The plaintiff and Abdulai made a written agreement that Abdulai would transfer the kibanja to the plaintiff. They called in Christopher Kigongo, who was the Land supervisor and housing manager of the Town Council. Kigongo saw the agreement and witnessed the payment of the agreed sum for the transfer, Shs. 3,000/-. He then proceeded to the kibonja, identified it on the map and inspected the buildings and plantations. He advised that the plaintiff and Abdulai come to the Town Council Office which they did. The name of Abdulai was cancelled on the Register and replaced by that of the plaintiff. Kigongo reported to the Council about the official transfer of the plot. The plaintiff was thereby authorised to occupy the land &n a temporary occupation basis, subject to annual renewal. In other words, the plaintiff had a licence ("T. O. L.").

From 1959 to 1979 the plaintiff continued to held a $T.0. L.$ over the kibanja. In 1964 he allowed his brother-in-law Musa Muhamed to occupy three rooms of it. Other persons (called "tenants", although incorrectly, as the plaintiff had no lense) occupied other rooms on the kibanja. When Musa Mohamed left the kibanja in 1970, the defendant came to occupy it, paying/rent to the plaintiff. In 1973 the plaintiff agreed that the defendant could live in one of the houses, in which he would keep his tools while he operated a garage under the mango tree. He would use another house on the kibanja as a store and office. For this he paid a rent of Shs. 300/- to the plaintiff.

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In April 1979 there occured what was called a Liberation war. There was fighting in Tororo^ Fleeing soldiers were exchanging fire with soldiers who had joined hands with the liberators. When the situation became very bad, several residents of Tororo fled into exile. The plaintiff went to Kisii in Kenya. Musa Mohamed also went to Kenya. The defendant remained on the kibanja for a time after the plaintiff left, then he left for Budaka.

In early June 1979 the defendant returned from Budaka. He found that the house in which he had been living on the kibanja was broken down.. By then the war situation had not yet improved so he returned to Budaka. He came again to Tororo in early July 1979- The situation had improved. He went back to the kibanja. He has not left it till now. On 7/7/1979 he applied to the Town Council for a T. O. L. over the kibanja, stating in the application form (Exh. D.1) that the plot had been ''abandoned" by the previous owner. He obtained a T. O. L on 20/3/80 (Exh. D.. W. 2) .

The plaintiff, after 1959 paid his ground rent as stipulated and had his T. O. L, annually renewed until 1979\* During those twenty years apparently he never applied for a lease of the kibanja. Nor, when he fled in 1979, did he appoint any agent to look after the plot in his absence. He may have assumed that the defendant would remain in occupation of the kibanja'^s o buildings. But he made no arrangement for payment of the ground rent for his T. O. L.

In October ¹⁹⁸⁵ the plaintiff returned from Kenya. He me t the defendant working in his garage on the kibanja. The latter informed him that the Town Council had allocated the plot to him (the defendant).. The plaintiff proceeded to the Town Council and met the Town Clerk, Mr. Ongoye. As a Clerk photocopy of which was admitted as Exh. Pl. result the TOwn wrote to the defendant a letter, a

/\*». "

It is worthwhtte quoting\* It read as follows:

"Mr. Donato (i.e. the defendant) Mr. Hassan Ali Ahmed (i.e. the plaintiff) has come to me requiring my assistance regarding your occupation of his house. He says that you have not paid to him any rental money since October last year when you paid him Shs. 10,000/- (ten thousand), please settle with him amicably. His complaint is genuine."

5/12/86. He was not willing to pay rent to the plaintiff. ^A ) 19\*12.86, the defendant applied for a lease tating that the purpose for which it was required was: "To erect He also stated the value of the building to be enected would be Shs. 80 ,OOO/-\$.(Exh. PII) . On the advice of the Town Clerk, the plain tiff also applied for ^a lease of the plot. The Works, Planning and Development Committee of the Town Council inspected the plot The Town Clerk informed the plaintiff on 3/5/87 that his application was not successful. On 26/5/87 the Town Clerk instructed the Senior Staff (i.e. the defendant) formal lease offer in the defendant'^s name under the following terms and conditions of offer; on 2\*4/2/87 in the presence of both applicants. a garage fo.r vehicle repairs." to prepare a fortnight later, on Supervisor, by letter copied to the ''Leasee" Exh.p1 (undated, it seems) was received by the defendant on of the same plot, s

