[2020] UGSC 43

## THE REPUBLIC OF UGANDA

# IN THE SUPREME COURT OF UGANDA AT KAMPALA

## [CORAM: TIBATEMWA-EKIRIKUBINZA; MUGAMBA; BUTEERA; TUHAISE; CHIBITA, JJSC

$\mathsf{S}$

### CIVIL APPEAL No.19 OF 2018

#### **BETWEEN**

# SAUL KISIRIBOMBO RUMANDA :::::::::::::::::::::::::::::::::::

#### AND

- **EMMY TUMWINE** 1. - BETTY NYAKATUKURA $2.$ - **JOVIA KYOMUGISHA** $3.$ - **KAMUGISHA GEOFREY** $4.$ - **ALICE MIREMBE** 5. - HARRIET KIRUNGI 6. - **DENNIS TUMWESIGYE** $7.$

[An appeal from the decision of the Court of Appeal at Kampala before Hon. Justices: Obura, Musota and Madrama, JJA in Civil Appeal No. 53 of 2017 dated 14^th August 2018.]

### **Representation:**

The appellant was represented by Mr. Bill Mamawi of M/S Greystone 30 & Co. Advocates while the $1^{st}$ respondent was represented by Mr. Edison Karuhanga and Ms. Akantorana Kobusingye all of M/S Kampala Associated Advocates. The 2^nd-7^th respondents were represented by Mr. Alex Tuhimbise of $M/S$ Tuhimbise & Co. Advocates.

**::::::::::::::::::RESPONDENTS**

レイモ

#### JUDGMENT OF PROF. TIBATEMWA-EKIRIKUBINZA, JSC. $\overline{5}$

This is a second appeal arising from the Judgment of the Court of Appeal. The background to this appeal is that in 2010 Emmy Tumwine (the 1^st respondent), a son to the deceased John Reuben Nyakatukura, sued the Administrator General in the High Court for mismanagement of his father's estate. Emmy Tumwine prayed for general and exemplary damages.

By way of amended plaint, on 21^st February 2014, Saul Kisiribombo (the appellant) was added as a $2^{nd}$ defendant in an action for trespass to land comprised in LRV 990 Folio 15 Kashari Block 1 Plot 26 (the suit land). Furthermore, Emmy Tumwine added the 2^nd- 7^th respondents to the suit as coplaintiffs since they were also beneficiaries to the estate of the late John Reuben Nyakatukura.

1976, the Administrator General had In obtained $\mathbf{a}$ management order over the deceased's estate. The deceased 20 had since 1972 been declared as a missing person.

It was contended by the respondents that the Administrator General only became an Administrator of the estate when Letters of Administration over the said estate were granted to him on 25^th July 1977. Subsequently, on 30^th January 1987, Violet Nyakatura, widow to the late John Reuben and now deceased, was also granted Letters of Administration over the same estate.

$\overline{2}$

Vit

It is on record that on 26^th November 1986, Saul Kisiribombo $\mathsf{S}$ (appellant) purchased part of the suit land from Violet Nyakatukura. The respondents contended that the land Kisiribombo purchased belonged to the deceased.

Prior to the grant of Letters of Administration to the deceased widow, she sold part of the suit land measuring 4.8 hectares to 10 Saul Kisiribombo (the appellant) who effected registration onto the certificate of title as owner in 1989 and started construction works in 2013.

On 15^th December 1986, Emmy Tumwine together with Betty Nyakatukura ( $2^{nd}$ respondent) lodged a caveat on the suit land. 15 Subsequently, in 1988 a notice for removal of the caveat was issued to Tumwine and Betty. In response to the said notice, the duo filed an application in December 1988 to delay removal of the caveat.

Later on, in 2010, a suit was filed by the 1^st respondent in the 20 High Court of Uganda (family division) against both the Administrator General and Saul Kisiribombo (appellant).

The High Court held in favour of the 1^st-8^th respondents with orders inter alia that the suit land held by Saul Kisiribombo be handed back to the estate of the late John Reuben Nyakatukura. The court also ordered the Administrator General to pay compensation to the $1^{st}$ -8^th respondents for mismanaging the estate.

