Lugoloobi and Another v wasswa and Another (Civil Suit No. 565 of 2007) [2013] UGHCLD 403 (13 March 2013)

Full Case Text

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMAPALA [LAND DIVISION]

### CIVIL SUIT NO.565 OF 2007

1. DAVID LUGOLOOBI 2. TEDDY ASABA LUGOLOOBI **.....................................**

#### **VERSUS**

1. SAM WASSWA 2. PAUL YAWE **::::::::::::::::::::: DEFENDANTS**

#### **BEFORE: HON. MR. JUSTICE RUBBY AWERI OPIO**

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#### JUDGMENT

The Plaintiffs brought this suit against the Defendants jointly and or severally for orders and declarations for:

(a) Cancellation of the $2^{nd}$ Defendant's name from the Certificate of Title to the $-15$ suit land.

(b) An order for restoration of the Plaintiffs name of the Certificate of Title to the suit land.

$CFR$ the suit land

(d)Demolition of the houses/structures illegally erected by the Defendants on

- (e) A permanent injunction restraining the Defendants from entering upon and domg anything on the suit land. - (0 1 damages for trespass and interest thereon at the rate of 20% per annum computed from the date ofjudgment until payment in full.

(g)Costs ofthe suit.

The Plaintiffs are husband and wife respectively. They bought the suit land comprised of Mailo Register, Busiro Block 366 Plot 51 measuring approximately 2.024 hectares situated at Nakirama village, Nsangi Sub-county, Wakiso District on 5th January 2006 from a one Yulio Kibaate at Shs. 17,500,000/= which was fully paid. The vendor executed a transfer —/ O instrument in favour ofthe Plaintiffs who took possession ofthe suit land. The Plaintiffs then flew back to London (UK) where they have been staying and working and requested the 1st Defendant who was their relative to look after the suit land and follow up with the Certificate of title from Land Office in Kampala. Upon receiving the Certificate of Title from the Land Office the 1st Defendant was to pass it over to the Plaintiffs which he did not despite many reminders.

On 23rd March 2007 the 1st Plaintiff who had come back to Uganda for a short visit made a search in the Land Office at Kampala. He discovered that the suit land had been transferred in the name of the 2nd Defendant under a transfer instrument purported to have been signed by the Plaintiffs whereas not since the Plaintiffs had never sold the same to the 2nd Defendant. The Plaintiffs contended that the transfer of the suit land to the 2nd Defendant by the 1st Defendant was wrongful and fraudulent. The particulars of fraud are set out in

paragrsph'sfLand 11 oftbie plaint.

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The Plaintiffs lodged a complaint against the Defendants at Katwe Police Station. The 1st Defendant was charged with theft, forgery, personation and obtaining money by false pretence. The case was filed in Makindye Chief Magistrate's Court under Criminal Case No.414 of 2007. In the judgment delivered on 16th April, 2010 the trial Magistrate convicted the 1st Defendant on $\sim$ S the counts of theft, forgery and personation. During the trial the Handwriting Expert testified and confirmed that the signatures of the Plaintiffs had been forged and that the alleged land sale agreement of 9th January 2007 in favour of the $2^{nd}$ Defendant did not bear the signatures of the Plaintiffs.

The 1st Defendant was served with summons to file defence but did not file a $-\infty$ defence.

The 2nd Defendant filed a defence on 14th November 2007 denying obtaining the suit land through fraud. He contended that he was a bonafide purchaser for value without notice of any defect in the title to the suit land.

$-15$

#### **Agreed Facts:**

During the scheduling conference held on 5th august 2008 the following facts were agreed:

The Plaintiffs spouses bought the disputed land – Busiro Block 366 Plot 57 at Nakirama, Wakiso in January 2001 from Kibaate at 17,500,000/=. The land was surveyed, defined and transferred to the Plaintiffs. While the Plaintiffs $-2\sqrt{2}$ were away they entrusted the 1st Defendant to follow up the title and eventually send it to them in London which was not done. On return from London the Plaintiffs found the land-had been sold and transferred to the 2nd Defendant by the 1st Defendant. COPY 3

#### **Agreed Issues:**

(1)Whether the Plaintiffs sold the land to the 2nd Defendant.

