Jaffer Brothers Limited v Bagaliwo and 2 Others (Civil Suit 43 of 1997) [1998] UGCA 46 (3 July 1998)

Full Case Text

# THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA

# **AT KAMPALA**

## $CORAM:$

HON. MR. JUSTICE G. M. OKELLO, JA.; HON. MR. JUSTICE J. P. BERKO, JA.; AND HON. MR. JUSTICE S. G. ENGWAU, JA.

## CIVIL SUTI NO. 43 OF 1997

JAFFER BROTHERS LIMITED:::::::::::::::::::::::::APPELLANT

**VERSUS**

MOHAMED MAGID BAGALIWO & 2 OTHERS::::::::::::RESPONDENTS

## JUDGMENT OF ENGWAU, JA.

I have had the benefit of reading the judgment of G. M. Okello, JA in draft and I agree with it. It is common knowledge that after the expulsion of the Asian community from Uganda in 1972, the suit property was among the properties expropriated and vested in the military Government of the day and to be managed by the Departed Asian Properties Custodian Board by virtue of Decree No. 27 of 1973.

In that Decree the Departed Asians Property Custodian Board was empowered to manage the expropriated properties as the former owners could do. So in 1977, that Board sold the suit property to one Major Francis Nyangweso who was in active service during the military era. Major Francis Nyangweso later sold the same property to the first respondent. The latter was registered as the proprietor of the suit property on $21/04/80$ .

The purchases, transfers and all dealings of whatever kind with the expropriated properties were nullified by the Expropriated Properties Act, No. 9 of 1982. Consequently, the sale and transfer transactions between the Departed Asians Property

$\mathbf{1}$

I Custodian Board and Major Francis Nyangweso and also between Major Francis Nyangweso and the first respondents were affected by the provisions of that AcE. The objective of that Act was to return to the former owners their expropriated properties. In so doing the Act removed Ehe evil-u imposed on the former owners by the miliEary Government by returning t.he properties.

In compli.ance wit.h the provisions of the Act of ].982, the Minister issued the appellant with a letter of repossession of the suit property on 7/L2/93, Annexture B which he confirmed by issuing another letter daEed 28/9/ 94, Annexture F. rn my view, t.hose leELers authorising Ehe appellant to repossess his property under dispute, have the same legal effect as repossession certificates issued by the same Minister to the former owners pursuant E.o the provis j-ons of the No. 9 Act of L982.

In order for time Eo st.art running against the appeflant. t.he 7/L2/93 would be the starting poinE., in my view, when Ehe Minister issued him with that l-eEEer of the repossession of the suit property. The learned t.rial ,Judge, wiEh due respect, erred in holding Ehat time started Eo run against the appelJ.ant in 1980 rrhen the firsE respondent had acquired the suit property from Major Francis Nyangweso .

By tshe issuance of the letter of repossession by the Minister, the appellanE. has since had locus standi to sue anybody blocking him from repossessing his property including the respondents in the instant case. It. is also my well considered view that the consenE judgment in the HCCS NO. 310 of 1987, between the firsE respondenE and E.he Attorney General was and is sEi11 of no legal consequence as far as the appell-ant is concerned. It does not bind him as he was not a party to it. In any case the ExpropriaEed Properties Act, 1,982 nullified the sale and purchase of the suit property between Major Francis Nyangweso and Ehe first respondent. Therefore, the consent judgement cannot restore Eo Ehe first. respondent what had been taken away from him by an Act of Parliament. The objective of that Act was to remove

the wrong that was done to the former owners by preventing continuous injury caused by the then Government in power.

On the issue of a counter-claim, my understanding is that that was a separate and distinctive suit which should have been heard and determined on its merit regardless of the dismissal of the lead suit instituted by the appellant. Therefore, the learned trial Judge erred in holding that the counter-claim of the first respondent abated when the appellant's suit was dismissed.

In the result, I would allow the appeal with orders made by Okello, JA.

Dated at Kampala this....................................

S. G. ENGWAU

JUSTICE OF APPEAL.

## THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA

# AT KAMPALA

CORAM:

HON. MR. JUSTICE G. M OKELLO, JA.; HON. MR. JUSTICZ J. P. BERKO, JA.; AND HON. MR. JUSTICE S. G. ENGWAU, JA.

#### CIVIL APPEAL NO. 43 OF 1997

JAFFER BROTHERS LIMITED:::::::::::::::::::::::::APPELLANT

#### VERSUS

MOHAMED MAGID BAGALALIWO & 2 OTHERS::::::::::::::RESPONDENTS

[Appeal from the Ruling and Orders of the High Court at Kampala (Kato J. as he then was) dated 18th August, 1997.]

## JUDGMENT OF G. N. OKELLO, JA.

This appeal is against the Ruling and Orders of the High Court (C. M. Kato J. as he then was) dated 18th August, 1997, in Civil Suit No. 31 of 1995, whereby he dismissed with costs the appellant's Suit on the ground that it was time barred and disclosed no cause of action against the respondents. He held that the 1st Respondent's counter-claim had abated and awarded costs thereof to the respondents.

