Lutaaya and Others v DFCU Bank Uganda Limited and Others (Civil Suit 616 of 2020) [2025] UGCommC 76 (30 April 2025)

#### 5 **THE REPUBLIC OF UGANDA**

#### **IN THE HIGH COURT OF UGANDA AT KAMPALA**

### **(COMMERCIAL DIVISION)**

#### **(CIVIL SUIT NO. 616 OF 2020)**

#### **(FORMERLY CIVIL SUIT NO. 138 OF 2018)**

- 10 - **1. Nakiganda Belinda Lutaaya (Administrator of the estate of the Late A. K. Lutaaya)** - **2. Mildred Ochwo Ssemakula** - **3. Akiror Sarah** - 15 **4. Kyaterekara Samuel** - **5. Sylivia Sabiti** - **6. Tugumisiriza Wilson** - **7. Damalie Igune** - **8. Paul Asiimwe** - 20 **9. Merab Asiimwe** - **10. Kusiima Justus N** - **11. Erong Susan** - **12. Musinguzi Richard Bob** - **13. Proscovia Mulumba** - 25 **14. Twongyweirwe Jane** - **15. Florence Kajumba** - **16. Nangozi Lilian** - **17. Sizoome Irene** - **18. Agaba Edison** - 30 **19. Kamya Richard** - **20. Mukiza William** - **21. Simiyu Ronald** - **22. Kacu Tophace Joy and Kushemererwa Elizabeth (Administrators of the estate of the Late Edgar Mawenu)** - 35 **23. Alex Muhindo** - **24. Ogwang Patrick** - **25. Ninsiima Julius** - **26. Nakamya Julian** - **27. Nuwagira Aggrey ……………………………………………. PLAINTIFFS**

#### 40 **Versus**

**1. DFCU Bank Uganda Limited**

| 5 | 2. | The Commissioner Land Registration<br>………………………… | | | DEFENDANTS | |---|----|--------------------------------------------------|--|--------------------|-------------| | | 3. | Bank of Uganda | | ……………………………………………… | THIRD PARTY |

### **BEFORE: HON. LADY JUSTICE SUSAN ABINYO**

#### **JUDGMENT**

#### 10 Introduction

The Plaintiffs instituted this suit against the 1st and 2nd Defendants for release of the Mortgage instrument originally issued by Global Trust Bank for Plots of land mutated from Block 171 Plot 37 at Nakwero, measuring approximately 8.96 acres, in which the Plaintiffs seek the following reliefs;

- 15 1. A declaration that the Plaintiffs are purchasers with an equitable interest in land comprised in Block 171 Plot 37 at Nakwero measuring approximately 8.96 acres and subdivided into Plots 288, 287, 239, 238, 241, 240, 271, 270, 269, 242, 243, 272, 273, 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230. - 20 2. A declaration that the 1st Defendant is illegally withholding the release of Mortgage to land comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres and subdivided into Plots 288, 287, 239, 238, 241, 240, 271, 270, 269, 242, 243, 272, 273, 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230. - 25 3. A declaration that the sub division by the Plaintiffs of land formerly comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres into Plots 288, 287, 239, 238, 241, 240, 271, 270, 269, 242, 243, 272, 273, 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230 using a mutation form was illegal. - 30 4. An order directing the 1st Defendant to issue a release of Mortgage to land comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres and subdivided into Plots 288, 287, 239, 238, 241, 240, 271, 270, 269, 242, 243, 272, 273, 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230. - 35 5. An order directing the 2nd Defendant to effect release of Mortgage and subsequently transfer the certificates into the names of the Plaintiffs over land comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres and subdivided into Plots 288, 287, 239, 238, 241, 240, 271, 270, 269, 242, 243, 272, 273,

- 5 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230. - 6. General damages. - 7. Costs of the suit.

