Bemba and Another v Victoria Tea Estates (Civil Appeal 821 of 1991) [1996] UGHCLD 4 (1 April 1996)

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THE REPUBLIC OF UCANDA IN THE HIGH COURT OF UGANDA AT KAMPALA CIVIL SUIT NO.821/91

JAMES BEMBA: : : : : : : : : : : : : : : : : : : ANDREW BENBAILLERICHTERSCHERFERSTERSCHERFERFE

**VERSUS**

VICTORIA TEA ESTATES:::::::::::::::::::::::::: JDEFENDANT

BEFORE THE HONOURABLE LADY JUSTICE C. K. BYAHUGISHA

## **JUDGEMENT**

In an amended pliant dated the 8th day of March 1993, the plaintiffs who are the registered proprietors of the land comprised in Buddu Block 326 Plot Volume 881 Folio 8 situated at Mutemula Baddu Masaka District are seeking the following reliefs:-

- (a) a permanent injunction; - (b) eviction order; - <pre>(c) general damages in trespass;</pre> - (d) interest on the decretal amount and costs of the action.

The facts constituting the plaintiff's cause of action arose as follows. By a lease dated the 22nd October 1943 the suit property was leased to one George Clawson Shamael for a period of 49 years. The lease agreement was attached to the pliant. It was part of the covenants in the lease that the lessee will pay ground rent to the lessor and the power of re-entry was reserved if rent was six months in arrears. It is the plaintiff's case that since 1970 the lessee breached the terms of the lease by not paying ground rent and no consent was given

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by the them or anyone else to the lessee to transfer the leased was noted on the register as On the as agent or General Manager of the defendant the land and land. to them. this letter use , s re-entry March 1991 property to any partly including the defendant. these breaches the plaintiffs re-entered the leased property and this entered upon thereon. started utilising it by growing tea Counsel for the plaintiffs M/S Kayondo & Co. Advocates wrote to Patel seeking to know the basis of his occupation of the In reply Counsel for the defendant .wrote claiming that^the land was leased t6 the defendant and the same has been allocated On receipt of thisletter the plaintiffs instituted this action complaining that their rights, use, possession and enjoyment of the land has been interfered with by the defendant' acts of trespass. <sup>o</sup><sup>n</sup> j> <sup>r</sup> \_\_ab <sup>o</sup> <sup>u</sup>t^jtr<sup>d</sup> Instrument No.247528. Onthe 28th November 1991 the Minister of Finance issued a certificate of repossession to the defendant under the provisions of the Expropriated Properties Act. Then one Patel As a result of

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In a written statement of defence filed on behalf of the defendant, it was admitted that the property was leased to one George Clanson Ishmael in 1943 who in turn transferred the lease to Kiwala Tea Estate in 1944 which transferred it to the defendants on <sup>15</sup>th July 1955. It is al leged that all the ^(7 necessary consents were oh tained before the transfers were effected. It was further a v e r <sup>r</sup> e d in paragraph three of the written statement' of defence that the defendants breached the conditions and covenants in the lease because in 197 all its shareholders and directors were expelled from Uganda being of Asian extraction and their property was expropriated by the-It was also averred that the re-entry was It is also the defendant's case that upon the re turn of its directors in 1987 the property was it by the Departed Asian Property Custodian Board <sup>I</sup> 1991 a was pending issued. allocated to verification and in certificate of repossession Uganda Government, wrong in law and a nullity.

The following were the agreed issues;

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- $(1)$ whether the property were affected by the Expropriated Properties Act and if so; - $(2)$ what is the effect of the certificate of Repossession issued to the defendant. - $(3)$ whether the current occupation of the suit property by the defendant amount t:o trespass: - $(4)$ damages if any.

In an attempt to prove the averments in the pliant one of the plaintiff James David Kasozi Jemba testified that his mother was the late Ruth Bemba who died in 1991, when she died the witness together with $\mathrm{h}\mathrm{i}_\mathrm{l}\mathrm{s}$ brother Andrew became the Administrators of her estate. As regards the subject matter of this suit, the witness stated that it was leased to one Clanson in 1943 by his grandfather Yusufu Bamuta. He stated that since 1970 the defendant has not paid any ground rent and in 1991 a re-entry was noted on the register. After this the witness got in touch with one Patel (D. W.1) who was claiming to be a representative of the defendant who told him that the estate was allocated to him by the Departed Asians Custodian Board. The said Patel did not pay ground rent or dues. Lastly the witness stated that he later got a copy of a repossession certificate issued to the defendant which was dated the 28th November 1991.

