[2022] UGHCLD 51

# THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA

### (LAND DIVISION)

### CIVIL SUIT NO. 153 OF 2014

$\mathsf{S}$

KASSAM AMARSHI & SONS LIMITED................... PLAINTIFF

#### **VERSUS**

- 10 1. ROBER NKAMWESIGA - 2. KAKAIRE ERIAS - 3. BAMULANGEYO SAM - 4. MOHAMOOD NSUBUGA - 5. SHUJA ABUDUL KARIM KHAN....................................

#### **AND**

**KASSAM AMARSHI & SONS LTD** (Represented by Kakaire Erias; Bamulangeyo Sam; Mohamood Nsubuga; & <table>

Shuja Abdul Karim Khan) NOMINAL DEFENDANT

# Before: Lady Alexandra Nkonge Rugadya

#### **JUDGMENT:**

#### Introduction:

- The plaintiffs in this case sought cancellation of the transfer of the certificate of title in respect 25 of plot Nos. 114 and 116, Seventh Street, Industrial Area, Kampala, comprised in LRV 330, Folio $\mathbf{8}$ (hereinafter referred to as the suit property), registered in the 1^st defendant's names; an order directing the cancellation of the Special Certificate of title issued pursuant to *instrument No.* 481124, dated 13^th March, 2013; an injunction; general and aggravated damages; costs and 30 interest.

Julay

As against the $2^nd-5^th$ defendants, they sought the following orders/declarations:

a) that at no time have the $2^{nd}$ -5^th defendants ever been duly authorized to deal with the affairs and properties of the last plaintiff company and/or the plaintiffs' directors and/or $\mathsf{S}$ shareholders including the suit property known as plot 114 and 116 Seventh Street, industrial Area, Kampala LRV 330, Folio 8; b) that the $2^{nd}$ -5^th defendants are not directors and/or shareholders and/or agents of the $1^{st}$ plaintiff and neither do they hold any other 10 lawful stake or interest in the $1^{st}$ plaintiff. c) an order nullifying all the dealings actions, resolutions and documents made by the $2^{nd}$ -5^th defendants or any one or more of them on behalf of the plaintiffs. 15 d) a consequential order directing the Registrar of titles to cancel the Special Certificate of title issued by the Commissioner Land Registration on the 31^st May, 2013 under instrument No. 481124 in respect of the suit land; 20 e) A consequential order directing the Registrar of companies to expunge from the company file of the $1^{st}$ plaintiffs all the company forms, resolutions and other documents made or filed by the defendants or any one or more of them; 25 f) a permanent injunction to restrain the $2^{nd}$ -5^th defendants from holding out to be shareholders, directors or other officials of the $1^{st}$ plaintiff; 30 g) General damages; h) Aggravate damages; i) Costs of the suit and interest on $(g)$ , $(h)$ , above at court rate from the 35 date of judgment until payment in full.

As against the nominal defendant they prayed that judgment be entered against it for among others: a declaration that the transformation of the nominal defendant to its current state in the

Oxforg

company registry whereby it is owned and/or controlled and/or managed by the 2nd-Srh defendants was null and void ab iniho; and costs of the suit, to be paid by the 2n.r-5rh defendants.

# Bgp\gqE,ltqtlo^:

Thc plaintiffs werc represented by M/s Ktbeedt & co. Aduocates. M/s caplto.l Lau Assoclqtes, ⁵ rcpresentcd the 1"t dcfendant.

By way of a brief background, on 18rh January, 20 19 counsel for the plaintiffs duly notified this informed court that M/s c(,,plta.l Laut Assoclates, the llrm representing the l"r defendant had been duly served. The 2"d-5th defendants whose whereabouts were not known were to be served through substituted service as directed by court.

¹⁰ on 18th March, 2019 during the pre -trial, Ms Kiconco represented counsel Asiimwe Ronald for the defendants. Court noted that the defendants had been duly served at each occasion, but that they had never complied with the directives of court. It nevertheless gave them another chance to appear in court and present their documents.

