[2001] UGCA 47

#### THE REPUBLIC OF UGANDA

IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

CORAM: HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, JA HON. JUSTICE S. G. ENGWAU, JA. HON. JUSTICE C. N. B. KITUMBA, JA.

#### CIVIL APPEAL NO. 42 OF 2000

ERUKANA KUWE:::::::::::::: **APPELLANT**

#### **VERSUS**

VASHRAMBHAI DAMJI VADHER::::::::::::::::::::::::::::::::::::

### [Appeal from the judgment of the High Court (Byamugisha, J.) dated 17^th March 2000 in H. C. C. S No. 124 of 19961

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# **JUDGMENT OF KITUMBA, JA**

This is an appeal against the Judgment and orders of the High Court whereby the respondent was granted relief against forfeiture.

The facts that lead to this appeal are that the appellant was the registered proprietor of land comprised in Block 29 Plot 123 By a lease agreement dated 15th August 1968, the Mulago. 30 appellant let the suit property to the respondent for a period of 49 years. According to the covenants of the lease agreement, the respondent was to pay a yearly rent of Shs. $600/$ = in arrears. The respondent was not allowed to assign, sublet or part with possession of the property without the written permission of the appellant but permission was not to be unreasonably withheld in case of a respectable and reasonable tenant. The respondent was

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The respondent who was an Asian, was expelled from ugancla in 1972. rhe propertv vested in the Departed Asian Properw Custodian Board. On 1Sth September 1993, the respondent repossessed the properw througn a propertv management companY t(nown as Anglo African Ltd. The resBondent through his agent entered into a one year tenancy agreement with Mumtaz Hassan, PW2, at a monthly rent of shs. 200,000/: ' o11 25th August,lgg5,theappellantgavethetenantonemonth'snoticeto vacate the premises. The tenant who had apparentlY spent some money on renovating the premises with the consent of the respondent's agent, complained. The appellant who had declared himself as the rightful owner of the properw offered him the opportunity to rent the same premises which he readilV accepted' A tenancv agreement was executed between Murntaz Hassan, PW2, and the aPPellant.

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The appellant made an application to the commissioner for Land Registration to note a re-elltrv in the register. However, the commissioner for Land Registration refused. The plaintiff filed ^a suit in the High Court seet(ing a declaration that he had lawfully entered and terminated the lease of the premises comprised in Block 29 Plot 'i23 Mulago. The appellant also sought a permanent injunction to restrain the respondent from evicting the appellant's tenant and an order for the Registrar of Titles to note the appellant's re-entrv and costs of the suit. l0

In his written statement of defence, the respondent claimed that from 1972-1993 he was not supposed to pay rent because the property was in the hands of the Departed Asian Property Custodian Board. The respondent averred that the premises were not in a sorry state as they had been renovated. The respondent filed a counter claim in which he claimed for relief against forfeiture under Section 27 of the Judicature Statute and articles. 26 and 126 of the Constitution. At the trial the following issues were framed.

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- Was there a breach of the existing lease by the defendant. $1.$ - Which covenants were breached. $2.$ - In case of a breach was the plaintiff entitled to a re-entry. $3.$ - Was there a re-entry of the premises in law by the plaintiff. 4. - Whether the defendant is entitled to relief against 5. forfeiture - Reliefs, if any. 6.

On the first issue, the learned trial Judge found that there was a breach of the lease agreement. Regarding the second issue, she found that the following covenants had been breached: Failure to pay annual rent, subletting without the written permission of the lessor and that the premises were not in a good tenantable repair and tidy condition. However, as the property was in the hands of people who were not privy to the agreement, the respondent was not responsible for the last breach. On issue 3, she found that the appellant was not entitled to re-enter on the suit property. With regard to issue 4, she held that the appellant had acquired an equitable interest by his purported entry. She answered issue 5 in the affirmative. She granted the respondents $30 -$

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relief against forfeiture on the grounds that under section 27 of the Judicature Statute the court has wide discretionary powers to grant the relief. Regarding issue 6, the learned trial Judge found that the appellant had for four years received a sum of under roughly Shs. 10 million. She was of the view that such amount would be enough compensation to put him in the position he was before the breaches and to pay costs of the suit.