Two witnesses testified for the defendant namely Patel (DW1) and Namirembe Olijo (D. W.2) an official from Custodian Board. The evidence of Patel was to the effect that the defendant is $a_i$ family private company whose shares are owned by Kampala Cotton Co. Ltd. The witness stated that to the best of his recollection $\ddot$ ground rent was paid up to 1973 when they were expelled from Uganda. The property was taken over by Government until it was returned to the defendant on 28/11/91. After the return they

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started looking for the descendants of the lessors and started negotiations about the new ground rent and the extension of the lease. The negotiations failed because according to the witness, the amount of rent which was being demanded by the lessors were unrealistic. He denied that the defendant lis on the property as a trespasser but it is there as a result of the repossession certificate. He admitted that the plaintiffs have rejected the proposal to be paid rent and instead they went repossession.

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Briefly, the testimony of Namirembe Olijo the legal secretary with Custodian Board is that the property under dispute was managed by Custodian Board until it was returned to the former owners - Victoria Tea Estates.

I will now turn to the issues as frames but first I shall set out the submissions of both Counsel Mr. Sekandi who represented the defendant submitted that the property in dispute was expropriated and therefore it enjoys all the protection under the law. The law in question is the Expropriated Properties Act which was enacted in 1982 to enable former owners of properties which were taken over by the Government of Uganda to be returned to those owners who wished to have them back. Counsel contended that the property under dispute was expropriated and therefore it $-{\bf i} \, {\bf s}$ affected by the provisions of the Act. Counsel argument as I understand it, is that if the lease had expired, the property enjoyed the protection under the Act until it could be returned to the former owners. Counsel pointed out that if the plaintiffs were dissatisfied with the decision of the Minister they should have appealed against his decision as it envisaged under the Act. He referred to a decision of this Court in Jasper Bamuta & others v. Victoria Tea Estate and others Civil Suit No.390/92 for the legal proposition that any party aggrieved by the decision of a Minister of Finance in exercise of his power under the Act has only a right of appeal. He maintained that the defendant is on the property by virtue of the certificate of repossession which has not been challenged. He invited Court to answer issue No.1 in the affirmative.

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While responding to the above submissions Hr. Kayondo SC for the plaintiffs stated that in determining this case, the Court should be guided by the pleadings and the evidence given in this case. Counsel pointed out that the testimony of PW1 was that no rent had been paid by the defendant since 1970. This was long before the expulsion of the Asians or the enactment of the Expropriated Properties Act. Referring to the pleadings and paragraph 4 in particular of the written statement of defence where it was not averred that upon return of some of its directors the property was allocated to it pending verification and in 1991 $\mathbf{a}$ certificate of repossession was issued. Counsel also referred to paragraph 3 of the written statement of defence in which it was claimed that they complied with the terms of the lease before 1972. Counsel pointed out that when DW2 came to Court to give evidence she did not adduce evidence of the payment of rent at all. He disagreed with the submissions of Counsel for the defendant that the provisions of the Expropriated Properties Act were intended t $\phi$ assist the lessee to breach the terms of the lease. He contended that recentry is provided for in the lease and it was property carried out. He invited Court to find that inspite of the Act, there was a lease agreement which was breached by the defendant.

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The facts of this case are not in dispute. The property in dispute was expropriated by the uganda Government. The testimony of Olijo (DM2) to that effect will be accepted in the absence of any other evidence to the contrary. It goes without saying therefore that the provisions of the Expropriated Properties Act $\,\,\times\,\,$ applies to the property. However, what was expropriated was the $\gamma$ lease which vested in the Custodian Board as the management agency on behalf of the Uganda Covernment. The lease which was granted to the defendant in 1943 was for 49 years. It therefore $\star$ expired in October 1992. The provisions of the EXPropriated Properties Act which call for consideration is Section 1 (i) which reads thus:

> "Expropriated properties shall from the

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commencement of this Act remain vested in Government the and be managed by the Ministry of Finance."

