[2025] UGHC 408

## THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA HOLDEN AT MBALE

# LAND SUIT NO 01 OF 2021

1. JOHN FAITH MAGOLO :::::::::::::::::::::::::::::::::::

# 2. MY FATHER'S HOUSE HOWIE CHRISTIAN CHARITABLE TRUST LIMITED

#### **VERSUS**

- 1. THE HOWIE CHRISTIAN CHARITABLE TRUST LIMITED - <table>

2. JUSTINE BOSCO MUSOBA :::::::::::::::::::::::::::::::::::: - 3. MBALE DISTRICT LOCAL GOVERNMENT - 4. COMMISSIONER LAND REGISTRATION

# BEFORE: HON. JUSTICE LUBEGA FAROUQ JUDGMENT

#### 1. Introduction

- 2. The Plaintiffs instituted this suit against the Defendants jointly and severally for- - (a) Trespass to the 2^nd Plaintiff's land comprised in LRV. HQT 291, Folio 4, Plot 736 & 737, Bungokho Block 3, land at Nakaloke, Mbale district by the $1^{st}$ , $2^{nd}$ , and $4^{th}$ defendants; - (b) a declaration that the purported resolution to transfer the suit land by the $1^{st}$ Defendant to the $2^{nd}$ Defendant is a nullity; - (c) a declaration that the $2^{nd}$ Defendant is illegally and unlawfully in occupation of the 2^nd Plaintiff's land and trespassing on the same; - (d) an order for cancellation of the fraudulent transfer of the title of the suit land comprised in LRV, HQT 291, Folio 4, Plot 736 and 737, Bungokho Block 3, land at Nakaloke, Mbale district in the 2^nd defendant's name and further cancellation of the certificate of title that may have been issued to the 2^nd defendant and any other interests transferred fraudulently to the 2^nd Defendant;

- (e) an order against the 4^th Defendant compelling it to restore the name of the 1^st Defendant back on the certificate of title to the land comprised in LRV, HQT 291, Folio 4, Plot 736 & 737, Bungokho Block 3, land at Nakaloke, Mbale district; - (f) an order for cancellation of fraudulent attempted transfer of ownership of the school called "My Father's House Primary School" located in Kireka, Nakaloke Town Council into the names of the 2^nd Defendant; - (g) a permanent injunction restraining the Defendants, their agents or succession in title from further interfering or dealing in any way with the suit land and the school; - (h) an order for vacant possession against the 2^nd Defendant and his agents or successors in title; - (i) general damages and punitive damages; - $(i)$ costs for the suit and - (k) Interest on (e) at $25\%$ from the date of filing until payment in full.

#### 3. Background

#### The Plaintiff's case

5. The background of the case is that the Plaintiff and his wife Annet Kisaka Magolo initially purchased the suit land from a one Patrick Okabe on the $28$ ^th day of January, 2009 at Ugx: $40,000,000/$ =. That by a memorandum of understanding dated $17$ ^th of September 2009, it was agreed between the 1^st Plaintiff, his wife and the 1^st Defendant that the suit land be managed and registered in the names of the 1^st Defendant (a company) where the $1^{st}$ Plaintiff is a director and that an NGO ( $2^{nd}$ Plaintiff) be registered in Uganda in the names of "My Father's House Howie Christian Charitable Trust" and the 2^nd Plaintiff was subsequently incorporated and the suit land was held in trust for it by the $1^{st}$ defendant. That the same land is developed with a school "My Father's House Primary School (a private school) solely owned and managed by the 1^st Plaintiff. That the Plaintiffs were however shocked to learn in 2021 that the suit land had been transferred into the names of the $2^{nd}$ Defendant purportedly by the 1^st Defendant with the aid of the 4^th Defendant. That 1^st Defendant had also purported to transfer the school to the 2^nd Defendant with the aid of the 3^rd Defendant thus this suit.

### 6. The $1^{st}$ and $2^{nd}$ Defendants' case

- 7. The 1^st and 2^nd Defendants denied the Plaintiffs' allegations and claimed that it's the 1^st Defendant which provided the funds for the purchase of the suit land as evidenced by an Email dated 12^th of February 2009 by the 1^st Plaintiff asking for the said money he used to purchase the land, and the 1^st Defendant's company authorized their banks to wit; Barclays Bank to transfer the sum of Ugx: $41,000,000/$ = into the account of the 1^st Plaintiff and his wife for purposes of purchasing the suit land. - 8. That the 1^st Plaintiff and his wife who were holding the suit land in trust for the 1^st Defendant, unconditionally transferred the suit land to the 1^st Defendant and indeed the certificate of title to the said land described as LRV HQT 291 FOLIO 4 PLOT 736 and 737 Bungokho Block 3 Mbale district measuring approximately 2.53310 hectares was later registered in the names of the 1^st Defendant and issued with a certificate of title in the names of the 1^st Defendant and not in the names of the Plaintiffs. - 9. Pursuant to such transfer, the suit land and all the property thereon has been the property of the $1^{st}$ Defendant and the $1^{st}$ Defendant through the 1^st Plaintiff who was the sole former Ugandan director of the $1^{st}$ Defendant has been filing returns to that effect. - 10. *The* 3^rd *Defendant's* case - 11. The 3^rd Defendant denied all the Plaintiffs' allegations and averred that the consent it gave followed due procedure as it is a requirement of the law. That there was nothing on the record which could bar the 3^rd Defendant from giving the said consent. The 3^rd Defendant further

contended that it has no interest in My Father's House Primary School in as far as ownership stands and the only interest it has in the school is the welfare of learners and a conducive learning or study environment.