> Rental: Terme: User: Industrial; Building Covenant; Shs.50 mill\*\* Cbmpensation is payable by lease if Shs.100,000/- per an revisable every 10; Two years extendi' \*\*9 years;

''Premium; Shs.1 million

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The plaintiff thereupon filed suit on 31/3/87 against the further relief that the Court may deem fit. profits, arrears of rent\*Shs.8^0,000/-, an eviction order, a *■f* • declaration, interest and costs and any or defendant claiming in his amended plaint general damages, mesne-

The defendant, by his written statement of defence, admitted that the plaintiff was forced to flee to Kenya in 1979 for safety due to political disturbances and left the suit premises in his possession as his ''tenant.¹¹ But he contended that, he never entered into ^a tenancy agreement with the plaintiff or his agent "from ¹⁹⁷⁹ to-date of the suit or at all as alleged in the Plaint." The defendant contended that he had been continously in occupation since granted a T. O. L of the plot on 17/3/80. Alternatively, he averred and contended that he was not a proper party to the suit.

The agreed issues were:;

1. Whether defendant was a tenant of plaintiff before 1979;

- 2. Whether defendant was a tenant of plaintiff after 1979; - 3. What rights plaintiff had over the suit premises between 1979 and 1987| - 4. Whether the defendant was a right party to the suit; - *A* 5. To what relief was plaintiff entitled if defendant was not his tenant? - 6. Whether the defendant could take over the interest of the plaintiff in the suit premises.

The learned trial judge, after hearing the evidence adduced and submissions from the counsel for the plaintiff and the defendant, in a reserved judgments

1. Answered affirmatively the issues ¹ and 2\*

- 2., Found on issues 3 and 6 that the plaintiff had been holding the plot under customary tenure and at the licensee of the Municipal Council of Tororo; and (b) tha ^t his houses on the, plot could not be taken over by the defendant without payment of compensation. same time as a - 3. Held on issue \*+ that since the defendant had been permitted to live in the plot and houses by the plaintiff and he was still in occupation now denying the plaintiff his rights over the plot and premises, he was the right party to the suit.

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«

- **\*4.** Decided on issue 5 that the defendant should pay the same rent that he had been paying to the plaintiff prior to April 1979» i.e. Shs. JOO/- from that date until date of judgment and the rent should remain unaffected by the Currency Reform Statute 1987. - 5. As regards mesne profits, made no order since there was no defendant was the one that was exclusively using and enjoying those crops or that the plaintiff was deriving any benefit from his crops. evidence that before the plaintiff loft in April 1979» the - 6. Declared that since there was no compensation paid to the plaintiff, the purported allocation of the plot to defendant wa s null and void (a) by virture of Article 1}(1) of the Uganda Constitution and (b) because the alleged acquisition was tainted with fraud since the defendant knew that the houses belonged to particularly when he had been renting them from the plaintiff.. plaintiff and more

The defendand filed 10 grounds of appeal in his Memorandum of Appeal against the whole of the decision in the High Court (save that part relating to mesne prof ⁱ ts). During the hearing before

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us hia counsel condensed the 10 grounds into three which may be dealt with in thia judgment in the order chosen by counsel. The plaintiff was absent and unrepresented before us but xe have had the benefit of lucid and fair submissions from learned counsel for the defendant.

