[2010] UGCommC 21

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\b\insrsid8458965\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14037253\charrsid8081547 HC}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid8458965\charrsid8081547 T - 00 - CC - }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14037253\charrsid8081547 CS}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid8458965\charrsid8081547 - }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14037253\charrsid8081547 560 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid8458965\charrsid8081547 -}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14037253\charrsid8081547 200}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid1592075\charrsid8081547 6}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14037253\charrsid8081547 \par \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14037253\charrsid8081547 WAKANYIRA GEORGE DAVID :::::::::::::::::::::::::::::::::::::: PLAINTIFF \par \par }\pard \ltrpar\qc \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14037253\charrsid8081547 VERSUS \par \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14037253\charrsid8081547 1.\tab KAVUYA BEN \} \par 2.\tab GLOBAL CAPITAL SAVE (2004) LTD \} \par 3.\tab RUTUNGU PROPERTIES LTD \} ::::::::::::::::::::::: DEFENDANTS \par \par \par BEFORE: THE HON. MR. JUSTICE GEOFFREY KIRYABWIRE \par \par J U D G M E N T: \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14037253\charrsid8081547 The plaintiff brought this suit against the defendants claiming for mesne profits, re nt, recovery of moveable property following an eviction of the plaintiff by the defendant from his properties. \par \par The case for the plaintiff is that on the 15}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid14037253\charrsid8081547 th}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14037253\charrsid8081547 January 2007 he obtained a loan from the defendants and gave}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 land}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14037253\charrsid8081547 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 titles to two of his properties as security for the said loan. The sum borrowed was (U) S}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 h}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 s. 170,000,000/= which was to be paid back within 6 months at an interest rate of 10% per month. It is the case for the plaintiff that he was asked to sign two agreements of sale, a power of attorney and a transfer form as furth}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 er security for the loan. It is the case of the plaintiff}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 however}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 that}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 the understanding between the parties}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 was}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 that the transaction was a loan and that the two properties comprised in Block 236 Plot 2062 Kyadondo (Land at Bweyogerere) and Volume 296}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6493265\charrsid8081547 5 Folio 18 Plot 17 Bunyonyi Lane}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 (Land at Kataza}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 Kiswa, Nakawa) were}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 security for the loan.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14037253\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 \par The sale agreement purported to indicate Shs. 272,000,000/= as consideration}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 for the sale}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 which the plaintiff avers}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 he}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547 has never received. \par \par The plaintiff further avers that }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6493265\charrsid8081547 less tha}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid556104\charrsid8081547 n three months into the agreed six month period the first defendant fraudulently without the plaintiff\rquote s consent and while there was no default in the monthly interest payment, transferred the above prop}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 erties to the third defendant (Ru}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid556104\charrsid8081547 tungu Properties Ltd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 a company owed by the first defendant}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid556104\charrsid8081547 ). The defendants then proceeded to issue eviction notices to his tenants who were occupying the plaintiff\rquote s prope}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2452158\charrsid8081547 rty. As a result of this sudden}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid556104\charrsid8081547 transfer of the property, the plaintiff was not able to recover his movable properties therein.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16672648\charrsid8081547

\par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 \par The defendants deny the claim of the plaintiff and contend that the properties in question were sold to them by the plaintiff. In this regard the defendants rely on a Sale Agreement dated 17}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid1380742\charrsid8081547 th}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 January 2007. It is the case for the defendants that the plaintiff had offered to buy back his properties from the third defendant (Rutungu Properties Ltd) at Shs. 260,000,000/= which was not accepted by the defendants. The second defendant denies ev en lending the plaintiff any money as alleged. \par \par The parties agreed to the following issues for determination: \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \ltrpar\qj \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\wrapdefault\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin1080\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 Whether the agreement was a straight loan or a Sale Agreement. \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 \hich\af0\dbch\af0\loch\f0 2.\tab}Whether or not the transaction was fraudulent \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 \hich\af0\dbch\af0\loch\f0 3.