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$\overline{3}$

Lit

Dissatisfied with the High Court judgment, Saul Kisiribombo $\mathsf{S}$ appealed to the Court of Appeal on grounds, inter alia, that the trial Judge erred in not finding that the respondents' action was barred by the Limitation Act. Furthermore, that the trial Judge erred in holding that the suit land was part of the deceased's estate. On the other hand, the 1^st-8^th respondents cross-10 appealed on the ground that the learned Judge erred in law and fact when she held that the appellant acquired the land fraudulently and yet at the same time allowed him to benefit from the transaction by holding that a wife to an intestate owns 50% of the estate and could therefore sell off her share. 15

Counsel for the $1^{st}$ - $8^{th}$ respondents argued that because the sale of the land was illegal and fraudulent, the appellant should not have been allowed by the trial Judge to benefit from the illegality by retaining 4.8 hectares of the estate. The Court of Appeal, inter alia, held that:

A defendant who raises a defence of limitation under $(i)$ Section 19 (1) of the Limitation Act must demonstrate that he is a bonafide purchaser for value without notice of any fraud. That in the present case, the appellant purported to buy land from Violet Nyakatukura who was not a registered proprietor. He therefore had constructive notice that there could be other interests other than that of Violet whose name was not on the certificate of title. To make matters worse, that the appellant was subsequently registered on the title through unlawful Letters of Administration obtained by Violet which were for the sole purpose of getting the appellant registered on the title.

$\overline{4}$

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- $(ii)$ That according to Section 19 of the Limitation Act, the limitation period under Section 5 of the Limitation Act does not apply to suits against third parties who are bonafide purchasers for value without notice of fraud. That the suit was not time barred because the limitation period did not apply by virtue of Section 19 $(1)$ (a) of the Limitation Act. Therefore, the beneficiaries were entitled to follow the assets into the hands of the appellant who had wrongfully received trust property into his possession. - 15

$\mathsf{S}$

(iii) That the appellant did not qualify to be considered as a bonafide purchaser for value without knowledge of defect in title.

In allowing the respondents' cross-appeal with costs, the Court of Appeal held that the holding of the trial Court that the widow passed 50% of the estate property which belonged to her in her 20 own individual right cannot stand and was set aside because the Judge applied the Land Act, a statute which had not been yet passed into law in 1986 when the sale of land to Kisiribombo took place. That following the legal principle which bars retrospective application of statutes, the Judge could not apply 25 the Land Act to the 1986 transaction.

In the result, Saul Kisiribombo's appeal was dismissed with costs both in the Court of Appeal as well as in the High Court.

Being dissatisfied with the decision of the Court of Appeal, Kisiribombo further appealed to this Court on the following 30 grounds:

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- 1. The learned Justices of the Court of Appeal erred in law when they held that the respondents were beneficiaries under a trust envisaged under Section 19 (1) of the Limitation Act. - 2. The learned Justices of Appeal erred in law when they held that the respondents' suit against the appellant was not barred by limitation. - 3. The learned Justices of the Court of Appeal erred in law when they held that the defendant who raises a defence of limitation under Section 19 (1) must demonstrate that he is a bonafide purchaser for value without notice. - 4. The learned Justices of the Court of Appeal erred in 20 law when they held that the land comprised in LRV 990 Folio 15 Kashari Block 1. Plot 26 forms part of the estate of the late John Reuben Nyakatukura when the same had already been transferred to the appellant. - 25

$\overline{5}$

5. The learned Justices of the Court of Appeal erred in law when they failed to evaluate the evidence on record when they held that there was fraudulent breach of trust by the trustee thereby coming to a wrong decision.

### **Prayers:**

The appellant prays that:

The appeal be allowed, judgment and orders of the $(i)$ learned justices of the Court of Appeal be set aside.

ここと

The respondents be condemned to costs in this Court $(ii)$ as well as in the courts below.

### **Appellant's Submissions**

The appellant formulated the following six issues arising out of the grounds of appeal:

$\mathsf{S}$

- Whether the respondents are beneficiaries under trust $(i)$ envisaged under Section 19 (1) of the Limitation Act. - Whether the respondents' suit against the appellant $(ii)$ was barred by limitation - Whether a defendant who raises the defence of $(iii)$ limitation under Section 19 (1) of the Limitation Act must demonstrate that he is a bonafide purchaser for value without notice of fraud. - Whether the land comprised in LRV 990 Folio 15 $(iv)$ Kashari Block 1 Plot 26 formed part of the estate of the late John Reuben Nyakatukura. - Whether there was fraudulent breach of trust by the $(v)$ trustee. - What remedies are available. $(vi)$

At the hearing Counsel for the appellant abandoned ground 1 of the appeal and argued the rest of the grounds and issues arising therefrom as one ground.