## Groundl• Post - 19^9 Rights over the Premises;

The defendant's counsel submitted that the learned trial Judge erred in law in holding that the plaintiff continued to have rights and a better title over the kibanja after 1979 and until 1937 whereas the plaintiff's right thereto had been extinguished by Effluxion tenant or licensee of the plaintiff over the suit premises from 1979, whereas the controlling authority of the premises (Tororo Municipal Council) had in 1979 re-entered, repossessed and allocated the suit premises to the defendant. Counsel also submitted that it was erroneous to hold that when the defendant applied from the Council, he usurp the rights of the plaintiff over the suit premises; and equally erroneous to hold that the plaintiff was entitled to receive payment of rent for the premises at the rate of Shs. JOO/- p.m. from April 1979 to December, 1987\* of time; that it was an error to hold that the defendant was a for and obtained an annual T. O. L and a lease grant of the premise's *from* suit promises and was thereafter in unlawful occupation of the

Before dealing specifically with these submission>on the first ground, we consider it may be desirable to make a few observations on the nature of the rights and interest generally applicable to cases of this nature. It is undisputed that as the plot in under Schedule 3 of ^the Public Lands Act, No.1^ nated urban area" question (or kibanja) was in Tororo Town, and Tororo was a ''desigof 1969, the Tororo Town Council as the controlling authority, had

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full power inter alia to grant estates and create rights or interests and to dispose of or otherwise deal with the estate or interest in the plot under S.18 of the said Act. Thus the Tororo Town Council dould validly grant licences or leases.

It must be equally undisputable that a controlling authority, vested with such important powers must establish rules and practices to ensure the smooth running of plot allocation processes. It should also bear in mind that it should perform the duties entrusted to it in a fair and reasonable manner so that the public at large does not lose confidence in it. Further, as a governmental body, albeit a local one, a Town Council must be vigilant to protect the constitutional rights of all citizens..

We pass now to the consideration of what right or interest, if any, was possessed by the plaintiff over the plot premises. Although sometimes referred to in the proceedings before the High Court as a tenancy or lease, in law it was a licence. No document attesting to this was produced. The plaintiff said he was given a paper by the Town Council in 1959 where he was to pay rent, a document to show that the plot was his. That document got lost in 1979 when he ran to Kenya $(p.25, record)$ . There was oral evidence of Kigongo to confirm that the Plaintiff from 1959 was on the land under temporary basis (T. O. L) which was subject to annual renewal.

Under general principles of land law, licences may be of various types. What may be called the simplest type of licence is a "bare licence." This is one which allows as do all licences, the licensee to do some act that would otherwise be a trespass on land owned by another. But its distinguishing characteristics are that it is granted otherwise than for valuable consideration and is recovable at will by the grantor of the licence. There is another type of licence, however, which may be contractual and yet another type which is said to be protected from revocation because of the Megafry & Y/ade, Law of'Real ''equity arising out of acquiesce^." Property, \*»th EdjK '(1975) p.778.

It would seem that increasingly in recent years, the courts have been inclined to hold that certain transactions, involving li cence s, the principle of estoppel may operate to prevent revocation of ^a right which one party has led the other to suppose was permanent. If a licence has created such an interest, it nay be capable of binding third parties, through the intervention of equity. give rise to proprietary interests in other property. F If such an interest is created, whether by contract or by conduct,

in the instant case proper for the trial judge to consider whether such circumsantances existed as to create in favour of the plaintiff an interest so that his T. O. L. was not revocable by the Town Council at will. In this connection it was relevant to consider whether the Council, in 1959, by acquiescence had allowed the plaintiff to spend what was then a substantial sum of money in the purchase of houses on the plot in circumstances which raised a reasonable expectation that the T. O. L over the plot granted to him would not be revoked; or at least that it would not be revoked save after notice and payment of adequate compensation *0* the plot. for the improvements (the houses) on It was, therefore,

> If this was the case, revocation of the plaintiff's licence could be restrained by the court. Equity also might particularily intervene if there was conduct by the plaintiff's successor in title, which would make it unfair that he should enjoy the benefit of the plaintiff's expenditure in purchase of the houses without notice or adequate compensation. i.e. the defendant,

> These principles may be distilled, we believe, from a number will mention only two, CRABB VS ARUN. D. X. of cases, of which we

> > 110.

(1975) 3 ALL E-R.865, esp. per Lord Denning, pp.871-872, and CHANDLER VS KERLEY (1978) ZALL E. R.942. In the latter case. heard by the House of Lords, it was stated per curatm (Lord Scarman, Megaw and Rushill LJJ) that:

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"In case, when a party has established an express or implied licence to occupy premises, the role of equity is supportive and suppl@mentary. Where the parties have contracted for a licence equity will provide an equitable remedy to protect the legal right, for example by injunction, which may be by interlocutory order if the court considers it just and convenient. If, however, the legal relationship between the parties is such that the true arrangement envisaged by the parties will be frustrated if the parties are left to their kegal rights and duties at law, an equity will arise which the courts can satisfy by appropriate equitable relief."