The background to this appeal may be stated simply, that the appellant is a Ugandan incorporated limited liability Company whose shareholders are all of Asian extraction. All the shareholders fled Uganda in 1972 following the expulsion of Asian from Uganda in 1972. At the time of expulsion, the appellant was the registered proprietor of Plot No. 9 HILL LANE, KOLOLO, KAMPALA, comprised in Lease hold Register Volume 354 Folio 17, which for convenience, I shall henceforth refer to as the suit property. Subsequently, Government of Uganda (3rd respondent) took over the suit property and by virtue of Decree No. 27 of

$\mathbf{1}$

$\cdots \cdots$

1973, vested it in the Departed Asian Properties Custodian Board (DAPCB) (2nd respondent) for management. This Decree 27 of 1973 came into force on 7/12/1973. Sometime in 1977, the DAPCB sold suit property to one Francis Nyangweso who in turn the transferred it to Bagalaaliwo, (1st respondent). Mr. Bagalaaliwo was on $21/4/80$ registered as the new proprietor of the suit property. By a consent judgment dated $18/11/87$ between Bagalaaliwo and the Attorney General in High Court Civil Suit No. 310 of 1987, the suit property was decreed in favour of Bagalaaliwo.

In November, 1973, however, the appellant obtained from the Minister of State for Finance and Economic Planning in-charge of Custodian Board (DAPCB), a letter dated 7/12/93, Annexture 'B' to the amended Plaint, authorising the appellant to repossess the suit property. This letter was clarified by a subsequent letter dated 28th September,, 1994, Annexture 'F' to the amended plaint. Armed with these letters, the appellant filed the original suit against Mohammed Magid Bagalaaliwo and Ronald Muwenda Mutebi to secure inter-alia, vacant possession of the suit property. The Plaintiff later withdrew the claim against Ronald Muwenda Mutebi. At the instance of Bagalaaliwo, DAPCB and the Attorney General were joined as defendants.

In his amended Written Statement of Defence, the 1st respondent countered the appellant's claim by a counter claim in which he claimed inter alia, compensation as an alternative remedy against the 2nd and 3rd respondents.

When the suit came for hearing, the respondents raised three preliminary objections, namely: -

> $[1]$ that the suit was time barred, it having been instituted allegedly well after 12 years from the date when the cause of action occurred thus violating Section 6 and 7 of

> > $\overline{2}$

1., j,mi tat ion Act. Cap . 7 0 ;

- l2l that the plainEiff has no locus standi in the suits since it does not hoLd any valid cert.if icat.e of repossession; - t3l EhaE the suit discloses no of action against alf defendants. cause Ehe

The trial ,Judge heard the objections and dismissed the appeflant's suiE. and upheld all the grounds Hence t.hi s appeal .

There are seventeen grounds of appeal namely: -

- t1l The learned t.rial Judge erred in 1aw in finding Eha! Ehe Eime began t.o run against. Ehe plaintiff in respect of the suit property from 7/L2/73 as far as the second and third defendant.s are concerned. - 12) The Iearned triaf . Tudge erred in 1aw in holding tshat time began to run against the plaintiff from the momenE t.he first, defendant acquired the sui,t property from Major General Nyagweso in 1980 and noE from 7/L2/93. - t3l The Learned Erial Judge erred in Iaw in concluding that. in the absence of any disability on the part of Ehe pl-aintif f or fraud on the part of the defendants in t.he

plaintiff's pleadings, the plaintiff's claim was time barred in respect of the defendants.

- $[4]$ The learned trial Judge erred in law in finding that Annexture 'B' to the Amended Plaint was a mere administrative letter outside the ambit of the Expropriated Properties Act (E. P. A) No. 9 of 1982 and cannot be used by the plaintiff to recover the suit property. - The learned trial Judge erred in $[5]$ law in finding that the Plaintiffs have never been issued with a Certificate Authorising Repossession of the suit property. - $[6]$ The learned trial Judge erred in law in concluding that since the plaintiff was not issued with a Certificate of Repossession of the suit property, they had no locus standi to sue the three defendants the on matter concerning the suit property. - $[7]$ The learned trial Judge erred in law in failing to find that the consent judgment in HCCS No. 310 of 1987 (Mohamed M. Bagalaaliwo Vs the Attorney General) was null and void since it contravened the express provisions of E. P. A. No.

9 of L982.