### 12. Legal Representation

13. Luchivya & Co. Advocates and Owori & Co. Advocates jointly represented the Plaintiffs, the 1^st and 2^nd Defendants were represented by M/S Naita & Co. Advocates while Kyabakaya & Co. Advocates represented the 3^rd Respondent. The 4^th Respondent was not represented.

#### 14. Issues for determination of court

- (a) Whether the acquisition and registration of the suit land in the names of the $2^{nd}$ Defendant was legal? - (b) Whether the $1^{st}$ Plaintiff is the rightful owner of the school "My Father's House Primary School" situated on the suit land? - (c) Whether the 1^st Defendant had powers to transfer and or give the suit land to the $2^{nd}$ Defendant? - (d) Whether the transfer of Motor vehicles UAV 225H Toyota Land Cruiser station wagon, UAV 538V Toyota Hiace Van Mini bus and UAN 23P Toyota Hiace LH178 Mini bus from the 1^st Defendant's name to the 2^nd Plaintiff's name was done fraudulently? - *(e) What remedies are available to the parties?*

#### 15. Burden and standard of proof.

16. The burden of proof in civil matters lies upon the person who asserts or alleges. Any person who wishes the court to believe the existence of any particular fact or desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he or she asserts, must prove that those facts exist. The standard of proof required is on the balance of probabilities. (See: sections 101, 102 and 103 of the Evidence Act Cap 8 and the case of Miller V. Minister of Pensions (1947)2 ALL ER 372

## 17. Preliminary Objection

- 18. Counsel for the 1^st and 2^nd Defendants argued that the suit land does not disclose a cause of action. He contended that the 1^st Plaintiff averred that him together with his wife purchased the suit land and agreed to unconditionally handover the same to the 1^st Defendant by way of a memorandum of understanding and pursuant to the same, the land was registered in the name of the 1^st Defendant who was the registered owner until the transfer of the land to the $2^nd$ Defendant by the 1^st Defendant. He cited Auto Garage & Other Ltd V. Motokov (No. 3[1971] E. A 514 and Mawejje Mike Joseph V. Emmanuel Mulondo & 2 Others Civil Suit No. 279 of 2009 to support his submission - 19. Counsel further cited section 59 of Registration of Titles Act Cap 240 which provides that the certificate of title is conclusive evidence of ownership. - 20. He submitted that the transfer of ownership of the suit land from the $1^st$ Defendant whose title was not impeachable at all to the $2^nd$ Defendant following a majority board decision, implies that the Plaintiffs enjoyed no right on the land and the same if any, was never breached and they suffered no damages at all. He invited court to find that the Plaintiffs' suit does not disclose a cause of action. - 21. Counsel further submitted that, this is a disguised derivative suit and the Plaintiffs cannot benefit from the exception to the general rule laid out in Foss V. Harbottle (1843) 2 page 461. He argued that a company is the only proper Plaintiff to sue for wrongs done to it. This is elaborated in the case of David Nahurira V. Baguma Cyprian Begumanya & 2 Others Civil Suit No. 392 of 2014 - 22. He submitted that the Plaintiffs do not have *locus standi* to commence the suit on their own behalf and as members of the said company, they do not fall under the exception in Foss V. Harbottle (Supra). - 23. Counsel for the Plaintiffs on the other hand submitted that the 1^st and 2^nd Defendants are mistaken because, the Plaintiffs' suit was not

against the title of the 1^st Defendant but against the transfer of the same to the 2^nd Defendant in total disregard of the memorandum and articles of association of the company.

### 24. Determination by court

- 25. Order 7 rule 11 (a) of the Civil Procedure Rules SI.71 provides that-" $a$ Plaint shall be rejected where it does not disclose a cause of action". - 26. In the case of Tororo Cement Co Ltd V. Frokina International Ltd Civil Appeal No. 2 of 2001 (S. C), a cause of action was defined to mean-

"Every fact which is material to be proved to enable the Plaintiff to succeed or every fact which, if denied, the Plaintiff must prove in order to obtain a judgment".

27. The judge further stated that-

"It is now well established in our jurisdiction that a plaint discloses a cause of action even though it omits some facts which the rules require it to contain and which must be pleaded before the Plaintiff can succeed in the suit. What is important in considering whether a cause of action is revealed by the pleadings are the questions whether a right exists and whether it has been violated ..."

28. Also in Steven Semakula V. Samuel Serunjogi Civil Suit No. 187 of **2021 (H. C)** Mulangira J. cited with approval Keborungi Justine V. Road Trainers Ltd and 2 others [2008] H. C. B 72, where the court observed that-

> "The question whether a plaint discloses a cause of action must be determined upon perusal of the plaint alone together with anything attached so as to form part of it".