The question then that this Court must ask is: "Fore the circumstances in the instant case such as to raise an equity in favour of the plaintiff? It is true that the plaintiff had failed to pay ground rent for the plot after 1979 and the $^\mathrm{T}\texttt{orcro To}\pi\texttt{n}$ Council had the right to re-enter, repossess and allocate it to someone else. But the defendant know or ought to have known that the plaintiff had invested his money in purchasing the houses on the plot. He also knew the circumstances which had forced the plaintiff to flee to Kenyn "abandoning the plet" as the defendant termed it, but in fact leaving two houses on it in the possession of the defendant.

The learned judge was of the view that:

"..... If the defendant had been a stranger to plaintiff, his position would in my view, be different from the present defendant; because in the present case prior to 1979 the defendant was a tonant of the plaintiff and continued to live in plaintiff's house even at the end of the war. Defendant's continued occupation of plaintiff's house after the Liberation War meant he remained the tenant or

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licenage of the plaintiff untill he usurped plaintiff's rights. He would therefore be estopped by agreement and conduct from denying having entered and occupy the plot and houses by consent of plaintiff and had been holding under customary tenure and at the same time as a licensee of the Municipal Council of Tororo. In my view equity would not permit defendant who had rented plaintiff's houses since 1970 until 1979 ..... after which he (the defendant) turned around and applied for Temporary Occupation Licence of the same plot and houses .......... In my view plaintiff's rights over the houses remained since 1979 as until 1987 and as such his houses could not be taken over by defendant who had been his tenant without first paying compensation." (p.57 of record).

With respect, we think that the learned trial Judge erred in law in holding that the plaintiff held the plot under customary tenure and at the same time as a licensee of the Tororo Council. Public Lands Act 1969, s.24 (1) (a) provides.................................... The two tenures are mutually exclusive in law and the only tenure that the plaintiff enjoyed was that of licensee of the Council. This error, however, did not affect the substance of the learned judge's holding. In our view he has not misdierected himself on the law as to the equitable position arising from plaintiff's and defendant's conduct respectively. In holding that this conduct resulted in the plaintiff's licence being coupled with a proprietory ARIN D. C. interest, the judgment is in accordance with CRABB VS and CHANDLEUR HERLEY (above cited). We think the learned Judge was not in error in holding that the plaintiff's rights remained over the houses after 1979 and until 1987 and as such his houses could not be taken over by the defendant without first paying compensation. This ground of appeal therefore fails. n

## Ground II:- Whether defendant committed fraud:

The second ground of appeal submitted by learned counsel was $(a)$ that the learned trial Judge erred in low in holding that when the defendant applied for and obtained a T. O. L. and a lease grant

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of the cult premises from the Municipal Council, he committed fraud and (b) that he erred in law in holding that the defendant'^s void. acquisition of a registered title to the suit premises was null and

Counsel for the appellant cited the of fraud in KATARIBAWE VS KATWIERA (19771 H. C. B. 187 and he argued that the evidence did not show any wrongful intention to defeat the plaintiff's interest in the plot in question. He hud wanted to have the plot tenant but he did so believing, as he stated in his testimony, tha ^t the plaintiff had abandoned the plot. The learned trial judge did not indicate in his judgment whether or not he accepted this part of the testimony of the defendant. Nevertheless he did say that what particularity convinced him of the defendant's fradulent intention was definition that the defendant was a tenant of the plaintiff and he had usurped the rights of the land lord. in his own possession, in his own right as a licensee and as a