\tab}Whether or not the plaintiff failed to effect loan repayments on time after borrowing from the second defendant. \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7293212\charrsid8081547 Mr. Bemanyisa appeared for the plaintiff while Mr. Owaraga and Mr. Mbabazi represented the defendants. The plaintiff called four witnesses namely the plaintiff himself Mr. G. D. Wa kanyira (PW1), Mr. Edgar Mutumba (PW2) a businessman who used to work for the second defendant, Mr. Paul Mungati (PW3) a Valuation surveyor, and Mr. Sam Kamanda (PW4)}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 a }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7293212\charrsid8081547 Clerk Assistant with the second defendant.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1380742\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7293212\charrsid8081547 \par For the defendant people testified namely Mr. Alex Kiyimba (DW1) a }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1581565\charrsid8081547 Principal}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7293212\charrsid8081547 Legal Officer with M/s Housing Finance Bank Ltd, Mr. Ben Kavuya (DW2) the first defendant, Mr. Stanley Mugabi (DW3) a businessman, Mr. Moses Mkachunga (DW4) a carpenter with M/s Ogaserian Holdings, Mr. Lawrence Baganga (DW5) a }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7566401\charrsid8081547 wielder}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7293212\charrsid8081547 with M/s J. B. K. Electricals and Metal Dealers and Mr. M. Nywaana (DW6) a Lawyer. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7566401\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid7566401\charrsid8081547 Issue No. 1: Whether the agreement was a straight loan or sale Agreement \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7566401\charrsid8081547 The parties in this dispute do not agree as to the nature of transaction that they entered into. The plaintiff avers t}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 h}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7566401\charrsid8081547 at what he entered into was a loan agreement while on the other hand the defendants state that it was an agreement of sale. \par \par The plaintiff testified that he approached Mr. Ben Kavuya the Managing Director of Global Capital Save (2004) Ltd (the second defendant) to borrow Shs. 170,000,000/=. The purpose of the loan was to pay off his }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1581565\charrsid8081547 mortgage with Housing Finance Bank Ltd which had gone into default and }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 as a result he}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1581565\charrsid8081547 was about to lose his two properties at Bweyogerere and Kataza in Kampala. The plaintiff testified that the first defendant agreed to provide him with the money but asked him to sign two agreements (as was his practice).}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid945739\charrsid8081547 The first was a purported out right sale}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7820549\charrsid8081547 agreement}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid945739\charrsid8081547 and the second was a loan agreement secur ed by the same two properties with Housing Finance Bank Ltd.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7566401\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid945739\charrsid8081547 \par The plaintiff testified that he went to Mr. Kavuya because he was a money lender and w}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 as desperate to save his two pr}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid945739\charrsid8081547 operties}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 from foreclosure by the bank. He further testified that he signed a loan agreement}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 with the first and second defendants}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 on the 19}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid5075994\charrsid8081547 th}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 January 2007 but was not given a copy. He further signed a purported sale agreement because Mr. Kavuya told him that as money lenders that is what they require}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 d}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 to protect themselves}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 in the event of default}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 . He testified that according to the terms of the loan agreement he was to borrow Shs. 170,000,000/= for a period of six months at interest of 10% pe}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5112139\charrsid8081547 r}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 month and therefore the total repayment of principal and interest would be Shs. 272,000,000/=. He also signed for the money by way of voucher which money }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 paid directly into his }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 bank}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 account}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5075994\charrsid8081547 . The plaintiff however was not given a copy of the voucher.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12330125\charrsid8081547 The plaintiff showed court a pay in slip for the sum of Shs.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 158,940,397/= paid into his}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12330125\charrsid8081547 bank}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 account}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12330125\charrsid8081547 on the 18}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid12330125\charrsid8081547 th}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12330125\charrsid8081547 January 2007.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid945739\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2710879\charrsid8081547 The plaintiff however showed court copies of transfer forms that he signed in favour of the third defendant M/s Rutungu Properties Ltd (owned by the first defendant) Exhibit P.3 and P.4. The plain}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 tiff further}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2710879\charrsid8081547 testified that at the time he signed the said transfer forms in blank and that it was the defendant who filled in the rest of the form}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 s}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2710879\charrsid8081547 to effect the transfers.