Kachira Investment Company Limited v Mbale Municipal Council and 2 Others (Civil Appeal 33 of 2021) [2024] UGSC 9 (17 May 2024)

Full Case Text

# THE REPUBLIC OF UGANDA

# IN THE SUPREME COURT OF UGANDA AT KAMPALA

(Coram: Owiny-Dollo, CJ, Faith Mwondha, Tibatemwa-Ekirikubinza, Tuhaise, Madrama, JJ. SC)

# CIVIL APPEAL NO. 33 OF 2021

# **KACHIRA INVESTMENT COMPANY** LIMITED....................................

#### **VERSUS**

# 1. MBALE MUNICIPAL COUNCIL **LOCAL GOVERNMENT** 2. ABDU SALAAM LUBOWA $\cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cdots \cd$ 3. MASH INVESTMENT LTD

(An appeal arising from the judgment and orders of the Court of Appeal at Kampala in Civil Appeal No. 193 of 2014 before Buteera, DCJ, Barishaki, Obura, JJA dated 25th August 2021)

# **JUDGMENT OF FAITH MWONDHA, JSC**

出

This is a second appeal; the appellant was dissatisfied with the judgment and orders of the Court of Appeal and appealed to this Court on the following grounds: -

- 1. The learned Justices of Appeal erred in law and fact when they held that Plot 15A Bishop Wasike Road is different from Plot 20 Malukhu Road. - 2. The learned Justices of Appeal erred in law and fact when they failed to find that the descriptions of Plot 15A Bishop Wasike Road and Plot 20 Malukhu Road referred to the same Plot of land.

- 3. The learned Justices of Appeal erred in law and fact when they held that the 1st respondent had an interest in the suit land which was sold to the $2^{nd}$ respondent. - 4. The learned Justices of Appeal erred in law and fact when they held that the $2^{nd}$ respondent assigned his interest to the $3^{rd}$ respondent. - 5. The learned Justices of Appeal erred in law and fact when they held that the $3^{rd}$ respondent had an equitable interest in the suit land.

The appellant proposed that this Court makes the following orders: -

- a) The appeal be allowed. - b) The Court of Appeal decision quashed. - c) The respondent pays costs of this appeal and the courts below.

#### Background.

The 3rd respondent sued the appellant in the High Court of Uganda at Mbale vide Civil Suit No. 008 of 2012. The 3rd respondent's claim was for a declaration that it is an equitable owner of the land comprised in Plot 15A Bishop Wasike Road, Mbale Municipality and that the said Plot is different from Plot 20, Malukhu Road, Mbale Municipality. It prayed, inter alia, for a permanent injunction restraining the defendant/appellant from trespassing on the suit land, general damages for trespass and costs of the suit.

According to the plaint, the cause of action arose when the $3rd$ respondent purchased the suit land from the 2nd respondent who had acquired the same from the 1st respondent in 2010. It was the 3rd respondent claim that the 1st respondent acquired the suit land in 1959 and had been in possession until it was sold to the 2nd respondent, Abdu Salaam Lubowa, who in turn sold it to the $3^{rd}$ respondent.

The 3rd respondent alleged that the appellant disguised the suit property as Plot 20 Malukhu Road whereas it is Plot 15A Bishop Wasike Road and laid an unlawful claim over its ownership thereby preventing transfer of it.

The appellant filed a defence and a counter claim against the 3rd respondent. The 3rd respondent contended that it was the rightful owner of the suit land and had obtained a lease from Mbale District Land Board with effect from 1st January 1998. The appellants' case was that after approval of its application vide min. DLB 1/98 (a) 39 of 8/01/1998, the Council requested for a survey of the land in question on behalf of the appellant which was done in April 1998.

The appellant contended that there is no supporting document which caused the Plot number of the suit land to change from Plot 20 Malukhu Road to Plot 15A Bishop Wasike Road and the reference on the cadastral sheet to Plot 20 Malukhu Road was created and registered earlier in time than the 3rd respondent's Plot 15A Bishop Wasike Road which is yet to be registered.

The appellant alleged that upon coming into force of the 1995 Constitution on 8th October, former statutory leases to urban authorities such as the one allegedly granted to council in or about 1959, ceased to exist. That therefore the 1st respondent council had no authority to dispose of any land. It was argued that the 3rd respondent had no equitable or legal interest in the suit land.

The appellant in the counterclaim inter prayed among others for declarations that Plot 15A Bishop Wasike Road in Mbale Municipality does not exist and is actually Plot 20 Malukhu Road in Mbale Municipality, a declaration that the 1st respondent's sale and disposal of the land or lease complained of was illegal, fraudulent, and void.

The respondents denied all the allegations of fraud and illegality as alleged in the counter claim. The respondent's case in the counter claim

$\overline{3}$

was that the appellant had fraudulently obtained a lease on the suit property from Mbale District Land Board and that the re-naming of the property as Plot 20 Malukhu Road was irregular. It was argued that the 1st respondent's lease that was granted in 1959 was still valid when the appellant was granted an additional lease by the Land Board. The 2nd respondent contended that he had been a sitting tenant on the suit property and was offered an option to purchase which he assigned to the 3rd respondent. The 3rd respondent therefore maintained that it is the rightful equitable owner of the suit property.

The trial court held in favour of the 3rd respondent and dismissed the appellant's counter claim. The trial Judge ruled that the suit property was Plot 15A Bishop Wasike Road whereas the appellant's title described as Plot 20 Malukhu Road was fraudulently and dishonestly acquired. The trial Judge declared the 3rd respondent as the rightful owner of the suit land. The appellant was aggrieved by the decision and orders of the trial $\cancel{\mathbb{B}}$ Court, and appealed to the Court of Appeal. The Court of Appeal dismissed the appeal and upheld the judgment of the trial court. Dissatisfied with the decision and orders of the Court of Appeal the appellant appealed to this Court on the grounds already reproduced in this judgment.

# **Representation:**

At the hearing, the appellant was represented by learned Counsel Mr. Charles Ssemakula Muganwa. The 1st respondent was represented by Mr. Aaron Bageya Motooka, learned Acting Principal State Attorney, Mr. Joshua Serugendo, learned State Attorney and Mr. Isaac Olocho, learned State Attorney. The 3rd respondent was represented by learned Counsel Ms. Agnes Kanyago.

#### **Appellant's submissions**

#### Grounds 1 and 2

Counsel faulted the trial court and the learned Justices of the Court of Appeal for having found that Plot 15A Bishop Wasike Road is different from Plot 20 Malukhu Road. Counsel submitted that the Court of Appeal failed to consider issues of contention to resolve the dispute between the parties namely, whether the suit land is Plot 15A Bishop Wasike Road or Plot 20 Malukhu Road.

Counsel referred to the joint scheduling memorandum at page 102 of the Record of Appeal where both parties agreed on issues to be determined by the trial court. Counsel faulted the lower Courts for having failed to evaluate and re-evaluate the evidence on record.

#### Ground 3

Counsel submitted that the learned Justices of the Court of Appeal erred when they found that the $1^{st}$ respondent had interest in the suit land which was later sold to the 2nd respondent. Counsel submitted that the learned Justices of the Court of Appeal erroneously applied the principles relating to grant of statutory leases and came to a wrong conclusion that the 1st respondent had interest in the suit land. Counsel further argued that the learned Justices of the Court of Appeal misapplied this court case of Kampala District Land Board & Chemical Distributors v National Housing & Construction Corporation SCCA No. 2 of 2004 and wrongly concluded that the rights of the 1st respondent were not extinguished upon abolition of statutory leases by the 1995 Constitution under Article 285.