15 on the next date fixed for hearing lgth september, 2oi9 only the plaintifrs side was in court. court thereupon appointed the 19th November, 2ol9 and l3rh January, 20 13 for the hearing and directed that the defendants to be served. The matter was cause listed for hearing.

The 2'a and 3rd defendant appeared in court on lgrh November, 2o1g and complained that they had not been served. From the record however, substituted service had been effected through lhe Dailg Monitor newspaper of 19rh February, 2ol5 by which they had been required to file ^a 20 defence

In the interest ofjustice however, this court allowed the 2nd -5s defendants to file their defence out of time on 19rh November, 20 I g, some four years later; and the matter which had been cause listed, was adjourned to 13th Januar]r,2o2o, a date which was 6.xed in the presence of Mr. Asiimwe Ronald for the 2Dd-3rd defendants.

25 court directed that the defendants be served by 9s December, 20 l9 and for their statements to be on record by 2l December, 2019 together with their trial bundles, none of which however was done. This prompted court to award costs to the amount of Ugx ,OO,OOO/= on account of the failure for the matter to take off, attributed to the defendants.

30 On 13s January, 2O2O, agatn only the plaintiff side was in court. Cou noted that the defendants had not filed the defence despite the fact that the time within which to file their defence had been extended.

3 U'i""d

On the 1Oth February, 2020, the next date fixed for hearing, the 1"r defendant,s counsel, Ronald Asiimwe appeared but his client did not appear. The matter thereupon proceeded for a full trial, in the absence of the defendants.

Issues.'

- 5 The following issues were identified for determination by court: - 7) Whether the 7,. delend,ant,s tltle to the sult lo;nd. uas acquired. lraudulentlg or unlawfully. - 2) Whether the 2^d-Sth d.eJendants haue ang legal lnterest t^ the platnttlJ compcrng, be it .rs lts sharehold.ers, d.lrectors or attomegs. - 3) Whether the power of attorneg purported.lg stgned. bg the plsiat{f appolntl'rg the 7d deJend.ant a.s plo.tntiff s al omeg wos lraudulent and./or unlauful.

- 4) IJ so, tlhether the stbsequent resolutlons and cotnpang Jorrns executed. bg the 24d-5th deJendants on behaf of the platnttfJ utere lawJullg executed.. - 5l Whether the plalntiff ts e^tttled. to the remed,les sought ln the a'n|.end.ed. plolnt.

# Backorouad, to the case:

The suit relates to property comprised tn Plot No, ll4 and, 116 seuenth street, I^dustrlal Area Ko,rnpo.la r,Rv 33o follo 8 (sult propertg), Ar all matcrial times, it was registered in the names of Ills f,cssa'm Azro,rshl & sons Ltd, the plaintiff company since 24thJune, 1960afact which was never disputcd. However, following the expulsion of thc Asians rn 1972, the property was taken over by the military regime of ldi Amin.

It was repossessed in 1993 and under a management contract w.ith Mr. Mohammed Allibhai, (PEgi, rented out by the plaintiff company. However on 17rh JanuaSr, 2oo1 the 2nd defendant obtained powers of attorney (P879) purportedly from Badrudin Kassam Amarshi and Abdulali Kassam Amarshi (father of Karimali Abdulali Kassam), two of the directors of the plaintiff

company. Karimali Abdulali Kassam testified as pur4. some decade or so later, on 20s June, 2013, the 2nd and 3rd defendants entered into an agreement with thc 1"t defendant for the sale ofthe suit propcrty, a transaction which the plaintiff claimed to have been fraudulent.


### The law:

By virtue of sectlon 1o1 (7) ol Eutdence Act, cqp. 6, whocvcr desires court to give judgment to arty legal right or liability depending on the existence of any facts he/she asserts must prove that those facts exist./c€orge Wllllg,m Ko,ko,,r.a. a Attontey General [2OIO] HCB 7 at page 78).

The burden of proof lies therefore with the plaintiff who has the duty to furnish evidence whose level of probity is such that a reasonable man, might hold more probable the conclusion which the plaintiff contend, on a balance of probabilities. fsebulibd. us cooperatlve Bank Ltd. [19a2] HCB 13O; Oketha us Attomeg General Cautl Sutt IVo. 0069 of 2OO4.