(2)Whether the land was fraudulently sold.

(3)What are the remedies available to the parties.

### Evidence **Adduced:**

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The Plaintiffs adduced evidence of two witnesses including the 1st Plaintiff. The Defendants on the other hand relied on the evidence ofthree witnesses.

The 1st Plaintiff**David Lugoloobi Pwt** in his testimony repeated the facts as set out in the plaint. He stated that he knew the 2nd Defendant having met him in May 2008 at Kitgum Road, Kampala and served him with witness summons to - appear in Makindye Court. He stated that the signatures that appear on the transfer form to the 2nd Defendant were not theirs. He stated that both ofthem (Plaintiffs) were not in Uganda during the purported sale to the 2nd Defendant. He stated that he did not know Lawrence Bumba, Edward Kalema and Kiyimba who appear on the Sale Agreement ofthe 2nd Defendant. \_\_\_ |

A. **M. Ntarirwa Pw2** a handwriting expert was absolved from testifying as his Expert evidence was not contested by the parties. In his report he proved that the Plaintiffs' signatures which appeared on the land sale agreement of 5/1/2006 between the Plaintiffs and Yulio Kibaate were different from those in the alleged sale agreement of 9/1/2009 purportedly between the Plaintiffs and the —-WQ 2nd Defendant. The report confirmed that the Plaintiffs^id^^igpj^e nllegsd / COPY Or

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![](_page_3_Picture_8.jpeg)

land sale agreement of 9/1/2007 and land transfer of 8/2/2007 in favour ofthe 2nd Defendant.

**is** In his defence **Sam** Wasswa **Dwi** testified that he knew the 2nd Defendant. He stated that a man calling himself Lugoloobi and the 2nd Defendant met at Dewinton Street in Kampala and discussed the purchase of the suit land in -—?=» Kalema David's office. He also stated that Yawe and Kalema refused to pay for the land in the absence of Lugoloobi's wife. That they met the wife at her office in Nsambya Hospital and she read and signed the agreement ofsale. That he witnessed the payment of 35 million Shillings to. Lugoloobi by the 2nd Defendant. In cross-examination he stated that his role was that of **a** middleman. He also stated that the 2nd Defendant paid the 1st instalment of 12,000,500/= on 9/1/2007 to which he witnessed but was not there when the subsequent instalments were paid. He testified that the agreement he witnessed was made in the absence ofthe 2nd Defendant and the Local Council members. The 2nd Plaintiffwas absent at Dewinton where payments were made. The LCs were also not present at Nsambya when the 2nd Plaintiff was signing. The 2nd Defendant took the document to the LCs and they signed. He further stated that he did not know when the money was paid in full; that he did not know the 1st Plaintiff and the 2nd Plaintiff; that he did not know the particulars of the land and did not know who prepared the alleged sale agreement between the 1st " Plaintiff and the 2nd Defendant.

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**Paul Yawe (2nd Defendant) Dw2** testified that Wasswa Bumba who knew the seller ofthe land introduced him to David Lugoloobi. He bought the suit land at 7,000,000/= per acre for five acres which was 35 million in total. He stated that himself and Luboloobi signed the sale agreement at Kalema's office while —, Asaba signed at Nsambya Hospital. The amount^as paidjn three .instalments that is to say 17,500,000/=; 12,50(1000/= an^XoOfyOOOMH **A®A----•**

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made after the 2nd instalment. He also stated that Asaba signed the transfer forms in her office and after the payment of the last instalment the land was registered in his names on 16/2/2007 at 9.26 a.m. That he later met the 2nd Plaintiff at Land Office who introduced herself as proprietor ofthe land and was different from the Asaba he had met earlier.