Dissatisfied with the above decision, the appellant filed an appeal in this Court. The appeal was on four grounds but at the hearing of the appeal counsel dropped grounds 2 and 3. Grounds 1 and 4 which remained read as follows:

Having established that the Respondent breached the $"1.$ terms of the lease by:-

Not paying ground rent in accordance with the terms

of the lease; Not keeping the suit property in good and tenantable repair and in clean and tidy condition;

Subletting the suit property without consent of the appellant, the learned trial Judge erred in law and fact when she decided to grant the Respondent relief against forfeiture.

The learned trial Judge misdirected herself in holding that Section 184 of the Registration of Titles Act was $\Delta$ . inapplicable to the facts of the suit whereas it is."

The respondent filed the following grounds for affirming the learned trial judge's decision namely:

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"1. The Honourable Judge of the High Court exercised a Judicial discretion whether to or not to grant relief of forfeiture to the Respondent, after receiving evidence from both parties and she opted to grant relief against forfeiture to the Respondent and unless the Honourable Judge of the High Court was plainly wrong in her decision (which is denied), an appellate body ought not to interfere in the exercising of that discretion.

## 2. The Honourable Judge of the High Court was fortified in exercising her judicial discretion through S.27 and 35 of $10$ the Judicature Statute (13/96)."

Submitting on ground 1, Mr. Dennis Wamala, learned counsel for the appellant, contended that the learned trial Judge was wrong to grant a relief to the respondent against forfeiture when she had established that there were other breaches of the lease apart from non-payment of rent. Counsel argued that Section 27 of the Judicature Statute provides for relief against forfeiture only for non-payment of rent and not for any other breach of covenants in a lease. He contended that that is the law as stated in $\underline{\mbox{Francis}}$ Butagira V Deborah Namukasa, Supreme Court Civil Appeal No. 6 of 1968 (unreported). He relied also on the Law of Real Property by Meggary and Wade 3^rd Edition p.664-665.

Counsel argued that Articles 26 and 126 of the Constitution were Article 26 of the Constitution not applicable to this case. concerned deprivation of property and article 126 was of a general nature and can not be relied upon for any specific remedy. Section 35 of the Judicature Statute was also of a general

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nature and gives the court wide powers which the court was wrong to rely upon when there is section 27 of the same Act which specifically deals with forfeiture. Counsel criticized the Judge for relying on Hyman and Another V Rose [1912] AC 632. In counsel's view, the case concerned discretionary powers under 14(2) of the English Conveyancing Act 1881 where relief against forfeiture could be granted in certain instances.

Mr. Augustine Musoke Kibuuka, learned counsel for the respondent, submitted to the contrary. He supported the learned trial Judge's decision. He submitted that the law was clear with regard to relief against forfeiture for non-payment of rent as provided by Section 27 of the Judicature Statute. However, there is no statutory law on relief against forfaiture for subletting. The learned trial Judge was right to use equity according to section 35 of the Judicature Statute.

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In her Judgment, the learned trial Judge found that there was breach of the covenant in the lease concerning subletting and non-payment of rent. She also found that the appellant had attempted to enforce his right of re-entry by renting the premises to Hassan, PW2. The Commissioner for Land Registration refused to note the re-entry. Relying on Lugogo Coffee (U) Ltd. V Singo Combined Coffee [1976] HCB 02 the learned trial Judge rightly found that the appellant had an equitable interest in the premises. Re-entry had not been campleted by noting in the register book.

The learned trial Judge considered whether the respondent was entitled to the equitable relief against fasfeiture. She concluded 30

that according to Section 27 of the Judicature Statute she could grant the respondents the relief prayed for. She was of the view that the respondent had made out a case on which she could exercise her discretion. She said as follows:

"In the matter before me, I think, the defendant has made out a case on which the court can exercise its discretion and grant relief against forfeiture. First, the parties agree that the defendant enjoyed the used of the demised property for a limited period of time from 1968 up to 1972 when he was expelled from Uganda. He could not pay the ground rent to the plaintiff. The Asian property Custodian Board whose acts and omissions cannot in all fairness be visited on the defendant. Second the plaintiff as lessor has his interest in reversion and the lease is due to expire in the $\eta$ ar 2017. The defendant has not enjoyed the use of the property he constructed with hard earned savings and therefore the loss of the use of the property first to the custodian board and personal serious cause will plaintiff the to now consequences to him in my view. To that extent the case of Butagira Vs Namukasa (supra) has to be distinguished from Third, the plaintiff has not been the instant case. commensurately and irreparably damaged by the breaches complained of, at least no evidence was adduced to that effect. I am satisfied on the facts and the circumstances of this case that the defendant has made out a case on which the court can exercise its discretion and grant him relief against forfeiture."