# 10 lnekaS\_Stlbgevldence:

The plaintiffs' case rested on the evidence of four witnesses. Pw7 Mr. Noorali Naz.alari Hassam aged 82 years, a resident of Masaka, and had been in Uganda since 1993. purJ Mohammed Allibhai; Pur3, Mr. sebuwuufu Erisa, the handwriting expert; and pu4, Mr. Karimali Abdulali Kassam, claimed to have been the surviving director of the plaintiff company.

¹⁵ In his testimony Pu7 told court that the company was owned by the plaintiff family which was well known to him, and that following the death of Abdulali Karimali Armashi, ptrr4,s father, put4 took over the ownership flll 1972 when the Asians were expelled from Uganda.

Initially Mr. Karima.li Abdulali Kassam was the 2"d plaintiff in the suit but later withdrew. Pur2, Mr. Mohammed Allibhai, the Managing Director of M/ s Alderbridge Real Estate and. Management

20 ald, currently the property Management Agent of the plaintiff company, and lawful attorney for the said company. He was therefore a key witness for the plaintiff in this suit.

The powers of attorney, exhibited by him in court as pE4 t,ad been donated to him on 10tr, July,1992, initially, for the purpose of repossession of the suit property for and on behalf of the company.

25 A memorandum and articles of association for the said company was tendered in court and exhibited PEs, together with a certificate of incorporation for the company, dated 1on Januarjr, 1959 as PE6.

The memorandum listed the names of Gulamhussein Kassam Amarshi, Abdulali Kassam Amarshi, Badrudin Kassam Amarshi and Hassanali Kassam Amarshi as shareholders, each w.ith one share, as at sth January, 1959.

^Aduplicate certificate of title was also tendered in evidence, (-K. ASr,f issued in January, 1955 for a 97 year lease term, under the names of the plaintiff company.


Ao2, Mohammed Allibhai testified that he just likc prrr had known the family of Kassam Amarshi of Masaka since his childhood, and in particular Abdulali Kassam Armashi, (pw4) who is currently resident in Canada.

5 He confirmed Purfls evidence that Mr. Abdulali Kassam Armashi, par4 was son to the late Abdulali Kassam Amarshi, and surviving shareholder and director. The names of the original shareholders who were also the directors appeared in the company registry in 1970 as per the last annual returns filed by the company at the time.fpEgr.

A search in the company registry by Put2 revealed that Form 8, pE2a, notilication of change of directors had been registered, following the death of Abdulali Kassam Amarshi on lsth May, 1969, the father to Par4.

Pur4 his son was named as a new director of that company, under the names of Karimali Abdulati Kassam. In 1995, as per PE24 another notification of changc of directors was filed, this time by the 2nd, 3rd and 51h defendants. unknown to the plaintiff company, put4' name was not listed among the directors.

The plaintiffs uncontroverted evidence indicates that after ho2 had obtained the powers of attorney in 1992, (PE 4), th.e suit property had on 2"d Junc, 1993 been restored to the plaintiff company as the original owners. fReJ PEB and pET). 15

PE7 was a letter from the Minister of State for Finance recognizing the plaintiff company as the original registered proprietors. At the time of repossession in 1993 as the plaintiffs agent pu2 found that the property was being used by the uganda prisons as their workshop. He started receiving rent from them as the plaintifls agent whcn the said tenancy was formalized with Ministry of Internal Affairs, Thus Uganda Prisons continued in occupation and paid rent till 6rh November, 2000 when they gave notice to vacate the premises[ f,ejner to: p9ll). 20

on 256 May, 2011 Pro2 on behalf of the plaintiff company through his management comp€rny entered into a tenancy agreement wirb wada woods Ltd. for the suit property. (pE l2). The tenants continued in occupation, with rent remitted as per pE rg, (as at 3rd october,20t6) to the plaintiff company through their agent. 25

At the tocus visit held on 29tt' Apnl,2o2t, wada woods Ltd confirmed that position. By 2016 the l"tdefendant already had the suit property transferrcd into his names following the sale between

him and the 2nd and 3rd dcfendants. I{e never filed any suit to challenge the plaintiffs continued occupation ad utilD,ation of the premises.