$\overline{7}$

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- The appellant faulted the learned Justices of Appeal for holding $5$ that the respondents' suit against the appellant was not barred by the Limitation Act because the limitation period does not run against the beneficiaries. - The appellant contends that the suit for recovery of land if any was supposed to be against Violet Nyakatukura (deceased $10$ widow) who was the trustee and not him. That the respondents only chose to file a suit after her demise. Counsel referred to the authority of **Yoswa Kityo vs. Kirya Kaddu**¹ where Karokora J held that no action in respect of an estate could be entertained after the expiration of 12 years. Even if there was a trust where 15 the defendant had been a trustee for the benefit of the plaintiff ... the action of the plaintiff was statute barred.

Another argument advanced by the appellant was that the respondents were aware of his registration on to the certificate of title and therefore the limitation period in Section 5 of the **Limitation Act** applied. The Section provides that:

"No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or her or, if it first accrued to some person through whom he or she claims, to that person."

¹ (1982) HCB 58.

$\overline{25}$

That in this case, the respondents got to know of the appellant's $\mathsf{S}$ purchase of the land in question in 1986. That a period of 27 years had lapsed before the suit for recovery of land against the appellant was instituted in the High Court. The appellant demonstrated the knowledge of the purchase of the land by referring to the application lodged by the respondents to revoke $10$ the grant of Letters of Administration to Violet Nyakatukura. That in the affidavit supporting the motion for revocation, Emmy Tumwine (the 1^st respondent) stated that the widow had fraudulently sold the suit property to appellant. the Furthermore, the appellant contends that by the time the suit 15 was filed against him in the High Court he had been in occupation of the land for over 30 years.

Counsel also argued that the Court of Appeal wrongly attributed fraud to the appellant who was a third party. That the proper trustee in the circumstances of this case was the Administrator 20 General. The appellant did not purchase from the Administrator General but Violet Nyakatukura. That therefore, there was no fraud that could be attributed to the appellant who was a third party in the transaction.

It was the contention of the appellant's counsel that to uphold 25 the finding by the Court of Appeal which is to the effect that mere knowledge of breach of trust by the respondents does not bring the limitation period into operation would be opening a flood gate for litigants who will willfully and with full knowledge

LITE

sit on their rights for long periods and then wake up all of a $5$ sudden to claim property. Counsel submitted that this would defeat the doctrine of laches and would encourage indolent litigants who would find comfort in knowing that even if they sat on their rights, they would still get a remedy in court.

#### Respondents' reply $10$

$15$

Just like counsel for the appellant, both the respondents' counsel replied to the grounds of appeal as one ground. Although the $1^{st}$ respondent was represented by a different lawyer from that of the $2^{nd}$ - 7th respondents, the arguments raised are essentially similar. I will therefore address the arguments together.

The 1^st respondent reiterated the arguments raised in the Court of Appeal and averred that the learned Justices of Appeal were right in holding that the suit was not barred by time.

- The respondents contend that the appellant erroneously $20$ interpreted Section 19 of the Limitation Act and argued that the said Section does not apply to the facts of the present case because there was no trust created. The respondents contend that a trust was created by virtue of Section 25 of the **Succession Act** which provides as follows: - "All property in an intestate estate devolves upon the personal representative of the deceased upon trust for those persons entitled to the property under this Act."

- Furthermore, Counsel also relied on the authority of G. L. Baker $\mathsf{S}$ vs. Medway Building and supplies Ltd² which is to the effect that trust property can be traced to third parties and as long as there was fraud or fraudulent breach of trust, the period of Limitation does not apply. - Counsel thus agreed with the finding of the Court of Appeal that $10$ the suit land was a trust under the administration of the Administrator General. Furthermore, counsel submitted that the Court of Appeal rightly found that the suit for recovery of the land was saved under Section 19 of the Limitation Act because there was fraudulent breach of trust to which the 15 Administrator General as trustee was privy. He added that such fraud was proved against the appellant as a third party. In support of this submission, counsel referred to Halsburys Laws of England 4^th edition Volume 48, paragraph 593 which states that: 20

"Where property is subject to a trust, the trust follows the legal estate wherever it goes, unless it comes into the hands of a purchaser for valuable consideration without notice."