- t8l In the alternative but without prejudice to ground ? above, the learned trial Judge erred in faw in failing to hold that the plaintiff was not bound by the consent . Tudgment in HCCS No. 3l-0 of 1987, since t.hey were not parties to the said suit and consent Judgment . - t9l The learned trial Judge misdirected himself when he concl,uded that t.he effecE of Ehe consenE JudgmenE in HCCS No. 310 of L987, was to remove t.he Suit Property from the ambit of t.he E. P. A. No. 9 of l-982. - [10] The learned trial ,Judge erred in law and fact when he assumed that when t.he At.t.orney GeneraL Consented to ,Judgment in HCCS No. 3l-0 of 1987 contrary to Sections 1 (2) of Ehe E. P. A. No. 9 0f ]-982 which he had pJ,eaded, the Attorney General must have reafised that t.he Act was not applicable to the Suit Property. - t11l The learned trial ,Judge erred in Law and fact in assumi.ng that the AEtorney General cannot consent to an ilJ-ega1it.y. - [12] The Iearned trial Judge erred in

l-aw and in fact in holding that. even if the provisions of S. 1 Ql of the Expropriated Properties Act 1982 were applicable to the Suit Propert.y lhe first respondent remained the undisputed owner of the Suit. Property as l-ong as the consent ,Judgment in HCCS No. 3l-0 of 1987 6Eands.

- Ir3] The learned trial ,Judge erred in l-aw in hoJ.ding that the Plaintiff had no vested interest in the properEy since t.hey had no Iega1Iy recognised Certificate of Repossession. - [14] The learned trial ,Judge erred in law in holding Ehat the pJ-aint.if f did not have any cause of acEion against any of the three defendants. - [15] The learned !ria1 . Tudge erred in Iaw in upholding the defendants preliminary obj ections and dismissing the suit with cost.s. - [15] The learned trial ,Judge erred in Iaw by awarding costs of the counEer claim to the defendants when they had noE addressed Court on costs of t.he counEer c1aim. - [17 ] The tso trial . Tudge generally failed properly evaluat.e all the

pl-eadings of the partj,es and thereby reached wrong decisions and dismissed the suit.

Before I consider the meritss of these grounds, t.here r.ras an oral applicaEion by Counsel for the 1st respondent, seeking leave t.o argue ground, other than the ones upon which the trial ,Judge relied, to affirm the decj.sion of that Court. Counsel for the 2nd and 3rd respondents had no objection to the application being granted.

On Ehe other hand, Counsel for the appell,ant, application. We allowed the application whilsE. reasons which I propose Eo give now. opposed res erving the our

Mr. Serwanga, Iearned Counsel for the 1st. respondenE's argument was that he desired t.o contend at E.he hearing Ehat Ehe decision of the Hj.gh Court should be affirmed on Ehe ground oEher than that upon which High Court relied. The ground he sought t.o argue was that : -

> "The Suit was lime barred in as far as the appellant did not fo11ow the procedure under Expropriat.ed Properties Act., 1982 in Eime."

He bl-amed his failure Eo give t.he Notice of Ehat ground under RuIe 91 of the Rules of this Court, on oversight and numerous interfocut.ory applications which distracted his attention.

Counsel for the appellant gave the following three grounds for his opposition: -

> t1l That the application should have been made formally before a single ,Judge in accordance with Rule 52 Q, read together with Rul-e 42 boch of lhe RuLes of Ehis

> > 7 Court .

- 12) The Not j-ce was not. lodged within t.he period prescribed in Rule 9 Q) of tshe Rules of Ehis CourE and was too general to comply with RuIe 9 (1) . - t3l That E.he proposed ground was a new matter which was neiEher raised nor canvassed before the triaf Court.

On t.hose grounds he prayed that the application be rejected.

In a brief response, Mr. could be made oraffy. GOUAI.,,DAS I,AX}IIIDAS TANNA Serwanga conE.ended that t.he He cited u1v1 1A DDea1 No. appJ. i cat ion !2 of L992, VS SR ROSEMARY MI'NINZA AND DAPCB (SC) (unreported).

I agree wiEh Mr. Walubiri, Counsel for t.he appellant., t.hat. Rule 91 of the Rules of t.his Court provides for procedure and time l-j-mit for giving Notice of grounds other than or addit.ional- to those relied on by the trial Court, for affirming the decision of thaE Court.. I am however, persuaded by the decisi,on in TANNA'S case (supra) by whj-ch I am bound, Ehat under certain circumstances, oral application of Ehis type can be allowed to argue ground other than or addiEional to Ehose upon which Ehe triaf Court relied, to affirm the decision of that. Court.

In that case, the appel]ant had in 1982 bought. t.he Suit. Property, PIot 12 Hannington Road in Kampala from a Public Auction ordered by UCB as the Mortgagee to recover a Ioan. The original owner of t.he Suit Property who had mortgaged j.t had l-eft the Country as a Departed Asian'r f oJ-J-owing Ehe expulsion of Asians from Uganda io 19'72 before he repaid the loan. Government of Uganda expropriat.ed the Suit Property and by virtue of Decree 27 of 1973

vested tshe same in the DAPCB for management. The appellant. became the registered owner of the SuiE ProperEy i,n 1985. In the meantime the Suit. Propert.y was occupied by t.he 1sE respondent as a tenant of the DAPCB. She refused to recognise the Appellant's ownership over t.he Suit Propertsy and resisE.ed his attempt. t.o evict her. Consequently, the appellant sued the 1st respondent and the DAPCB in Ehe High Court claiming inter aIj-a vacant. possession. At the hearing, the question of the effect of SecEion 1of E.he Expropriated ProperEies Act., 1982 on the sale of che Suit Property to the appellanE. was raised and argued. The trial ,Judge dj.smissed the appellant's suit on a different. ground other than on t.he basis of Section l- of the Act.