## Background

- That on 28th 10 June, 2011, a company known as Hosanna Real Estates Limited (Hosanna) obtained a credit facility from Global Trust Bank (GTB) of UGX 2,500,000,000. The facility was secured by Land comprised in Block 171 Plot 37, Land at Lugala measuring 17.49 hectares, and Block 421 Plots 43, 45, 46, 47 & 49, Land at Ziru measuring 15.288 Hectares. That Hosanna failed to service and or 15 settle the facility in accordance with the terms on which it was granted. GTB commenced foreclosure action in relation to the security held by filing Civil Suit - No. 1 of 2013 (O. S) Global Trust Bank Vs Hosanna Real Estates Limited, in which a consent was recorded pursuant to which, GTB was to sell 34.26 acres out of the 43.22 acres with the balance of 8.96 acers to be returned to Hosanna Real Estates

20 Limited.

That GTB sold part of the 34.26 acres to Real Marketing Ltd, Hakeem Lukenge, and retained an unsold portion. Following this, GTB instructed Hectarage Surveyors to survey and subdivide the Land at Lugala to create 5 plots, one for 8.96 acres to be retained by Hosanna and the others for Real Marketing and Hakeem Lukenge.

- 25 That on 26th May 2014, GTB wrote to the Commissioner Land Registration forwarding the Certificate of Title of the land for creation of the subdivided certificates of title, but before the subdivision was concluded, GTB was placed under liquidation and DFCU Bank Uganda Limited (DFCU)assumed some of its assets. That at the time of the takeover, neither DFCU nor Bank of Uganda (BOU) - 30 was in physical possession of the Certificate of Title that had been deposited in the Lands Registry by GTB prior to liquidation.

Subsequently, people (including the Plaintiffs) who had purportedly purchased portions of the property from Hosanna but had not been given their Certificates of title filed a number of complaints with the Land Directorate-State House, which

- 35 took over the titling process of the land, and eventually released 73 titles to DFCU, while others were retained by State House. That following a request by DFCU, the Commissioner Land Registration directed Hosanna to deliver to the Registry, titles curved out of Plot 37 at Lugala for cancellation. Additionally, BOU was requested to surrender the Certificate of Title for Lugala to enable the cancellation of all titles - 40 that had been created therefrom.

- 5 That on 7th December 2018, DFCU forwarded the Certificate of Title to the Commissioner but Hosanna declined to surrender the Certificate of Title, which had been created under the auspices of State House Lands Unit. These titles were in the hands of AK Lutaaya and others, who declined to return them, causing the process of cancellation to abate while DFCU retrieved the Certificate of Title from - 10 the Lands Registry.

Consequently, Global Trust Bank Uganda Limited sued Hosanna Real Estates vide Originating Summons No.1 of 2013, seeking foreclosure on the mortgaged suit property to recover monies owed. Global Trust Bank Uganda Limited and Hosanna Real Estates Ltd entered into a consent order, wherein they agreed that

15 32.26 acres of the mortgaged land would be sold by Global Trust Bank Uganda Limited to recover the outstanding loan, and the balance of 8.96 acres would then be returned to Hosanna Real Estates Ltd.

That Global Trust Bank forwarded the Duplicate Certificate of Title to Block 171 Plot 37 Lugala, Kyadondo, also known as the mother title, to the Commissioner 20 Land Registration for mutation following the consent order. Global Trust Bank authorized the subdivision, and also issued a Release of Mortgage instrument to

Hosanna Real Estates Ltd on 11th April, 2014, which discharged it from all obligations and conditions under the mortgage. Following the mutation, 32.26 acres were retained by Global Trust Bank Uganda Limited, whereas 8.96 acres of 25 the land was returned to Hosanna Real Estates, which were eventually

sub-divided into 37 plots and allocated to the Plaintiffs. Each of the 37 subdivided plots (titles) are still in the name of the Hosanna Real Estates Ltd.

That on 14th March, 2019, a meeting was held between DFCU, BOU, AK Lutaaya, Hosanna, and Mr. Elias Edu (representing the shareholders of GTB), where it was 30 established that the Certificates of Title created out of the land pursuant to the consent was to be sold by GTB. Unfortunately, GTB went into liquidation and was taken over by DFCU Bank Uganda Limited. The original release of Mortgage issued by the said bank, GTB, was unfortunately misplaced in the lands office. The Plaintiffs wrote to the 1st Defendant requesting for another release of the 35 Mortgage to be issued but their pleas were not met hence this suit.

The 1st Defendant filed a written statement of defence contending that there is no cause of action against it, and it has never transacted with either the Plaintiffs or the 3rd Party in regard to the suit land. That it is not true that the 2nd Defendant took over or bought out GTB as alleged by the Plaintiffs, but only took over

40 management of selected transactions and accounts on behalf of the 3rd Party and the suit property is not one of them.

5 Before trial could commence, the 1st Defendant was granted leave to add Bank of Uganda as a third party, having been the liquidator of Global Trust Bank Uganda Limited.