This was not quite the correct discreption of the situation. lease of the premises; therefore he could not sub-let it. He possessed ^a temporarily licence and for several years delegated to the defendant some of his licdnsee. This arrangement could not survive the expiration of the plaintiff's licence when he failed to renew it in 1979< It was unfortunate that the learned Judge did not apparently consider whether or not the defendant had, as stated in the note of the Town Clerk, Exh.p1, paid Shs. 10,000/- towards rent in ''October the plaintiff's rights. Nowhere does the judgment indicate that the high standard of proof required in cases where fraud is alleged (as distined from the ordinary civil cases) was applied.. Had such ^a standard been used in applying the law to the facts of the instant case, we cannot be satisfied that with an intention to "usurp" rights as a The plaintif f/re-spondenU had never possessed a last year", i.c. in 1985 nnd if he had, whether it was consistent

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the evidence would have been sufficient to prove fraud, therefore we hold that the second ground of appeal succeeds on the first limb. We now come to the second limb of this ground of the appeal which was that the learned trial Judge erred in law in holding that the defendant's acquisition of a Registered Title to the suit premises was null and void. As we have indicated earlier, the first limb on which this holding was based, that is to say, fraud, was untengable. The second limb was that the Constitution forbids in Article 13 the taking away of property without adequate compensation save in certain excepted circumstances (which did not apply in the instant case.) It is not clear whether the Nunicipal Council in the instant case had given any thought to the rights over the plaintiff's 4 houses. The T. O. L. Exh. DW3 makes no mention of houses.

Counsel for the appellant submitted during the hearing of this appeal that under the general and well established principles of land law any permanent fixtures attached to the land accrue to the owner of the land. Thus if a tenant or a licensee chooses to build a permanent structures on the land of his landlord or licensor, at the termination of the lease or of the licence the landlord becomes the owner of those permanent structures. He cited RUHDA COFFEE VS SINGHI (1966) E. A.564.

While we do not disagree with the decision in the case cited, it involved a constructual licence where's the instant case, acquiscence arising from conduct and must be conditioned by Article 13 of the consitutuon. It does not seem that land is repossessed and reallocated as a matter of normal practice by the Council when there are semi-permanent buildings on the land and this was the undisputed testimony of PW3, Christopher Kigongo, an employee of the Torord Municipal Council. According to Kigongo; "If a tenant does not renew his T. O. L. we take him to court. If one abandoned his kibanja I would report to the Council for necessary action."

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Whatever that "necessary action" may be, if at the expiration of a licence, the Municipal Council re-allocates the licence or grants it to another person, the Municipal Council must take care to fix terms or conditions to protect the previous licensee's property right, if any. The new licensee must be bound by a covenant or condition that if he wishes to take over and make use of the permanent structures he must pay adequate compensation to the previous owner of property. Counsel for the appellant submitted that licensees of urban areas know that if they build non-permanent structures only, there are no problems at the termination of the licence about whether or not they accrue to the land.

They therefore generally build only mud and wattle huts with tin roofs. A licensee may, if he desires, on expiration of his licence remove them from the land in question. If he does not desire to remove them and abandon^§ them, then the new licensee may use them or knock them down as he may desire $\sqrt{\phantom{0}}$ We are of the view that where, as in the instant case, the buildings are semi-permanent, . then if the non-permanent parts of the buildings can be removed by the owner of the buildings he may remove this non-permanent parts, but if he damages the land in doing so, he must compensate the land owner, i.e. the Municipal Council for any such damage. Did the failure of the Municipal Council in the instant case to attach such conditions or terms to the T. O. L. granted to the defendant invalidate the grant?

As regards the lease offered to the defendant, a photocopy has been exhibited. The offer, Exh. DW5, states that the terms and conditions were to be inter alia; "Premium: Shs.1 million. Rental; Sha. 100,000/- per annum revisable every 10. Terms: 2 years extendible to 49 years. User: Industrial. Building Covenant: Shs.50 million. Compensation is payable by lease if any." It is not quite clear what is meant by the last sentence above-quoted. In any event this

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was not a lease; this document was written by the Town Clerk to the As I have indicated earlier the T. O. L. granted to the defendant DWJ stated no real purpose for which it was granted, save '•payment of ground rent." Senior Staff Surveyor of Mbale Land Office dated 2O/J/19S7 copied (eht defendant).. to the ''leasee"