On appeal , Counsel for the respondent sought. ora1ly in the cause of the hearing, leave to argue the effect of Sect.ion 1 of Expropriated ProperEies Act on the sale of the Suit Property to the appellant as a ground for affirming the decision of the trial Court .

In an unanj.mous decision, Wambuzi, C,J, said aE page 4 of his j udgmenE EhaE : -

> "It would have been preferable for Counsel for the respondent to have given NoEice under Rule 91 of the Rules of this Court of grounds for affirming the decision of the superior Court. on grounds other than or addit.ional to EhaE relied on by that Court. However, in the circumstances of t.his appeal, we allowed learned Counsel- for the respondents to puE forwards argument.s relating to Section 1of the Expropriated Properties Act, 1982 to enable the Court. t.o reappraise the issues and decide Ehe real" issues beEween the parEies. "

The circumstances of that appeal as contained on page of Ehe

Judgment of Oder JSC were: -

o t

"Both the respondents in t.heir Writ.ten Statement of Defence relied on t.he effect of that Act as the ground for resisting the appelLant's c1aim. In the agreed facts, the second respondenE reiterated its cont.ention that t.he transact.ion between the Uganda Commercial Bank and the appellant was nullifj-ed by the provisions of t.he Act. "

The gisE of the above circumstances is E.hat. Ehe point sought to be argued was not new. It was pleaded and canvassed at the trial . It \$ras centra] to the case.

The above principle, in my view, applies to the case before us as the circumstances of t.he two cases are similar. In the instant case, the issue of procedure to repossess property under the ExpropriaEed Properties Act, was pleaded by the second respondent in paragraphs 5 and 5 of its Written St.at.ement of Defence. It was also canvassed at the t.ria1 by Counsel for the second respondenE. He argued at. the trial t.haE Ehe Suit Propert.y was not returned to the appellant under the Expropriated Properties AcE, 1982. This ground is t.herefore not new. It is also cenEral to this appeal .

It was therefore necessary that Counsel for the respondenE. present their argument.s relat.ing Eo that procedure Co enabl,e the Court to consider the point. and effectually determine Ehe real issue beEween the parties. Its was for t.his reason that we affowed the oral applicaEion.

I now Eurn to the grounds of appeal . The appeal was argued on a broader quesEion wheEher Ehe appellant applied Eo repossess the Suit ProperEy under tshe Expropriated Properties Act, 1982 in time.

The argument put forward for the respondents, as I understand it, was, that the appellant did not apply to repossess the Suit Property within the ninety days prescribed under the Act and did not comply with the procedure prescribed for such application. In Counsel's view, Annexture 'B' was not issued under the Act as it did not refer to application nor did it even talk of returning property and was not signed by the Minister responsible for Finance. For these reasons, Mr. Sekandi, Counsel for the second respondent, submitted that the suit was time barred.

$\mathbf{r}$

Counsel for the 1st and 3rd respondents associated themselves fully with the submission of Counsel for 2nd respondent.

On the other hand, Counsel for the appellant contended that Annexture 'B' was issued under the Act to return the Suit Property to the appellant, a former owner. He submitted that as the substance of Annexture 'B' and 'F' to the amended Plaint tallies with the purpose of the Act, which is to return the properties to their former owner, Section 5 (1) of the Act and Regulation 10 (3) of Regulations 1983 (S. 1 No. 6 of 1983) should be interpreted liberally so that Annexture 'B' should be regarded as a Certificate of Repossession.

Section 3 of the Expropriated Properties Act, 1982 sets time limit within which a former owner may apply to repossess his/her/its property which had been expropriated by the Military Regime and vested in the Government under Section 1 of the Act. It reads: -

> "Any former owner of the property or business vested in the Government under Section 1 of this Act, may within ninety days of the commencement of this Act, apply to the Minister in writing and in such form as may be prescribed for repossession of the property or business."