29. In Civil Appeal No. 0017 of 2016 Dima Domnic Poro V. Inyani **Godfrey and Anor** the judge cited the case of <u>Njau and others v. City</u> Council of Nairobi [1976-1985] 1 EA 397 at 407 and defined the term "locus standi to literally means;

> "A place of standing, a right to appear in court, and, conversely, to say that a person has no locus standi means that he has no right to appear or be heard in a specified proceeding. To say that a person has no locus standi means the person cannot be heard, even on whether or not he has a case worth listening $to."$

- 30. Counsel for the 1^st and 2^nd Defendants argued that the Plaintiffs do not have a cause of action and *locus standi* to institute this current suit. He submitted that this is more of derivative suit where the Plaintiffs who are not shareholders, members or directors have no right to sue the $1^{st}$ Defendant (a company). - 31. I have reviewed the amended plaint and noted that under paragraph 8 (e) & (j) the Plaintiffs averred that in the memorandum of understanding it was agreed that the 1^st Defendant would hold the suit land in trust for the NGO ( $2^nd$ Plaintiff) which NGO is owned and run by the 1^st Plaintiff, his wife and a one Aaron Bwana. However, to the surprise of the 1^st Plaintiff, the 2^nd Defendant who is only a board member on the 1^st Plaintiff's school management committee on or around the 17^th of December, 2020 without any colour of right caused the fraudulent transfer of the title of the suit land and the school in to his personal names without the consent, knowledge and approval of the Plaintiffs contrary to objective 7 of the 1^st Defendant's memorandum and articles of association. - 32. The Plaintiffs further contended that the 1^st Defendant Company illegally, unlawfully and fraudulently transferred the suit land in to the names of the 2^nd Defendant without the consent, knowledge and approval of the 1^st Plaintiff being the co-founder of the 1^st Defendant. - 33. From those averments, it is clear that the $2^{nd}$ Plaintiff is claiming ownership of the land as per the memorandum of understanding and

7 | Page

the $1^{st}$ Plaintiff is claiming interest in the $2^{nd}$ Plaintiff as a director and owner of "My Father's House Primary School".

- 34. In the circumstance, I would agree with counsel for the Plaintiffs that the cause of action in Nahura V. Baguma & 2 others Civil Suit No. 392 of 2014 referred to by counsel for the $1^{st}$ and $2^{nd}$ Defendants is different from the cause of action in this case. - 35. I have got an opportunity to read the ruling in Nahura case in detail, and I was able to note that in that case, the trial judge specifically discussed the rights of minority members of the company to sue the company visa viz the decision of the majority board members or shareholders for the wrongs committed to the company. The other issue was about whether none members of the company can sue the company for the wrongs committed to it. - 36. However, contrary to what was discussed in the case of Nahura (supra), in this case, the Plaintiffs' claim is about ownership of the land which was gifted by the $1^{st}$ Defendant to the $2^{nd}$ Defendant without their consent since they also claim interest and property thereon. - 37. In the result, the preliminary objection is overruled. - 38. Having overruled the preliminary objection raised by counsel for the $1^st$ and $2^nd$ Defendants, I will proceed to determine the suit on its merit. - 39. Analysis of court. - 40. I will answer issues No.1 and 3 together and the other issues, will answered separately. - 41. Issue No.1: Whether the acquisition and registration of the suit land in the names of the $2^{nd}$ defendant was legal? - 42. Issue No.3: Whether the 1^st defendant had powers to transfer and or give the suit land to the $2^{nd}$ defendant? - 43. PW1 testified that the suit land was initially purchased by him and his wife (PW2). However, when the idea of forming a partnership with the 1st Defendant emerged, they agreed to have the land voluntarily registered in the name of the $1^st$ Defendant as their contribution to the

relationship. PW1 further stated that the District Land Board required a linking document for the transfer of the land to the company, as the land originally belonged to them. Acting on this advice, a memorandum of understanding dated 17^th September, 2009 was executed, in which it was agreed that the suit land would be managed and registered in the name of the $1^{st}$ Defendant in trust for the $2^{nd}$ Plaintiff. PW1's testimony was corroborated by PW2.

- 44. DW3 (Thomas Ernest Howie) on the other hand testified that him and his wife got an idea of starting up an orphanage home in Uganda way back in 2005 and because of the argue or will to provide support to the communities of Uganda, the best way to do it was to start up a children's home which could accept children who were orphans or less privileged. Because they did not have a home, they decided to start caring for the children under an already existing home which was managed by a one John Silaiti. However, along the way, the home of John Silaiti could not manage the overwhelming numbers of orphans and they decided to render support to the said children while under the care of their guardians. - 45. It is because of the above, that DW3 and his wife decided to make a decision to purchase land which could accommodate the increasing number of orphans in the area, which they later called My Father's House Children's Home. In order to accomplish their goals, DW3 and his wife deemed it necessary to entrust the 1^st Plaintiff who was based in Uganda with the responsibility to oversee all of the good hearted projects they were trying to establish in Uganda to help the local communities. The land was found by a one Chelebei Geoffrey (DW2) in the company of the 1^st Plaintiff and others. That the money for the purchase of said land was sent by DW3 as per the testimonies of the DW2, DW4 and DEX.15. - 46. The Defendants' evidence further indicates that the suit land was purchased by DW3 and his wife. However, at the time of purchase, they were led to believe by PW1 (the 1^st Plaintiff) that the registration of the 1^st Defendant had not yet been completed. As a result, they purchased the unregistered interests in the suit land, in the names of the 1^st Plaintiff and his wife.