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12330125\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2710879\charrsid8081547 \par Mr. Kavuya in his defence and that of his two companied testified that he bought the}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12476712\charrsid8081547 said properties from Mr. Wakanyira}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2710879\charrsid8081547 and that a sale agreement was executed between the p}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 arties for the sum of Shs 272,000,000/= on the 17}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid2710879\charrsid8081547 th}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2710879\charrsid8081547 January 2007. He further testified that the plaintiff\rquote s property had been mortgaged to M/s Housing Finance Bank Ltd and were in danger of fore closure. Mr. Kavuya testified that he had to pay off the bank to secure the release of the said properties. Mr. Kavuya did so by paying Shs. 159,972,138/= the outstanding money directly into the plaintiff\rquote s bank accounts. The balance of Shs. 112,027,862/= was paid}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 to}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2710879\charrsid8081547 the plaintiff in two installments. Counsel for the defendants submitted that the transaction between the parties was a straight sale and that the document marked Exhibits P. ID.2 purporting to show that the plaintiff was servicing a loan by payi ng Shs. 1,500,000/=}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5572184\charrsid8081547 was not}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 an agreed document and was not proved and}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5572184\charrsid8081547 therefore was inadmissible in evidence. Counsel for the defendants dismissed as not credible the plaintiff\rquote s testimony that he signed transfer forms t}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 h }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5572184\charrsid8081547 at were blank. \par \par I have perused the submissions of both counsel and the evidence on record. Counsel for the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 defendant}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5572184\charrsid8081547 adduced into evidence six exhibits }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 namely:}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5572184\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 \tab a)\tab Exhibit P.1\tab -\tab The Sale Agreement \par \tab b)\tab Exhibit P.2\tab -\tab The payment slip to Housing Finance Bank \par \tab c)\tab Exhibit P.3\tab -\tab Transfer}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 forms}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 for Plot 17}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 Kataza Kiswa}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 \par \tab d)\tab Exhibit P.4\tab -\tab Transfer}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 forms}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 for Plot 2062}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 Bweyogerere}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 \par \tab e)\tab Exhibit P.9\tab -\tab Copy of Certificate of Title for Plot 2062}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 Bweyogerere}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 \par \tab f)\tab Exhibit P.10\tab -\tab Copy of Certificate of Title for Plot 17}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 Kataza Kiswa }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 \par as evidence that the plaintiff sold his property to the defendant. \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 The plaintiff}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 on the other hand says this was a loan and signed an agreement to that effect a copy of which was not given to him. \par The plaintiff }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 also }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 relied on a document Exhibit P. ID.1 a copy}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16008170\charrsid8081547 of a computer}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 print out suggesting that he paid Shs. 1,500,000/= to the first and second defendants on the 14}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid8924957\charrsid8081547 th}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 February}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 2007}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 as installments on the loan}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 which was}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 signed by Sam Kamwada an Accountant with the second defendant}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 . Mr. Kamwada (PW4) gave evidence in court and denied generating the document Exhibit P. ID.1 or that the handwriting }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 on }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 it was his. To my mind Mr. Kamwada was a hostile witness for the plaintiff.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8924957\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 Another witness Mr. Edgar Mutu}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 mba (PW2) a businessman and former employee of the second defendant also testified that he }{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 w}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 as a witness to the sale agreement between the plaintiff and the first defendant. While agreeing that the second defendant company was a money lending enterprise}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 , Mr. Mutu}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 mba}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 however}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 testified that all he knew about the transaction in court was th at it was a sale of property by the plaintiff. This in my view made Mr. Mutumba a second hostile witness during the plaintiff\rquote s case. \par \par The first defendant testified that he owned both the second defendant}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9505403\charrsid8081547 ,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 a money lending company and the third defendant}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9505403\charrsid8081547 ,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 a property company as a family business. He testified that the property business however was not his main business. \par \par I must concede that the transaction between the plaintiff and the first defendant does raise eye brows as to its true nature. There is a ten dency now days for money lenders to lend money and also secure such transactions by signing transfer forms for properties. Counsel for the plaintiff referred court to one such case namely }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid3803790\charrsid8081547 Patrick Kirumira vs David}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid6703184\charrsid8081547 Tomusange }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 HCCS No. 225 of 2002}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2838288\charrsid8081547 which was before Hon. Lady Justice C. A. Okello.