In cross-examination he testified that he first saw Lugoloobi in November 2006 with Teddy Asaba at Kitgum House and in the company of Lawrence Wasswa; that he had met Lawerence Wasswa before, who was introduced to him by his workmate. That Wasswa introduced Teddy and Lugoloobi as the people who were selling the land. He also stated that he paid the 2nd instalment of -— {Q 12,500,000/= in January to the vendor and no second signature appeared on 7/2/2007. That Teddy Asaba did not sign because she was not present. That on 19/2/2007 Teddy Asaba did not sign. He stated that he took the sale agreement to the LCs to sign and did not know whether stamp duty was paid since it was not disclosed to him. He further stated that Asaba worked at Nsambya and did —- *kj* not have uniform and it was Lawrence Wasswa who introduced her to him. That the said Sam Wasswa was the one he knows as David Lugoloobi and was verbally summoned in Criminal Case No. 414 of 2007.

On re-examination the 2nd Defendant told Court that he was not aware of the criminal case at Makindye and that he was never summoned by Police in respect ofthe criminal case which related to the suit land. He also stated that the consent form to transfer land was prepared by Kalema who also filled in the information and the 2nd Defendant only signed.

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**Kaggwa Blasio Dw2** testified inter alia that he knew the 2nd Defendant who was introduced to him as having bought the lan^elengingfro-D^yid Lugoloobi in -J*e2£~* 2006 He testified that he knew Lugoloobi alias''W^^^j^lftOO^OOS who

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# was the title owner of the land at the time of sale to the 2nd Defendant. He stated that he was shown the sale agreement between the Plaintiffs and the 2nd Defendant on 28/3/2007 which he endorsed on as Chairperson ofthe area. The document was brought by the 2nd Defendant, Robinson Sebyuma (Caretaker) and Lugoloobi alias Wasswa.

On cross-examination he testified that Kibaate was the principal owner of the land in dispute which he sold to Lugoloobi in 2004-5. That Kibaate never signed any agreement in his presence since it was usual for him to introduce people he sold to. He also stated that the agreement of sale was unknown to him and was not present when the agreement was made and signed. He also told Court that Kibaate did not introduce Lugoloobi alias Wasswa to say that he had sold him part of his land in 2006. That he did not know Lugoloobi alias Wasswa and neither asked for the agreement or his identification. That Lugoloobi alias Wasswa sold the same land in 2006. That the agreement was concluded in his absence. That he stamped **exhibit Pj** probably on 28/3/2007 —1 after a year ofsale. He also stated that he did not see Lugoloobi alias Wasswa and Kalema sign and did not know Bumba Lawrence and Kalema. That the sale agreement was brought to him by the 2nd Defendant and Lugoloobi alias Wasswa was not present.

#### **I** Resolution ofissues:

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## **I** Issue No. I: Whether the Plaintiffs sold the land to the 2nd Defendant.

It is very clear from the evidence on record that the Plaintiffs did not sell the suit land to the 2nd Defendant. The documents which purported sale and transfer were not done by the Plaintiffs. The 1st D^nd^fffalsety~held himself [CF. F](CF. Fr)r "IED

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out as the 1st Plaintiff. It was the 1st Defendant who sold the suit land to the $2^{nd}$ Defendant. The 1st issue is accordingly answered in the negative.

Issue No.2: Whether the land was fraudulently sold/or whether the 2nd Defendant was a bonafide purchaser for value without notice of fraud.

Section 181 of the Registration of Titles Act provides that only a bonafide purchaser for value is protected under the Act in any action of ejection or for recovery of damages or for deprivation of the estate.

Section 136 of the Registration of Titles Act is to the effect that:

"except in the case of fraud, no person contracting or dealing with or taking or proposing to take a transfer from the proprietor of any registered $\longrightarrow$ 1 land, lease or mortgage shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which that proprietor or any previous proprietor thereof was registered, or to see to the application of any purchase or consideration money or shall be 15 affected by notice actual or constructive of any trust or unregistered. interest, any rule of law or equity to the contrary notwithstanding, and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud."

According to the Plaintiffs, the 2nd Defendant was affected by notice of the fraud, that he knew or he was in a position to know that the alleged sale was a $\cdot$ fraud, he was privy to the fraud and he himself actively participated in the fraudulent transactions. This was however denied by the 2nd Defendant.