- 47. The said land was subsequently transferred into the names of the $1^{st}$ defendant unconditionally as per PEX.2. Particularly it states that-"The magolos purchased and have been holding this piece of land and the building on it in trust for the Howie Christian Charitable Trust and hereby transfer the land and all its interests to the TRUST unconditionally. The Magolos to this effect hereby surrender the purchase agreement made between them and the previous owner (Mr. Patrick Okabe) to the trust." - 48. That exhibit clearly stipulates that the suit land was never owned by the 1^st Plaintiff nor his wife but were holding it in trust for the 1^st Defendant, which to this court is the reason why it was unconditionally transferred. That fact was not disputed by the Plaintiffs. - 49. However, in disregard to PEX.2, the 1^st Plaintiff who testified as PW1 stated that- "... a memorandum of understanding dated $17$ ^th September, 2009 to formalize our relationship, it was agreed between me, my wife and the $1^st$ Defendant that the suit land be managed and registered in the names of the $1^{st}$ Defendant in trust for the $2^{nd}$ Plaintiff." That piece of evidence was corroborated by PW2. - 50. DW3 on the other hand denied knowledge of the memorandum of understanding when he said that- "I am not aware of any memorandum of understanding executed between the $1^{st}$ defendant and the $1$ ^st Plaintiff allegedly giving the assets of the $1^st$ Defendant to the $2^nd$ Plaintiff and I have never signed any such memorandum as alleged by the $1^{st}$ Plaintiff since I can only act for the $1^st$ Defendant upon a resolution authorizing me to do

## so and as a matter of fact, the $2^{nd}$ Plaintiff is not known to me at all."

- 51. From the evidence of DW3, it is apparent that he denied knowledge of the existence of PEX.3 (the memorandum of understanding). Following the wording of PEX.2, I would agree with DW3. It defeats logic why one would transfer the land on 6^th of September, 2009 unconditionally and in less than a month, signs a memorandum of understanding which is totally contradicting with the land transfer ownership agreement. - 52. Secondly, at the time of signing the purported memorandum of understanding, the 1^st Defendant was already a company which according to the law speaks through a resolution. No such resolution was however adduced to prove that the said memorandum was entered into by the $1^{st}$ Defendant. - 53. In addition, PW1 testified in cross-examination that he is the one who signed PEX.2 on behalf of DW3. I have reviewed the signature of DW3 in both documents and it appears similar. Having that in mind, the possibility of the 1^st Plaintiff signing PEX.3 as well, cannot be ignored. - 54. DW3 further denied knowledge of the 2^nd Plaintiff. He testified that if the 1^st Plaintiff registered the $2^{nd}$ Plaintiff as a company, then the same was done fraudulently. In other words, the 1^st Defendant has never consented to the registration of the $2^{nd}$ Plaintiff. All he admits is that he and his wife under the umbrella of the 1^st Defendant established a school (My Father's House Primary School) and the same has never been registered as a body corporate. - 55. According to the memorandum of understanding, clause 5 states that-"The Howie Christian Charitable Trust shall hold the 4 acre piece of land located at Kireka Mile 6 village, kireka parish, Nakaloke Sub-County, Mbale district in trust for My Father's House Howie Christian Charitable Trust a yet to be registered NGO."

56. It should however, be noted that the memorandum of understanding (PEX.3) was entered into after the suit land was unconditionally transferred to the 1^st Defendant. The unconditional transfer of the said land meant that the 1^st Defendant got conclusive ownership of the land.

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- 57. It was therefore wrong for PEX.3 to state that the 1^st Plaintiff and his wife agreed that their land (see: Clause 2) be managed and registered in the names of the $1^{st}$ Defendant in trust for the $2^{nd}$ Plaintiff. The said land at the time, no longer belonged to the 1^st Plaintiff and his wife, since it had already been completely transferred to the $1^st$ Defendant prior to signing of PEX.3. - 58. In any case, the 1^st Plaintiff and his wife did not hold any beneficial interest in the suit land from the outset, but merely held it in trust for the 1^st Defendant. In fact, by executing the deed of transfer of ownership (PEX.2), the 1^st Plaintiff and his wife were merely fulfilling an obligation they were duty-bound to perform. - 59. Therefore, the 1^st Defendant having denied knowledge of PEX.3, it became a duty of the Plaintiffs to prove to this court that the said document was indeed signed by the 1^st Defendant as it is a requirement under sections 101, 102 and 103 of the Evidence Act (Supra). - 60. PW1 also contended that he was a director of the 1^st Defendant but he did not participate or was not invited for the meeting where the decision to transfer the suit land to the $2^{nd}$ Defendant was made. - 61. DW3 testified that in the late 2006, they developed the idea to register the 1^st Defendant a company based and registered in the UK and in Uganda so as to oversee all the good hearted projects that they were establishing in Uganda and that is how the 1st Plaintiff became a member and director of the 1^st Defendant based in Uganda. - 62. I have reviewed the memorandum and articles of association of the $1^{st}$ Defendant and indeed observed that the 1^st Plaintiff was one of the

subscribers of the 1^st Defendant. It is also an admitted fact by the Defendants that the 1^st Plaintiff was a director of the 1^st Defendant.