Counsel submitted that Article 285 of the 1995 Constitution abolished statutory leases and the rights of such holders were extinguished as rightly held by Odoki, CJ as he then was in Kampala District Land Board & Chemical Distributors v National Housing & Construction Corporation (supra) that "I think it is well settled that the Constitution abolished Statutory leases...the effect of this provision is that the statutory leases granted to the city council by the Uganda Land Commission in 1970 were extinguished on the coming into force of the Constitution. Kampala city council ceased to be the registered owner of the suit land on the coming into force of the Constitution. This would mean that the respondent ceased to be a bonafide occupant of the City Council, as the registered owner."

Counsel further submitted that when the statutory leases were abolished, Mbale Municipal Council ceased to be the body regulating public land in Mbale District, and the power to allocate and hold land in Mbale District was vested in Mbale District Land Board.

Counsel submitted that since Mbale Municipal Council failed to apply to Mbale District Land Board to have its rights in the suit land salvaged, they ceased to be the lawful owners of the suit land upon the coming into force of the 1995 Constitution. Counsel argued that the appellant had conducted due diligence and established that there was no overriding interest over the suit land before applying for grant of lease in 1998 and had since been $\mathbb{Q}$ in possession of the suit land. Counsel concluded by submitting that the $1st$ respondent did not have power to deal in the suit land.

### Ground 4

The appellant's Counsel submitted that the learned Justices of the Court of Appeal erred in law and fact when they held that the 2nd respondent assigned his interest to the 3rd respondent. Counsel submitted that the 2nd respondent was a licensee on the suit land and held no exclusive possession and that his possession was temporary. Counsel cited Manual of the Law of Real Property by R. E Meggary 2nd Edn at page 442.

Counsel submitted that the evidence on record proves that the 2nd respondent (PW2) was a licensee for value. Counsel referred Court to the 2nd respondent's statement at page 287 line 13 of the Record of Appeal which showed that the $2^{nd}$ respondent had no exclusive possession of the suit land, and that possession could have been taken anytime. That the suit land was closed for two years after the IGG stopped him and that he paid a temporary occupation license of $60,000/$ = per year since 1995. Counsel submitted that the 2nd respondent's statement on record indeed proved that he was a licensee for value and had no right to assign his interest to anyone including the $3^{rd}$ respondent.

Counsel submitted that the 2nd respondent evidence on record does not show that he ever purchased the suit land but rather mentioned that he had applied for and given permission to construct a building which proves that he was a tenant at will/licensee.

## Ground 5

Counsel, in the submissions, faulted the learned Justices of the Court of Appeal for finding that the 3rd respondent had an equitable interest in the suit land. Counsel submitted that the 3rd respondent acquired the suit land from the 2nd respondent who was just a licensee and had no right to assign his interest. That the 1st respondent had no authority over the suit land given the fact that the statutory leases where abolished and as such the rights of the suit land were vested in Mbale District Land Board.

Counsel submitted that the memoranda entered by the 2nd and 3rd respondents were void. He further argued that the memoranda were never consented to by the Controlling Authority (Mbale District Land Board), that by 2011 when the second agreement (DEX 4 at page 205-206 of the Record of Appeal) was executed, the 1st respondent had ceased to have interest in the suit land by virtue of the 1995 Constitution. He further submitted that the 1st respondent had no interest to pass it to the 2nd respondent. He added that the said agreement was never registered with the Registrar of Documents, and it was therefore inadmissible. Counsel prayed that the appeal be allowed, costs be provided for, and the Court of Appeal judgment and orders be set aside.

$\overline{7}$

### 1st Respondent's Submissions

### Grounds 1 and 2

Counsel submitted that Plot 20 Malukhu Road was a fictitious plot created by the appellant as a tool to grab Plot 15A Bishop Wasike Road as rightly found by both lower courts. Counsel supported the learned Justices of the Court of Appeal finding that Plot 15A Bishop Road was created before plot 20 Malukhu Road. Counsel further submitted that there was no evidence to show how the change of name came about, and invited this Court not to interfere in their findings.

### Ground 3

Counsel submitted that the evidence on record which was uncontested shows that the 1st respondent acquired a statutory lease from the colonial government in 1959 which was to run until 2008. That the statutory leases were abolished by the 1995 Constitution under Article 286. Counsel submitted that the correct position of the law is that the rights previously $\mathbb{R}$ held under the abolished leases were not automatically extinguished. See Lutalo Moses v Ojede Abdallah Bin Cona SCCA No. 15 of 2019 where Court held that; "...those rights previously held under the abolished statutory leases were not automatically extinguished under Article 286 of the Constitution. A party can still claim rights and benefits under the abolished Statutory leases." Counsel submitted that this was the same position in the Kampala District Land Board v National Housing Corporation, supra case.

#### Grounds 4 and 5

Counsel submitted that the 1st respondent was a sitting tenant on the suit land. And that since its rights in the suit land were not extinguished, the contract executed with the 2nd respondent were legal because it had valid title and a running lease over the suit land. Counsel submitted that since the 1st respondent had a valid title which it sold to the $2^{nd}$ respondent and subsequently to the 3rd respondent, the latter had equitable interest in the suit land. Counsel prayed that the appeal be dismissed with costs and the Court of Appeal judgment and orders maintained.

## 3rd Respondent's Submissions.

# Grounds 1 and 2

Counsel for the 3rd respondent submitted that the trial court and the Court of Appeal determined the issue as to whether the suit land is Plot 15A Bishop Wasike Road or Plot 20 Malikhu Road. Counsel submitted at page 461 of the Record of Appeal the learned trial Judge held that Plot 15A Bishop Wasike Road existed before Plot 20 Malukhu Road. He further argued that the documentary evidence (exhibit MMCA) proved that Plot 15A Bishop Wasike Road was formerly Kumi Road South and that Plot 15A lied between Plot 13 and Plot 15b Bishop Wasike Road, Mbale.

Counsel submitted that the Court of Appeal upheld the trial Court's decision and further held at page 13 of the Record of Appeal that the suit property was historically known as Plot 15A Kumi Road South, and that 8 the suit plot is described as Plot 15A Bishop Wasike Road.

## Ground 3

Counsel submitted that the 1st respondent had a valid lease on the suit land. That the learned trial Judge rightly held that the title granted to Mbale Municipal Council in 1959 was superior, and took precedence over the appellant title which was acquired in 1998. Counsel submitted that the abolition of statutory leases did not give absolute powers to Mbale District Land Board to disregard the interests of the existing leases such as the one held by the $1^{st}$ respondent.

## Ground 4

Counsel submitted that the evidence at page 284 of the Record of Appeal shows that the suit land was allocated to the $2^{nd}$ respondent upon application. Counsel affirmed that the 2nd Respondent occupied the suit land from 1995 until 2010 and that when the 1st respondent approached him to sell the suit land to him, and he accepted the bid though he sold his interest to the $3rd$ respondent.

Counsel submitted that the $2^{nd}$ respondent was a tenant of the $1^{st}$ respondent, and that the $2nd$ Respondent was entitled under the law to be the purchaser at first instance if the 1st respondent decided to dispose of the property. Counsel submitted that the appellant had no running lease, and the purported lease on the property was nonexistent.

