Davakam Collections Limited v Commissioner for Lands Registration (Misc Cause No. 16 of 2020) [2021] UGHCLD 215 (4 February 2021) | Caveats On Land | Esheria

Davakam Collections Limited v Commissioner for Lands Registration (Misc Cause No. 16 of 2020) [2021] UGHCLD 215 (4 February 2021)

Full Case Text

## THE REPUBLIC OF UGANDA

### IN THE HIGH COURT OF UGANDA AT MASAKA

#### MISCELLANEOUS CAUSE NO. 16 OF 2020

DAVAKAM COLLECTIONS LTD :::::::::::::::::::::::::::::::::::::::::::::::::::: APPLICANT

#### VERSUS

#### COMMISSIONER FOR LAND REGISTRATION:::::::::::::::::::::::::::: RESPONDENT

*Before; Hon. Lady Justice Victoria Nakintu Nkwanga Katamba*

# RULING

This application is brought by Notice of Motion under Sections 182 & 188 of the Registration of Titles Act Cap 230, Order 52 Rules 1 & 3 CPR and Section 33 of the Judicature Act seeking orders that;

- 1. The Respondent do appear before the High Court and give and substantiate grounds for her refusal to act of the Applicant`s application for removal of a caveat lodged on the Register of Kabula Block 45 Plots 28, 34, 35, 37 and 38 land at Kankubebe belonging to the Applicant; - 2. An order be issued to the respondent to remove the caveat instrument number 00013158 lodged by Kiganda Vincent, Kato David, Apolot Waswa and Stephen Kamya on the Applicant`s land comprised in Kabula Block 45 Plots 34,35,36, 37 and 38 at Kankubebe.

The grounds of the application are extensively set out in the affidavit of David Kamya the Applicant's managing director and are that;

a) The Applicant purchased the subject land after court liquidation of Kyobe Estates Ltd. the former registered proprietor;

- b) Kiganda Vincent, Kato David, Apolot Waswa and Stephen Kamya lodged caveats on the subject land and instituted a suit against the former registered proprietor who was non-existent at the time and the suit was dismissed on the 6th day of February 2017;(A copy of the Ruling is attached.) - c) That caveator made an application reinstatement of the suit which was also dismissed and the Applicant applied for removal of the caveat and subsequently presented the dismissal ruling and order to the respondent; - d) That the Respondent issued a notice of intention to remove the caveat and also published the notice in the gazette. (a copy of the Uganda Gazette indicating the Respondent's notice is attached) - e) The Respondent only removed the caveat on Plot 36 and refused to remove the said caveat from the other plots; - f) The Respondent has selectively removed some caveats on the land and deliberately refused to remove from other plots which goes to show corruptive and inconsistency tendencies; - g) That the caveators had the opportunity to address their claims in various legal proceedings but have failed at all fronts;

The respondent did not file an affidavit in reply neither did she attend the hearing despite being served with the application and the hearing notice. There is an affidavit of service and an endorsed copy of the application on the court record. For those reasons, the matter proceeded *ex parte.*

Counsel for the Applicant raised two resolutions for determination by this Court;

- 1. Whether the Respondent is justified in refusing to remove the caveats from the Applicant`s titles. - 2. What remedies are available to the parties?

In arguing the first issue, Counsel submitted that the Caveators' interest was premised on the fact that they had lodged a civil suit challenging the Applicant's ownership of the suit land but rather civil suit No. 23 of 2015 was challenging the liquidation process of the former registered proprietor of the suit land. The suit was dismissed and the Applicant then moved the Registrar of Titles Masaka Zonal Office to remove the caveats. Counsel cited the case of Boynes vs Gathure (1969) EA 385 cited in Hunter Investments Ltd vs Lwanyaga & Anor Misc. Cause No. 0034 of 2014 which states that the primary objective of a caveat is to give the caveator temporary protection. Counsel also cited Section 140 (1) of the RTA and emphasized the provision for caveators to show cause why the caveat should not be removed. The Respondent after receiving the Applicant's application for removal of caveats issued notice to the caveators and proceeded with the transaction after expiry of 60 days.