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HE ORIGINAL What amounts to fraud has recently been defined by Hon. Bart Katureebe JSC in Fredrick Zaabwe v Orient Bank Limited and Others, SCCA No. 4 of $2006.$

"To act with intent to defraud means to act willingly and with the specific intent to deceive or cheat: Ordinarily for the purpose of either causing some financial loss to another or bringing about some financial gain to oneself."

Another elaborate definition of fraud is found in Gray and Grey Elements of Land Law 5th Edition, page 1097.

"The core meaning of "fraud" involves concepts of dishonesty and $-l\sigma$ There must be taking from someone else, literally or deprivation. metaphorically, of that which is his due or is due to him. If the designed object of a transfer is to cheat a man of a known existing right, that is fraudulent. The purchaser must, in effect, be guilty of something in the nature of personal dishonesty or moral turpitude."

From the above definitions it is trite that in order to prove fraud, the Plaintiffs have to show that the 2nd Defendant acted dishonestly and deprived the Plaintiffs of property and had knowledge of the fraud and took advantage of it. In other words fraud must be attributable to the 2nd Defendant. The above position was upheld by the Supreme Court in the case of Kampala Bottlers Limited v Damanico (U) Limited, SCCA No. 22 of 1992.

"Fraud must be attributable to the transferee. I must add here that it must be attributable either directly or by necessary implication. By this I mean the transferee must be guilty of some fraudulent act or must have known of such act by somebody else and taken advantage of such act.... I think it is generally accepted that fraud must be proved strictly, the burden being heavier than on a balance of probabilities generally applied in civil matters."

In the instant case, the 2nd Defendant knew that the suit property was owned by $-5$ two people but decided to deal with only one person called Lugoloobi David. The two defence witnesses testified to the effect that the 2nd Plaintiff was not present at the alleged signing of the agreement of sale dated $9/1/2007$ . The 2nd Defendant also admitted that the 2nd Plaintiff was absent when he made the last payment of Shs.5,000,000/=. It is a principle of law and fact that before one $-\sqrt{ }$ enters into a transaction to purchase land/real property he or she must first establish ownership and where land is owned by more than one person, the transaction must be made by all of them or with their authorities. Therefore the 2nd Defendant was wrong when he purportedly dealt with David Lugoloobi at the expense of the other co-owner knowing that Lugoloobi alone could not $-15$ legally sell the suit land without participation and consent of the other co-This is evidenced by the signature of only David Lugoloobi on the owner. acknowledgement of receipt of payments on the 2nd and last instalments. It was also proved that the said David Lugoloobi who purportedly signed the transfer forms was not David Lugoloobi in fact who is the 1st Plaintiff. Those signatures were forged. In order to conceal the fraud, the $2^{nd}$ Defendant and his collaborators decided to dispense with the participation of the local authorities. The 2nd Defendant himself testified that he took the agreement of sale to the LC I Chairman of the area in the absence of the rest of the alleged signatures to the document for the Chairman's endorsement. That clearly meant that the $-25$ Chairman could not properly witness the execution of the sale agreement because he only dealt with paper transaction and not with human transaction

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THE ORIGINAL

Another problem with the transaction was the contradiction between the testimony of the 2nd Defendant and his witness Wasswa Sam. Whereas the 2nd Defendant testified that he made payments in three instalments, of 17,500,000/=, 12,500,000/= and 5,500,000/= Wasswa Sam, testified that the 1st instalment was 12,500,000/= which was paid on 9/1/2007. This witness also $-\zeta$ told Court that the 2nd Plaintiff was absent when the payments were made. The above contradiction in the mode of payment goes to prove that the transaction was fishy.

I also noted a problem with the valuation of the suit land. The $2^{nd}$ Defendant testified that he bought the land at 35,000,000/= but the consent form which was $-10$ filled in the Land office to get the land registered in his name indicated that he paid Shs.1,800,000/= and the $2^{nd}$ Defendant paid Shs.20,000/= as tax for registering the suit land. The above transaction tantamounted to defrauding Government of revenue which would have been paid thereby causing financial That much casts doubt on the morality of the $2^{nd}$ . loss to Government. Defendant. Fraud is personal dishonesty or moral turpitude.