Put2 further testified that his company had also rented out part of the premises to M/s Jaibra General Enterpises l,td, which at some point had defaulted in its rent payments. In the suit filed

6 il"Fd

against it in Nakawa court, judgment had been passed in favour of the plaintiff side on the 3Oth September, 2013: vide Civil Suit No. 635 of 2011 lAlderbidoe Real Estate anaoement Ltd us Jaibra Genetal F)nterpises Ltdl

Among the orders granted by that court was an order for recovery of the rental arrears and an eviction order. The orders, the effect of which were to confirm the plaintffs ownership ofthe suit property have never been discharged.

It is against that backdrop, the defendants who were total strangers to the processes of repossession; the renting and occupation of suit premises, and unknown to the plaintiff family, purporting to be the company directors somehow through a company resolution on 2l"r Februa5r,2013, authorized Mohamood Nsubuga (4th defendant), Kakaire Erias (2'd defendant) and Sam Bamulangeyo (3.d defendant), to sell the suit propcrty to the 1"1 defendant.

It was Pur2's evidence that around July, 2013 they got to learn from one of the neighbors, that the l"t defendant wanted to sell the suit property. The neighbor had also availed to him a copy of the certificate of lille (P814), registcrcd in the names of the 1"r defendant on 18tt' July, 2013.

15 On 26s August, 2O13 the 1"t defendant advocates, Ms Capttal Lau pantr.ers dnd Aduocates wrote to the private security company that was guarding the property on behalf of the plaintifps managing agent, claiming the 1"t defendant's ownership of the suit land.

However upon inquiry by Pur2 from the director, (PtD4) he had denied having issued any authority to anyone to sell the suit property to the lst defendant. On 10rh December, 2013 he gave put2 powers of attorney, PD 78, under which he authorized him to protect his interests in the suit property as a shareholder and director.

A notice of a caveat emptor was put up in t}]le Daitg Monitor Newspaper on 23"1 August, 2013, notifying the public that the property had never been sold. (PE75). pu2 also lodgcd a caveat on the suit land in August, 2Q13 (PE16l as well as a complaint with the Land protection Unit.

The 1"1 defendart who by 26th August, 2013 had constructive knowledge of the caveat never sought its removal from the suit land, despite the fact that by that time he had already purchased the suit property.

The plaintiff company claimed thercfore that they had physical possession of the suit property which they denied having sold; and therefore the transfer to the 1st defendant was fraudulent, since he had notice, and/or was party and/or privy to the fraud.

The company claimed further that the lsl defendant failed to exercise the basic due diligence of identifying the actual proprietor of the suit land and its interest represented by its tenants and agents who were in physical occupants at the time,


# 7't defend t's case.'

Unlike the 1"t defendant, the 2nd-5!h dcfendants did not file any response to the allegations raised by the plaintifl comPany. It is trite that a party who does not enter appearance and file his defence is deemed to have admitted the allegations in the plaint lsr7rlth vs Auto E ectrlc Servlces Ltd,

5 (19s1) 24 Xr,R22 rq.

> This court also came across a letter dated 8th April, 2014 titled: Denial of any instructions to sue Roger Nkamuesiga in lhis sui, and IfrA No.355 and ss6 of 2074, addressed to the Registrar of the Land Division.

The author of that letter Mr. Kalaire Erias (2nd defendant) who signed as a director of the company denied having instructed Itrs Klbeedl & co. Adaocates to sue Mr. Roger Nkamttesiga the 1"r defendant. 10

In that letter the said director confirmed that the company had sold the suit property to Nkamwesiga for va.luable consideration and with no outstanding payment. He asked court therefore to dismiss the suit and applications as frivolous and not sanctioned by the company.