### Agreed facts

During the scheduling proceedings, the following were set out as the agreed 10 facts.

- (i) Hosanna Real Estates Limited obtained a loan from Global Trust Bank Uganda Limited, and used the suit land as security. - (ii) Hosanna Real Estates Limited failed to settle its outstanding financial obligations to Global Trust Bank Uganda Limited, and was consequently - 15 sued by GTB, in Originating Summons No.1 of 2013, seeking foreclosure on the mortgaged suit property, and recovery of monies (UGX 3,153, 770,323) owed under the said mortgage. - (iii) The suit was settled by Consent of the parties, in which they agreed that 34.26 acres of the 43.22 acres of land be sold by Global Trust Bank Uganda - 20 Limited to recover the outstanding loan, and the remaining 8.96 acres be retained by Hosanna Real Estates Limited. - (iv) The Plaintiffs purchased parcels of land from Hosanna Real Estates Limited known as Block 171 Plot 37 Lugala, Kyadondo Wakiso, and measuring 8.96 acres, from which they claim an equitable interest in part of the said land. - 25 (v) Bank of Uganda placed Global Trust Bank Uganda Limited under liquidation, and it was taken over by DFCU Bank. - (vi) The 1st Defendant wrote a letter to the Plaintiffs and the 2nd Defendant requesting the cancellation of the Certificates of Title.

## Representation

30 The Plaintiffs were represented by Counsel Bazira Anthony of M/s Byenkya, Kihika & Co. Advocates, while the 1st Defendant was represented by Counsel Edwin Tabaro jointly with Counsel Kenneth Kipalu of KTA Advocates, and the Third Party was represented by Counsel Ernest Sembatya of MMAKS Advocates.

### Issues

- 35 The agreed issues for determination during the scheduling proceedings were; - 1. Whether the suit discloses a cause of action against the Defendants? - 2. Whether the land purchased by the Plaintiffs was part of the land returned to Hosanna Real Estates Ltd pursuant to the consent in Civil Suit. No. 1 of 2013 (OS)?

# 5 3. What remedies are available to the parties?

# Evidence

The Plaintiffs adduced the evidence of two witnesses according to a consent signed by the parties vide Miscellaneous Application No. 1253 of 2022, namely, Ms. Sizoomu Irene (hereinafter referred to as "PW1") and Mr. Musinguzi Richard Bob

- 10 (hereinafter referred to as "PW2"). The Defendants adduced the evidence of Mr. Muhammad Kiwanuka Ssenoga (hereinafter referred to as "DW1") and the Third Party adduced the evidence of Ms. Ann Kiwanuka Kalanda (hereinafter referred to as "DW2"). In addition, the Plaintiffs' trial bundle was marked PE1-PE17; the 1st Defendant's trial bundle was marked DE1, and the Third Party's trial bundle was - 15 marked 3T-E1-3T-E15.

The 2nd Defendant did not enter an appearance in this suit upon failure to file a written statement of defence despite proper and effective service upon it therefore, the Plaintiffs proceeded exparte against the 2nd Defendant.

Before the hearing could commence, two Plaintiffs died and were substituted by 20 the Court; Nakiganda Belinda Lutaaya substituted the 1st Plaintiff vide Administration Cause No. 0191 of 2022, while Kacu Tophace Joy and Kushemererwa Elizabeth substituted the 22nd Plaintiff vide Administration Cause No. 1026 of 2020.

## **Issue No.1**: Whether the suit discloses a cause of action against the Defendants?

25 Submissions of Counsel for the Plaintiffs

Counsel submitted that the 1st Defendant wrote various correspondences to the 2nd Defendant and 3rd Party regarding the suit land, such as PE5 pg.141 and PE7 pg. 144 of the Plaintiffs' trial bundle, 3T-E3 pgs. 5-6, and 3T-E4 pg. 7 of the 3rd Party's trial bundle, in which all these correspondences attest to the fact the 1st Defendant

- 30 was a successor in title of Global Trust Bank. That having asserted that it's the successor in title in the various correspondences with the 2nd Defendant and 3rd Party, the 1st Defendant is estopped from challenging the Plaintiffs' cause of action. Counsel relied on section 114 of the Evidence Act, Cap 8, and the cases of *Lanex Forex Bureau Ltd Vs Mulangwe (Civil Appeal No. 190 of 2016) [2021] UGCA 125 (1* - 35 *June 2021)*; *Semakula Haruna Vs Stanbic Bank (U) Ltd (HCT-00-CC-CS 432 of 2009) [2012] UGCommC 31 (22 April 2012)*, and *Real Marketing Ltd Vs DFCU Bank (HCCS 858 of 2015) [2019] UGCommC 5 (19 March 2019)*, in support of their submissions.