Counsel further submitted that the Respondent removed caveats from some of the Plots belonging to the Applicant and did not remove the caveats from others (without justification). The basis for lodging the caveats was Civil Suit No. 23 of 2015 which was dismissed by court and the Respondent was notified of the same. Affidavits contain evidence and what is deponed, if not controverted, becomes unchallenged. The Respondent did not file an affidavit in reply nor appear and substantiate reasons for refusal of removing the caveats on the Applicant's land and for this reason, the Applicant's claim remains unchallenged. That Applicant is entitled to the reliefs sought and an order to remove all caveats on the suit land. That is the Applicant's case.

#### Determination of the Application;

I have carefully perused the record and indeed the Respondent was served with summons and pleadings relating to this matter and yet no affidavit in reply was filed. Evidence of service is contained in the affidavit dated the 21st day of October 2020 and a stamp of the 30th September 2020 acknowledging receipt by the Respondent's office is on the attached copy of the pleadings. When the matter came up for hearing on the 22nd day of October, 2020, the Respondent did not enter appearance nor was it represented despite having been served. The matter proceeded *ex parte* under Order 9 Rule 20 of the CPR. An order of this court was made directing the Respondent to avail this court with certified copies of

documents pertaining to this application which it did. The certifications were done on 12th November,2020. In the circumstances, I am convinced that the Respondent is aware of the Application I therefore agree with Counsel that this application stands unchallenged.

If the Respondent had any objection to this application, it would have filed an affidavit in reply or entered appearance to provide the necessary information and evidence to guide this court in reaching its decision.

The law under which this application is brought *is Section 182 and 188 of the RTA. Section 182 of the RTA* provides that;

(*1) If upon the application of any owner or proprietor to have land brought under the operation of this Act, or to have any dealing registered or recorded, or to have any certificate of title or other document issued, or to have any act or duty done or performed which by this Act is required to be done or performed by the registrar, the registrar refuses so to do, or if the owner or proprietor is dissatisfied with any decision of the registrar upon his or her application, the owner or proprietor may require the registrar to set forth in writing under his or her hand the grounds of his or her refusal or decision, and the owner or proprietor may, if he or she thinks fit, at his or her own cost summon the registrar to appear before the High Court to substantiate and uphold those grounds.*

*(2) The summons under subsection (1) shall be served upon the registrar six clear days at least before the day appointed for hearing the complaint of the owner or proprietor.*

*(3) Upon such hearing the registrar shall have the right of reply; and the High Court may, if any question of fact is involved, direct an issue to be tried to decide the fact; and thereafter the High Court shall make such order in the premises as the circumstances of the case require, and such order as to payment of costs and fees as to it shall seem fit; and the registrar shall obey that order."*

Before I delve into the Application as it is, I must provide the background. The facts of this case are that the Applicant purchased the suit land following the liquidation of the previous registered proprietor, Kyobe Estates Ltd. The Caveators in September 2016 lodged caveats on the basis in their affidavits I support that the directors actions to transfer property were nullified by the Masaka High Court decision and decree in Civil Suit No.18 of 2009 and that they had filed a case in Masaka High Court Civil Suit No. 23 of 2015 challenging the winding up of Kyobe Estates. They alleged fraudulent transfer of their deceased father's interest in Kyobe Estates Ltd. The different applications and affidavits in support of the caveats are annexed to this application and marked as C2 and these the court has seen. According to their affidavits, the Caveators instituted Civil suit No. 23 0f 2015 on the basis of fraudulent transfer of the said Kyobe Estates property. The suit was dismissed for want of prosecution on 6th February, 2017. They then filed Miscellaneous Application No.20 of 2017 for reinstatement of Civil Suit No 23 of 2015. The said application was not considered on merit on the basis that one of the parties was nonexistent thereby rendering the application moot and that summons were served out of time. From the foregoing, I find that the Caveators were never heard as the suit they instituted was not determined on its merits. I cannot over emphasize the importance of the right to be heard. When parties come to court, they expect the courts to determine the issues between them on merit. That being said, I will not go into the evaluating the earlier decisions of the court as it would offend the rules of legal procedure. Rather I will determine the application based on what justice demands.

It is clear from the record that since the suit was dismissed, the Applicant's right to ownership of the suit land stood unchallenged in court. However, it is also true that the Caveators' objection to the Applicant's ownership of the property has never been heard. A caveat is intended to warn the general public that there is an interest in the property for a particular reason but also to protect the interest of someone with priority interest in that property. The position of the law is that a caveat is intended to offer temporary protection. (See Ssegirinya Gerald vs Mutebi Innocent MA No.081 of 2016). And this is the Applicant's contention. However a caveat should not be removed without serving its intended purpose.