The respondents' counsel argued that given the principles governing trust property, the burden was on the appellant to prove that he was a bonafide purchaser for value without notice but observed that the lower courts had found that he was not. Counsel submitted that where the appellant fails to discharge

^&lt;sup>2</sup> (1958) 2 All. ER 532.

this burden, then the defence of Limitation is not available to him. Counsel argued that even if the appellant's submission $\mathsf{S}$ that he purchased from Violet Nyakatukura and not the Administrator General was to be taken as true, he would still be liable because he purchased from a trustee who had no capacity to sell. Counsel contended that the transfer of land to the appellant in 1986 was done before Violet had obtained Letters 10 of Administration and as such Violet could not pass proper title to the appellant. Counsel added that the appellant received the property with notice that it belonged to the beneficiaries and as such he was a constructive trustee.

Counsel further argued that knowledge of fraud is not a requirement under Section 19 of the Limitation Act. Therefore, the assertion by the appellant that the $1^{st}$ respondent knew about the sale of the suit land to the appellant in 1988 does not in any way bar the respondents from bringing the suit.

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$\hat{\mathcal{L}}$

In response to the appellant's reliance on the doctrine of laches and submission on the floodgates argument, the respondents argued that since the doctrine of laches is based on equity, the appellant ought to invoke it only if he has clean hands. He submitted that the respondents relied on the authority of Stanbic Bank Uganda Ltd vs. Uganda Crocs Limited³ which cited the equity maxim that he who comes to equity must come with clean hands and argued that the appellant did not have

^&lt;sup>3</sup> SCCA No.4 of 2004.

clean hands having been a purchaser of land from a trustee who $\mathsf{S}$ breached her fiduciary obligations and had knowledge of the breach.

The respondents prayed that the appeal be dismissed with costs.

## Rejoinder $10$

No rejoinder was made.

## Court's consideration

The central question in the instant appeal is: whether a claim for trust property can be pursued against a third party outside the prescribed limitation period in the Limitation Act. In answering the question, interpretation of Section 19 of the **Limitation Act** is critical.

**Section 19** of the **Limitation Act** provides as follows:

Limitation of actions in respect of trust property.

(1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action—

(a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or

(b) to recover from the trustee trust property or the proceeds of the trust property in the possession of the trustee, or previously received by the trustee and converted to his or her use.

$(2)$ Subject to subsection $(1)$ , an action by a beneficiary to recover trust property or in respect of any breach of

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trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued; but the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property until the interest fell into possession.

(3) No beneficiary as against whom there would be a good defence under this Act shall derive any greater or other benefit from the judgment or order obtained by any other beneficiary than he or she could have obtained if he or she had brought the action and this Act had been pleaded in defence. (My emphasis)

Whereas the appellant claims that the respondents' suit was barred by the Limitation statute, the respondents claim it was not, because they are beneficiaries of trust property who are not barred by limitation periods according to **Section 19 (supra).**

In order to understand Section 19, it is important to appreciate who the proper claimants would be, who the appropriate defendant(s) would be and the rationale its behind promulgation.

A claimant under Section 19 is a beneficiary under a trust. According to Section 1 (r) of the Trustees Act, a "trust" and "trustee" are interpreted to extend to implied and constructive trusts, and to cases where the trustee has a beneficial interest in the trust property, and to the duties incidental to the office of a personal representative, and "trustee" where the context

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admits, includes a personal representative, and "new trustee" $\mathsf{S}$ includes an additional trustee.

In cases of intestate estates, a personal representative holds the assets of the intestate in trust for the beneficiaries. According (r) of the Succession Act, a personal to Section 1 representative means the person appointed by law to administer the estate or any part of the estate of a deceased person. Therefore, in the instant case, the Administrator General who was granted the Letters of Administration to administer the late John Reuben Nyakatukura's estate is a trustee and held all assets of the estate in trust for the benefit of the beneficiaries 15 who include the children of the deceased.

Having understood who the proper claimant is under Section 19, it is important to discover who the proper defendant is. This is the bone of contention in the instant case. The respondents argue that the appellant was a proper defendant whereas the appellant argues he was an innocent third party having purchased part of the suit land from the mother of the respondents (Violet Nyakatukura). The appellant in essence argued that Section 19 provides for actions against a trustee who breached their duty not a third party like himself.