#### Ground 5

Counsel submitted that the $2^{nd}$ and $3^{rd}$ respondents purchased the suit land as per Ex PEX2 though under PEX4, the 2nd respondent assigned his rights to the $3rd$ respondent. Counsel argued that the appellant's submission could not be sustained as there was no evidence to prove the allegation that was irrelevant because no authority was cited to back up the allegation that the agreements by the 3rd respondent were not signed by at least two $\mathcal{B}$ Directors.

Counsel submitted that the $2^{nd}$ and $3^{rd}$ respondents could not involve Mbale District Land Board again in execution of their agreements because the Board had already dealt with the suit property when it renewed the 1st respondent's lease.

Counsel prayed that this Court upholds the judgment of the lower Courts, and upholds the Court of Appeal judgement, and its orders. He prayed that the costs of this Court and the lower Courts be provided for but mainly reiterated what he had already submitted earlier.

The appellant filed a rejoinder which I considered.

### **Consideration of the appeal: -**

This is a second appeal, and the duty of the second appellate Court was long settled in various decisions of this Court. It is trite law that as a second appellate court, we are not expected to re-evaluate the evidence on record. However, where it is shown that the lower courts did not evaluate or re-evaluate the evidence or where they are proved to be manifestly wrong on a finding of fact the Court is obliged to do so and to ensure that justice is properly and timely served. See Tito Buhingiro v Uganda SCCA No. 8 of 2014

Also, in **Kifamunte Henry v Uganda SCCA No. 10 of 1997**, it was stated that; "On second appeal, it is sufficient to decide whether the first appellate court in approaching its task applied or failed to apply such principles." see also Pandya v R [1957] EA 336.

In determining this appeal, I shall bear the above principles in mind.

The appellant raised five grounds of appeal which have been reproduced in this judgment. I shall resolve them in the order they were argued by both Counsel.

$\mathcal{R}$

# Grounds 1 and 2

The complaint of grounds 1 and 2 was that the learned Justices of the Court of Appeal failed to find that Plot 15A Bishop Wasike Road and Plot 20 Malukhu Road referred to the same plot of land (suit land). Counsel submitted that the trial court ignored the issue framed in the Joint Scheduling Memorandum (page 102 of the Record of Appeal, issue 1) which in his view would have determined the dispute between the parties.

The issue counsel referred to in the Joint Scheduling Memorandum states; "Whether the suit land is Plot 15A Bishop Wasike Road or Plot 20 **Malukhu Road."**

While determining the issues at trial (at page 461 of the Record of Appeal), the learned trial Judge noted as follows: -

"From the evidence adduced at trial, it has been proved on a balance of probabilities that indeed Plot 15A Bishop Wasike Road existed before Plot 20 Malukhu Road was purportedly created.

PW1, PW2, PW3, RW1 and RW2 all testified to this land being known as Plot 15A Bishop Wasike Road which lies between Plot 13 and Plot 15B Bishop Wasike Road Mbale.

Documentary evidence Exhibit MMCA, Exhibit MMCB and Exhibit D25, Exhibit D31 and Exhibit D32 refer to Plot 15A Bishop Wasike Road. PW1, PW2, RW2 AND DW4 ALL AGREE THAT Bishop Wasike Road was originally known as Kumi Road South. The change of names was in memory of the late Bishop Wasike who was murdered during the military regime. Exhibit MMCA refers to Plot 15A Kumi Road South. This document was issued in 1960 during the colonial times.

Since none of the parties to this suit produced evidence or any minutes which changed Plot 15A Bishop Wasike Road to Plot 20 Malukhu Road, the above evidence shows that the name of the road has not changed."

While upholding the trial Court's decision on the above issue the Justices of the Court of Appeal noted that the appellant and the respondents claim for the same piece of land but with different descriptions. That the appellant referred to it as Plot 20 Malukhu Road while the 1st respondent (Mbale Municipal Council) referred to it as Plot 15A Bishop Wasike Road.

I have carefully perused the Record of Appeal, considered the submissions of counsel and I find that both courts considered the issue of whether the suit property was Plot 15A Bishop Wasike or Plot 20 Malukhu Road. The trial Court found that the suit property was Plot 15A Bishop Wasike Road and the Court of Appeal upheld this decision. It is clear according to the Record of Appeal that, the suit property is described by two different Plot numbers (Plot 15A Bishop Wasike Road and Plot 20 Malukhu Road. Both Courts found that Plot 15A Bishop Wasike Road existed before Plot 20 Malukhu Road. The Court of Appeal in the lead judgment of Butera, DCJ said, and I quote, "the evidence on record demonstrates that the suit property was historically known as Plot 15A

Kumi South Road. The first respondent originally acquired a 49-year lease to the same plot then known as Plot 15A Kumi South in 1959. In the 1990s the street name was changed to Bishop Wasike Road in memory of the late Bishop who was murdered during the military regime hence the change of name to Plot 15A Bishop Wasike Road".

The above evidence clearly shows that there was only one plot. The Court of Appeal further in its judgment observed that the trial judge evaluated the evidence before him which formed the Record of Appeal as a whole and found that Plot 15A Bishop Wasike Road existed before Plot 20 Malukhu road, and that Plot 15A Bishop Wasike Road, which is the suit land, and it is described as such. I add for avoidance of doubt that this was owned by the lease of the $1^{st}$ respondent way back in 1949.

I am therefore unable to accept Counsel for the appellants' submissions that the lower Courts failed to determine the issue of whether the suit property was Plot 15A Wasike Road or Plot 20 Malukhu road. $#$

Grounds 1 and 2 fail.

## Ground 3

The complaint on this ground was that the learned Justices of the Court of Appeal erred in law and fact when they found that the 1st respondent had interest in the suit land. Counsel for the appellant submitted that since the 1995 Constitution abolished statutory leases, the 1st respondent's rights in the suit land extinguished and thus had no interest in the suit land to pass on to the 2nd respondent. Counsel relied the cases of **Kampala District** Land Board & Anor v National Housing & Construction Corporation, SCCA No. 2 of 2004 and Lutalo Moses v Ojede Abdallah **Bin Cona** (supra)

Article 286 of the Constitution was repealed by Article $45(n)$ of Act 11 of 2005. It however, provided as follows: -

"Upon the coming into force of this Constitution and subject to the provisions of article $237(2)$ (a) of this Constitution, statutory leases to urban authorities shall cease to exist."

In the Lutalo Moses v Ojede Addallah Bin Cona case, while citing the earlier case of Kampala District Land Board v National Housing & Construction Corporation, Chibita, JSC observed that: -

The import of this decision is that those rights previously held under the abolished statutory leases were not automatically extinguished under Article 286 of the Constitution. A party could claim the rights and benefits accruing under the abolished statutory leases.

In the case of Kampala District Land Board v National Housing & Construction Corporation, (supra) court posed a question of the consequence of the abolition of statutory leases on those interests granted and owned under the extinguished statutory leases. Odoki, CJ as he then K was held that: $-$

The implication of the abolition of statutory leases has not been determined and in my view, this remains a gray area. I am unable to hold that the rights of the respondent as a tenant in possession who held adversely to the city council for a long time were automatically extinguished on the abolition of the statutory lease. In my opinion, the respondent could claim the rights and benefits accruing to a bonafide occupant of a registered owner, who must be deemed to be the Kampala District Land Board under section 59(8) of the Land Act.