The issues raised in the letter were however the gist and subject of this suit. It was a.lso a question to be addressed by this court as to whether or not the 2"a defendant had the power and/or authority to write, represent and act on behalf of the company.

on his part, although the l"tdefendant failed to respond to the summons issued by court for the hearing, he frled a wSD in which he ctaimed that Karimali Abdulali Kassam Amarshi was ^a fictitious person. 20

He made reference to one Karimali Abdulali Kassam a British nationa-l and another person with names similar to those, but a Canadian national born in Masaka. He also disputed the validity of the management contract signed by Pw2 on rhe basis that it was never executed by the

registered proprietor nor executed by a person who had authority to bind the former registered owner. The source of his information however could not be readily be established nor were the allegations therefore substantiated. 25

He furthermore relied on the company resolution pe2s dated 21"r February, 2013 signed by 2no and 3'd defendants both purporting to be directors of the company; and the search statement dated lTth June, 2013 which showed that the 97 year lease was in the names of the plaintilr

company.

In his counterclaim therefore he claimed that fraud had been committed by the plaintiff and not by him, claiming that he was a bonaf.de purchaser for value without any notice of the fraud.

 # Ihe law:

A registered proprietor is protected from ejection from certificate save for fraud (sectlon 776 (c). Similarly under sectlon 59 of the RTA the general principle is that a title is conclusive evidence of ownership, except where it has been established that fraud has been committed. This applied to the plaintiff company equally as it did to the 1"r defendant, both ofwhom had registeration for

It is trite law that that fraud that vitiates a land title of a registered proprietor must be attributable to the transferee, registcred purchaser or thc purchaser's agents. Fraud of ^a transferor not known to the transferee cannot vitiate the title. See: Wambuzl C,J, Kampo'la

#### Bottlers vs l)amanlco (Q LfD, SCC:I .tVo. 27 ol 2012. 10

the same piece of lald, though at different times.

The party who seeks reliance on fraud must not only specihcally plead fraud, but must also prove it- the burden being hcavier than on a balance of probabilities generally applied in civil matters. 6<cmpala Botalers Ltd. Vs Damo,^lo.co M Ltd (supra.)).

A bona fi.de purchaser for valuablc consideration of land dcrives protection under section f8I oI the RTA. The tcrm is dcfined in Blo.ck's lau Dlctlono,ry th Edltlon at page l27l to mean:

"One uho bugs sornethlng Jor ualue wtthout notlce of (rnother,s clq;i/,l. to the propertg and ulthout a.ctuq.l or constructlae notlce ol ang d,efects ln or lnJldnltles, claj,ns, or equltles agalnst the seller's tltle; one who has good. fafth patd laluqble conslderatlon wlthout notlce oJ prlor aduerse clalms.',

t5

ln Uganda Posts and Telecommunlcatlons us Abraham Klt.tmba SCCA IVo. 36 of l99S), where there is failure to make reasonable inquiries or ignorance or negligence was held to form particulars of the offence of fraud.

courts have always been consistent in placing a burden on prospective buyers of land to carr5r out prior inquiries before purchasing land property, as an act ofdue diligence. Such is not only a requirement of law and practice but an act of prudence. 25

Thus where it is found that the dcfendant had all the means available to him to establish the truth or verify the information received by him, the prcsumption would be that he had constructive knowledge of fraud. (Refer also to: Omq.r Sollm ltruko.sa Vs HaJl ltriuha,mmed, &

rr;tother CACll .lVO 174 of 2OOS). In that same case it was also held that in equity constructive knowledge is deemed to constitute fraud. 30

U"F%

The 1"r defendant in this case relied on a number of documents which he received from the defendants: the sale agreement between them, (P827), which he had signed as the purchaser on 201h June, 2013.

PEI4, was the certificate of title, his proof that he had legally acquired the property. A statement of search dated 17th June, 2013 (annexture D to his WSD), indicating that the plaintiff company was the registered owner. Notice of change of directors was filed in 1995, listing three (3) of the defendants as the directors of the plaintiff company.