Learned Counsel for the defendant in the courft below had subthat they as the contthe plot to the defendant rather than to the plaintiff. The learned trial Judge held that; since the defendant is the one in occupation of the plaintiff's houses, if he thought that Tororo Municipal Council Hrs r~i^g ^h t ^pa-Hr?—who—shertrld—hrrv *as a* ■e—be-en—su-ad/, he ought to mitted that the orders prayed for by the plaintiff could only be made against the Tororo Municipal Council^so rolling authority might have explained why they prefered to lease have applied for Third Party Notice to issue to join Tororo Municipality co-defendant, but he never took that course and I do not see •/ what purpose it would even have served, (p.60 of record).

cannot agree with the learned trial Judge on this holding. True, there is a provision in 0.1, Rule 1^ of the Civil Procedure Rules for a defendant, by leave of the court, to issue ^a third party notice. But this is only done where a defendant claims to be entitled to contribution or indemnity over against another person not a party to the suit.. for dam«ages for loss suffered in driving of his motor vehicle, the defendant can "'apply for leave to join as Wflfl therefore, In the instant case, *i* Tororo Municipal Council. He asserts that the Council is blameless. \* *^a party to* the suit nnothor motorist whoso negligence he claims a road accident caused by the negligent We regret that we Thus, for example, if the defendant is sit'd the cause of or contributed to the plaintiff's loro and who, should con tribute, or indemnify the defendant any order of the court awarding damages for the loss suffered. however, the defendant is not making onJ-y claim over against the

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It is the plaintiff who in effect claims the Council acted ultra vies or arbitrarily. It is the plaintiff, therefore, who under $\ldots$ 0.1, Rule 3 of the Civil Procedure Code, should have faired the Tororo Municipal Council with the defendant as parties against whom he claimed a right of relief in respect of or arising out of the same act or series of acts or transactions or, alternatively where common questions of fact or law would arise if they were sued separately. Last have been granted as The learned Judge did.

Lastly Counsel for the appellant argued that the learned trial Judge erred in law in holding that the Currency Reform Statute (Statute No.2 of 1987) did not affect the respondent's claims for rent in the suit premises at the monthly rate of 300/- (old currency). This matter was discussed in the judgment and the learned trial Judge had this to say:

> "..... the plnintiff had demanded rent over and above $300/-$ p.m. as a rent appears unreasonably low, considering their imponderable such as preservation of the premises when they could have been destroyed by some bad characters. I feel that this would be fair and nominal rent. In fairess, the rent of Shs.300/- per month would remain unaffected by Currency Reform Statute 1987"

But it seems to be clear that the submission of Counsel for the appellant in this respect is correct; the clnim for rent by the plaintiff was based on arrears of agreed rent not on fair compensation. Therefore in computing the arrears of rent the new currency rate should have been used as from the date that the statute No.2 1987 came into effect. We would therefore allow the appeal in part. And since the appellant has not been wholly successful we would make no order as to costs in this count.

SIGNED:

Delivered at . hengo. this ... 7.7. day of Fibring. 1996.

+ All that he should have declared was: That the defendant was not entitled to use or enjoy the plaintiff's houses on the plot in ques-<br>tion without poyment of rent it compensation in the plaintiff IN THE SUPREME COURT OF UGANDA

## ODUST TA

CORAM: MANYINDO, D. C. J., PLATT, J. S. C, S STATON, J. S. C.

## CIVIL APPRAL RO. 1 OF 1990

**BETWEEN**

ROHALD DOMATO KANYARA

AND

HASSAI ALI AHIED

::::::::::::::::::::::::::::::::::::::

**1111111111111111111111111111 APPENANT**

(Appeal from the decision and judgment of the Migh Court of Uganda at Kampala (Mr. Justice Karokora) dated $12/7/1989$

IN

## N. C. C. S. NO. 396 OF 1987

JUDGHEIR OF PLATT, J. S. C.

Having had the benefit of studying the judgment and proposed ordof Seaton J. W. C. with great regret I cannot agree. I will therefore indicate my discent s! ortly.

The facts have been fully set out by Section J. S. C.