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With due respect to the learned trial Judge she misinterpreted section 27 of the Judicature Statute when she held that she could use the section to grant relief against forfeiture for sbreach of other covenants in the lease apart from non-payment of rent. The marginal note of the section is "Relief from forfeiture for non-payment of rent" and the section reads:

"27.(1) Where a lessor is proceeding, by action or otherwise, to enforce a right of re-entry or forfeiture for non-payment of rent, the lessee, his or her executors, administrators or assigns may in the lessor's action or in an action brought by himself or herself apply to the High court for relief.

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(2) The High Court, under subsection (1) of this section, may-(a) grant any relief it considers fit on such terms as to costs, expenses, damages, compensation, penalty or otherwise including the granting of an injunction to restrain any future non-payment of rent as it thinks fit; or"

Section 16 of the Judicature Statute provides for the law to be applied by the High Court. Hence section 16 (2) states:

$(2)$ Subject to the provisions of the Constitution and of this Statute, the jurisdiction of the High Court shall be exercised

in conformity with the written law including any $(a)$ the immediately before force in law commencement of this Statute.

- Subject to any written law and in so far as the $(b)$ written law does not extend or apply, in conformity with - the common law and the doctrines of $(i)$ equity; - $(ii)$ any established and current custom or usage; and - where no express law or rule is applicable to any $(C)$ matter in issue before the High Court, in conformity with the principles of justice, equity *and good conscience.*" (underlining mine)

In my view the above section imposes a duty on the High Court to use equity where there is no written law. Section 35 of the Judicature Statute provides:

**35.** The High Court shall, in the exercise of the jurisdiction vested in it by the Constitution, this Statute or any written law, grant absolutely or on such terms and conditions as it thinks just, all such remedies as any of the parties to a cause or matter is entitled to in respect of any legal or equitable claim properly brought before it, so that as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicities of legal proceedings concerning any of those matters avoided.

When sections 16(2) and 5.35 of the Judicature Statute are read together, one appreciates that the learned-trial Judge's resort to equity in this matter was right though she quoted a wrong

I am therefore unable to appreciate counsel for the section. respondent's complaint that section 35 of the Judicature Statute is in general terms and cannot be used by court to provide any remedy.

Counsel's criticism of the trial judge's reliance on Hyman and Another V Rose (Supra) is well founded. The above authority dealt with forfeiture as provided in Section 14(1) in the English Conveyancing and Property Act, 1881. I have looked at the section and it provides for relief against forfeiture for breaches of covenants in the lease generally. It is not restricted to nonpayment of rent. However, I would like to add that she was right in as far as she followed the reasoning of that authority with regard to section 27 of the Judicature Statute to grant relief against forfeiture for non payment of rent. She observed in that authority how the courts should exercise disrection when the statute allows it. What is stated in that case is not different from our law. I am inclined hold that in the circumstances the trial Judge properly used her discretion.

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It is well established that the Court of Appeal will not interfere with the exercise of the discretion by the trial court unless it is satisfied that the trial court misdirected itself on some matter as a result arrived at a wrong decision, or unless it is manifest from the case a whole that the judge was clearly wrong in the exercise of the discretion and that as a result there has been injustice. See Mbogo & Another V Shah [1968] EA 93. For the foregoing reasons, the ground 1 should fail. Both grounds of affirmation of the judgment succeed.

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I now turn to ground 4 in which counsel complained that the learned trial Judge was wrong to find that section 184 of the Registration of Titles Act did not apply to the facts of the case.

Counsel contended that according to Section 184 of the Registration of Titles Act the respondent could not be allowed to bring an action for ejectment of the appellant from the land where he was a registered proprietor. The lease agreement which was attached to the plaint was an absolute bar to the respondent's action. In support of his submission counsel quoted The Executrix of the Estate of Late Christine Mary Namatovu and Another Noel Grace Shalita Stananzi, Supreme Court Civil Appeal No. 2 of 1996 (unreported). Counsel for the respondent supported the learned trial Judges finding that Section 184 of the Registration of Titles Act did not apply and no certificate of title was produced.

It is appreciated that under the provisions of Section 184 of the Registration of Titles Act, a lessee has no right to bring an action of ejectment against his lessor. See Francis Butagira Vs Deborah Namukasa (Supra). The authority of The Executtrix of the Estate of Late Christine Mary Namatovu and Another V Noel Grace Shalita Stananzi, (supra) which counsel for the appellant has relied upon is distinguishable from the instant appeal. In that case the lessee brought an action in trespass and for the recovery of land against a lessor who had lawfully re-entered the land. In the present case the lease had not yet been voided and the appellant has not physically re-entered the land. The learned trial Judge found that the appellant simply told Hassan, PW2, that he was the rightful owner of the premises and not the respondent.