- 63. DW3 further stated that- "it is the mismanagement of the funds of the trust that made the board of the $1^{\rm st}$ defendant to think of change of the management and ownership of My Father's House Primary School, My Father's House Children's Home and other assets and properties of the $1^{st}$ defendant to the $2^{nd}$ defendant. In accordance with the thought, the $1^{st}$ defendant on the $10^{th}$ of November, 2020 made a resolution giving the suit land with all the developments thereon to the $2^{nd}$ defendant." - 64. Clause 33 of the memorandum and articles of association provides that-

"the office of the director shall be vacated if the directors;"

(a) Ceases to subscribe to the organisations statement of faith and or vision.

(b) becomes bankrupt or makes any arrangement or *composition with his or her creditors generally;*

(c) becomes prohibited from being a Director by reason of any order made under section 189 of the Act;

(*d*) *becomes of unsound mind;*

(e) resigns his or her office by notice in writing to the *Organization;*

(f) ceases to be a Director by virtue of section 186 of the Act; or $(g)$ is directly or indirectly interested in any contract with the organization and fails to declare that nature of his or her interest in the manner required by section 200 of the Act."

- 65. By alleging mismanagement of funds in my view DW1 meant that the 1^st Plaintiff had ceased to subscribe to organization's statement of faith and vision by virtue of his actions. - 66. I have also reviewed clause 88 of table A 2^nd schedule which refers to sections 189 or 192 and 197 of the Companies Act Cap 106 which

provides for the circumstances under which a director of a company can be disqualified from office, but found none applies to the 1st Plaintiff.

an ann an Saoile

and a final company to the state of the state of the state of

67. However, section 191 of the Companies Act, Cap 106 provides that-

"(1) A company may, by ordinary resolution, remove a director before the expiration of his or her period of office, notwithstanding anything in the articles or in any agreement between the company and the director, but this subsection shall not, in case of a private company, authorize the removal of a director holding office for life at the commencement of the *Act.*, *whether or not subject to retirement under an age limited by virtue of the articles or otherwise.*

(2) A special notice shall be required if any resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he or she is removed".

- 68. According to the above provision, a director of the company can be removed from office by an ordinary resolution which is initiated by issuance of the notice of the meeting to all members. (Also see: section 137 of the Companies Act Cap 106) - 69. Contrary to that provision, in this case, except for allegations of DW3 that the 1^st Plaintiff ceased the position of directorship because of mismanagement of the $1^{st}$ Defendant's funds, no notice or resolution was passed to remove him from the said office in total disregard of Article 8 of the 1^st Defendant's memorandum and articles of association. - 70. In that vein, I am persuaded by the Indian decision in **Alcon Electronics Pvt. Ltd V. Celem S. A,** where the judge stated that-

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"The Company being a jurist person has to act by passing a resolution authorizing the members of board to adopt such proceedings..."

- 71. A company resolution refers to a written document that is created by the board of directors of a company which represents a decision made by the company members or directors by voting, by formal expression of their opinion or by will. (See: http://www.investopedia.com) - 72. Therefore, in absence of any resolution to that effect, it is presumed that the $1^{st}$ Plaintiff is still a director of the $1^{st}$ Defendant. - 73. DW3 admitted as alleged by the 1^st Plaintiff that a special resolution was passed by the 1^st Defendant's directors to transfer the suit land in the names of the 2^nd Defendant and PEX.12 was admitted to that effect. - 74. I have read sections 144 and 145 of the Companies Act, Cap 106 referred to me by counsel for the Plaintiffs. In substance, the sections requires that a special notice should be issued to all members before a special meeting is held. Section 145(1) further makes a resolution passed without a special notice to members to be ineffective. - 75. It specifically provides that-

"(1) Where by any provisions of this Act special notice is $\frac{1}{2}$ required of a resolution, the resolution shall not be effective unless notice of the intention to move it has been given to the company not less than twenty-eight days before the *meeting at which it is moved.*

(2) The company shall give its members notice of a resolution under subsection $(1)$ at the same time and in the same manner as it gives notice of the meeting or, if that is not practicable, shall give them notice either through any advertisement in any media of wide circulation as the registrar may determine by notice in the Gazette or in any other mode allowed by the articles, not less than twenty-one days before the meeting. (3) Subject to subsection $(1)$ , if after notice of the intention to move the resolution has been given to the company, a meeting is called for a date twenty-eight days or less after the notice

has been given, the notice though not given within the time required by this section shall be taken to have been properly given for the specified purposes".

that is a set what is the set of the

나라 왔는데 아이 아니라 나는데요. 그 아닌다는데. 나도 있어 있었으니? 요... 먹은 거야? 이 다음 거야?

76. The section is coached in mandatory terms which requires that a special notice should be served to the Company and its members within 28 days before the meeting.

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- 77. A special resolution in the instant case was passed on 10^th of August, 2020 as per PEX.12. The 1^st Plaintiff being a director of the 1^st Defendant, alleges that no notice was served to him prior to the meeting which passed PEX.12 (special resolution). The Defendants did not tender in court evidence to dispute that fact. - 78. Consequently, since the section makes a resolution passed without a notice to members ineffective, it follows that the special resolution (PEX.12) which was passed by the $1^{st}$ Defendant is ineffective. - 79. Counsel for the Plaintiffs further, while referring to clause 7 of the memorandum and articles of association submitted that the 2^nd Defendant who was given the suit land does not fall in the category stated in clause 7 of the memorandum and articles of association as there is no provision which authorizes any one to give company property to an individual. - 80. Clause 50 of the 1^st Defendant's memorandum and articles of association provides that-

"The organization shall not dissolve except with prior consent of the international head office and by a resolution of two-thirds majority of the members of the organization in General Meeting duly convened for that purpose. The disposal of the organization's goods and properties shall be carried out in accordance with clause 7 of the Memorandum of Association".