The above therefore raised the issue of the validity of the documents, also raising the issue of the capacity of the defendants to enter into the transaction, so crucial to the determination of the entire case.

sectlon Lql) of the contracts Acts 2o7o defines a contract as an agreement made with a free consent of parties wilh the capacitg to contract, for a lauful consideration and with a latuful object, with the intenlion to be legallg bound.

Under sectlon 70 ol th.e Contra.cts Act, No. 7 of 2O7O, a binding contract/sale agreement would arise when one is made with the free consent of parties with capacitg to contract, for ^a lawful consideration, with a lawful object, and w.ith the intention to be legally bound. 15

Further, under sectlo'n 7 7(7 ) (supra) a person must have the capacity to contract where that person is of eighteen ycars or above; of sound mind; and not disqualified from contracting by any Iaw to which he or she is subject.

This court in its analysis of the documents as presented by the defendants noted that the 2'd and 3'd defendants purporting to act on behalf of thc company did not however sign the sale agreement as directors or shareholders. They carried out the transactions as individuals, but did so under the name of the plaintiff company.

This point is strengthened by the fact that none of the documents relied on by the l defendant had the company seal or stamp. The 2nd defendant who claimed to have been issued with powers of attorney dated 17rh January, 20o1, however did not use those powers in effecting the transfer but instead signed in his individual capacity, w.ith another person who evidently had no powers

of attorney/ authority to deal with the property. 30

> In that instrument the donors ofthe powers were Abdulali Kassam Amarshi & Badrudin Kassam Amarshi of UK 461 Lode I-A Sol hull West Midlands 89 2 BNS, formerly KASSAM AMARSHI & SOIVS LID of Masaka.

\$"'}--tr

Pur4 whose evidence was received by court via a video aII refuted the defence claims, confirming that his father from whom the 2nd defendant purported to have received the said powers of attorney had died in 1969.

He became the director and subsequently the sole surviving director after the death of the other directors. His father could not therefore have signed the powers of attorney as a dead man. This was confirmed in the report of Pura the hand writing expert, that the signature appearing on the deed as that of Put4's father could not have been his.

It therefore also leaves one wondering that if the 2nd defendant and other defendants were listed as directors of the company as early as 1995 why he deemed it appropriate to secure the powers from the original directors in 2O01.

Put rather differently, if indeed the powers of attorney donated by the original directors in 2001 had been genuine, then it ought to have been the same donors to pass the resolution to dispose of the property.

Pur2 disputed the said notihcation of the change of directors as it was not signed by any of the legrtimate shareholders and directors of thc l"r plaintiff company. He also refuted, rightly so, the aPpointment of the defendants as shareholders or directors since there was no resolution of the company in the registry, to that effect. 15

Furthermore, in the rejoinder by the plaintiff in paragraph 6(d)of rhe plaint, it was argued that clauses 5.2 and 6.3 of th,e sale Agreement, the completion of the sale was conditional upon the defendant getting vacant possession ofthe suit property and no third party claims arising within a period of one year ending 19th June, 2014, which conditions were not met. The plaintiff therefore claimed that as such therefore not only was the sa.le transaction fraudulent but also incomplete. I could not agree more. 20

It was the 1'1 defendant's duty to carry out prior search and thorough investigations, to scrutinize the documents presented to him by the defendants and estabtish who the actual owners of the suit property or the company itself were, specifically after knowing that it was ^a family company. 25

Had he conducted a physical search of the premises, he would have discovered the truth since at the time ofthe transaction in 2013, the tenants ofthe plaintiff company were in occupation aJId remitting rent to the company through its agents.

credible evidence was led by the plaintiff to prove t]nat WADA wood.s Ltd. were in quiet and uninterrupted occupation of the premises and had been in such occupation since 20 1 1, paying

\$'I-'l"!t

rent to the agent of the plaintiff company. This was before the 1st defendant had even thought about purchasing the property.

He however never took the trouble to obtain vacant possession, as per the terms of the sale agreement. He had full access to the DAPCB, the company registry and the Land offices, and at all material times had full access to the services of his counsel. He therefore had constructive

knowledge of the true ownership of the company, its family setting and the ownership and occupation of the suit property.

