Kisitu v Shell Uganda Limited & Another (Civil Suit 507 of 2005) [2013] UGHCLD 399 (16 June 2013)

Full Case Text

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# XikO&fr no. 507 of 2005

PLAINTIFF LYDIA KISITU MUKASA DEFENDANTS VERSUS 1. SHELL UGANDA LIMITED 1 2. DENNIS BOB KASULE

### BEFORE: HON. MR. JUSTICE RUBBY AWER1 OPIO

## JUDGMENT

The Plaintiff instituted this suit as Manager of Christopher Kisitu's estate against the Defendants jointly and severally seeking a declaration that the Defendants got proprietorship of the suit property through fraud; that the Defendants' names be struck off the Register and Christopher Kisitu Mukasa be reinstated as the proprietor; that the Defendants pay rent from 1981 till the date - ofjudgment; that the 1" Defendant pay mesne profits in respect of the property from the date of its fraudulent registration till date of vacant possession to the Plaintiff; general damages for fraudulent conversion; interest and costs of the suit.

The background facts are that Semu K. Kiwanuka was the registered proprietor of the suit property known as Mailo Register Volume 8 Folio 10 which later became Kibuga Block 38 Plot 63. He granted a 49 lease of the said property to Gulam Hussein Alibhai, who was registered proprietor of the leasehold interest referenced as LRV 382 Folio 14 under instrument No. 4530 on 12lh April, 1956.

SI The lsl Defendant bought the leasehold interest from Gulam Hussein Alibhai and was registered proprietor in 1964 and went on to operate a fuel station. The said- station was operated by the 2nd Defendant, Denis Bob Kasule. Christopher ■' K. Mukasa became proprietor of the Mailo interest upon the death of his father Semu K. Kiwanuka and thereby became the 1st Defendant's landlord. On 10lh January 1988, Christopher K. Mukasa decided he would not renew the 1st Defendant's lease upon its expiration after the lsl Defendant rejected a proposal to have the annual rent increased from Shs. 150/= to Shs. 150,000/=.

In 2004 the Plaintiff who had been residing in the United States of America returned to Uganda and found that her father, Mr. Kisitu had become of unsound mind and that in 1991, the 2nd Defendant had obtained proprietorship of the Mailo interest in the suit property which he had transferred to the 1st Defendant in 1995. The lsl Defendant's leasehold was thereafter merged with the reversionary Mailo interest.

The Plaintiff contended that the transfer of that interest from her father Christopher K. Mukasa into the names of Denis bob Kasule was fraudulent and also that Shell (U) Limited having acquired from a fraudulent person their title was void. She contended that she discovered the fraud in 2004 when she found that her father had lost his memory. Hence this suit.

The Defendants denied the Plaintiffs claim in toto. The parties filed a joint memorandum ofscheduling and agreed on the following facts:-

Agreed Facts:-

(i) The Plaintiff is the manager ofthe estate of her father C. K. Mukasa.

- (ii) That Semu Kiwanuka was proprietor of land Kibuga Block 38 Plot 63 which he leased to Gulam Hussein. - (iii) That the lease was eventually transferred to the 1SI Defendant who used it as a fuel station. - (iv) That upon the death of Semu Kiwanuka the ownership of the land devolved to his son Christopher Kisitu Mukasa in 1981. - **(v)** Defendant dealt with the said C. K. Mukasa as its landlord and paid his rent. That the 1st - **nd** (vi) That the 2nd Defendant was appointed a dealer by the Is1 Defendant to am the service station. - (vii) That the 2nd Defendant became registered proprietor of the suit land on 26/6/1991 vide KLA Instrument No. 146565. - **nd** Defendant on (viii) That the 2 18/4/1995 vide KLA No. 172616. Defendant transferred the land to the Ist - (ix) That the 1st Defendant later merged the Mailo and leasehold interests.

### The Agreed Issues:

- fraudulently registered as proprietor of the (1) Whether the 2nd Defendant was suit land. - fraudulently registered or is a bona fide (2) Whether the 2nd Defendant was purchaser for value. - (3) Whether the suit is time barred.

(4) Whether the Plaintiff is entitled to the remedies sought.