81. Clause 7 of the memorandum and articles of association provides that-

"Upon the winding up or dissolution of the organization there remains after satisfaction of all the debts its and liabilities and property whatsoever, the same shall not be paid or distributed among the members of the Organization but shall be donated to or transferred to some other institutions having objectives similar to the objects of this organization in the General meeting at or before the time of dissolution and if and so far as effect current be given to aforesaid provision to some charitable $object(s)$ ".

- 82. The reading of the above quoted clauses indicates that, upon dissolution, the 1^st Defendant would transfer ownership of its properties through a general meeting at or before the time of dissolution. It further states that in case of such disposal of the properties, the same has to be donated to or transferred to some other institutions having objectives similar to those of the 1^st Defendant. - 83. However, according to the evidence of both parties, it is not indicated anywhere that the 1^st Defendant was dissolved or came to an end. In fact, DW1, DW4 and DW5 collectively testified that after purchasing the 4 acres, the members of the community gave the 1^st Defendant more land next to the suit land. - 84. It follows, therefore, that the 1^st Defendant did not own only the 4 acres in question. Thus, in absence of any evidence to the contrary, it is presumed that the 1^st Defendant is still in existence, and through the alleged special resolution, resolved to dispose of the 4 acres along with the school situated on it. No evidence was adduced to show that the 1^st Defendant was prohibited from disposing of its property while still in existence. - 85. Secondly, no evidence was adduced to show that the other pieces of land and the properties owned by the 1^st Defendant were also sold off, to make this court believe that the 1^st Defendant was dissolved.

86. Section 59 of the Registration of Titles Act Cap 240 provides that-"... a certificate of title issued under this Act shall be received in all courts as evidence of the particulars set forth in the certificate and of the entry of the certificate in the Register Book, and shall be conclusive evidence that the person named in the certificate as the proprietor of or having any estate or interest in or power to appoint or dispose of the land described in the certificate is seized or possessed of that estate or interest or has that power."

87. In CDBI V. Cobec (Nigeria) Ltd (2004) 12 NWLR (PT.948) 376, the court held that-

> "from the date of incorporation of a company stated in the certificate of incorporation, the subscribers of the memorandum together with other persons who may become members of the company, become a body corporate by the name contained in the memorandum capable forthwith of exercising all the powers and functions of an incorporated company including the power to acquire and hold land, have perpetual succession and a common seal..."

88. Also in Mohammed Abdallah Garelnab V. Diana Irene Nayiga Court of Appeal Civil Appeal No. 231 of 2019, the court while citing Bramwell V. Bramwell, [1942] 1 K. B 370 stated that-

> "...a person not in possession of land can recover both" possession and title from the person in possession if he or she can prove his or her title. The actions for recovery of land are premised on proof of a better title than that of the person from *whom the land is sought to be recovered.*"

89. I have carefully and thoroughly examined the evidence on record, particularly Exhibits PEX.2 and PEX.3. I find that, having been the registered owner of the suit land, the 1^st Defendant was legally entitled to register and transfer the land into the name of any person. No evidence was led to prove existence of any better title than that of the 1^st Defendant.

- 90. However, as a body corporate (Okatta V. The Registered Trustees of the Onitsha Sports Cub- (2008) 13 NWLR (PT.1105) 632), the 1st Defendant can only act through resolutions, and prior to the passing of any such resolution, proper notice must be issued to all members of the company. (See: section 137 of the Companies Act Supra) - 91. In the present case however, the 1^st Defendant did not issue a special notice to all its members. This omission rendered the special resolution, which led to the transfer of the suit land into the names of the 2^nd Defendant, invalid. - 92. In the circumstances, the acquisition, registration, and transfer of the suit land by the $1^{st}$ Defendant into the name of the $2^{nd}$ Defendant was unlawful. - 93. Issue No.1 and 3 are answered in the affirmative. - 94. Issue No.2: Whether the 1^st Plaintiff is the rightful owner of the school My Father's House Primary School situated on the suit land? - 95. According to the defence evidence, it was DW3 and his wife who initially conceived the idea of caring for orphans as far back as 2005. At that time, they did not have a permanent facility and temporarily housed the children in the home or school of one John Silaiti, who shared similar objectives. As the number of children grew significantly, they were compelled to send them back to their guardians and continued supporting them from there. In 2007, they decided to purchase land in Uganda to establish a permanent home and school for the orphans. They assigned Chelibei Geoffrey (DW2) the task of identifying the suitable land. DW2 located the land in the company of the 1^st Plaintiff and others. However, at that time, the 1^st Plaintiff misrepresented that the 1^st Defendant was not yet fully registered in

Uganda, and as a result, the land was purchased in the names of the 1^st Plaintiff and his wife.