In relation to the above, the transfer form dated 8/2/2007 did not show the amount of consideration that was paid by the 2nd Defendant to "David Lugoloobi" contrary to Section 92 (1) of the Registration of Titles Act.

To make it worse, the 2nd Defendant did not call a one Edward Kiyemba named $-\mathcal{W}$ as a witness on the false transfer dated 8/2/2007 to prove that he was legally qualified to attest the document and that he actually subscribed his signature to the alleged transfer in order to prove that he saw the Plaintiffs signing that document. This is not a reflection of an innocent bonafide purchaser for value without notice of fraud.

THE ORIGINAL

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From the above I find that the transaction was surrounded with fraud which is attributed both to the transferor and transferee. As a result the 2nd Defendant does not qualify to be a bonafide purchaser for value without notice. The transaction by the Defendant was done to deprive the Plaintiffs ofthe property which legally belonged to them. In the premises the answer to the 2nd issue is that the land was sold fraudulently and that the 2nd Defendant was not a bonafide purchaser for value without notice.

**Issue No. 3: Remedies available.**

The Plaintiffs prayed for the following orders:

(a) Cancellation ofthe 2nd Defendant's name on the title ofthe suit property. —- j

(b) Restoration ofthe Plaintiffs' names on the title to the suit property.

- (d)Demolition ofthe houses illegally erected by the Defendants on the suit land. - (e) Permanent injunction restraining the Defendants from entering upon and doing anything on the suit land.

(f) General damages for trespass and interest.

(g)Costs ofthe suit.

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Having answered the first two issues in sought above from (a) to (e) are &lt; settled on this by **Lord Denning 1** QB **702, 712.** favour of the Plaintiffs the prayers accordingly granted. The law has clearly been [ **in Lazarus Estate Limited-v-BeasteyTF^^]' — GF. F"** COPY Of>PK^OR!G{NaL

"No Court in this land will allow a person to keep advantage which he has obtained by fraud. No judgment of a Court, no order of a Minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The Court is careful not to find fraud unless it is distinctly pleaded and proved, but once it is proved it vitiates judgments, contracts $\sim$ and all transactions whatsoever."

As far as general damages is concerned, the 1st Plaintiff testified that himself and his wife had acquired the suit property through their savings when they were working in London. They had planned to come back to Uganda and settle on the suit land and establish some income generating projects. But all their $\mathcal{N}$ dreams were shattered by the fraudulent transfer of the suit land by the Defendants. The Plaintiffs suffered loss and injuries since their plans were frustrated by the Defendants. In all fairness therefore they are entitled to Counsel for the Plaintiff proposed a $sum$ $\quad\text{ of }\quad$ general damages. Shs.100,000,000/ $=$ . I am of the view that the above sum is not justified and fairly on the higher side. Doing the best I can a sum of Shs.50,000,000/= (fifty million) would be sufficient.

As to costs, the law is that costs follow events. The Defendants forced the Plaintiffs to seek justice to reclaim their property which the Defendants fraudulently deprived from them. This is a proper matter where the Defendants. should be condemned to pay costs of the suit.

I also order interest on the above at 20% p.a. computed from the date of Judgment until payment in full

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In a nutshell Judgment is entered in favour of the Plaintiffs for orders and declarations prayed for in (a) to (e).

The Plaintiffs are awarded general damages for trespass in the tune of —- Shs.50,000,000/= (fifty million only) plus costs of the suit. The Plaintiffs are also entitled to interest on the above at 20% p.a. from the date ofJudgment until payment in full. *i fl*

**HON. MR. JUSTICE RUBBY A JUDGE I 13/3/2013 WERfoPIO**

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## $14/3/2013$

## $Count:$

Lutakome for the Plaintiffs. None for the Defendants. Dillis for Court Clerk.

## **Lutakome:**

The matter is for Judgment.

## Court:

Judgment read and explained to the Plaintiffs in the absence of the Defendants this $14^{th}/03/2013$ at 3.00 p.m. $17$

HIS WORSHIP ALEX AJIJI **ASSISTANT REGISTRAR LAND DIVISION** $14/03/2013.$

**JED TSUE** THE ORIGINAL

$15$