> > $11$

The effect of the above section is thaE a former owner who wished to repossess his/her/iEs property has to submit his/her/j.ts applicaEion on a prescribed form wit.hin ninety days from the daEe when the Act came into force. The Act came into force on 21,/2/83 by Statutory Instrument No. 5 of 1983. By a simple calculat.ion, che ninety days ended on 22/5/1983.

o I

> However, there was General Notice No. 88 of 1993 issued by Ehe Minister responsible for Finance and published in Uganda cazet.t.e, Vol . LXXXVI No. 20 of May 13th 1993, and a StaEutory Instrument. No. 1 of 1994. The St.atut.ory Inst.rumenE referred in its preamble to the General Notice. The General Notice invited former owners, both citj.zens and non-citizens whose properties had been exproprj-ated by the Military Regime to apply up to 30/10/93, lo repossess them. The General Notice and the Statutory fnsErument in effecE amended SecEion 3 of the Exproprj.ate Properties Act., :-982 by ext.ending the nineEy days period prescribed in the Section. None of t.he Counsel for the part.ies had alluded to these documenEs when they argued the appeal . We therefore invited Ehem to address us on Ehe effect of the two document.s.

> Mr. Sekandi, l-earned Counsel for the 2nd respondent, argued t.hat t.he General Not j-ce was issued by the Minist.er as Chairman of the DAPCB under Decree 27 of 1973 in a mistaken belief lhat he had powers under Sect.j-on 17 of the Decree to return properties of citizens. Yet, that Section 17 of the Decree had been repealed ten years ago when the Expropriated Properties Act came into force. And that the distinction between citizens and noncit.izens had been abolished from the day of the judgment of t.he Supreme Court in The Reqiatered TruBteeg of Ka.mpala Institut,e VB DAPCB - Cl-vi1 Appea1 No. 21 of 1993 (unreporE,6d). According to that JudgmenE, all expropriaEed properties, whether belonging !o citizens or non-ciEizens now faII under the Act. In Counsel's view, Ehe Minist.er has no power under the Act to i-ssue such a Notice or to amend any provision of the Stat.ut.e. That the General Notice is a mere administrat.ive "confusion" without any legal effecE on the case in hand. He cited TARMAIJ MDUSTRIES IJT

> > t2

VS COMMISSIONER OF CUSTOMS AND EXCISE (1986) EA 471. He concluded that it was a misconception on the part of the Minister to have referred to the General Notice in the preamble of the Statutory Instrument No. 1 of 1994.

Counsel for the 1st and 3rd respondents associated themselves fully with the above submission.

From the outset, I agree with Counsel for the respondent that as from the date of the judgment of the Supreme Court in The Registered Trustees of Kampala Institute (supra), all expropriated properties whether belonging to citizens or noncitizens of Uqanda at the time of expropriation, now fall under the Act. I am however, unable to agree that the General Notice was issued by the Minister under Decree No. 27 of 1973 nor that he did so under a mistaken belief that he had powers to return expropriated properties of citizens under Section 17 of the Decree. There is no suggestion that that was the case. Reference to Decree No. 27 of 1973 in the General Notice was to show the origin of the DAPCB which manage the expropriated properties. The Minister must have known of the repeal of that provision because he never referred to it in the Notice. He must have, wrongly or rightly, issued the Notice under the Act since he referred to a provision of the Act in the Notice.

The salient question to be answered here, in my view, is whether the Minister has powers under the Act to issue such a General Notice which has the effect of amending a provision of the Act?

Mr. Bamwine, learned Counsel for the appellant, contended that the Minister has powers under Section 8 of the Act to issue such a Notice to enable him receive late applications and deal with them to carry out the purpose of the Act. His argument was that Expropriated properties Act being a remedial Statute, must be given liberal construction to achieve the purpose of the Act. In Counsel's view, Sections 3 and 8 read together, would show that Parliament did not intend, that Section 3 should be

mandaEory. He urged, that these two Sections be inLerpreEed Iiberally. He cired SECRETARY OF STATE FOR TRjADE AND TNDUSTRY vs E 1 1 3 ALLER 591 as authority for the principles for deEermining directory. wheEher a Statutory provision is mandatory or

I am persuaded by the argument Ehat Expropriated Properties Act being a remedial Statute must be interpreted 1iberal1y to give effect to t.he purpose of the Act.. To adopE a strict interpreEative approach canvassed by Counsel for the respondents. would only help to perpetuate the mischief which the St.at.uEe intended to combat and Eo provide no remedy Eo Ehe former owners for wrong done to them by the Military Regime. This is infact what Odoki JSC as he Ehen was, said in the unanimous decision in The ReqiBtered TruBte€g of Keunpala Instsitute (eupra) . He said on page 5 of his judgment that: -

> "The Expropriate Properties Act is therefore a remedial Act. I agree thaE such a Statsute must construed liberal-ly and not restrictively. To do other!'rise would be to perpetuate t.he mischief intended to be redressed and not to provide a remedy to the injustice which was occasioned by the Military Regime to Ehe former owners. It would be wrong and unjust t.o return property which the Mj-litary Regime Eook over Iawfully and refuse to reEurn properEy which was i1Iega1Iy taken over. This CourE cannot approve of an interpret.at. ion which wouLd result in such an injust.ice and which runs contrary t.o the plain meaning of the words and the purpose of the Act. "

I have perused the SECRETARY OF STATE FOR TRADE AI\ID II{DUSTRY (SUP&A) Eo which Counsel for the appellant referred us. That case concerned interpretation of Section 15 (1) of the Company Directors Disqualificat.ion Act, 1985. The Section requires E.hat. Not.ice of Intentsion to apply for disqual i f icat ion order 'shaI1' be given to the person against whom the order is sought not less E.han ten days before filing the application. The Secretary of State gave to Mr. Langridge l-ess t.han ten days Notice. The question before Court was whether the SEatutory provision for ten days NoEice period is mandat.ory or mere direcEory. What is Ehe effect of failure to given the t.en days Not.ice. ?