- 96. DW3 testified that he and his wife regularly sent money to the 1^st Plaintiff for the purpose of developing the land. The 1^st Plaintiff indeed undertook the development, and the buildings constructed now house a school known as *My Father's House Primary School*, which initially operated as My Father's House Children's Home. This testimony is corroborated by Exhibits DEX.13 and DEX.15, which are bank statements showing the transfer of funds from DW3 and his wife to the $1^st$ Plaintiff for the development of the school. - 97. The defence witnesses specifically DW3, DW2 and DW4 collectively stated that the 1^st Plaintiff was only an employee of the 1^st Defendant on a monthly salary remuneration and he does not own any interest in the 1^st Defendant's company beyond being a mere employee. - 98. Contrary to the foregoing evidence, the $1^{st}$ Plaintiff testified that My Father's House Primary School is owned by him. However, aside from the fact that he registered the school in his name, he did not provide any evidence to demonstrate that the school was established, financed, and operated by him independently of the 1^st Defendant. - 99. The evidence of DW2 and DW4, both former members of the 1st Defendant, indicates that My Father's House Primary School was established by the 1^st Defendant in 2011. Their testimonies are supported by Exhibits DEX.11, DEX.12, and DEX.15, which indicates that the 1^st Plaintiff regularly submitted the school's budget and expenses for approval to T. E. Howie, a director of the 1^st Defendant. Furthermore, Exhibits DEX.12 and DEX.15 demonstrates that the 1^st Plaintiff received funds from T. E. Howie to operate the school. - 100. According to Exhibit PEX.8, My Father's House Primary School was indeed established in 2011. This timeline aligns closely with DW3's evidence that the idea to purchase land in Uganda was developed in

2009, and the land was subsequently acquired. They then renovated and constructed buildings on the land to educate the orphans. Given the approximate three-year period between 2009 and 2011, it is reasonable to conclude that the school which DW3 and his wife planned to establish is the same school that commenced operations in 2011.

- 101. However, contrary to the defence evidence, a letter from the Ministry of Education and Sports dated 8^th February, 2021, indicates that My Father's House Primary School was registered in the name of the 1^st Plaintiff. This constitutes fraud. As an employee of the 1^st Defendant, the 1^st Plaintiff had no authority to register the school in his name without the consent of the 1^st Defendant, who is the rightful owner and funder. - 102. In any event, if My Father's House Primary School truly belonged to the 1^st Plaintiff, it raises the question: why he would adopt a name identical or strikingly similar to that of the 1^st Defendant's orphanage or children's home? - 103. Secondly, the 1^st Plaintiff claimed that *My Father's House Primary School* is his personal initiative and that the 1^st Defendant merely acted as a funder. Ordinarily, there is a formal procedure for seeking and obtaining funding, which typically involves submitting an application or request to the relevant organization, government body, or individual. However, no evidence or correspondence was adduced to show that any such process was followed in this case. - 104. Based on the foregoing analysis and the evidence on record, this Court concludes that the 1^st Plaintiff fraudulently registered My Father's House Primary School in his personal name.

## 105. The Black's Law Dictionary 6^th Edition page 660 defines fraud to mean-

"An intentional perversion of the truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. A false representation of a matter of fact, whether by words or by *conduct; by false or misleading allegations, or by concealment* of that which deceives and is intended to deceive another so that he shall act upon it to his legal injury..."

106. I am also fortified by the holding in Kampala Bottlers LTD V. Damanic (U) LTD Supreme Court Civil Appeal No. 22 of 1992, where Wambuzi C. J at page 7, stated that-

> "Fraud even if proved, it must be attributed directly and by necessary implication to the transferee. By this, I mean, the transferee must be guilty of some fraudulent act or must have known of such act by somebody else and taken advantage of such act."

- 107. By virtue of PEX.8, it is evident that the 1^st Plaintiff fraudulently registered My Father's House Primary School in his name. However, the email correspondences and bank statements tendered by the Defendants clearly demonstrate that the funds used for developing the school, caring for the orphans, and paying the teachers were provided by DW3 and his wife on behalf of the 1st Defendant. - 108. Counsel for the 1^st and 2^nd Defendants cited the case of Lazarus Estate Ltd V. Peasley (1966) QB 702, at page 712 where Lord Denning stated that-

"No court in this land will allow a person to keep an advantage which he obtained by fraud. No judgment of the court, or order of a minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved. But once it is proved, it vitiates judgments, contracts and all transactions whatsoever."

- 109. I am bound by that decision. Based on the defence evidence, the 1^st Plaintiff was an employee of the 1^st Defendant and received a salary for the work he performed on its behalf. His act of going beyond his role as an employee to register the 1^st Defendant's school in his own name amounted to fraud. - 110. Issue No. 2 is answered in the negative. - 111. Issue No.4: Whether the transfer of Motor vehicles UAV 225H Toyota Land Cruiser station wagon, UAV 538V Toyota Hiace Van mini bus and UAN 23P Toyota Hiace LH178 Mini bus from the $1$ ^st defendant's name to the $2^{nd}$ Plaintiff's name was done fraudulently? - 112. Thomas Ernest Howie (DW3) testified that the 1^st Defendant purchased motor vehicles to help in the management of its affairs and two vans were attached to My Father's House Primary School to ease transport of the children to and from school and also to do ministry work. However, the 1^st Plaintiff fraudulently transferred the vehicles into the names of $2^{nd}$ Plaintiff. - 113. The above evidence is supported by DEX.17 and DEX.18 (Email communications between T. E Howie and the 1^st Plaintiff regarding purchasing of the vehicles as well as the bank statements for MESSR HOWIE CHRISTIAN CHARITABLE TST LTD. The said THE communication started from 24^th to 31^st May, 2014. Particularly, in the email dated 31^st of May, 2014, the 1^st Plaintiff sent a message to T. E. Howie (DW3) via tehowie@hotmail.com and stated that- "Dear Paapa, I found a dealer in Kampala who had 4 vehicles (2004) each at 95m, but willing to sell one at 80M to clear taxes for the rest. I told him that we may pass there on Monday."

