Bulega v Commissioner Land Registration (Miscellaneous Cause 35 of 2022) [2023] UGHCLD 292 (19 January 2023)

Full Case Text

# THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT MUKONO

## **MISCELLENEOUS CAUSE NO. 35 OF 2022**

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BULEGA DICK NELSON APPLICANT

#### **VERSUS**

COMMISIONER LAND REGISTRATION ....................................

# BEFORE HON. LADY JUSTICE KAAHWA CHRISTINE **RULING**

### 1. Background of the matter

This is an application brought under Section 103(8), 106 and 114 of the Registration of Titles Act, RTA, Cap 230, Section 98 of the Civil Procedure Act, Cap 71 and Order 52 rule 1 of the Civil Procedure Rules for orders that;

- a. the lease comprised in LRV 3341 Folio 6 under Instrument No.071687 granted to N. L Shyam Sundar and subsequently passed on to Eruma Roses Limited be removed from the incumbrance page on the mailo register Kyaggwe Block 133 Plot 94 land at Nabigayi by the Respondent. - b. That the re-entry of the Applicant be noted on the incumbrance page. - 2. The grounds of the application are briefly that; the Applicant was granted a lease of 25 years to N. L. Shyam on the 1st June 2004 which

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lease is now comprised in FRV 3341 Folio 6 under Instrument No. MK 071687 transferred to Eruma Roses Limited; the leasee defaulted on the payment of ground rent for lease since 2011; the Applicant gave the leesee notice of six months for termination of the lease on the 16th November 2012; the leasee replied the notice on the 28th March 2013 protesting the termination of the lease and asking for more time which was given to her but she abandoned the premises instead; the Applicant again demanded for the rent arrears on the 12th November 2014 but never got a response from the leasee which forced him to re-enter and he is now in physical possession of the property; the Applicant applied to the Respondent for re-entry on the 2nd January 2014 but the Respondent asked for several items to note the re-entry on the Mailo Register and that it is fair and equitable that this Court grants the orders prayed for.

- 3. The Application is supported by the affidavit of the Applicant deposed on the 20th May 2022 which reechoes the motion and for brevity, I will not repeat the averments. - 4. The Respondent filed an affidavit in reply affirmed by Ssekabira Moses and opposes the application and affirms that upon perusal of the register the Respondent discovered that the lessee, Eruma Roses Limited had obtained a facility from Equity Bank Uganda Limited, registered on the 30th March 2011 vide Instrument Number 446o28; the requirements that were requested from the Applicant

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upon receipt of the application for re-entry were all fulfilled save for the consent from Equity Bank Limited which had a registered mortgage on the title; the Respondent is duty bound to maintain a clean register and could not cancel the leasehold interest and note the re-entry of the Applicant until the issue of the existing mortgage had been steeled and or resolved; that inspite of the re-entry by the Applicant, legal re-entry must satisfy the requirements of the law and the same has not been sufficiently proved by the Applicant to the satisfaction of the Respondent and whereas the Court is clothed with the authority and powers as stated, the remedy sought by the Applicant is subject to third party interest which cannot be wishfully done away with.

5. The Respondent prayed that the matter be dismissed with costs as the Application was misconceived and frivolous.

### 6. Hearing of the matter

The matter came for hearing on the 26th October 2022 and the Respondent requested the Court and was granted time to file an affidavit in reply. The Court also directed that the Applicant considers amendment of the application to include the third party, Eruma Roses Limited, to enable the court to conclusively determine the matter. The amendment was never done by the Applicant. On the 13th December 2022 when this matter came up for mention to gauge the readiness of the parties to have the matter heard the Applicant and his Counsel were absent and no reason was given

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for the non- appearance. The Court then took note of the Respondent's affidavit in reply and adjourned the matter for ruling on the 19th January 2023. A formal hearing was dispensed with in light of the straight forwardness of the pleadings and evidence of both parties.

### 7. Issues

The issues for determination are as follows;

- i. Whether the lease comprised in LRV 3341 Folio 6 under Instrument No.071687 granted to N. L Shyam Sundar and subsequently passed on to Eruma Roses Limited should be removed from the incumbrance page on the mailo register Kyaggwe Block 133 Plot 94 land at Nabigayi by the Respondent? - ii. Whether the re-entry of the Applicant should be noted on the incumbrance page. - iii. What remedies are available to the parties?

## 8. Analysis and determination.

### Issue 1:

The Application is in my view rightly grounded in law on the provisions as cited in the application and for ease of references are expounded as below;

"103. Powers to be implied in lessor.

In every lease made under this Act there shall be implied in the lessor and his or her transferees the following powers—

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$1.(a)$ that he or she or they may with or without surveyors, workers or others once in every year during the term, at a reasonable time of the day, enter upon the leased property and view the state of repair of the property;

1. (b) that in case the rent or any part of it is in arrear for the space of thirty $\frac{1}{2}$ days, although no legal or formal demand has been made for payment of that rent, or in case of any breach or nonobservance of any of the covenants expressed in the lease or by law declared to be implied in the lease on the part of the lessee or his or her transferees, and the breach or nonobservance continuing for the space of thirty days, the lessor or his or her transferees may reenter upon and take possession of the leased property.