The Applicant brought the Application against the Respondent under sections 182 and 188 of the Registration of Titles Act on the basis that the Caveators suit and subsequent applications had been dismissed. The Applicant notified the Respondent of the order of court and moved the office to remove the said caveats. A copy of the application for removal of caveats is also on record and marked as annexture A2. Upon receipt of the application and the order of court, the Respondent issued a notice to the caveators (in annexture N2) to show cause why the caveats should not be removed with in the statutory period of 60 days.

*Section 140 (2) of the RTA* provides that caveats that are not beneficiary caveats shall lapse upon expiry of 60 days after notice has been given that the proprietor has applied for removal of caveat.

In the instant application, some of the copies of the incumbrances pages of the certificates of titles on which caveats were lodged are not clear, however, caveat registered on 06.12.2016 vide Instrument number MSK00014057 indicates that the caveators claim an interest as administrators and beneficiaries. Section 140(2) of the Registration of Titles Act applies to them. In any event, the intention of the legislator in providing that Caveators have to be notified before their caveats are removed was in my view to give them a right to a hearing. They should be given the opportunity to show cause why their caveats should not be removed. Moreover, the procedure as laid out does not guarantee receipt of the notice to show cause why the caveat should not be removed. I believe that the legislators intention in providing for notice to show cause was that the caveator would be informed of the intention to remove the caveats so lodged. It was not merely to tick a box that notice was issued by the Registrar of Titles. In any case, the Uganda Gazette mentioned by the Applicant was not attached to his affidavit evidence and this court has not had the opportunity to see it. My perusal of the record shows a deliberate intent to deny the Caveators a hearing. This in my opinion would be a miscarriage of justice.

The law governing beneficiary caveats as established under Section 139 of the Registration of Titles Act provides that, "*Any beneficiary or other person claiming any estate or* *interest in land under the operation of this Act … may lodge a caveat with the commissioner …forbidding the registration of any person as transferee or proprietor of and of any instrument affecting that estate or interest until after notice of the intended registration or dealing is given to the caveator, or unless the instrument is expressed to be subject to the claim of the caveator as is required in the caveat, or unless the caveator consents in writing to the registration."*

In the case of *Sentongo Produce Vs Coffee Farmers Ltd & Rose Nakafuma Muyiisa HCMC 690/99* cited in *Hunter Investments Ltd vs Simon Lwanyaga & Anor HCMC No. 034 of 2012*, it was held that for a caveat to be valid, the Caveator must have a protectable interest legal or equitable to be protected by the caveat otherwise the caveat would be invalid.

In their affidavits in support of the Caveats, particularly the supplementary affidavit of Apollo Wasswa dated 24th August, 2016, the deponent speaks of fraudulent transfer of property, connivance and illegal winding up of Kyobe Estates. I paragraph 11, he states that the beneficiaries of the deceased's estate are living on the said land.

As stated already, caveat is lodged to protect the caveator`s interest and since the Caveators are beneficiaries Kyobe Esates(In Liquidation) they have an equitable interest in the property which is caveatable interest in the suit land.

A beneficiary caveat unlike other forms of caveats does not lapse and can only be withdrawn by the caveator, or removed on an Order of Court. (see S.140(2) of the Registration of Titles Act supra) In the instant case, the Applicants challenge the caveats lodged by the caveators and for that reason, the Caveators must be given the opportunity to show cause why the caveats should not be removed, failure of which would result into an order for vacation of the caveats by this Court.

For these reasons, I decline to grant the relief sought by the Applicant. I do not agree with the Applicant that the Caveators had the opportunity to address their claims in various legal fronts but failed to do so at all fronts. Their intentions were at all times fettered by the rules of procedure. I therefore find that the Respondent is justified in refusing to remove the caveats on land known as and comprised in Kabula Block 45 Plots 34,35,36,37 and 38 at Kankubebe because the liquidation process from which the Applicant acquired title is what the Caveators challenge. If they challenge that process and allege fraud which is a serious matter, then they challenge his ownership. Unless and until the ownership issue is resolved between the Applicant and the Caveators, there will be stalemate.

The Caveators must be given the opportunity to show cause why the caveats they lodged should not be removed and clear evidence of the notice communicated must be given.

In the result, I decline to grant the Application.

No order is made as to costs.

I so order.

Dated at Masaka this 4th day of February, 2021

**Victoria N. N. Katamba**

**Judge**