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$\mathcal{L}^{-1}$

The Court of Appeal in addressing the issue as to whether a third party who acquired property on account of fraud or fraudulent breach of trust by a trustee can be sued without regard to the law of limitation held as follows:

- "We can conclude from the wording of Section 19 (1) (a) of the $\mathsf{S}$ Limitation Act that the Section saves an action by a beneficiary under a trust. It further qualifies the action to be in respect of any fraud or fraudulent breach of trust to which the trustee was a *party or privy..."* - The above holding reveals the Court of Appeal's interpretation $10$ of Section 19. In essence, the Court stated that Section 19 applies to both trustees and third parties. I am in agreement with this interpretation. The presence of Subsection (b) which specifically deals with trust property in the possession of the trustee makes one believe that Subsection (a) deals not only 15 with the trustee but also any person claiming through him.

The respondents relied on the authority of G. L. Baker vs. Medway Building and supplies Ltd (supra) to support their case. The brief facts of the case are that the plaintiff company (G. L. Baker) employed Titley as its auditor. Titley was also a director and accountant for the defendant company (Medway Building and supplies Ltd). The plaintiff company gave Titley a sum of 80,000 pounds to be held in trust. Titley instead fraudulently paid 6,161 pounds of the money he was entrusted to the defendant company. Titley was sued for the fraud and ordered to refund the money which he failed to do. Upon this failure, the plaintiff company sought to recover from the defendant company the sums which it had admittedly received from Titley.

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- The questions resolved by the court of first instance were: $\mathsf{S}$ - Whether the plaintiff company can recover from a third $(i)$ party. - Whether the defendant company was in a position to $(ii)$ rely on the Limitation Act to defeat the Plaintiff's claim. - The court (Danckwerts J) held as follows: 10

$\gamma_{\chi}^{-1}$

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(i)No limitation period was applicable as the proceedings against the defendant company was because of Titley's fraudulent payments and the action was in respect of a fraud or fraudulent breach of trust to which the trustee was a party or privy within Section 19 (1) (a) of the 1939 England Limitation Act.

(ii) Assuming, however, that the six year Limitation period enacted by S.19 (2) of the 1939 Limitation Act were the relevant limitation period, nevertheless, the commencement of the period was postponed under S.26 (a) as the action was based on the fraud of Titley through whom Medway Ltd claimed until the discovery of the fraud within six years before the action was begun.

In reaching the above conclusions, Danckwerts J applied the following ratio by Lord Denning in the case of Nelson vs. Larholt

[1947] 2 ALLER 751: "... money taken from the rightful owner, $25$ or, indeed, from the beneficial owner, without his authority can be recovered from any person into whose hands it can be traced unless it reaches one who receives it in good faith and for value

LIE

without notice of the want of authority." Thus, the Judge held $\mathsf{S}$ that in order to defeat G. L. Baker's action, the defendant company had the onus of establishing that it received the money in good faith and for value without notice of the want of authority. Although the defendant company had innocently received the money from Titley, the court held it had not $10$ furnished consideration for it. Therefore, the action could not be defeated.

The implication of the above persuasive English authority is that trust property can be traced in the hands of a third party who is not a bonafide purchaser for value without notice.

- Another authority relied on by the respondents is the English case of Williams vs. Central Bank of Nigeria⁴. I find that the authority is not to their benefit although it is instructive on the subject matter at hand. - The brief facts of the case are that Williams instituted a suit $20$ against the respondent Bank in 2014 alleging that he was a victim of a fraud, dating to 1986, in which he was induced to act as a guarantor of a fraudulent transaction to import food into Nigeria. Under this transaction, Williams paid \$6,520,190 to Mr. Gale (an English solicitor) that was to be held in trust 25 pending the release of certain funds in Nigeria. It was alleged that Gale, in fraudulent breach of trust (knowing that the funds had not been released to Williams in Nigeria), transferred

LTE

^&lt;sup>4</sup> [2014] UK (Supreme Court) 10.

\$6,020,190 to the Central Bank of Nigeria and personally $\mathsf{S}$ retained the remaining \$500,000.

Williams brought a claim against the Bank on the basis that the Bank was a constructive trustee, and that it had dishonestly assisted Gale's fraud by knowingly receiving funds in breach of trust. Williams also brought a claim seeking to trace the 10 misappropriated sums into the Bank's assets. The case was based on Section 21 of the 1980 Limitation Act of England which is in pari materia with Section 19 of Uganda's Limitation Act.