I have considered both counsel submissions and the two authorities cited above, and I agree with the decision in Lutalo Moses v. Ojede Supra, but for Kampala District Land Board v. National housing & Construction Co. Supra. I do not agree with the statement that, "the implication of the abolition of statutory leases have not been determined, and in my view, this remains a gray area".

The Constitution determined and resolved the would-be implication of the abolition of statutory leases, and therefore, it is not at all a gray area for reasons discussed hereunder: -

Article 237 (5) and (6) of the Constitution provide; $(a)$

(5) Any lease granted to the Uganda citizen out of public land may be converted into freehold in accordance with a law which shall be made by Parliament

(6) For purposes of Clause 5 of this Article, public land includes statutory leases to urban authorities: Conversion into freeholds is a process and citizens are doing it but the Constitution by this above provision empowers it. Therefore, it cannot be a gray area for determination.

(b) Article 274 of the Constitution provides: Existing law.

(1) Subject to the provisions of this Article the operation of the existing. Laws after the coming into force of this Constitution shall not be affected. by the coming into force of this Constitution but the existing law shall be construed with such modification adaptations, qualifications, and exceptions as may be necessary to bring it into conformity with this Constitution.

(2) For purposes of this Article the expression "existing law" means the written and unwritten law of Uganda or any part of it as existed immediately before the coming info force of this Constitution, including any Act of Parliament or Statute or Statutory instrument enacted or made before that date which is to come into force on or after that date.

In line with the above I solely state that the rights of the 1st Respondent as a tenant in possession who held adversely to the City Council and in the instant case to Mbale Municipal Council for a long time, (Now Mbale City) the rights were not and could not be automatically extinguished on the abolition of the Statutory leases.

There are two ways;

- To convert their interest into a freehold in accordance with the $i)$ existing law to bring it into conformity with the Constitution. - The other way was stated in Kampala District Land Board v. ii) National Housing & Construction Corporation, when Odoki CJ stated, "In my opinion the Respondent could claim the rights of a registered owner who must be deemed to be the Kampala District Land Board under S.59 (8) of the Land Act. In the instant case, it would be the Mbale District Land Board).

The $1st$ respondent had an interest in the suit land because its lease was still running upon coming into force of the 1995 Constitution.

Ground 3 fails.

# Ground 4

Counsel faulted the learned Justices of the Court of Appeal for finding that the $2^{nd}$ respondent assigned his interest to the $3^{rd}$ respondent. Counsel submitted that the $2nd$ respondent was a licensee and had no rights to assign to the 3rd respondent because he had no exclusive possession of the $\mathscr{B}$ suit land.

The Black's Law Dictionary $8^{th}$ Edn defines a licensee as (1) one to whom a license is granted. (2) one who has permission to enter or use another's premises but only for one's own purpose and not for the occupier's benefit.

The Black's Law Dictionary (supra) defines a license as an authority to do a particular act or series of acts, upon author's land without possessing any estate therein. It is founded in personal confidence and is not assignable.

EXP2 at page 107 of the Record of Appeal shows that the 2nd and 3rd respondents entered into an agreement as partners to develop the suit land into a commercial facility. It is also shown that the $2^{nd}$ respondent was a sitting tenant. Exp1 at page 106 of the Record of Appeal shows that the

$2nd$ respondent extinguished his rights in the suit property to the 3rd respondent. Further, 2nd respondent testified at page 284 of the Record of Appeal that he applied and was allowed to operate on the suit land in 1995. It should be noted that before the abolishment of the statutory leases, the Municipal Councils had the authority to hold and allocate land in the district. The 1st respondent's lease was still running at the time it allocated the suit land to the $2nd$ respondent. I have carefully read the Record of Appeal and considered the submissions of counsel and the authorities; I did not find anywhere where it was shown that the $2^{nd}$ respondent was a licensee as submitted by counsel for the appellant. The evidence of counsel was from the bar, and it could not be sustained. Therefore, ground 4 fails.

# Ground 5

The complaint on this ground was that the learned Justices of the Court of $\mathcal{O}$ Appeal erred in law and fact when they held that the 3rd respondent had2 an equitable interest in the suit land.

Counsel for the appellant argued that the 1st respondent whom the 2nd and 3rd respondents revived their interests had no authority to transact in the suit land. The learned Justices of the Court of Appeal observed at page 17 of the Court judgment on record that "the 1st respondent had an interest in the suit land which was recognized by the Land Board when it granted it renew of the lease in 2010. I hasten to say that the Land Board erred in granting a lease for the purported Plot 20 Malukhu Road to the appellant on the same piece of land where the 1st respondent had a running lease, without hearing the 1st respondent."

I uphold the finding of the Court of Appeal, therefore, there is no basis for interfering with its finding and decision. I have already discussed in this judgment, the 1st respondent's rights as a lease, and I am certain that the right was not automatically extinguished upon coming into force of the 1995 Constitution which abolished statutory leases as discussed while resolving ground 3 of the Appeal. According to Article 237 (5) of the

Constitution, the owners of the leases had the opportunity to convert into leaseholds. Conversion into leasehold is a process using the existing law that is the RTA to bring it into conformity with the Constitution as provided in Article 274 of the Constitution.

Ground 5 fails too.

All grounds of appeal have failed for lack of merit. In the result, the appeal is dismissed, and the judgment and orders of the Court of Appeal are upheld. Costs of this Court, and Courts below are provided for to the respondents by the appellant.

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

Johner all

**Faith Mwondha Justice of the Supreme Court**

Juelymont deplivered as directed 17/05/24.

## THE REPUBLIC OF UGANDA

## IN THE SUPREME COURT OF UGANDA AT KAMPALA

(*Coram: Owiny - Dollo, CJ; Mwondha; Tibatemwa-Ekirikubinza;*

*Tuhaise; Madrama, JJ. S. C)*

## CIVIL APPEAL NO. 33 OF 2021

KACHIRA INVESTMENT CO. LTD............ ..................... APPELLANT

#### **VERSUS**

1. MBALE MUNICIPAL COUNCIL LOCAL GOVERNMENT ........ RESPONDENTS 2. ABDU SALAAM LUBOWA

3. MASH INVESTMENT LTD

[An Appeal from the Judgment and orders of the Court of Appeal at Kampala in Civil Appeal No. 193 of 2014 (Buteera, DCJ, Barishaki and Obura, JJA) dated 25th August, 2021]

#### JUDGMENT OF ALFONSE C. OWINY - DOLLO, CJ.

I have had the benefit of reading, in draft, the judgment of my learned sister Hon. Lady Justice Faith Mwondha, JSC. I agree with her decision that this Appeal should be dismissed for the reasons she has given in her judgment. I also agree with the orders she has proposed.

As Tibatemwa-Ekirikubinza, Tuhaise and Madrama, JJ. S. C agree, this Appeal is hereby allowed on the terms proposed by the learned Lady Justice Faith Mwondha, JSC.