## Plaintiffs evidence:

Lydia Kisitu Pwj testified that she was appointed the manager of the estate of her father Christopher Kisitu Mukasa by the High Court. She told Court that her father was the son of the late Semu Kiwanuka who was the registered proprietor of land known as Kibuga Block 38 Plot 63 at Makerere. The late Kiwanuka leased the above land to Gulam Hussein and the lease was eventually transferred to the ls: Defendant. Upon the death of Kiwanuka the land was transferred into the name of Christopher Kisitu Mukasa. She stated that all this time she had been living in the States since 1988. In 2004 she was informed by her aunt Mirieri that her father was unwell and that people were taking advantage of his condition to deprive him ofhis properly. Because of her father was found to be of unsound mind, she was appointed by Court to manage his estate. She found that the 1st Defendant has been paying rent to her father and the administrator General but the record showed payment up to 1981. Later she discovered that the Ist Defendant had acquired reversionary interest through the 2nd Defendant. From there her lawyers wrote to the Commissioner Land Registration to find out the status of the land only to be told that Instrument KLA 146565 dated 21/6/1991 was not a transfer but a mutation lodged by Mr. Mukasa. That it was not a transfer to Kasule or anyone else. Later her father was examined by Dr. Seggane Musisi, a specialist in Psychiatry in Mulago who found that her father suffered from early onset of dementia which must have started in his late 50s or 60s and as such he could not manage his properties since all his children were abroad and his wife was dead.

During cross-examination she stated that she left for United States in 1988/89 but used to communicate with her father. However she did not know that her

father had lost his memory. She stated that her father did not mention to her that his property were being taken fraudulently nor that rent was not being paid to him in respect of Plot 63 Bombo Road. She also stated that she used to communicate to Uganda but none of her siblings had intimated that their father had a memory problem until he was examined by a medical doctor and found to be suffering from memory loss.

Prof. Seggane Musisi Pw2 testified that he was a specialist Psychiatrist stationed at Mulago Hospital. He told Court that he examined Christopher Kisitu Mukasa having first met him on 13/6/2007. He was briefed of his condition by Lydia Kisitu and his caretaker Claire Nakasita that he ordered topographic scan of his brain done on 8/6/2004 and another one done in 2008 following a stroke. He found that Mr. Kisitu was suffering from ALZHEIMERIS DEMENTIA of the early onset type. That the clinical examination and laboratory findings confirmed the diagnosis with probability that it started in his 50s or early 60s.

During cross-examination he stated that the first time he examined Mr. Mukasa was on 13/6/2007 when he came with Lydia Kisitu and the Caretaker. Prior to the examination Mr. Mukasa had seen a Psychiatrist called Juliet Naku and he had a report from Dr. Naku dated 13/4/2005. That Mr. Mukasa could not state when the problem started because the problem was actually memory loss known as Dementia.

pressure. knowing. He stated that the effect ofthe disease is that you have impaired judgment. The ability to judge deteriorates over time with progressive loss of brain cells. He stated that the condition may be worsened with the presence of diabetes and He concluded that one may have the above condition without

Kakerwe Yusuf Pvv3 testified that he was a lawyer working in Mailo Office Department of Land Registration. His duty was to maintain and keep Mailo records in Kampala, Wakiso and Mpigi Districts. He admitted having records of Kibuga Block 38 Plot 63 situated at Kagugube Kampala which reveals;

- (a) That up to 1981 the Registered proprietor of the land was Semu K. Kiwanuka until it was transferred to Christopher Kisitu Mukasa vide Instrument No. 125464 dated 2/1/1981. - (b) 1 hat in 1991 the land was transferred to Denis Bob Kasule Instrument No. 146565 dated 21/6/1991. - (c)That Mr. Kasule in turn transferred the land to Shell Uganda Limited in 1995 vide Instrument No. 1726 dated 18/4/1995. The same Instrument was used to transfer another Block 38 Plot 6A. Shell which acquired a leasehold interest in the land from Gulam Hussein Alibhai in 1964 then merged the Mailo interest with the lease. - (d)That on 5/10/2005 M/s Nangwala, Resida & Co. Advocates wrote to the Commissioner Land Registration on behalf of Lydia Kisitu seeking a certified copy of the Instrument No. KLA 146565 registered on 21/6/1991.