- 114. Following that kind of communication and others contained in the exhibits mentioned, the 1st Defendant via MESSR THE HOWIE CHRISTIAN CHARITABLE LTD through Barclays bank paid Jounda Motors Ugx: $40,000,000/=$ on 4^th of June, 2014 and Ugx: 40,000,000/= was paid using a cheque on $14^{th}$ of June, 2014. - 115. DEX.9 shows that UAY 538V and UAN 234P were on 27th/5/2016 registered in the name of the 1^st Defendant and also UAV 225H was on 11^th of June, 2014 registered in name of the 1^st Defendant. However, on 13^th of December, 2021 UAY 538V and UAN 234P were transferred from the name of the $1^{st}$ Defendant to the name of the $2^{nd}$ Plaintiff without any company resolution to that effect. - 116. It is trite that a company acts and communicates through resolutions. However, in this case, no resolution was produced to support the transfer of the said motor vehicles into the name of the 2^nd Plaintiff. (See: Alcon Electronics Pvt. Ltd V. Celem S. A (Supra) - 117. Counsel for the Plaintiffs submitted that PW1 in cross- examination stated that he received money for the purchase of vehicles from the 1st Defendant/Counter claimant and further agreed that he transferred the vehicles from the names of the 1st Defendant to those of the 2^nd Plaintiff. - 118. I have already observed in the body of this judgment that the $2^{nd}$ Plaintiff is not known to the 1^st Defendant. Accordingly, the transfer of the said motor vehicles to the $2^{nd}$ Plaintiff was unlawful. The actions and/or omissions of the $1^{st}$ Plaintiff in this regard amounted to fraud. (See: Kampala Bottlers Ltd v. Damanico (U) Ltd (supra)). - 119. Issue No. 4 is answered in the negative. - 120. Issue no. 5: What are the remedies available to the parties? - 121. In light of my findings under issue No.4, the $1^{st}$ and $2^{nd}$ Defendants are entitled to the remedies sought in the counter claim. - 122. In the counter claim, the 1^st and 2^nd Defendants prayed for a declaration that the transfer of the motor vehicles was fraudulent, an

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order cancelling the said transfer, a permanent injunction restraining further claim for ownership of the vehicles, general damages and costs of the counterclaim.

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## 123. General damages

- 124. Considering the inconveniences caused by the Plaintiffs in denying the 1^st Defendant access to the vehicles, I have awarded general damages of Ugx: 5,000,000/= (Five million shillings) to the $1^{st}$ Defendant. - 125. In the premises, this court makes the following orders- - (a) It is declared that the 1^st Defendant illegally transferred LRV. HQT 291, Folio 4, Plot 736 & 737 Bungokho Block3, land at Nakaloke, Mbale district to the $2^{nd}$ Defendant. - (b) It is ordered that the transfer of the duplicate certificate of title for LRV. HQT 291, Folio 4, Plot 736 & 737 Bungokho Block3, land at Nakaloke, Mbale district in the names of the 2^nd Defendant should be cancelled by the 4^th Defendant and the title reverts back into the names of the 1^st Defendant. - (c) It is declared that the $1^{st}$ Plaintiff is NOT the lawful owner of My Father's House Primary School situated on LRV. HQT 291, Folio 4, Plot 736 & 737 Bungokho Block3, land at Nakaloke, Mbale district. - (d) It is declared that the 1^st Plaintiff fraudulently transferred Motor vehicles UAV 225H, UAY 538V and UAN 234P to the 2^nd Plaintiff and the same shall be re-registered in the names of the $1^{st}$ Defendant - (e) A permanent injunction is issued restraining the Plaintiffs from claiming ownership of Motor vehicles UAV 225H, UAY 538V and UAN 234P. - (f) The 1^st Defendant is awarded general damages of Ugx: 5,000,000/= $\mathbb{E}[\mathbf{v}]\leq \frac{1}{\sqrt{2}}$ (Five million shillings). - (g) 50% of the costs of the suit and 50% of the costs for the counter claim are awarded to the Defendants.

I so order. $\mathcal{L}$ tral in $\mathcal{L} = \mathcal{L} \mathcal{L} + \mathcal{L} \mathcal{L} + \mathcal{L} \mathcal{L}$ LUBEGA PAROUO $\mathbf{e}^{-\frac{1}{2}} = \frac{1}{\sqrt{2}} \mathbf{e}^{-\frac{1}{2}} \mathbf{e}^{-\frac{1}{2}}$ Ag. JUDGE

Judgment delivered via the emails of the Advocates of the parties on the $10^{th}$ day of June, 2025

and the first parties of the parties of the

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$\mathcal{L} = \mathcal{L} \mathcal{L} \mathcal{L} \mathcal{L} \mathcal{L}$