The High Court held that although the Central Bank could not 15 be described as a trustee, Section 21 (1) (a) was not confined to actions against the trustee. It extended to an action against the Bank who participated in the trustee's fraud. The Court of Appeal agreed with the High Court and held that a party who is not a trustee but participated in the trustee's fraud can be sued. 20

The above holdings were overturned by the Supreme Court. One of the issues considered by the Court was:

whether an action "in respect of" any fraud or fraudulent $i.$ breach of trust under section $21(1)$ (a) to which the trustee was party or privy, includes an action brought against a party which is not a trustee (such as the Bank)?

The Supreme Court drew a narrow interpretation of section $21(1)$ (a) and held that the said section has nothing to do with

third parties. It only applied to actions against "true trustees" $\mathsf{S}$ in respect of a fraud or fraudulent breach of trust (i.e. Gale-the solicitor). It is concerned with actions against trustees on account of their own fraud or fraudulent breach of trust. That it would not cover the Bank. Lord Sumption (who authored the lead judgment) noted that Section 21(1) applied only to claims 10 against express or *defacto* trustees and not to claims against constructive trustees whose liability came into being as a result of the transaction impeached.

However the Lord Justice went on to hold that nevertheless the practical significant sole obligation is for the third party to 15 restore the assets immediately; but this also does not make him a trustee.

Notwithstanding the above conclusion, Lord Sumption argued that, the linguistic construction of the phrase "sued in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy" which appears in Section 21 seems to offer the interpretation that a stranger whose interest is hinged to a trustee who has breached the trust can be sued even though they are not a trustee in the true sense.

I note that one of the reasons advanced by Lord Sumption as to 25 why Section 21 did not apply to non-trustees was that:-

"The liability of a non-trustee/ stranger to the trust was independent of any fraud on the part of the trustee." Lord Sumption explained that "the stranger's liability arises by virtue of knowingly receiving trust property. [That] knowing assisters $\mathsf{S}$ are liable on account of their own dishonesty irrespective of the dishonesty of the trustees. The liability of a knowing assister has always depended on unconscionability of his conduct ... In practice, the trustee usually is dishonest and the alleged constructive trustee's conscience is affected because he has 10 participated in the scheme with knowledge of that fact."

$\pi^{\mu}$

$\mathcal{F}^{\mathcal{A}}_{\mathcal{A}}$

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Thus, the Court concluded that since the Central Bank of Nigeria was not a trustee, the period of Limitation applied to the claims brought by Dr. Williams. The Limitation period remained a good defence to a non-trustee who does not have knowledge of the fraudulent breach of trust.

I note from the above persuasive English authorities of Williams vs. Central Bank of Nigeria (supra) and G. L. Baker vs. Medway Building and supplies Ltd (supra) that, whereas in the earlier case the House of Lords strictly interpreted the 20 provisions waiving the limitation periods to apply to only trustees and not third parties, the latter case held that the waiver extended to third parties.

However, both authorities come to the same conclusion that where a third party knowingly receives property on account of fraud or fraudulent breach of trust by a trustee, then that property can be claimed by a beneficiary.

The question which then arises is: whether the appellant (a third party) claiming through the widow (a trustee), is a bonafide

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*purchaser for value without notice of fraud or fraudulent breach* $\mathsf{S}$ of trust.

The Court of Appeal in dealing with the issue as to whether the appellant was a bonafide purchaser for value without notice held as follows:

"The appellant knew that Violate Nyakatukura was a widow and 10 children of the deceased were residing on the land. He therefore knew the prior equitable interests of the children of the intestate. *The appellant knew about the steps leading to transfer of the title* into his names. He was no stranger to the dealings by which he *was registered on the title deed of the suit property ... It follows* 15 that the appellant was not a bonafide purchaser for value without *notice of fraud."*

Indeed, the evidence on record indicates that the appellant knew (had knowledge) at the time of purchasing the suit property from the widow that she had no Letters of $20$ Administration which would have given her capacity to deal with the estate. Having realized this fact, the appellant assisted the widow in obtaining Letters of Administration to validate the earlier sale well aware that the Administrator General had long obtained Letters of Administration over the said estate.

Furthermore, the appellant had a duty to conduct due diligence over the property he was purchasing. Since the suit property was part of the deceased's estate, it was incumbent on the appellant to find out if the land was subject to other

しこし

beneficiaries interests. The need for thorough investigations $\mathsf{S}$ before purchase of land was pointed out by this Court in the decision of Fredrick J. K. Zaabwe vs. Orient Bank Ltd⁵.