- 5 Counsel further submitted that the 1st Defendant is bound by the letters she wrote describing herself as a successor in title. Counsel cited the cases of *Euromec International Limited Vs Shandong Taikai Power Engineering Company Limited (Civil Case E527 of 2020) [2021] KEHC 93 (KLR) (Commercial and Tax) (21 September 2021)*, and *Guma Paulino Vs Bank of Africa (U) Limited & 2 Others* - 10 *HCCS No. 13 of 2008) (unreported)*, on the proposition that when a person signs a document, the signature should denote an intention to be bound by the terms and conditions embodied in the signed document. Counsel contended that in the absence of contrary evidence, the 1st Defendant took over the assets and liabilities of Global Trust Bank, which included the suit land comprised in Block 171 - 15 Plot 37 Lugala, Kyadondo.

# Submissions of Counsel for the 1st Defendant

Counsel submitted that for a plaint to disclose a cause of action, the plaint must on the face of it fulfill the following three requirements: That the Plaintiff enjoyed a right, that right was violated, and the Defendant is liable. That if any of the 20 above is missing, the plaint is a nullity, and ought to be struck out under Order 7, Rule 11(a) of the Civil Procedure Rules, SI 71-1. Counsel relied on the case of *Priamit [Enterprises Ltd Vs Attorney General \(Civil Appeal 10 of 2001\) \[2002\] UGSC](https://ulii.org/akn/ug/judgment/ugsc/2002/39/eng@2002-12-19) [39 \(19 December](https://ulii.org/akn/ug/judgment/ugsc/2002/39/eng@2002-12-19) 2002)* in support of their submissions.

Counsel further submitted that applying the above principles to the instant facts, 25 the claim being fronted by the Plaintiffs as against the 1st Defendant in paragraphs 6 and 7 of the Plaint, is that it failed to issue a Mortgage release instrument after allegedly taking over and becoming the successor in title of Global Trust Bank; that what is clear from the pleadings of the Plaintiffs is that the suit was commenced against the 1st Defendant under a misconception that it is the successor in title of

30 the 1st Defendant.

Counsel argued that the above facts as pleaded in the Plaint and the annextures thereto, clearly show that the Plaintiffs have no cause of action against the 1st Defendant because the 1st Defendant is not the successor in title of Global Trust Bank. That the evidence on record clearly speaks to the fact that the 1st Defendant

35 was contracted by the Third Party to manage certain assets of Global Trust Bank on behalf of the Third Party and take over only deposits as seen in DEX 1 the public notice issued by the Third party notifying the customers of GTB that the 1st Defendant has only taken over the deposits in full.

Counsel further argued that the claim by the Plaintiffs for release of mortgage 40 instrument arise from breach of a loan contract between Global Trust Bank Limited 5 and Hosanna Real Estate Limited. That the relationship between GTB and Hosanna Real Estate Limited being contractual in nature, the Plaintiffs cannot sue the 1st Defendant, who was not privy to the contract, in the absence of evidence of novation.

Counsel contended that the Plaintiffs have not pleaded any exception to the rule 10 of privity to contract; the sale agreements marked as PE11 and PE12 from which the Plaintiffs' derived rights were executed only by the Plaintiffs and Hosanna Real Estate Limited therefore, it is legally untenable for the Plaintiffs to sue the 1st Defendant, which is not a party to the said contractual relations.

### Submissions of Counsel for the Third Party

- 15 Counsel submitted that one who is not a party to a contract cannot sue or be sued against it, and further that a contract cannot impose obligations on one who is not a party to it. Counsel relied on the case of *Abdul Rahman Elamin Vs Dhabi Group Civil Appeal No. 2 of 2013(unreported)*, and *Gulf Cross limited and Anor Vs Shree Hari Tiles Limited and Anor (Civil Suit 753 of 2018) (2021) UGCommC 134 (18 March* - 20 *2021)*, in support of their submissions, where in the latter case, the Court held that although a contract or its performance can affect a third party, as a general rule, a contract cannot confer rights or impose obligations arising under it on any person except the parties to it… A third party may not enforce a contract except where it was made expressly for his or her benefit in such circumstances that it was - 25 intended to be enforceable by him or her.