The Court adopted the following principles from the Smitsh,s . Tudicial Review of Adminigtrati ve Action (4th Edn, 1980 pp 142- 143 co resoLve the questions before iL: -

> "When Parl-iament prescribes the manner or form in which a duty is Eo be performed or power exercised, it seldom lays down whaE. will be t.he legal consequences of failure to observe its prescript.ions. The Courts must therefore famulate their own criteria for determining hrhether the procedural ruLes are Eo be regarded as mandatory, in which case disobedience will render void or voidable what has been done, or as direcEory, in which case disobedience will be t.reat.ed as an irregularit.y not affecting the validity of what. has been done (though in some cases it has been said there must be "subst.ant.ialcompl-iance" with the Statutory provisions if the deviation is to be excused as a mere irregularity) . Judges have often stressed the impract icabi l ity of specifying exact ru1es for the assignment of a procedural, provision Eo the appropriatse caEegory. The whole scope and purposes of enactment. must be considered and one must assess "the j.mportsance of the provision that has been disregarded, and Ehe relation of t.hat.

> > 15

provision Eo t.he generaf objects intended to be secured by the Act. " In assessing the importance of the provision, particular regards may be had to its si.gnj.f icance as a protection of individual rights, the relat.ive value that is normally at.tached to the rights that may be adversely affected by the decision and the importance of the procedural requirement in t.he overall admini sL.rat. ive scheme est.ablished by Statute. Al-though nullificatj,on is the natural and usual consequences of disobedience, breach of procedural, or formal rules is likeIy to be t.reated as a mere irregularity if the depart.ure from the terms of the Act is of a trivial nature, or if no substanEial prejudice has been suffered by those for whose benefit the requirement.s were introduced, or if serious public inconvenience would be cause by holding them to the mandat.ory, or if the court is for any reason disinclj-ned to interfere with the act or decision Ehat is impugned . "

above principles relevant and t.hem to handle the question in I find the shaI1 adopt also persuasive. hand . I

The purpose of the ExpropriaEed Properties Act., 1982, is contained in j-ts l-ong titsl-e or preamble which reads: -

> rrAn Act. to provide for t.he tsransfer of the properE.ies and busi.nesses acquired or oEherwise expropriated during Ehe MiliEary Regime to the Ministry of Finance to provide for the ret.urn Eo Ehe former owners or disposal of the same by Government and to

provide for other matters connected therewith or incidental thereto."

The purpose of the Act is in a nutshell to provide for the return to the former owners of the properties that had been expropriated during the Military Regime.

Section 3 of the Act which is said to have been disregarded was set out earlier in this judgment. It is intended to urgently ascertain former owners and the properties they claim repossession of, to enable government to deal with their matters speedily. The Section is in my view, procedural in nature. It is intended to benefit the former owners and to protect them and government against fraudulent claimants. A strict interpretation of the provision as Counsel for the respondents canvass, would produce substantial prejudice to the former owners for whose benefit the provision was intended.

It would result in former owners not receiving back their That would perpetuate the mischief Parliament properties. intended the Act to combat. The effect of that interpretative approach is to deny the administrative scheme established by the Statute enough time to deal with the load of work to implement the purpose of the Act. I cannot imagine Parliament to waste so much time and public funds to make this Act if its objectives were not to be carried out.

The Section cannot be construed restrictively. I would interpret the word 'may' in Section 3 to make the Section directory so that non compliance with it, is only an irregularity. That is the only sensible meaning which Parliament must have intended. The provision to Section 8 gives the Minister discretion to give direction as he deems fit, if he is satisfied that retention of the property would be prejudicial to the minority interest in a registered enterprise or business. The provision strengthens the view that Parliament did not intend that Section 3 be mandatory but directory. In view of the above, I am satisfied that the Minister has powers under Section 8 of the Act to issue the General Notice and there was no misconception to have referred to the Notice in the preamble of Statutory Instrument No. 1 of 1994. He is empowered so to do under Section 15 (b) of the Act.

I now revert to the argument that the appellant did not apply to repossess the suit property under the Act in time. For this argument to succeed, it had to be shown that the appellant's application was submitted after the 30th day of October, 1993. The onus is on the respondent who alleged the lateness of the appellant's application. Unfortunately no such facts had been shown.