It appears that some equitable consideration is said to arise, s that the Town Council of Tororo in granting the licence to the Definal and later a lease, must take care to fix terms or conditions to prete the previous "temant" or licensee; so that the new licensee may be bound to pay compensation for semi-permanent buildings. It is that said that the Defendant should pay Compensation by computing areas of rent. This stems it seems from the duty of the Council to protect the constitutional right of all citizens. Authority is also found in CRADE vs ABUE P. C. (1975) 3 All S. R. 865 and CHAEFITE vs $\frac{1}{2}$ VD $\frac{1}{2}$ ( 2 All $7.7$ . $24.2$ and the proposition favoured is:-

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"If, however, the legal relationship between the parties is such that the true arrangement envisated by the parties will be frustrated by the parties or left to their legal rights and duties at law, an equity will arise which the Courts can satisfy by ampropriate equitable relief".

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The relationship between the Plaintiff and the Town Council may that the Town Council was the controlling authority with full force to grant estates and create rights or internsts and to dispose of emotiwise deal with the estate or interest in a plot. Hence if it is a proa licence or a lease having fullfilled its statutory duties, it is in bound to protect the constitutional rights of all sitisces. Titl $N$ is to manage the colate of the Town Jouncil in conformity with a mal principles of management for the benefit of the prople within the jar diction of Tororo Town Council; and its decisions are not to be quies unless they are ultra vires the powers, procedures and using of the Council. The latter's duty is to see that the rights as fixed if the people of Mororo are preserved within the relationship entroliminal between the people and the Council. Thus if Souncil has a polity of granting a temporary licence of a plot to a person of Tourno, in the is not objectionable per se. If it has the need to enumerous local, business men on easy terms, it may not insist on diving insering terms. However, if the licence, contains certain conditions, and the conditi are broken, then the Council may revoke the licence and realizatio in plot. In these circumstances it is well understood that the theory licenger chould not develop the land with buildings that may contain the the land and broome the Council's property. If development is the i

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lease should be sought. That will have conditions rcqu development to be of the required standard\* Development of a lower level may well not bo in the interest of Town planning. Consequently if haphazard development is made \&ich is not sanctioned by the Council, or acquiesced in by the Council, or where the Council lias not aisled . • the licensee in any'way, the Council may revoke the licence f the conditions are not fullfilled. U. SINGH (1966) K. A. apply. *the* then a ⁱ The princpics of RUTFDA v<-

It appears that two sets of relationships may arise when uncuntroli development of licensed property has taken place. The iirs clationsli lies between the licensee and the Council. The second relations .. a private matter between the licensee giving up the licence and the naw licensee• There is no connection between the asreerjent of the old licensee and the Council as to terms which may or may not be agreed between the old and new licensee. The Council may never know w?.ctho'r any such relationship ever arose between the old and new licensee. The Council may even decide that the uncontrolled development is harmful to that neighbourhood and have it demolished. It has no duty that the new licensee should pay compensation for the develop:. nt which the new licensee may not want and may wish to destroy. .en if the now licensee should use some part of the development that development now belonging to Council may attract greater land rent. But it would net matter about which the Council would compensate the old licensee. Yet that is where the " */Llf tts* lies. When the old licensee *irn is* normally be a tc see returns the land temporarily occupied by him to the Council, it is to

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the Council that the licensee should look for compensation, if any land. What the old licensee can get out of the new licensee, matter for the licensees themselves. Hence, if the old and now license agree on compensation, and the old licensee vacates the land, and then temporary licence of the land, after c to revoke the temporary licence\*#. Hor can the old licensee direct the Council to add a term to the new allocation to pay compensation to land? He lias merely his contractual rights if any against the :icv; licensee*•* The old licensee 1ms in truth used the land as he /leased, and once the licence has come to an end, that is the end of his intore; in the development of the land. Even if there is for improvement must be agreed upon. A licensee or lessee canr.ct force what he calls improvenients on the owner of the land. The constituti"n: right which the licensee or lessee lias, is determined by the contract of licence or lease, unless the Council has taken some step to cc.ur\* itself to bo liable for compensation for improvements. Unless those principles arc clearly adhered €o Council may be embroiled in suits into personal situations to ascertain whether any constitutional rights arise. This may prove harmful to other tax payers in the Council's area. Moreover it is did^mpoGC a condition of payment of compensation to an old licensee, it would bo acting properly within its powers. **fc.** "font coiv it; tional rights has the old licensee got, after he has relinquished the a moot point whether if the Council \* the new licensee is granted a basis for that compensation arisen for improvements to the Council's a lease, ccr.pcnsatio: Y.'hy should the nev he fails to pay the old licensee, the latter cannot appeal to the Counc which are none of- their making, and they may be required to enquire him. ?/liat has the Council to do with this compensation?