The Acting Commissioner Edward Karibwende replied on 17/10/2005 stating

*"The Instrument No. KLA 146565 could not be physically located but that according to the lodgement register in which all Instruments recorded Instrument No. KLA 147515 (and not 146565) registered on 21/6/1991 at 2.25 p.m. is described as a mutation (sub-division) of Plot No. 63 Kibuga Block 38. The one who lodged it is described as Mr. Mukasa. It is not a transfer to Kasule or anyone else."*

Instrument No. KLA 4530 of 12/6/1956 is available and is a lease between the Mailo owner one Semu K. Kiwanuka and the first lessee Gulam Hussein Aiibhai which is registered as Volume 384 Folio 14. This is the lease which changed hands until it was finally owned by Shell.

He concluded that the record do not reveal that any transfer of die land from Christopher Kisitu Mukasa io Denis Bob Kasule was ever lodged or registered.

During cross-examination he stated that Instrument No. KLA 172612 was not a problem because it was a transfer Instrument and stamp duty of Shs.600,000/= was paid. He stated that he could not see Instrument No. KLA 146565 and that KLA 146565 should come before 147560.

He stated that Instrument No. KLA 146565 was not in the file but was in the only sub-divide. lodgement entry. That the actual Instrument No. was KLA 147565 which was registered on 21/6/1991 at 2.25 p.m. and was stated to be a mutation Instrument to subdivide another title. He concluded that a mutation cannot transfer but can

### Defence case:

Stephen Chomi Dw1? the Head of Legal Department of Shell Uganda Limited stated that the 1st Defendant has a service station which was sitting on four Plots, including Plot 63, which was the disputed Plot. That the Is1 Defendant was paying annual rent of Shs. 150/= for the above Plot to the Administrator General. Later on the Plaintiffs father wrote to the 1st Defendant to meet and discuss the new rent, however it was not clear whether they met or not. There was another letter indicating that the lease would not be renewed upon the expiry of the lease. He stated that between 1986 and 1992 the service station dealer was Bob D. Kasule (RIP) also owned Plot 64 having acquired the same in 1992. However Kasule's dealership was terminated on 27/10/1992 by a letter (exhibit D9). However Bob Kasule owed money to the 1st Defendant on account of their relationship to the tune of Shs.58,268,000/=. In settlement of the above debt, Kasule proposed to sell his Plot to Shell inclusive of Plot 63 and also claimed rent from 1980 which was not honoured. After making the transfers there was no complaint until in 2005 when a complaint was made that Plot 63 was fraudulently acquired by Bob D. Kasule.

During cross-examination he stated that their record showed that the 2nd Defendant acquired the property in 1991. He admitted that he knew the Plaintiff as the Landlord of the Defendant and that the Is' Defendant appointed the 2nd Defendant as its dealer but terminated him in 1992. He stated that the 1st Defendant acted on the strength of the 2nd Defendant's title and did not know what was happening between the Plaintiffs father and the 2nd Defendant. He acknowledged that a mutation could not transfer property and that if Kasule had used the mutation to transfer the property then it was not proper. He stated that they were not aware of Kasule's fraud. Fie concluded that they paid Kasule Shs.28,268,000/= for both charges because Kasule owed Shell some money, so part ofit was used as a set off.

## Defendant: 2nd

Defendant filed statement of defence stating that he was a bona fide purchaser for value without notice but never gave any evidence in Court. Instead they opted to file written submission but also failed to comply. The 2nd

## Resolution of issues:

Issue No.l: proprietor of the suit land. Defendant was fraudulently registered as Whether the 2nd

It was the contention of the Plaintiff that the original certificate of title showed that the suit property was transferred to the 2nd Defendant under Instrument No. 146565 on 21/6/1991 at 2.25 p.m. The Lodgement Register however shows that Instrument entered on the said date and time was No. 147565 and described the nature of the transaction as mutation and payment of Shs.2,000/= as registration fee. According to Mr. Yusuf Kakerwe Pw3 there was no Instrument oftransfer on record from Christopher K. Mukasa to Denis Bob Kasule which was lodged or registered. The Lodgement Register also showed that no stamp duty had been paid, which would be the case ifthe Instrument was a transfer.

According to the Court record, apart from claiming that Christopher Kisitu Mukasa transferred the said land to the 2nd Defendant, there is no evidence to prove it. The 2nd Defendant failed and/or neglected to provide any evidence. It is very clear that before any transfer is registered, there must be a transfer form signed by the person transferring his interest to the buyer at a stated consideration. There is also a requirement of payment of stamp duty. The record only shows that the Instalment No. KLA 147565 dated 21/6/1991 was not a transfer but a mutation form lodged by Mukasa. Mutation form does not serve as a transfer form. Mutation is just for sub-dividing the land and not for transferring the same.