Subsection (2) says: -

"for the avoidance $of$ doubt and notwithstanding the provisions of any written law governing the conferring $\verb|of|$ title to land property or business and the passing or transfer of such title, it $i$ s hereby declared that:-

- $(a)$ any purchase, transfers and grants $\bullet \texttt{f}$ $\verb"or"$ any dealings $of$ whatsoever kind in such property or business are hereby nullified and; - $(b)$ where any property affected $by$ this section was at the time of expropriation held under a lease or any agreement for lease or any other specified tenancy. $\texttt{of} \quad$ whatever description and where such lease or tenancy had expired or was terminated the same shall be deemed to have continued and continue in force until such property has been dealt with in accordance with this Act.

The provisions of this section were judiciary considered in the case of Bidandi Sali vs Attorney General Civil Suit No.834/89 [unreported]. The brief facts of the case are that the plaintiff bought property which had been leased to an Asian but whose lease had not cancelled by a re-entry by the lessor for non-payment of

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ground rent. This took place in 1987: The property was at the time of purchase occupied by soldiers of the National Resistance Army as it then was. The plaintiffs' efforts to gain possession of the property was resisted by the Government alleging that the property was still vested in the Ministry of Finance until dealt with under the provisions of the Act. In otherwise, the lessor's right of re-entry was being challenged. In dealing with this situation the Court said kat page 9 of the judgment.

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"On careful perusal of the provisions of Act 27/73, the Assets of Departed Asians Decree and the Expropriated Properties Act, Act 9 by 1982. I find it hard to accept Miss Nassuna's submission that the provisions of <u>S.1(i) and 1(2) of Act 9</u> were intended to apply to future dealings or transactions. I would be inclined to accept Mr. Mwesigwa Rukuntana's contention that the phrases "are hereby nullified and had expired or was terminated" were intended to act. retrospectively and not prospectively."

I agree with this interpretation and perhaps I would add that Parliament could not have made a Statute to nullify an act or acts which had not yet occurred. If it had wanted to do so, this would have been stated expressly. In any case I do not think that the rights of lessors were extinguished by the expropriation of the properties. The provisions of Section 4 (3) of the Departed Asians Decree supports this. The Section says:-

> liabilities attaching to anything "Any vesting in Government by virtue of the foregoing provisions of this Section shall also vest in Government."

The liabilities in question would include loans, mortgages, ground rent etc. In the instant case, the liabilities of the

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Government was to continue paying ground rent to the lessor $\overline{in}$ order to keep the lease in existence. Failure to pay ground rent leaves the lessor with the option to exercise his right of reentry and avoid the lease. I think the law is quite clear that provision for re-entry in a lease agreement is regarded in equity as security for rent and failure to pay rent renders the lease voidable and the lessee is entitled to be relieved against forfeiture on payment of the rent and any expenses to which the landlord had been put.

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CONTRACT IN THE REAL PROPERTY.

In the matter now before Court, the testimony of the plaintiffs that the lessee did not pay ground rent was not controverted. However the witnesses for the defendant were either evasive or completely silent about the payment of rent. DW1 admitted that he failed to agree with the plaintiffs on the rent payable and the renewal of the lease because the figures they demanded were $\;$ unrealistic.

I therefore accept the testimony of the plaintiffs that rent was not paid and that is why the lease was terminated by re-entry. It was however argued by Mr. Sekandi that the defendant is on the premises by virtue of a repossession certificate which was issued to it under the provisions of the Act. There is no dispute about The legal effect of the issuance of a certificate of that. repossession is found in Section 6 of the Act which says:-

> "A certificate issued under section 4 or 5 of this Act shall be sufficient authority for:-

- the Chief Registrar of Titles to $(a)$ transfer title to the new joint venture company or the former owner as the case may be; - the bank or financial institution $\mathbf{r}$ $(b)$ to reactivate any frozen account

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## or repay any transferred moneys;

$(c)$ the Registrar of Companies to reinstate $\overline{on}$ the **Register** $\mathbf{a}$ company that had been struck off.

The Section is silent about the reinstatement of a lease which $\boldsymbol{\mathfrak{t}O}$ had been determined by the lessor for non-payment of ground rent. I am not prepared to say what the legislature kept unsaid. $My$ finding on the first issue is that although the property was affected by the Expropriated Properties Act, at the time when the Minister of Finance issued a certificate of repossession to the defendant the leasehold interest was no longer in existence in law. It had been cancelled from the register by the re-entry. It is not enough in my view to say that the plaintiffs should 20 have lodged an appeal against the decision of the Minister, it was instead the duty of the Minister to satisfy himself that the $\chi\chi$ defendant's leasehold interest was still in existence before issuing a certificate of repossession. This disposes of the first and second issues.