Dated at Kampala this... $\mathcal{I}$ $\mathcal{I}$ day of ................................... $2024$

ALFONSE C. OWINY - DOLLO

**CHIEF JUSTICE**

#### THE REPUBLIC OF UGANDA

#### IN THE SUPREME COURT OF UGANDA AT KAMPALA

(Coram: Owiny - Dollo, CJ; Mwondha; Tibatemwa-Ekirikubinza; Tuhaise; Madrama, J. S. C)

### CIVIL APPEAL NO. 33 OF 2021

KACHIRA INVESTMENT CO. LTD............ $\mathsf{S}$ ......................... APPELLANT

#### **VERSUS**

# 1. MBALE MUNICIPAL COUNCIL LOCAL GOVERNMENT ........ RESPONDENTS

## 2. ABDU SALAAM LUBOWA

### 3. MASH INVESTMENT LTD

[An Appeal from the Judgment and orders of the Court of Appeal at Kampala in $10$ Civil Appeal No. 193 of 2014 (Buteera, DCJ, Barishaki and Obura, JJA) dated 25th August, 2021]

[Correction of errors under rule 2 (2) & 35 (1) of the Judicature (Supreme Court Rules) Directions arising from the ruling by the Court in Supreme Court Civil *Application No. 16 of 2019.)*

#### JUDGMENT OF OWINY - DOLLO, CJ.

My Judgment in respect of Civil Appeal No. 33 of 2021 read:

"I have had the benefit of reading, in draft, the judgment of my learned sister Hon. Lady Justice Faith Mwondha, JSC. I agree with her decision that this Appeal should be dismissed for the reasons she has given in her judgment. I also agree with the orders she has proposed.

As Tibatemwa-Ekirikubinza, Tuhaise and Madrama, JJ. S. C agree, this Appeal is hereby allowed on the terms proposed by the learned Lady Justice Faith Mwondha, JSC."

There was an error whereby after concurring with the decision of Mwondha 25 JSC, instead of dismissing the appeal as had already been indicated in the preceding paragraph, and as agreed by the other Justices, I inadvertently allowed the appeal.

$\mathbf{1}$ Rule 35 (1) of the Judicature (Supreme Court Rules) Directions provides for the power of this Court to correct its earlier order, in what is known as the slip rule. Rule 35 (1) provides:

"35. Correction of errors.

(1) A clerical or arithmetical mistake in any judgment of the court or any error arising in it from an accidental slip or omission may, at any time, whether before or after the judgment has been embodied in an order, be corrected by the court. either of its own motion or on the application of any interested person so as to give effect to what was the intention of the court when judgment was given." (My emphasis)

I hereby correct that error by substituting the word "allowed" with "dismissed." Accordingly, the Judgment is corrected; and now reads as follows:

"I have had the benefit of reading, in draft, the judgment of my learned sister Mwondha, JSC. I agree with her decision that this Appeal should be dismissed for the reasons she has given in her judgment. I also agree with the orders she has proposed.

As Tibatemwa-Ekirikubinza, Tuhaise and Madrama, JJ. S. C. agree, this Appeal is hereby dismissed on the terms proposed by the learned Mwondha, JSC."

day of May 2024 Dated at Kampala this... $30$

the Cer is

ALFONSE C. OWINY - DOLLO

#### **CHIEF JUSTICE**

#### THE REPUBLIC OF UGANDA

#### IN THE SUPREME COURT OF UGANDA AT KAMPALA

[CORAM: OWINY-DOLLO, CJ; MWONDHA; TIBATEMWA - EKIRIKUBINZA; **TUHAISE; MADRAMA, JJSC)**

#### CIVIL APPEAL NO. 33 OF 2021

#### **BETWEEN**

## KACHIRA INVESTMENT CO. LTD :::::::::::::::::::::::::::::::::::

#### AND

1. MBALE MUNICIPAL COUNCIL LOCAL GOVERNMENT 2. ABDU SALAAM LUBOWA **:::::::RESPONDENTS 3. MASH INVESTMENT LTD**

(An appeal from the Judgment of the Court of Appeal in Civil Appeal No. 193 of 2014 before Hon. *Justices: Buteera,DCJ, Barishaki and Obura,JJA at Kampala, dated 25th August 2021.*)

#### JUDGMENT OF TIBATEMWA-EKIRIKUBINZA, JSC.

I have had the benefit of reading in draft the judgment of my learned sister, Hon. Justice Faith Mwondha, JSC.

I agree with her conclusion that the appeal be dismissed. I also agree with the Orders she has proposed.

Dated at Kampala this $17^{th}$ day of $17^{th}$ 2024.

L'usalenne. HON. JUSTICE PROF. LILLIAN TIBATEMWA-EKIRIKUBINZA JUSTICE OF THE SUPREME COURT.

### THE REPUBLIC OF UGANDA

## IN THE SUPREME COURT OF UGANDA AT KAMPALA

(Coram: Owiny-Dollo, CJ; Mwondha; Tibatemwa-Ekirikubinza; Tuhaise; Madrama; $JSC$ )

## CIVIL APPEAL NO. 33 OF 2021

# KACHIRA INVESTMENT COMPANY LIMITED ....................................

### **VERSUS**

## 1. MBALE MUNICIPAL COUNCIL LOCAL GOVERNMENT

### 2. ABDU SALAAM LUBOWA

3. MASH INVESTMENT LTD ..................................

(An appeal arising from the judgment and orders of the Court of Appeal at Kampala in Civil Appeal No. 193 of 2014 before Buteera, DCJ, Barishaki and Obura, JJA dated 25th August 2021.)

## **IUDGMENT OF TUHAISE, JSC.**

I have had the benefit of reading in draft the Judgment prepared by Hon. Lady Justice Faith Mwondha, JSC.

I agree with her decision and conclusions that this appeal be dismissed with costs to the Respondents.

Dated at Kampala, this $\frac{1}{7}$ day of $\frac{1}{2}$ day of $\frac{1}{2}$ ....................................

$\alpha$

Percy Night Tuhaise **Iustice of the Supreme Court**

## THE REPUBLIC OF UGANDA

## IN THE SUPREME COURT OF UGANDA AT KAMPAI A

# (CORAM: OWINY - DOLLO CJ, MWONDHA, TIBATEMWA - EKIRIKUBINZA, **TUHAISE, MADRAMA, JJSC)**

## CIVIL APPEAL NO 33 OF 2021

KACHIRA INVESTMENT COMPANY LTD} .................................... 10

### **VERSUS**

- 1. MBALE MUNICIPAL COUNCIL LOCAL GOVERNMENT} - 2. ABDU SALAAM LIBOWA} - 3. MASH INVESTMENT LTD ..................................

#### (Appeal against the of Judgment and Orders of the Court of Appeal in 15 Court of Appeal; Civil Appeal No. 193 of 2014, before Buteera, DCJ, Barishaki and Obura, JJA dated 25th August 2021)

## JUDGMENT OF CHRISTOPHER MADRAMA IZAMA, JSC

I have read in draft the judgment of my learned sister Hon. Mwondha, JSC and I agree with it. I however based my decision on ground 3 of the appeal 20 on the reasons I state below: Ground 3 of the appeal is that:

> The learned Justice of Appeal erred in law and fact when they held that the 1st respondent had an interest in the suit land which was sold to the $2nd$ respondent.

My learned sister Hon. Mwondha, JSC found that the abolition of statutory $25$ leases granted to urban authorities did not automatically extinguish rights formerly held under those leases. This echoes the Judgment of the High Court and the Court of appeal. Article 286 provided that:

$\mathsf{S}$

Upon the coming into force of this Constitution and subject to the provision of paragraph (a) of clause (2) of Article 237 of the Constitution, statutory leases to urban authorities shall cease to exist.