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licensee be saddled with payment for so-called improvements not authorised or encouraged by the Council? Would the Council not be moving out of its jurisdiction with realms outside its proper functions And worst of all, as the Council has not been made a party to this suit how has the Council been ordered to add a condition to its allocation of the licence retrospectively. It has been, indeed, long since spent, because a lease has been granted to the new licensee. Surely on the lease was granted to the Defendant who had been the new licensee, the lease has ended, and gone with it are the supposed powers of the Council to force compensation to be paid.

All these suppositions made, as to the relationship of the parties causing Council to be responsible, depend on what the licencees have said in their understanding of the Council's position. This Council has not been heard. I agree with the Defendant that that is a fatal Vlaw. Can other persons now rely on this case and cause other Council: to act in the way now indicated without this Council ever having been heard? Perhaps the Council has some constitutional rights as well, of which the Court has not heard. Suppose, for instance, that the reason why during 20 years from 1959 to 1974 the Plaintiff took no. lease mas because the Council had discouraged him from "improving" the plot as undesirable from a Town planning point of view; and suppose it was / said that the buildings on this plot will have to be demolished, and t plot leased for better building, is the Council responsible to a condition of paying compensation on the lew licenses? Did that apply even when the Plaintiff was not in Tororo? This person took refuge in Kenya for many years thus defaulting on his obligations. It the Council responsible to find out where the Plaintiff refugee went,

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and wait for him to return, despite non-payment of ground roll and the wrongful ontrudiction of "tenants"? How far is this principle to

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It is my view that this matter is an example of the alone, that hard cases make bad law. This is a hard case. But the Plaintiff's choice of escaping from Uganda without making provision for his absence, left him vulnerable. The Council might not have reallocated his plot. But it did. The Plaintiff did not challenge its legal power to do so. The Council might not have leased the plot to the Defendant. Fut it iid. Apparently the Plaintiff did not challenge the exercise of the Council's discretion. The Plaintiff had no contractual relationship with the Defendant after the licence was terminated. I would have been proposed, to hold that the Plaintiff made out no case at all for any the reliefs he claimed, and that this suit should be dismissed with costs against him here and below. But if his suit is to be admitted at all, to assert whether any equity arose, then the judgment and decree of the High Court should be not aside, and the record remitted to the High Court for re-trial, the Council being added as a necessary party to the sait; by the Court itself if necessary. I would promose that there be no order as to the costs of this appeal, and that the costs in the Court below. abide the event of the retrial. I would be happy to abide by this compromise.

Delivered at Mengo this ... 2.7. day of .. February. 1991.

JUCTICT

IN THE SUPREME COURT OF UGANDA.

AT MENGO MANYINDO - DCJ, $\overline{G}$ DER - JSC, PLATT - $JSC$ ) (CORAM: CIVIL APPEAL NO. 1 OF 90

BETWEEN

RONALD DONATO KANYARX: APPELLANT

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HASSAN ALI ARMED: RESPONDENT

> (Appeal from the decision and Judgment of the High Court of Uganda at Kampala (Mr.<br>Justice Karokora dated 12-7-89 in H. C. C. S. No. $396/87$ .

JUDGMENT OF MANYINDO $DCJ:$

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I have had the opportunity of reading the judgment of Seaton-J. S. C. in draft. I agree with him that this appeal must succeed but only in part for the reasons he has stated in the judgment. As Plath there will be an order in the terms proposed in the judgment of Seaton - J. S. C.

DATED at Mengo this:..?... Day of: $.1991$

т. MANYINDO

DEPUTY CHIEF JUSTICE