It is also a fact on record that the caveat which had been lodged by the $1^{st}$ and $2^{nd}$ respondents to stop any person from dealing with the suit land was irregularly removed to facilitate the registration of the appellant as a proprietor. On the premise of this evidence, the appellant does not qualify as a bonafide purchaser without notice of fraud. I therefore find no fault with the Court of Appeal's finding and conclusion on this issue.

- Without prejudice to the foregoing, I must address the argument 15 raised by the appellant which is to the effect that the respondent beneficiaries came to know that he had purchased the suit land in 1986 but they nevertheless sat on their rights to bring a claim which is now defeated by laches. - Even if the appellant's argument was taken to be correct, the 20 result would not be different. Section 25 of the Limitation Act provides for instances where the limitation period can be postponed. The Section provides in part as follows:

Where, in the case of any action for which a period of limitation is prescribed by this Act,

... the period of limitation shall not begin to run until the plaintiff has discovered the fraud or could with reasonable diligence have discovered it; but nothing in this section shall enable any action to be brought to

Luité

^&lt;sup>5</sup> SCCA No.4 of 2006.

recover, or enforce any charge against, or set aside any transaction affecting, any property which—

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

The appellant argued that the respondents knew that he had purchased the suit land in 1986. Furthermore, that during cross-examination in the trial court, the $1^{st}$ respondent testified that he knew that the widow wanted to transfer the said land to 15 the appellant. Whereas this fact is on record, there is no evidence on record to show that the respondents eventually got to know the actual time when the transfer of the suit land into the appellant's name materialized. The conduct of the widow to sell the suit land is what triggered the respondents to lodge a $20$ caveat in 1986. It is on record that this caveat was irregularly removed to facilitate the appellant's registration. The period when the caveat was removed is not known by the respondents. It cannot therefore be argued that the respondents sat on their rights yet the facts show that they took legal steps to protect 25 their interests. Furthermore, the period of limitation could not start to run until the respondents became aware of the fraudulent transfer of land. If 2010, the year in which the respondents filed the suit in the trial court is taken as the year when the time started running, then the respondents' suit is not 30 time barred. The respondents' claim would still be within the 12

$\sqrt{6}$

$\mathsf{S}$

vears window stipulated in **Section 5** of the **Limitation Act** for $\mathsf{S}$ claims to recover land.

Thus, having reached a finding that Section 19 of the Limitation Act applies to third parties and that the appellant is not a bonafide purchaser without notice of the fraudulent breach of trust, I hold that no limitation period is applicable to the present matter. The origin of the suit against the appellant was hinged on the fraudulent dealings in the land as well as fraudulent breach of trust which the widow through whom the appellant claims was a party or privy.

Arising from my analysis above, I hold that the appeal fails and 15 is accordingly dismissed with costs to the respondents.

Furthermore, the orders as to costs in the lower court as well as the cross-appeal filed in the Court of Appeal are hereby upheld.

#### 20

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#### **Orders of Court**

- 1. Since all the Justices on the panel in this matter are in agreement, this appeal is hereby dismissed with costs to the respondent. - 25 - 2. The costs granted in the Court of Appeal and in the High Court are hereby upheld.

Dated at Kampala this .................................... $\mathsf{S}$

> L'isatenue. PROF. LILLIAN TIBATEMWA-EKIRIKUBINZA JUSTICE OF THE SUPREME COURT.

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# THE REPUBLIC OF UGANDA

## IN THE SUPREME COURT OF UGANDA AT KAMPALA

(Coram: Tibatemwa-Ekirikubinza; Mugamba; Buteera; Tuhaise; Chibita; $JJ. S. C.$

## CIVIL APPEAL NO: 19 OF 2018

#### **BETWEEN**

## SAUL KISIRIBOMBO::::::::::::::::::::::::::::::::::

#### AND

**RESPONDENTS**

**EMMY TUMWINE BETTY NYAKATUKURA JOVIA KYOMUGISHA** KAMUGISHA GEOFREY **ALICE MIREMBE** HARRIET KIRUNGI DENNIS TUMWESIGYE

[An appeal from the decision of the Court of Appeal at Kampala (Hon. Obura, Musota and Madrama, JJA) in Civil

Appeal No. 53 of 2017 dated 14^th August, 2018]

### **JUDGMENT OF CHIBITA, JSC.**

I have had the advantage of reading in draft the judgment prepared by my learned sister, Justice Lillian Tibatemwa-Ekirikubinza, JSC. I agree with her that this appeal should be dismissed. I also agree with the orders she has proposed.