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6703184\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2838288\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 However in the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid3803790\charrsid8081547 Patrick Kirumira}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid2838288\charrsid8081547 case}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2838288\charrsid8081547 unlike this one there was both a loan agreement and transfer forms t}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 h}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2838288\charrsid8081547 at were signed. }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12917585\charrsid8081547 In this case there is no evidence of a loan agreement at all.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 There is also the issue of two ins tallments said to have been given to the plaintiff being the difference between the outstanding value of the Housing Finance Bank loan and the purchase price of the suit properties which the plaintiff did not sufficiently address.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12917585\charrsid8081547 In such a situation based on the evidence on record I am inclined to agree with the submissions of counsel for the defendants that the only agreement before court is the agreement of sale.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2838288\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4218062\charrsid8081547 \par I therefore find in answer to the first issue that this agreement was a sale agreement between the parties. \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4218062\charrsid8081547 Issue No. 2: Whether or not the transaction was fraudulent \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4218062\charrsid8081547 Counsel for the plaintiff approached this issue from three angles. First that if there was a money lending agreement then the int}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12476712\charrsid8081547 erest charged therein of 10% p.m}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4218062\charrsid8081547 . is illegal under Section 12 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 (}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4218062\charrsid8081547 1) of the Money Lenders Act (Cap 273) as being harsh and unconscionable . \par \par The second is that based on the alleged terms of the loan agreement the duration of the loan was six months}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11819890\charrsid8081547 ,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4218062\charrsid8081547 but the said properties were transferred into the third defendant\rquote s names within one month. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11819890\charrsid8081547 \par Thirdly that the transfer was illegal and fraudulent as according to the two transfer forms the two properties in question though elaborately developed were declared to be empty plots worth Shs. 10,000,000/= each, with a view to make an under-declaration for stamp duty purposes. \par \par I have already found that the argument of a loan agreement cannot be sustained. Therefore the first two grounds of fraudulent transaction must fail. The third}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9371683\charrsid8081547 ground however is different. Counsel for the plaintiff submitted that a contract is bad if it offends public policy. In this regard he referred me to the case of }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid9371683\charrsid8081547 Dr. Kaijuka Mutabazi Emmanuel vs Fang Min}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9371683\charrsid8081547 SCCA No. 23 of 2007.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11819890\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9371683\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15935583\charrsid8081547 Counsel for the plaintiff further referred me to a decision of Justice Alfred Karokoora (}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4160081\charrsid8081547 J.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15935583\charrsid8081547 as he then was) in the case of }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid15935583\charrsid8081547 Samuel Kizito Mubiru & }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4160081\charrsid8081547 Another}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid15935583\charrsid8081547 vs G. W. Byansiba & Another }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15935583\charrsid8081547 [1985] HCB 106, where h}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 e held that by Public Policy any}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15935583\charrsid8081547 transaction designed to defraud the Government of its revenue is illegal.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9371683\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15935583\charrsid8081547 \par Counsel for the defendant in his submissions conceded that there was evidence of under declaration}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5012557\charrsid8081547 and misdescription of the two properties in this case. He however submitted that such a finding cannot be made in isolation as it is a common practice. Counsel for the defendant submitted that if court were to cancel the transaction it would open a flood gate of cases. }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15935583\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5012557\charrsid8081547 \par Counsel for the defendant submitted that under the Stamps Act (Cap 342) a}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 s amended there are sanctions }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12476712\charrsid8081547 and}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5012557\charrsid8081547 penalties for not paying tax and those are more appropriate in the circumstances}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3029190\charrsid8081547 .}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5012557\charrsid8081547