Annexture 'B' was issued on $7/12/93$ . It was explained by a subsequent letter dated 28/9/94 (Annexture 'F').

It was argued that Annexture 'B' was not issued under the Act because it did not refer to application, did not even talk of return property and was not signed by the Minister responsible for Finance.

I think that these are matters of technicality relating to form which should not override substance. If the substance of the letter complies with the intent and purpose of the Act it should be given effect. To do otherwise would be going contrary to Article 126 (2) (e) of the Constitution which provides that "Substantive justice shall be administered without undue regard to technicalities." This is also in line with the provision of Section 43 Interpretation Decree No. 18 of 1976 which provides that:-

> "Where any form is prescribed by any Act or Decree, an instrument or document which purports to be in such form shall not be void by reason of any deviation therefrom which does not affect the substance of such

instrument or document or which is not calculated to mislead."

Annexture 'F' which explained Annexture 'B' reads in part as follows:-

"28th September, 1994.

M/S Kwesigaba, Bamwine and Company Advocates, KAMPALA.

### RE: PLOT 9 HILL LANE, KOLOLO, KAMPALA LEASEHOLD REGISTER VOLUME 354 FOLIO 17.

acknowledge receipt of your $\mathbf{I}$ letter CIV/75/94 dated 6th September, 1994 with regard to the above subject. For a long time properties of Uganda citizens have been returned using letters of repossession while of non-citizens these are issued Certificates. Therefore the letter dated 7th December, 1993 is a bona fide document authorising the owner to repossess his <pre>property." [emphasis mine]</pre>

It is clear from the above that the Minister intended in the letter dated 7th December,, 1993 which is Annexture 'B', to return the Suit Property to the appellant. That is what the purpose of the Act is and that is what Section 5 (1) thereof and regulation 10 (3) of the Expropriated Properties (Repossession and Disposal) Regulations, 1983 (S. 1 No. 6 of 1983) are intended Deviation of Annexture 'B' from Form $(3)$ to accomplish. prescribed in Regulation 10 (3) above should not render Annexture 'B' void since its substance is not affected. It was meant, to return the property to the former owner.

The issuance of AnnexEure B and F shows that. the Minister was satisfied under Section 5 (1) of the Expropriated Properties Act., L982.

I am satisfied EhaE the appellant applied and obtained Annext.ure B which amounEs to a Certificate of Repossession under Expropriated Propert.ies Act, 1982, in Eime. The Suit is therefore not t.ime barred.

As I have held above, Annext.ure B and F constitute a Certificate of Repossession. The Cert.if icat.e j.mmediately ctothed t.he appeLlanE with equitable right. over the Suit ProperEy, pending the transfer of E.he 1ega1 right by covernment on regist.rat. j,on. RegisEration is a formalit.y as covernment is bound under the Act. to Eransfer the property to former owner with a Certificate of Repossession. The equitable righE enabled the appellant t.o serve a quits Not j.ce to the 1st respondent who occupies the Suit. Property as a Statutory tenant. under Section 9 of the Act. Failure by t.he lst respondent t.o comply with the quit notice gave the appel-l-ant a cause of act.ion against the t-st. respondent. The appel-lant therefore has locus sEandi to bring Ehe Suit and has a cause of act.ion against the 1st respondent..

FinalIy, dismissaL of the main suiE does not automat.ical-1y abates t.he counter claim. Under 08 R2 of the Civil Procedure Ru1es, a counter-c1aim is a cross cIaim. It should have been heard on the merits. The tsrial ,Judge was therefore wrong in holding that the counEer-cLaim abated,

In the resu1t., I would alLow the appeal with cosEs Eo the appellant. I wouLd set. aside Ehe dismissal and other consequential orders made by the trial Judge and remit. the case t.o the High Court. for hearing on merits as there is a cause of action against 1st. respondent. As Berko JA and Engwau . IA both also agree the appeal is allowed.

The dismissal and other consequential orders made by the trial Judge are set aside. The case is remitted to the High Court for hearing on merits. The respondents shall pay appellant's costs of this appeal.

Dated at Kampala this.... $3$ ................................

$C_{\mathcal{L}}$

G. M. OKELLO JUSTICE OF APPEAL.

### THE REPUBLIC OF UGANDA

### IN THE COLIRT OF APPEAL OF UGANDA

### AT KAMPALA

### CIVIL APPEAL NO.43 OF I998

# (]OR,\I\I: HON. NIR. JTISTICE G. I\{. OKELLO, J. A., HON. I!IR. JUSTICE . I. P. BERKO,. I. A. & HON. MR.. IUSTICE S. G. ENGWAU,. I. A.

JAFFER BROTHERS LIMITED APPELLANT

#### VERSUS

## MOHAMED MAGID BAGALALIWO & 2 OTHERS ........ . ..... ... RESPONDENT.

### JT]DGMENT OF BERKO.. ITISTICE OF APPEAL

I agree that an Order should be rnade as proposed by Okello, J. A. I add some observations of rny own because we are differing from Kato J. (as he then was) on one point of general importance and out of deference to the arguments of Counsel.