It is trite that a person who purchases an estate which he knows to be in occupation of another person other than the vendor is nol a bona fide purchaser for value without notice of the fraud if he/she fails to make inquiries before such purchase is made.

Thus whether or not there was fraud and whether or not a party was a bonafide purchaser for value without notice the question that a court would poise is whether the defendant honestly intended to purchase the suit property and did not intend to acquire it wrongfully. (Darrld sena,k(r Nallln,o. us Rebecca llf,usoke SCCII /Vo. 12 ol 79afl.

Ifthe 1"t defendant had taken enough trouble, he would have established that the annual returns for the Period ending 22nd February, 2013 revealed that the directors and shareholders ofthe plaintiff were still the same as originally hled. 15

There was enough information and such circumstantial evidence sufficient to raise the red flag, which ought to have put him on notice of the fraudulent intentions of the defendants to permanently deprive the company of its property, using the fake documents.

In Vlao Energy Ugonda Ltd vs Lgd,la KlsltI.t CACA IW. I93 ol 2013, court while laying emphasis on the need for thorough investigation rejected the argument that a certificate of title was enough to establish ownership, where there was circumstantial evidence that should have put the defendant on notice requiring him to go beyond thc certificate of title.

ln Ugo.'nd.a Posts and Telecotnrnunlcatlons us Abra.ho,m Klt.tnba SCCA o. 96 of l99S), such failurc to make reasonable inquiries or ignorance or negligence was held to form particulars of the offence of fraud. 25

Irraud is dcfincd as act of dishoncsty or an intcntional perversion of truth for the purposc of inducing another in reliance upon it, to part with some valuable thing belonging to him or her or

to surrender.(Ref Ka.try)alo,. Bottlers Ltd. vs, Ddms.nta.co M Ltd SCCA Jyo. 2 oJ 1992.); F. I. K Zaabwe vs Orient Bc;rk qnd. 5 others SCCA iVo. 4 oJ 2OO2) 30

12 J",t

It is such grotesque monster that courts should hound it wherever it rears its head and wherever it seeks to take cover behind any legislation. It unravels everything and vitiates all transactions. (Fam International Ltd and Ahmad Farah vs Mohamed El Fith [1994]KARL 307).

$\mathsf{S}$

It was not enough for the 1st defendant to challenge the management contract and leave out the authenticity of the powers of attorney in December, 2013. The omission to challenge those powers and the annual returns of 2013 could only mean that in 2013, the company was in reality still in control.

**Pw2** against whom several acts of fraud were raised by the $1^{st}$ defendant, was not party to the suit. He was an agent of the plaintiff and as a holder of powers of attorney merely acted on 10 instructions of his principal. The 1st defendant therefore had no cause of action against him and could not blame him for his own folly.

The 1^st defendant, just like the rest of the defendants failed to turn up in court to substantiate or provide proof to any of the allegations made by the plaintiff, thus making it appear that all claims perceived against the plaintiff and its agents were abandoned.

- 15 There is nothing on record to show that there had been any sale or transfer of that company to the defendants by the members of the family of the plaintiff company. Since therefore the defendants did not seek prior consent of the plaintiff to sell off the property the contract of sale between the 1^st defendant and the rest of the defendants is declared null and void. - The defendants had no legal interest in the company and its property, be it as shareholders, 20 directors or attorney and therefore lacked the capacity to commit the company in any transaction. Accordingly, the resolutions and company forms were unlawfully executed by the defendants.

That therefore fully resolves *issues No. 1, and 2.*

### Issue No. 3: Whether the power of attorney purportedly signed by the plaintiff appointing the $2^{nd}$ defendant as the plaintiff's attorney was fraudulent and/or unlawful. 25

This has been answered in part. As earlier noted, the 2^nd defendant obtained power of attorney signed by Abdulali Kassam Amarshi dated 17^th January, 2001 and registered with the Registrar of documents under Instrument No. 9637, purportedly appointing him as attorney of the plaintiff.