106. Recovery of possession by lessors to be entered in Register Book.

The registrar, upon proof to his or her satisfaction of recovery of possession by a lessor or his or her transferees by any legal proceeding, may make an entry of the recovery of possession in the Register Book; and the term for which the land was leased shall upon that entry being made determine, but without prejudice to any action or cause of action which previously has been commenced or has accrued in respect of any breach or nonobservance of any covenant expressed in the lease or by law declared to be implied in it. "

Book or Sublease Register. In the "114. Determination of lease or sublease by reentry to be entered in Register

In the case of a lease or sublease of land under this Act, if it is proved to the satisfaction of the registrar that the lessor or sublessor or his or her transferee has reentered upon the premises in strict conformity with the provisions for reentry contained in the lease or sublease, or under the power of section 103(b), where the lease or sublease is under this Act, or that the lessee or sublessee has abandoned the leased premises and the lease, and that the lessor or sublessor or his or her transferee has thereupon reentered upon and occupied the abandoned premises by himself or herself or tenants undisturbed by the lessee or sublessee, the registrar may make an entry of that reentry in the Register Book or in the Sublease Register, as the case may be, and the term for which the land was leased or subleased shall, upon that entry being made, determine and may be removed as an incumbrance from a certificate, but without prejudice to any action or cause of action which previously has been commenced or has accrued in respect of any breach or nonobservance of any covenant expressed in the lease or sublease or by law declared to be implied in the lease or sublease."

9. The Applicant seeks re-entry of the said land, which physical reentry is not contested, and however seeks that the Respondent duly re-enters him in the register book. The Respondent in paragraph 6 of their affidavit states that most of the requirements sought from the Applicant before consideration of the re-entry were fulfilled however it was brought to their attention upon perusal of the register that there was a third party interest who hold a mortgage 12/10/2022 over the lease which is now the suit property. They further state that they are bound to maintain a clean register and cannot cancel a lease and make a re-entry when there is an incumbrance on the land.

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- 10. It would seem to me that whereas the Respondent, has the power to note a re-entry on the register book, the Registrar must be satisfied that the lessor "reentered upon the premises in strict conformity with the *provisions for reentry contained in the lease or sublease, or under the power* of section 103(b), where the lease or sublease is under this Act, or that the lessee or sublessee has abandoned the leased premises and the lease, and that the lessor or sublessor or his or her transferee has thereupon reentered *upon and occupied the abandoned premises by himself or tenants undisturbed by the lessee or sublessee, the registrar may make an entry of* that reentry in the Register Book or in the Sublease Register, as the case may be, and the term for which the land was leased or subleased shall, upon that entry being made, determine and may be removed as an incumbrance from a certificate, but without prejudice to any action or cause of action which previously has been commenced or has accrued in respect of any breach or nonobservance of any covenant expressed in the lease or sublease or by law declared to be implied in the lease or sublease. "emphasis mine. - 11. The Respondent opposes the application for the sole reason that he has not been satisfied as stated or provided, and rightly so in my view. The Applicant has somehow by default or design failed to bring to this Court the other parties who would ordinarily be

212. Section 118 of the RTA provides for convenants on property that is encumbered by a mortgage the

"118. *Covenants to be implied in every mortgage.*" In every mortgage made under this Act there shall be implied covenants with the mortgagee and his or her transferees by the mortgagor binding the latter and his or her heirs, executors, administrators and transferees that he or she or they will pay the principal money mentioned in the mortgage on the day appointed in the mortgage, and will so long as the principal money or any part of it remains unpaid pay interest on it or on so much of it as for the time being remains unpaid at the rate and on the days and in the manner specified in the mortgage; also that he or she or they will repair and keep in repair all buildings or other improvements which have been or are erected or made upon the mortgaged land; and that the mortgagee and his or her transferees may at all reasonable times until the mortgage is redeemed enter into and upon that land with or without surveyors or others to view and inspect the state of repair of those buildings or improvements."

13. It would have been fallacious or erroneous if the Respondent had granted the application without properly interrogating the issue at hand. This Court for the same reason and in compliance with Articles 28 of the Constitution of the Republic of Uganda as amended, hold the view that the interested parties in this case to wit; Erma Roses Limited and Equity Bank Limited should have been added as a party to this application to enable this Court to 12/01/2023 wholesomely and conclusively determine the matter. The right to fair hearing is a cardinal principle in the law and would render a decision made by this Court or other Tribunal without hearing of the concerned parties a fiasco.

14. In the case of Francis Butagira vs Deborah Namukasa (1992) KaLR 767 (Supreme Court), to which this Court was referred, Odoki JSC (as he then was) held:

"It is trite law that the proviso for re-entry on non-payment of rent is regarded in equity as merely a security for rent and therefore, provided the lessor can be put in the same position as before, the lessee is entitled to be relieved against forfeiture and any expenses to which the lessor has been put. See 23 Halsbury's Laws of England, 3rd Edn, para 1409, page 681. The principle that the law leans against forfeiture was re-emphasized by Meggary and Wade in their book, The Law of Real Property, 2nd Edn, page 63 where they state:

'The law leans against forfeiture and a landlord suing for it is put on strict proof of his case."