- The question is how and whose interests were affect by the ceasing of $\mathsf{S}$ statutory leases in the circumstances of this appeal. It is the appellant's contention that the first respondent had no interest to pass to the second respondent and hence any transfer by him of title to the third respondent is a nullity. The first respondent is a statutory authority and I would further elaborate on the law. In Kampala District Land Board, Chemical Distributors $10$ Vs National Housing and Construction Corporation; Supreme Court Civil Appeal No. 2 of 2004 Odoki, C. J held *inter alia* that the effect of abolition of statutory leases: - 15

... is that the statutory lease granted to the City Council by the Uganda Land Commission in 1970 was extinguished on the coming into force of the Constitution.

Further on the issue of leases granted to a lessee by the controlling authority, Odoki C. J. stated that:

It seems to me, therefore, that the District Land Boards became successors in title to the controlling authorities or urban authorities in respect of public land which had not been granted or alienated to any person or authority. The District Land Boards became successors by operation of aw because land was vested in them by law, not by grant, transfer or registration, under Section 59 (8) of the Land Act.

In addition, Odoki C. J. observed that:

The implications of the abolition of statutory leases have not been determined and 25 in my view this remains a gray area. I am unable to hold that the rights of the respondent as a tenant in possession who held adversely to the City Council for a long time were automatically extinguished on the abolition of the statutory lease. In my opinion, the respondent could claim the rights and benefits accruing to a bona fide occupant of a registered owner who must be deemed to be the 30 Kampala District Land Board under section 59 (8) of the Land Act which provides: ...

The question to be considered in this appeal include whether the first respondent, which is a controlling authority under the law by the time of the promulgation of the Constitution of the Republic of Uganda 1995, had a statutory lease which was abolished. Secondly, if such a statutory lease

$20$

was abolished, what interest did it have? Thirdly, whose and what interest $\mathsf{S}$ was transferred to the third respondent? And finally when did the second respondent start occupying the suit property and what interest did he have?

The learned trial judge held the first respondent had a statutory lease with effect from 1959. That the lease was granted by the Governor of the Colonial Government. Further, the learned trial Judge held that a statutory lease was deemed to have been granted to the first respondent (Mbale Municipal Council). On the other hand, the Court of Appeal held that this lease was for a period of 49 years from 1959 and was to expire in the year 2008. They found that upon expiry of the 1st respondent's lease, they applied to the

Mbale District Land Board which granted it an extension of lease for 5 years 15 and also a certificate of title was issued for the suit property. On the other hand, the appellant was allocated the property in 1998 by the Mbale District Land Board. The Court of Appeal found that the land was sold to the second respondent by the first respondent and the second respondent in turn sold

it to the first respondent. Further they found that the second respondent 20 had always been on the suit land by 1st January 1998.

The appeal of the appellant hinges on the pivotal issue of whether the abolition of statutory leases to urban authorities extinguished the property rights of the first respondent and who therefore had no title to pass to the second respondent. It is further argued that the second respondent did not

have any interest or right to pass to the $3rd$ respondent.

The learned trial Judge found that the first respondent had a statutory lease. The Court of Appeal on the other hand, reached a different conclusion based on the same facts that the first respondent had a lease granted in 1959 which expired in 2008 and which was renewed by the District Land Board for another period of 5 years.

I have carefully considered the above state of affairs and my conclusion is based on the law on statutory leases and the occupancy of the second respondent.

$\overline{3}$

- The status of land in an urban area which had been dealt with by the colonial $\mathsf{S}$ government prior to Uganda's independence is determined by law. The law is that under the repealed Public Lands Act Cap 201, 1964 laws of Uganda (before the Public Lands Act of 1969), land which had been transferred to a Land Board under that repealed Act were transferred as a statutory lease - to the Urban Authorities who are deemed to have been granted a lease of 10 199 years to the urban authority under that Act. In other words, land in urban areas where deemed to be statutory leases granted by the Land Board to the urban authorities where they are situated. The grant of a lease to Mbale Municipal Council by the Governor was deemed to be granted by the Land Board and was converted to a statutory lease of 199 years. 15

The Public Lands Act (repealed) cap 201 came into effect on 1st March, 1962

and section 11 of thereof vested land in the Land Commission and the Land Boards and Public Bodies as follows:

11. (1) subject to the provisions of the Constitution and this Act, Crown lands which immediately prior to the commencement of this Act –

(a) had not been demised by way of a lease under the provisions of the Crown Lands Ordinance; and

(b) were occupied by the government for public purposes,

shall be vested in the Land Commission in freehold to be held and enjoyed, sued for, recovered, maintained, dealt with and disposed of in the manner provided by the Constitution and by this Act

(1) Subject to the provisions (1) this section, any right, title, estate or interest in land of all which immediately prior to the commencement of this act the Government was seized, possessed or entitled shall be vested in the Land Commission to the same extent and the same estate or interest as the same was previous vested in the Government.

(3) For the purposes of this section, that area of Crown lands within the Municipality of Kampala which has been declared under the provisions of the Forests Act to be a central forest reserve shall be deemed to be Crown land to which the provisions of subsection (1) of this section apply.

The reversion of the land granted by the Governor to Mbale Municipal $\mathsf{S}$ Counsel was issued as a Freehold Title to the Land Commission.

Section 15 of the repealed Public Lands Act cap 201 1964 laws of Uganda provided that leases granted to urban authorities (such as Mbale Municipal Council) shall be deemed to be held for the benefit of the inhabitants of that area and was for a period of 199 years which expires on the appointed date. All public land (other than private land) in an urban area was supposed to be leased to the urban council or authority under the terms stated in section 15. Section 15 provided that:

- 15 (1) Where by the operation of this Act, either at the commencement thereof or at any time thereafter, land which is situated in an area over which an urban authority exercises jurisdiction is vested in or transferred to a land board, it shall be the duty of the board in or to which the land is so vested or transferred to grant a lease thereof to that urban authority in accordance with the provisions of this section - (2) Where a lease is granted under the provisions of this section -20 - (a) the rent shall be one shilling per annum; - (b) the lease shall terminate on the appointed date; and

(c) the lease shall not contain any covenant restricting the use by the lessee of the land thereby demised or the right of the lessee to sub-let any part of such land.

(3) If within one month from the commencement of this Act (or, in the case of land transferred to land board after such commencement, within one month from the date of such transfer) the Land board has not granted a lease which it is required to grant under the provisions of subsection (1) of this section, such lease shall be deemed to have been granted upon the terms set out in subsection (2) thereof and should be registered accordingly by the Registrar of titles under the provisions of the Registration of Titles Act.

(4) any leasehold interest in land acquired by an urban authority under the provisions of this section shall be held and administered by such authority for the benefit of the inhabitants of the area within which it is established and shall be

$\epsilon^{(i)}$

controlled, managed and otherwise dealt with in accordance with the provisions of this Act.

(5) In this section "appointed date" means the date occurring at the expiration of the period of 199 years from the commencement of this Act..."

The import of section 15 (3) is that these leases are deemed as granted under the terms of section 15 (2) of the Public Land Act (supra) which terms 10 included the lease having to expire on the appointed date. The appointed date under section 15 (5) means a date after expiration of 199 years.