7rom the above evidence it is clear that registration of the 2nd Defendant was lone by way of perversion of the truth. Perversion of truth is a fundamental

**9**

element of fraud: See Black's Law dictionary, 6 Edition page 660. The truth is that the intended transaction was mutation and not transfer.

Issue No.2: Defendant was fraudulently registered as proprietor or is a bona fide purchaser for value. Whether the 1st

ft is very important to note that purchase ofreal property is not like that ofshop goods from a counter. There are precautions to be taken to establish the proprietorship of the vendor. In the instant case there is all the evidence to show that the title ofthe vendor was tainted with fraud as there was no transfer forms signed between the 2nd Defendant and Mr. Mukasa. More importantly, the 1st Defendant knew that the suit property belonged to Mr. Mukasa who was their Landlord while the 2nd Defendant was operating their (Ist Defendant) petrol station. The 1st Defendant should have inquired how the suit property changed hands from Mr. Mukasa to the 2nd Defendant. All that is because there were indicators that the three parties used to communicate very frequently on issues pertaining to the suit property. It would appear that the 2nd Defendant wanted to sort out his debts with the lsl Defendant by defrauding the Plaintiff and both of them knew about the fraud. The circumstances of this transaction do not qualify under a bona fide purchaser because 1st Defendant should have known that the title of the 2nd Defendant was dubious. The 1st Defendant acted without due diligence: See Omar **Sulaiman** Mukasa v **Hajji** Mohamed Ojaa & Another {2006} HCB **114.**

For the above reasons I find that the 1st Defendant was registered fraudulently and was not a bona fide purchaser for value.

## Issue No. 3: Whether the suit was time barred.

The basis of the Plaintiffs claim was that the Plaintiffs father lost property because of his mental status. He was suffering from dementia. This was discovered in 2005. This was the time it was realised that the old man's property had been fraudulently taken over by the 2nd Defendant. Soon thereafter the suit was filed on November 29th. 2005. Therefore this suit is not affected by the Limitation Act.

Issue No.4: Whether the Plaintiff is entitled to the remedies sought.

In view of my conclusion above, I find that the Plaintiff be entitled to the following:

- (1)Since it has been proved that the 2nd Defendant was registered through fraud and the 1st Defendant was also registered by fraud their names are accordingly struck off the Register and the name of Christopher Kisitu reinstated on the Register. - Defendant is ordered to surrender the title to enable the orders be (2)The 1st effected. - Defendant is also ordered to surrender vacant possession of the property. (3)The lsl - (4) Payment ofmesne profits:

The Plaintiff claimed rent from 1981 to 2004 when the lease expired at Shs,150/= i.e. 23 years totalling Shs.4,450/=. That amount is genuine and is awarded accordingly.

The plaintiff claimed that she be paid rent from 2004 to April 2012 i.e. 91 months at shs.6 million per month according to the rate for a nearby petrol station - making a total of 546,000,000/=. Rent is determined by both parties to the lease. It is a presumption that both parties could have agreed to a lesser or higher amount than the above figure. 1 would give the Defendant the benefit and fix the same at 3.000,000/= (three million) making it 273,000,000/= (Two hundred seventy three million) making the grant total of mesne profit 273,004,450/= (two hundred seventy three million four thousand four hundred and fifty only).

**A**

## (5)General damages:

There is no doubt that the Plaintiff suffered inconvenience, anguish and stress. General damages would be awarded. It was proposed that Shs. 100,000,000/= be awarded. In Fredrick. Zaabvve v Orient Bank & Others, SCCA 4 of 2006 the Appellant who had lost his house to fraud was awarded damages of Shs.300,000,000/=. In the instant case the figure of 100,000,000/= would not be very fair especially that mesne profits have also been awarded. I would accordingly award the Plaintiff general damages of Shs.80,000,000/= (eighty million only).

(6)1 would also award interest on the above sums at Court rate from the date of Judgment until payment in full.

(7) Costs of the suit is awarded to the Plaintiff.

In conclusion Judgment is *entered for* the Plaintiffin the above terms.

16/6/2013 Hon. Mr. Justice Rubby Aweri Opio JUDGE