15. In Francis Butagira vs Deborah Namukasa (supra), the Court upheld the principle in Gill vs. Lewis (1956) 1 All ER 844 that the fact that tenants had been bad payers in the past or elusive when attempts were made to serve them was irrelevant when exercising the discretion to grant relief against forfeiture for non-payment of The Court did, however, recognise a long period of nonrent. payment of rent as a ground for refusal to grant relief against forfeiture, as well as non-grant having no serious personal consequences for the lessee.

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16. In the case of **Public Trustee vs. Westbrook & Another (1965) 3 All ER 398**, Lord Denning held:

"It does seem to me that this is a case which is most exceptional far outside the ordinary cases. When a period of time has passed such as here twenty two years without any rent being paid at all, without anyone treating a lease as in existence it seems to me that quite a strong case must be put forward in order to obtain relief."

17. As regards the Registrar's refusal to act on the applicant's application for his re-entry to be noted in the register the case of Lugogo Coffee Co. Ltd. -vs- Singo Combined Growers Ltd. (1976) H. C. B.92, appears to support the view that where the Registrar of Titles declines to note a re-entry and advises that the dispute be resolved by court action, the lease does not remain subsisting as between the lessee and the lessor. It is terminated notwithstanding a refusal by the Registrar of Titles to note the re-entry, as happened in the instant case. This is what Wambuzi, C. J. said in *The Executrix* of the Estate of the Late Christine Mary N. Tebajjukira (supra):

"In Lugogo Coffee Co. Ltd. -vs- Singo Combined Growers Ltd. $(1976)$ H. C. B. 92, the plaintiff company brought an action against the defendant company for possession and general damages for trespass. Before the action the land in question had been leased to the defendant. The vendor re-entered for non-payment of rent and applied to the Registrar of Titles to mark the re-entry in the register book on the ground of non-payment of rent. The Registrar declined to mark the re-entry and advised that the

dispute be resolved by court action. The vendor did not refer the matter to court but instead sold the land to the plaintiff company. Nyamuchoncho J., as he then was, held inter alia, first that as between the lessor and the lessee the lease is determined by the lessor's lawful re-entry. I think this is a *correct proposition in law.*

Secondly, the learned trial judge held that refusal by the Registrar of Titles to make an entry did not have the effect of keeping the lease subsisting. The lease was terminated by the lessor's re-entry for all intents and purposes as between the lessor and the lessee although the law had not recognized the re-entry. I think by this the learned Judge meant that the lessee could pass title of the leasehold to some third person who was unaware of the reentry. I do not know whether this is or is not correct in law but quite clearly it is the duty of the court to say whether or not the re-entry was lawful and if so, issue proper orders to give effect to the re-entry such as rectification of the register. As I have already observed the main issue before the lower *court was whether or not there was a lawful re-entry. Instead the court was* preoccupied with determining whether the respondent was lawfully *registered as proprietor of the lease held."*

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18. In my view, the principles expressed by Wambuzi C. J. in the passage of his judgment in *The Executrix of the Estate of the Late Christine M. N. Tebajjukira* (supra), to which I have just referred, apply to the instant case. The lease agreement between the appellant and the respondent was terminated by the appellant's re-entry for

clear breaches of covenants by the respondent. It only remained for the High Court to order the Registrar of Titles to perfect the re-entry by noting in the register, a remedy which the appellant sought by his suit.

- 19. The Court has also considered the agreement which annex "A" to the affidavit of the Applicant, paragraph 5 a of that agreement states that "To pay all charges arising out of or in connection with the leased land such as but not limited to rent charges thereon. - 20. The agreement is between the Applicant and a one N. L. Shyam Sundar and the title indicates that on the 2.09.2004 the incumbrance was entered in favour of the said Shyam, Annex "C" indicates that the consents to transfer were obtained to transfer in accordance with clause 5 (c) of the agreement. It is interesting to note that this was done in August 2010, that subsequent transfer does not seem to have been entered in the register book that is before this Court. However the Respondent in paragraph 4 of his affidavit avers that there is registered on the same title a mortgage by Equity Bank Limited; a position which is affirmed by a letter dated 20th October 2014, Annex "J". - 21. Finally, in my view, while this Court expresses the foregoing as the proper position of the law, in the instant case there is an incumbrance on the land vide Instrument No. 071687 a mortgage by Equity Bank Limited, this Court would hesitate to order for a reentry to be noted in the register book.

22. This Court is therefore of the considered opinion that a re-entry cannot be granted without hearing the other interested parties as earlier opined. The Court therefore dismisses this application with costs to the Respondent and hastens to direct that a decision on the application should be formally reached by the Respondent.

Dated at Mukono this 19th day of January 2023.

**Hon. Lady Justice Christine Kaahwa**

**JUDGE**