Subsequently, the Uganda Land Commission was established by the Constitution of the Republic of Uganda 1967 and article 108 thereof as the lessor envisaged under the law. Article 108 of the Constitution of the Republic if Uganda 1967 provided that:

108 (1) There shall be a Land Commission for Uganda.

(2) The Land Commission shall consist of not more than 5 members who shall be appointed by the President.

(3) The land Commission shall hold and manage any land vested in it by this 20 Constitution or any other law or acquired in Uganda by the Government of Uganda and shall have such other powers and duties as may be prescribed by Parliament.

$\sim$

$\mathsf{S}$

- (1) For the purposes of clause (3) of this article, land vested in the land Commission shall include. - (a) every official estate held by a Corporation Sole by virtue of the provisions of the Official Estates Act: - (b) any land which immediately before the commencement of this Constitution is vested in the land board of the Kingdom or a District, - and accordingly all rights, interests and other estates in any such land shall vest 30 in the land Commission and any monies accruing from the land so vested under paragraph (a) of this clause shall be paid to such authority as Parliament may prescribe.

The Land Commission was designated to hold and manage any land vested $\mathsf{S}$ in it by the Constitution or any other law or acquired by the Government of Uganda. Pursuant to the 1967 Constitution of the Republic of Uganda, the Public Lands Act 1969, Act 13 of 1969 was enacted and vested land, which used to be vested in the land Commission, in the Uganda Land Commission under section 1 thereof. Under the repealed Public Lands Act Cap 201 1964 10 laws of Uganda, section 2 (1) defined public land as "any land vested in or transferred to an established body or public body under the provisions of the Act. "Controlling authority" in relation to public land meant -

$20$

"(a) in the case of public land leased to an urban authority under the provisions of section 15 of this Act, the urban authority to which the lease has been made; ..."

In addition to the assertion that under the Public Land Act, leases were granted for a term of 199 years to urban authorities, these provisions were repeated under the repealed Public Lands Act, Act 13 of 1969, which provided in section 23 thereof that all leases granted to urban authorities are deemed to be statutory leases. Section 23 (1) of the Public Lands Act 1969 provided that.

23 (1) "any lease granted or deemed to have been granted in accordance with the provisions of section 15 of the repealed Act to an urban authority of a designated area shall continue in force but subject to the provisions of this Act.

(2) the Commission shall grant to the urban authority of a designated urban area 25 such lease and on such terms and conditions as the Minister may direct; and any lease so granted shall be deemed to be a statutory lease.

All leases granted to urban authorities by the Governor or Land Board or its successor; the Land Commission, were deemed to be statutory leases under the Act. Section 23 (2) (supra) provided that the Commission shall grant to the urban authority such lease and on such terms and conditions as the Minister may direct and the lease shall be deemed to be a statutory lease. A "statutory lease" is defined by the Public Lands Act, Act 13 of 1969 to mean: a lease granted or deemed to have been granted in pursuance of section 15 of the repealed Act.

The Public Lands Act, Act 13 of 1969 and the interpretation section 54 provides that:

In this Act, unless the context otherwise requires.

"controlling authority" means, 10

> (a) in relation to land held on a statutory lease, the designated authority by which the land is so held:

> (b) in relation to land vested in freehold in the Commission and not let on a statutory lease, the Commission;

The term "designated authority" means:

"A city council, municipal council, town council or Town board, established in a designated urban area:

"designated urban area" means an urban area mentioned in Schedule 3 to this Act or any area declared by the minister responsible for urban administration by statutory instrument to be a town:

"urban area" means a city, municipality, or a town.

Mbale Municipal Council territory was an urban area and therefore as the controlling authority, it held leases granted to it as a statutory lease of 199 years. Further, section 23 of the Public Lands Act 1969 provided that:

23 (1) any lease granted or deemed to have been granted in accordance with the provisions of section 15 of the repealed Public Lands Act to an urban authority in a designated urban area shall continue in full force subject to the provisions of this Act

(2) the Commission shall grant to the urban authority in a designated urban area 30 such lease and on such terms and conditions as the Minister may direct; and any lease so granted shall be deemed to be a statutory lease.

$\mathsf{S}$

- Pursuant to the 1995 Constitution of the Republic of Uganda, statutory $\mathsf{S}$ leases were abolished and land that had been vested in the Uganda Land Commission was transferred and vested in the citizens of Uganda with a few exceptions. This land is held by District Land Boards in trust for the citizens. - This means that the $1st$ respondent had no statutory lease with effect from 10 abolition of statutory leases which ceased to be in force. Thereafter they had a right to acquire any property in the public interest under article 237 (2) (a) of the Constitution. Instead the first respondent continued to exercise control as a lessor and further sold the property in dispute. I would find that - the first respondent had no legal interest capable of being transferred to 15 the second respondent other than a subsequent lease granted to it after 2008 by the Mbale District Land Board and by which time the lease offer issued to the appellant for 5 years from 1st January 1998 had expired.

For further clarity, the lease granted to the first respondent had initial covenants with the lessor before its conversion to a statutory lease. In $\overline{20}$ Exhibit MMCA, the lease shows that Plot 15A Kumi Road was covenanted to be a Public open space (at page 6 of the lease agreement). Following this covenant in exhibit X, The Town Planner of the first respondent by letter dated 29th of October 1999 addressed to The Chairman and Members of the Works, Housing, Physical Planning and Environmental Committee, Mbale $25$ Municipal Local Council wrote inter alia that:

RE: PLOT NO. 15. A BISHOP WASIKE ROAD, MBALE.

The above plot was zoned as a public open space. It was offered to M/S Resort Village for management of a Recreational Park under Minute PD.22/95 of 1st March 1995 on the following conditions: -

- $(i)$ For set up of a recreation Park. - The public had free access to the Park. $(ii)$ - $(iii)$ That no construction of anything other than providing seats and planting flowers. - $(iv)$ Only soft drinks be served. - Effect payment of Temporary Occupation levy of sh. 60,000= per year. $(v)$

$\mathcal{L}^{\mathcal{A}}$

$(vi)$ Permission could be withdrawn anytime the Council deemed it necessary to do so. ...

... M/S. Resort Village submitted building plans which were received on 8th July, 1996 and considered by the council under TP 40/96 and BR 40/96 and subsequently approved by Council under Minute PD. 61/96 of 2nd August, 1996.

The letter further noted that Resort Village breached covenants to construct 10 a temporary structure and had put up a permanent concrete structures on the land and had limited access to the public.

Of great importance is to note that Resort Village owned by the second respondent had been approved for use by him as early as 1st March 1995 before the promulgation of the Constitution of the Republic of Uganda on 8th 15 October 1995. The question is; after the ceasing of statutory leases, what happened to the interest of the second respondent? This matter was not addressed specifically and the evidence thereof was not dealt with because the lower courts reached the conclusion that the $1^{\rm st}$ respondent had a right to sell and transfer the property to the 2nd respondent. $20$

The Court of Appeal found that the appellant was allocated the suit property by the Mbale District Land Board in 1998. The Mbale Municipal Council sold the property to the $2^{nd}$ respondent who sold to the third respondent. They found that the $2^{\mbox{\tiny{nd}}}$ respondent had always been an occupant of the suit property by 1st January 1998. This fact appeared as an agreed fact in the joint scheduling memorandum of the parties. The admitted facts in the joint scheduling memorandum endorsed by the plaintiff and the defendants side need not be proved. I will reproduce some of the agreed facts below:

(a) The suit property is in Mbale Municipality between 2 buildings known as Paramount Building and Ashok Cinema Building. ...