The facts of this appeal are set out in the.judgrnent of Okello, J. A. which I have had the advantage ofreading in draft. I find it unnecessary to restate the facts, subrnissions and legislation save in so far as this is necessary to give point to the reasoning in rny judgment.

The main issues in contention in this appeal are

- (1) Whether the Judge rvas right in holding that the appellant's suit against all the defendants was time barred, - (ii) Whether the appellants have ever been issued with a certificate of repossession of the suit property, - (iii) Whether the appellants had locus standi to sue the defendants concerning the suit property,

The legal effect of the consent judgment in H. C. C. S. $(iv)$ No. 310 of 1987 and

$\mathcal{L} \rightarrow \mathcal{L}$

Whether the trial Judge was correct when he held that $(v)$ the counter – claim of the First respondent abated when the appellant suit was dismissed.

It is a common ground that after the expulsion of Asians from Uganda in 1972 the Government took over the suit property and by virtue of Decree No. 27 of 1973 vested it in the Departed Asian Properties Custodian Board to manage. Some time in 1977, the Departed Asians Property Custodian Board sold the property to one Major Francis Nyangweso who in turn sold it to the first respondent who was registered as the proprietor of the suit property on $21/4/80$ . The purchases and transfers of the suit property from the Departed Asians Properties Custodian Board to Major Francis Nyangweso and from Major Francis Nyangweso to the first respondent were nullified by S. $1(2)(a)$ of the Expropriated Properties Act 1 1982, Act 9. Section $1(a)$ of the Act vested the property back in the Government and brought it under the management of the Ministry of Finance. See: Gokaldas Laximidas Tanna v Sr Rosemary and Departed Asian Property Custodian Board – Civil Appeal No. 120 of 1992.

Thereafter the first respondent ceased to have tittle to the suit His right to occupy the property was regulated by property. Section $9(1)$ of the Act which provides:

> $(9(1)$ Any person who, at the commencement of this Act is legitimately occupying or managing property or business affected by the provisions of Section 1 of this Act, shall continue to so occupy or manage the property or business until such time as the property or business is returned to the former owner or is sold or otherwise disposed of under the provisions of this Act.

An officer, or employee of the Government, $(2)$ Government Institution or parastatal body or any other legitimate tenant shall be entitled to not less than ninety days notice to vacate any residential *property he is legitimately occupying, where such* property is returned to a former owner, sold or

### otherwise disposed in accordance with the provisions of this Act".

It is plain from the above provisions that after the First respondent's purchase of the suit property had been nullified by the Act of 1982, he had only a right under the Act to occupy the property until it was returned to the former owner or sold or disposed of by the Minister of Finance in accordance with the provisions of the Act. That right to occupy the property did not confer on him a right to prevent the Minister from returning the property to its former owner. Consequently he cannot set up a Statute of Limitation to defeat the appellant's right to repossess his property from the Minister of Finance. The first respondent cannot set up *jus terti* against the appellants claim.

The situation, however, will be different, if after the former owner had repossessed his property, he went to sleep for over twelve years without taking action to recover the property from the person in occupation by virtue of S.9 of the Act. In such a case, the occupant can resist the former owner's claim to recover possession from him by a plea that his claim is time barred.

In the instant case the evidence on record shows that the appellant was issued with a letter of repossession by the Minister of the $7/12/93$ . Therefore the Judge erred when he held that time began to run against the appellant from the moment the first respondent acquired the suit property from Major Francis Nyangweso in 1980.

The next point I want to deal with is the effect of the consent 310 of 11987 between Mohammed judgment in the HCCS Attorney General. In my view the consent Bagalaliwo $\mathbf{V}$ judgment is not worth the paper on which it was written. My reasons are firstly, that the appellant cannot be sound by a judgment in *personam* when he was not a party to it; Secondly, as the provisions of Section 1 of the Expropriatal Properties Act, 1982 nullified the sale and purchase of the suit property by the first respondent, the consent judgment cannot restore to him what had been taken away from him by an Act of Parliament: See: **Gokaldas Laximidas Tanna (Supra).** The objective of the Act was to correct a historical wrong that was done to the Asian Community in Uganda by the then Government in power and in a way to prevent the endless mischief and injury: See Constitutional Petition No. 9 of 1997 Pyrali Abdul Rasul Esmail vrs. Adrian Sibo, Court of Appeal (unreported). That objective cannot be defeated by a consent judgment recorded behind the back of the former owner. The learned Judge therefore erred when he held that so long as the consent judgment stands the respondent remains an undisputed owner ofthe property. The other points are adequately covered by Okello, J. A.

./"

a ,

> For the above few observations, I agree that the appeal be allowed.

Dated at Kampala this ...1 ,A ...day of J 1998

. I. P JUSTIC APPEAL