The plaintiff led proof however that the instrument alleged to have been signed by the father of

30 Pw4 had been dead since 14^th May, 1969 before the Asians were expelled from Uganda. Both the original and photocopies of the death certificate were tendered in court as PE20.

Who is

As noted earlier, the signature appearing on the instrument were examined by the handwriting expert, Mr. Sebuwuufu Erisa who testified as Par3. The findings in his report were dated 1lth April, 2014 PE 27, ar:.d PE 22 dated 17ih November 2015 which were not challenged by the 2'd defendant.

5 Such was proofthat the powers ofattorney purportedly issued and relied on by the 2nd defendant to transfer the suit property to the 1st defendant had been forged, rendering the entire transaction fraudulent.

That also therefore addresses lssue.lVo.3.

### Renedles:

## 10 Generq.l d.qlmgges:

Its trite law that, that damages are dircct and probable conscquence of the act complained of, also noted in thc case of Kanpa.lo. Dlsttlct Land Board. a td. Gcorge Mlt(Ia(t Vs Ve,.d'trslo Barnwcgq,^o CA No. 2 ol 2OO7. Such may be loss of profit, physical inconvenience, mental distrcss, pain and suffering, (See qlso Asstt (U) Vs ltallo,,r Asph(rult & Hq:Ulo.gc & Anor HCCS No. 7291 of 1999 at

#### 15 poge 5),

It is also a settled position of the law that the award of general damages is in the discretion of court and is always as the law will presume to be the natural consequence of the defendant's act or omission.

The object of an award of damages is to givc the plaintiff compensation for thc damage, Ioss or injury he or she has suffered. (See: . Fledrlclc Nsu,bug(t Vs AtAorneg Gencrsl S. C. C.i. No, a of 1999).

Therefore, in the circumstances oi the quantum of damages courts are mainly guided by the value of the subject matter, the economic inconvenicnce that the party was put through at the instance of the opposite party and the nature and event of the breach.

A party is etigible for general damages where loss and inconvenience has been suffered due to the wrongful act of the defcndant. Ile/she must be put in the position he or she would have been in had he or she not suffered the wrong; and must lead evidencc or give an indication what damagcs should be awarded on inquiry as the quantum. (Ongon Vs. Ac (1979) HCB 267, ctted. W court ln Kamuglra Vs Nollonal Houslng & Co4st.uctloa Co. CS..iIo. 127 oJ 2OO9)

Accordingly, the following orders/ declarations are made

a) The platntttf contpa g ls the rlghtful owner of the s'utt properag cotnprlsed tn plot 774 qnd 776 Seuenth Street, Industrlal Area, Ko,rnpalrr LRV 33O, Follo 8;


- b) The $2^{nd} \cdot 5^{th}$ defendants had no interest in, were not directors or shareholders in the plaintiff company and therefore had no valid authority to act on behalf of the surviving director or deal with any company affairs and/or its properties, including the suit property: - c) An order issues accordingly, nullifying all the dealings actions, resolutions and documents made by the $2^{nd}$ -5^th defendants or any one or more of them on behalf of the plaintiffs. - d) A consequential order issues directing the Registrar of titles to cancel the Certificate of title issued on the 31^st May, 2013 under instrument No. 481124 in the names of the $1^{st}$ defendant in respect of the suit land; - e) A consequential order issues directing the Registrar of companies to expunge from the company file of the $1^st$ plaintiff all the company forms, resolutions and other documents purported to have been made or filed by the defendants or any one or more of them; and accordingly, the plaintiff company to be restored to its current status/ownership. - f) a permanent injunction is granted to restrain the $2^{nd}$ -5^th defendants from holding out to be shareholders , directors or other officials $% \mathcal{L}_{\mathcal{A}}$ of the $1^{st}$ plaintiff; - g) General damages of Ugx 150,000,000/= (Uganda shillings one hundred and fifty million only) with interest payable at court rate from the date of judgment until payment in full. - h) costs of the suit, to be paid by the $2^{nd}$ -5^th defendants.

Alexandra Nkong

Judge

$\mathsf{S}$

35 12^th April, 2022

Defuerd by sail<br>Claboly<br>Joly 2022