\par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3029190\charrsid8081547 \par I find that there is a difference between not paying stamp duty on a sale agreement and not paying stamp duty on a transfer form. There is no doubt that}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 by}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3029190\charrsid8081547 failing to pay due tax is contrary}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10775406\charrsid8081547 to public policy. In a ttacking which document should be scrutinized I think it should be the transfer form. This present case should be distinguished from the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid10775406\charrsid8081547 Mubiru case}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3803790\charrsid8081547 (Supra) because in that}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10775406\charrsid8081547 case the plaintiff sought protection in a land transaction that he was a bona fide purchaser for value without notice. However, the Judge in that case rightly pointed out that you cannot be a b}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7170196\charrsid8081547 ona fide purchaser if you do not pay}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10775406\charrsid8081547 Government tax. That is different from this case. In this case I agree that the short fall of tax should be d rawn to the attention of the Uganda Revenue Authority for appropriate action. The main agreement however remains valid as there is no evidence that it was fraudulently made.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12611648\charrsid8081547 This also disposes of all the outstanding substantive issues and leave}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7170196\charrsid8081547 s}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12611648\charrsid8081547 court to look at the remedies available.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10775406\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4077819\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4077819\charrsid8081547 Issue No 3. Remedies: \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4077819\charrsid8081547 The plaintiff prayed for special damages on the grounds that he was served with a 14 day notice to vacate that suit properties but before that notice period was over h}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7170196\charrsid8081547 e was forcefully evicted as a result of which}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4077819\charrsid8081547 a lot of his property wa}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2122695\charrsid8081547 s}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4077819\charrsid8081547 destroyed. As a result the plaintiff lost property worth Shs. 72,107,276/=. He also claims he lost rent worth Shs. 344,520,037/=. As to the claim for property that was destroyed there is evidence of notices of evict ion. However, apart from a long list of receipts for property purchased for the hostel at Kataza, Bugolobi there is nothing to detail what was destroyed at the time of eviction. \par \par The plaintiff did not raise the destruction with the police or other civic authorities who could have come to testify }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2122695\charrsid8081547 about this. No inventory of destroyed property was given or valuation made. Special damages must not only be pleaded but also strictly proved. In this regard the plaintiff has failed the test.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4077819\charrsid8081547

\par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2122695\charrsid8081547 \par As to rent due counsel for the defendants submitted that this is a departure from the pleadings of the plaintiff and should be disallowed. I agree. That being the case the head for special damages must fail. \par \par All in all the plaintiff has failed to prove his case save for the issue of unpaid taxes against the defendant. That being the case this suit fails and is dismissed with costs. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16345920\charrsid8081547 \par \par }\pard \ltrpar\qc \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid16345920\charrsid8081547 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85 \par Geoffrey Kiryabwire \par JUDGE \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid2711288\charrsid8081547 Date:\tab 24}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid787323\charrsid8081547 /08/2010}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid2711288\charrsid8081547 \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 \par \par \par \par \par \par \par \par \par 24}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\super\insrsid12476712\charrsid8081547 th}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 August 2010 \par \par 9:45 am \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12476712\charrsid8081547 Mr. B. Kamya H/B for A. Bemanyisa for the Plaintiff \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 \par In Court \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12476712\charrsid8081547 The Plaintiff \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12476712\charrsid8081547 Mr. Okune Court Clerk \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 \par Court \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12476712\charrsid8081547 Judgment read and signed in open court \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 \par }\pard \ltrpar\qc \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85\'85..

\par Geoffrey Kiryabwire \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid6493312\charrsid8081547 JUDGE \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid6493312\charrsid8081547 Date: }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 24}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid6493312\charrsid8081547 /08/}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid787323\charrsid8081547 2010}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid12476712\charrsid8081547 \par }\pard \ltrpar\ql \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid8081547 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid2711288\charrsid8081547 \par }{\*\themedata 504b030414000600080000002100828abc13fa0000001c020000130000005b436f6e74656e745f54797065735d2e786d6cac91cb6ac3301045f785fe83d0b6d8 72ba28a5d8cea249777d2cd20f18e4b12d6a8f843409c9df77ecb850ba082d74231062ce997b55ae8fe3a00e1893f354e9555e6885647de3a8abf4fbee29bbd7 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