Dated at Kampala this ....................................

ustice Mike J. Chibita JUSTICE OF THE SUPREME COURT

## THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA **AT KAMPALA**

(CORAM: TIBATEMWA-EKIRIKUBINZA, MUGAMBA, BUTEERA, TUHAISE, CHIBITA JJSC)

## CIVIL APPEAL NO19 OF 2018

## **BETWEEN**

SAUL KISIRIBOMBO :::::::::::::::::::::::::::::::::: AND

| 1. EMMY TUMWINE<br>2. BETTY NYAKATUKURU<br>3. JOVIA KYOMUGISHA | <table> </table> | |----------------------------------------------------------------|------------------| | <b>4. ALICE MIREMBE</b> | | | <b>5. HARRIET KIRUNGI</b> | | | <b>6. DENIS TUMWESIGYE</b> | |

[Appeal from the decision of the Court of Appeal at Kampala (Obura, Musota and Madrama, JJA) in Civil Appeal No.53 of 2017 dated 14^th August 2018]

## JUDGMENT OF TUHAISE, JSC.

I have had the benefit of reading in draft the judgment of my learned sister, Justice Lillian Tibatemwa – Ekirikubinza, JSC.

I agree with her analysis of the evidence, decisions and conclusion that this appeal has no merit and should consequently be dismissed with costs.

Dated at Kampala, this $\frac{30^{11}}{20}$ day of $\frac{0.0000}{0.00000}$ day of $\frac{0.00000}{0.000000}$ .

Percy Night Tuhaise

JUSTICE OF THE SUPREME COURT

#### THE REPUBLIC OF UGANDA

## IN THE SUPREME COURT OF UGANDA AT KAMPALA

Coram: (Tibatemwa-Ekirikubinza; Mugamba; Buteera; Tuhaise; Chibita; $JJ. S. C)$

### **CIVIL APPEAL NO.19 OF 2018**

#### **BETWEEN**

### SAUL KISIRIBOMBO RUMANDA :::::::::::::::::::::::::::::::::::

#### AND

- 1. EMMY TUMWINE - 2. BETTY NYAKATUKURA - 3. JOVIA KYOMUGISHA - 4. KAMUGISHA GEOFREY - 5. ALICE MIREMBE - 6. HARRIET KIRUNGI - 7. DENNIS TUMWESIGYE

(An appeal from the decision of the Court of Appeal at Kampala before Hon. Justices: Obura, Musota and Madrama, JJA, in Civil Appeal No. 53 of 2017 dated 14^th August 2018)

**::::::::::::::::::::RESPONDENTS**

#### **JUDGMENT OF BUTEERA, JSC**

I have had the benefit of reading in draft the judgment of my learned sister, Lillian Tibatemwa-Ekirikubinza, JSC.

I agree with her reasoning, analysis and decision that this appeal should be dismissed. I also agree with the orders she has proposed.

**Hon. Justice Richard Buteera** JUSTICE OF THE SUPREME COURT

## THE REPUBLIC OF UGANDA

### IN THE SUPREME COURT OF UGANDA AT KAMPALA

[CORAM: TIBATEMWA-EKIRIKUBINZA, MUGAMBA, BUTEERA, TUHAISE, CHIBITA. JJ. S. C.]

### CIVIL APPEAL NO. 19 OF 2018

#### **BETWEEN**

SAUL KISIRIBOMBO ::::::::::::::::::::::::::::::::::

AND

1. EMMY TUMWINE 2. BETTY NYAKATUKURA 3. JOVIA KYOMUGISHA 4. ALICE MIREMBE 5. HARRIET KIRUNGI

6. DENIS TUMWESIGYE ::::::::::::::::::::::::::::::::::::

(An Appeal from the judgment of the Court of Appeal in Civil Appeal No.53 of 2017 dated 14^th August, 2018 (Obura, Musota and Madrama, JJ. A)

#### **JUDGMENT OF HON. JUSTICE MUGAMBA, JSC**

I have had the benefit of reading in draft the judgment prepared by my learned sister Hon. Justice Lillian Tibatemwa-Ekirikubinza,

JSC. I agree with her reasoning and the orders she proposes.

Dated at Kampala this....................................

## HON. JUSTICE PAUL MUGAMBA JUSTICE OF THE SUPREME COURT