The third issue is whether the defendant's occupation of the land in dispute amounts to trespass. Trespass to land, as the name suggests is an act of entering upon another man's land without lawful authority. In order to bring an action in trespass to land, the person bringing the action must $\mathbf{be}$ in actual possession.

Were the plaintiffs in possession of the disputed land or entitled to its possession at the time of filing the action? $In$ order to answer this question the Court has to consider the rights of the parties because in some instances trespass to land may be over rights of possession. Possession in its primary sense is the visible possibility of exercising physical control coupled with the intention of doing so either against all the world or against all the world except perhaps certain persons.

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In the instant case, the testimony of the plaintiffs that they re-entered the property and this re-entry was noted on the register by the Registrar of Titles is not being seriously contested. Although the defendant in its written statement of defence had averred that the re-entry was a nullity and bad in law, no evidence was adduced to prove these allegations. $\mathbf{r}$ therefore take it that the Registrar must have been satisfied that $\verb|the|$ provisions of Sections 102(b) and 113 of the Registration of Titles Act were complied with. In my view the Registration of Titles Act were complied with. In my view the plaintiffs are presumed to be absolute owners of the property until the contrary is shown and they are protected by law in their possession against all who cannot show a better title to the possession than they have. The defendant was issued with a certificate of repossession after the noting of re-entry. It is the certificate which is being relied upon as a basis for their being on the premises. But since I have already found that the certificate of repossession did not confer title on the defendant having been issued after the determination of the lease, it goes without saying that the occupation of the property by the defendant is an act of trespass. The third issue will be answered in the affirmative.

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Lastly is the question of the reliefs. In view of finding the plaintiffs are entitled to a permanent injunction to restrain the defendant, its agents, servants and anyone claiming to derive title from them from interfering with the plaintiffs rights, use, occupation etc. The plaintiffs are also entitled to an order of eviction.

As regards damages the basic principles involved is that damages are compensatory in nature and they are usually at large and within the discretion of the Court. The figure which was suggested by Counsel for the plaintiff was Shs.39m/=. However the defendant has been on the property since 1991 and this is a period of about five years. The loss suffered by the plaintiffs can be ascertained in accordance with the general principles that

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be nor worse a the wrong was committed. a person injured must as far as possible in terms of money, put in as good a position as if the wrong complained of had not been committed: See-. Philips v. Ward 1195.6J—<sup>1</sup> All—ER—874\_x\_ In other words the person who has been injured must receive such sum of money as would reasonably be said to put him in as good, but neither better nor worse a position as he was immediately before

Doing Using the above principles and applying them to the facts of the case, the land ip question was under a lease and was being used by the defendant to grow tea thereon. The period of trespass is almost four years and it is a fairly big chunk of land. .the best I can, I would award the plaintiffs 5 million Shillings .as general damages for trespass and costs of the suit. b- <sup>i</sup> • •

entered in favour of the will be following terms:- In conclusion, judgment ; plaintiffs and against the defendant in the

- (1) A permanent injunction. - (2) Eviction Order.

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- (3) General damages of 5m/= . - (4) Interest at Court rate. - (5) Cists of the suit.

(Mrs) C. K. BYAMUGISHA **<sup>I</sup>**

JUDGE .

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01/04/1996.

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IN THE HIGH COURT OF UGANDA AT KAMPALA CIVIL SUIT NO. 821 OF 1991

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PLAINTIFFS DEFENDANT 1. JAMES BEMBA 2. ANDREW BEMBA ) ) VERSUS M/S VICTORIA TEA ESTATES **LIMITED**

## DECREE:

THIS SUIT coming on this day for final disposal before Hon Lady Justice Byamugisha (Mrs) in the presence of H. M. B. Kayondo SC Counsel for the Plaintiffs and Edward Sekandi Esq Counsel for the Defendant, IT IS HEREBY ORDERED AND DECREED that Judgment is entered for the Plaintiffs against the Defendant in the following terms:-

- a) A Permanent Injunction. - b) An Eviction Order\* - c) General damages of shs.5>000,000/-\* - d) Interest at Court rate until payment in full. - e )- Costs of the suit\*

DATED AT KAMPALA on this 1st day of April, 1996.

*i* DRAWN & FILED BY:- *M/s* Kayondo & Co Advocates City House, 2 William Street P. O. Box 14210, KAMPALA.