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The appellant made a tenancy agreement with Hassan. This, in the judge's view, did not amount to physical re-entry. She held that the appellant just took advantage of the situation created by the In my view, the learned trial Judge respondent's agents. considered all the circumstances of the case and properly came to the right conclusion that Section 184 of Titles Act was not applicable. I am unable to fault her on this finding. Ground 4, too, fails.

In the result, I would dismiss the appeal with costs to the $10$ respondent.

Dated at Kampala this 21st day of September, $\ldots 2001$

> $LS$ $GL$ R KITUMBA **IUSTICE OF APPEAL**

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## THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA **HOLDEN AT KAMPALA**

## CORAM: HON. JUSTICE A. E. MPAGI-BAHIGEINE, JA. HON. JUSTICE S. G. ENGWAU, JA. HON. JUSTICE C. N. B KITUMBA, JA.

### 10

## CIVIL APPEAL No. 42 of 2000.

### **BETWEEN**

## ERUKANA KUWE :::::::::::::::::::::::::::::::::::: **AND**

# VASHRAMBHAI DAMJI VADHER::::::::::::::::::::::::::::::::::::

( Appeal from the judgment and order of the High Court (Byamugisha J.) dated 17, 3,2000 from H. C. C. S. No. 124 of 1996)

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## JUDGMENT OF S. G. ENGWAU, J. A.

I have had the benefit of reading a draft judgment of Kitumba, J. A. and I agree with her reasons and orders. I have nothing more useful to add.

21St day of September 2001. Dated at Kampala this ......

> S. G. ENGWAU JUSTICE OF APPEAL.

## THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

**CORAM:** HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, JA. HON. JUSTICE S. G. ENGWAU, JA. HON. JUSTICE C. N. B. KITUMBA, JA

## **CIVIL APPEAL NO.42 OF 2000**

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#### ERUKANA KUWE $\cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cd$ **APPELLANT** VERSUS VASHRAMBHAI DAMJI VADHER ::::::::::::::: **RESPODENT**

# **JUDGEMENT OF A. E. N. MPAGI-BAHIGEINE, JA**

I have read in draft the judgment of Kitumba, JA. I agree with the conclusion therein that the appeal should be dismissed.

It is my view that the learned trial judge properly appraised the peculiar 20 circumstances surrounding the lease agreement and properly exercised her discretion. This was a situation which the Expropriated Properties Act sought to remedy.

It can safely be said that the Asian exodus and all the Departed Asians Property Decrees suspended the performance of the lease covenants by the respondent as the property was taken over and vested in the Departed Asians Property Custodian Board. This was never contemplated by the appellant and the respondent when they were making the lease in 1968. This rendered

performance of the respondent's obligations impossible. However, the impossibility of performance of the respondent's obligation ceased with the promulgation of the Expropriated Properties Act No.9 of 1982.;He has, since repossession in 1993, been trying to perform his obligations but is only being prevented by the appellant who reftsed to accept the rent. The lease tras still to run until 2ol'l . It was ftie superrrening expropriation which desffoyed the respondent's obligations. There was therefore no breach on his part.

This court cannot shut its eyes to the improper and underhand means employed by the appellant in trying to persuade the Registr\*ar of Titles to note a re-entry on the Title without a Court Order. Furthermore by deliberately refusing to accept the rent and usurping the tenancy agreement entered into by the respondent and another tenant, the appellant was taking the law in his own hands and enforcing his re-entry by self-help. t0

The respondent as a lessee has rights which he should not be easily deprived of. The forfeiture provision sought to be enforced by the appellant is intended only as security for observance of the covenants, which covenants must be interpreted according to the peculiar circumstances of a particular situation. There is no hard and fast rule to follow.

Under these circumstances the appellant cannot therefore exercise his power ofre-entry. fu Bailv vs De Cres nisnv ¹⁸⁶⁹) L. R.4. oB. 180 (1861 -73) AER 332 The learned trial judge properly exercised her discretion'

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As Engwau, JA also agrees, the appeal stands dismissed with costs.

$z$ day of September, 2001 Dated at Kampala this ... zerli E. A. N. MPAGI-BAHIGEINE<br>JUSTICE OF APPEAL

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