(b) That Kachira Investment Company Ltd was granted a lease of 5 years by Mbale District Land Board with effect from 1st January 1998 by the Mbale Interim District Land Board and acquired title vide LRV 2722 Folio 22 for plot 20 Maluku Road. ...

(e) The lease is LRV 2722 Folio which expired on 31/December/2002....

(i)The 2nd respondent has always been on the suit land as of 1st January 1998. 35

$25$

$\mathsf{S}$

(j) the second counter respondent constructed a building commonly known as Resort on part of the suit land.

(k) there were transactions between the Plaintiff/3rd Respondent and the 2nd Respondent on part of the suit land.

(l) There was a sale agreement between the 2nd Respondent and the 1st Counter Respondent over suit land on 11th/Feb/2011.

(m) Mbale Municipal Council was granted the lease (Vide Title LRV 502 Folio 6) by the Governor of the Protectorate ... Lease was to run from 1st July 1959 for 49 years over Plot 15 Kumi Road South.

(n) Kumi Road South is presently known as Bishop Wasike Road.

(o) The 1st respondent applied for a fresh lease in respect of Plot 15 A Bishop 15 Wasike Road and was granted a 5-year lease on 1st August 2010 (Vide Certificate of Title LRV 4357 Folio 13).

What should be highlighted is that the second respondent had always been on the suit land by March 1995. In other words, the second respondent was in possession. The question being from when did the 2nd respondent actually 20 gain possession of the suit property? Evidence shows that the second respondent was the sitting tenant when all the transactions referred to in the agreed facts as set out in the joint scheduling memorandum I have reproduced above, took place. The testimony of RW2 Alice Joy Manana Nakayenze in re-examination (at page 346 of the record) on the pertinent 25 question was that by 1995 the 2nd respondent was using the space (the suit land). The evidence points to and an inference of fact can be made that the second respondent was in possession of the suit property by the time of promulgation of the Constitution by 8th October 1995.

The second respondent had constructed a building known as 'Resort' on part 30 of the suit property. The inference of fact is that the second respondent was a sub-lessee or tenant of Mbale Municipal Council by the time statutory leases were abolished. Under article 237 (5) of the Constitution leases granted to a citizen out of public land may be converted to freehold. Under

article 237 (6) of the Constitution, the expression "public land" under article 35

$11$

$10$

$\mathsf{S}$

237 (5) includes statutory leases to urban authorities. While there is no $\mathsf{S}$ sublease agreement in evidence as between the 1st Respondent and the 2nd Respondent, the 2nd respondent was referred to as a sitting tenant but no terms of the tenancy, if any, were mentioned other than what I have quoted from the evidence. The $1^{st}$ respondent sold the property to the $2^{nd}$ respondent

$\mathcal{C}^{\prime}$

- on the basis that he was the siting "tenant" (though he had constructed a 10 structure known as "Resort" thereon in breach of certain covenants I have mentioned above). Further it can be inferred that the appellant and the 3rd respondent also dealt with the second respondent inter alia as a person who was in possession of the suit property. The 2nd respondent in the - circumstances was a sub-lessee or tenant of the municipality by agreement 15 because he had constructed a place called "Resort" on the suit property. He therefore qualified to apply in his own right for registration as the owner in whom the land vested under article 237 (1) of the Constitution coupled with the fact that statutory leases to urban authorities ceased to exist. - Mbale Municipal Council ought to have pleaded that they had acquired the 20 property in the public interest as an open recreational space for the public but they went ahead and made a deal to sell the property to private developers. - A lessee of public land became entitled to convert lease or a sublease granted out of Public Land into freehold as stipulated under article 237 (5) $25$ of the Constitution. In this appeal, if the conclusion that the second respondent was a sub lessee is not acceptable, what then was his status? That is the crux of the issue on tracing whether the 2nd respondent had an interest to transfer to a third party. - In the very least, the $2^{nd}$ respondent entered the premises with the full 30 consent and agreement of the Municipal Council before the Promulgation of the Constitution of the Republic of Uganda 1995. Did the 2nd respondent qualify as a lawful or bona fide occupant entitled to security of occupancy under article 237 (8) of the Constitution? Article 237 (8) provides that:

- (8) Upon the coming into force of this Constitution and until Parliament enacts an appropriate law under clause (9) of this article, the lawful or bonafide occupants of mailo land, freehold or leasehold land shall enjoy security of occupancy on the land. - The $2nd$ respondent in the very least, was an occupant, with the permission of the Lessee of leasehold land before statutory leases were abolished. 10 Thereafter he became the citizen entitled to acquire some rights unless otherwise the property was acquired by the 1st respondent in the public interest. Under article 237 (9) (b) Parliament was required to enact a law providing for the acquisition of registrable interest by a lawful or bona fide occupant. This law was enacted under the Land Act cap 227 in 1998. The 15 Land Act commenced on the 2nd of July 1998 after the appellant purportedly acquired a lease offer for the suit property of 5 years.

The 2nd respondent in the circumstances could have been considered as a lawful or bona fide occupant of former leasehold land originally registered in the name of the 1st respondent as a statutory lessee. He was entitled to 20 be given a first right on application for registration as a proprietor by the District Land Board. A lawful occupant is defined by section 29 (1) (b) of the Land Act to includes an occupant who occupied the land with the consent of the landlord. Section 29 (1) (b) of the Land Act provides inter alia that:

$\omega^2$

$\mathsf{S}$

(1) "Lawful occupant" means—...

(b) a person who entered the land with the consent of the registered owner, and includes a purchaser; or

The 2nd respondent before abolition of statutory leases occupied the suit premises with the permission of the 1st respondent who was the lessee. The $2nd$ respondent even constructed structures on the suit land with the permit 30 of the first respondent. The 2nd respondent was entitled to obtain registered title of the suit land from the Mbale District Land Board in his own right only because the 1st respondent did not claim it as acquired or retained in the public interest. The leasehold of the Municipal Council ceased to exist. In the very least, the second respondent ought to have been considered as a lawful occupant of public land entitled to first offer of registration as the

owner and, on that basis his sale of the suit land to the $3^{\ensuremath{\sf rd}}$ respondent $\mathsf{S}$ cannot be impeached. In any case the 1st respondent got a lease offer from Mbale District Land Board upon expiry of the lease of the appellant and sold its interest to the $2^{\rm nd}$ respondent who in turn sold all his interest to the $3^{\rm rd}$ respondent.

$\mathcal{L}^{\mathcal{L}}$

- For the above reasons I find no merit in ground 3 of the appeal. Though I 10 agree that the 1st respondent had no right to the suit property initially after ceasing of statutory leases, and that it had not acquired or retained the suit property in the public interest as it should have done after abolition of statutory leases, the $2^{nd}$ respondent had a right to the suit property and derived his interest from the Constitution and the land Act as well as from 15 a subsequent interest acquired by the 1st respondent as I have set out above. - In the premises, I concur with the order of my learned sister that the appeal be dismissed with the orders she has proposed.

| 20 | Dated at Kampala the $17^{\text{th}}$ day of ___ | | |----|--------------------------------------------------|--| | | Christopher Madrama Izama | |

Justice of the Supreme Court