Counsel relied on the book: *The Law of Contract (Common Law Series), Chapter 1 General Considerations, para 1.182 by Roger Halson-Professor of Contract and Commercial Law,* in which the learned author stated that;

"Where the dispute lies between a contracting party claimant and a 30 non-contracting third-party defendant, these two categories of inter-contracting party dispute have their analogues. In other words, the dispute can centre on the effect of an alleged contractual modification to the background regime of obligations, or (as in the indirect Names part of the Henderson case) it can focus on a question akin to that of concurrent liability. The involvement of a non-

- 35 contracting third party in the dispute does, however, introduce a significant new element. For, according to the doctrine of privity of contract strictly applied, such a third party cannot be burdened by the claimant's contract and, even after relaxation of the privity principle (as in the Contracts (Rights of Third Parties) Act 1999), there will still be limits to the third party's right to take the benefit of such a - 40 contract. This means that, where the dispute lies between a contracting party - 5 claimant and a non-contracting third-party defendant, two principles are liable to be in play. First, there is the 'general regulative principle' (as we can call it), namely that a contracting party may have recourse to tort provided that this is not inconsistent with the contractual position; and, secondly, there is the specific principle of privity of contract." - 10 Counsel, therefore, submitted that there are exceptions to the above stated legal position, and these were inter alia discussed in the case of *Asante Aviation Ltd Vs Star of Africa Air Charters Ltd & 3 Ors (Civil Suit No. 431 of 2014) [2017] UGCOMMC 125 (2 November 2017)* where it was held that;

"In *summary, only parties to a contract may sue for the breach of contract.* 15 *Ordinarily, the Counterclaimant, not being a party to the loan agreement, would not proceed to sue under that agreement. The position in practice has however, changed, and it is now possible for a person not privy to a contract to sue. Such instances are where the third party is a beneficiary to the agreement between the other two parties. The test lies in the question* 20 *of whether the two contracting parties intended the third party to derive benefit from their contract.*

*Such a party is at times referred to as a third party beneficiary. In this case, a third party would be the intended beneficiary of the contract as opposed to an incidental beneficiary. The third party will especially benefit when he* 25 *moves to do his part of the contract with one of the contracting parties because the relationship of the contracting parties gives him assurance of what he expects to benefit ... ln Dunlop Pneumatic Tyres Vs Selfridge & Co. Ltd (1915) AC 847, the court held that a third party beneficiary may uphold a promise made for its benefit in a contract to which it is not a party;* 30 *Trindent General Insurance Co. Ltd Vs MacNeice Bros Pty Ltd (1988) 165 CLR 107.''*

Counsel contended that no exceptions are pleaded by the Plaintiffs, and certainly no evidence of such unpleaded exceptions was tendered. That in this case, neither DFCU Bank nor Bank of Uganda is named as a party to the purchase

35 agreements between the Plaintiffs and Hosanna Real Estates Ltd, nor are they even mentioned anywhere in the agreements. It follows, therefore, that the Plaintiffs cannot sue DFCU Bank on these contracts, and conversely, no action can be sustained against Bank of Uganda arising out of these contracts.

Counsel further contended on the propriety of the Third Party proceedings 40 pursuant to which Bank of Uganda was joined as a party to these proceedings;

- 5 that even if Bank of Uganda had properly been added as a Third Party (which they contend it wasn't), no claim can as a matter of law be brought against it. Counsel relied on section 89(1) and 89 (2) (e) of the Financial Institutions Act, 2004 FIA (*now Cap 57 of the Revised Laws of Uganda, 2023 Edition*), to submit that the claims in relation to GTB can only be sustained as against it in its name and not - 10 against the Third Party.

Counsel argued that the claim as against the Third Party is also expressly barred by section 124 of the FIA (*now section 134)*, which states that;

"No suit or other legal proceedings shall lie against the Bank of Uganda or any officer, employee or agent of the Bank of Uganda for anything which is done or 15 is intended to be done in good faith under this Act."

Counsel submitted that the Plaintiffs can validly allege to have enjoyed a right, that right was enjoyed as against Hosanna and not DFCU Bank or Bank of Uganda. That they can also validly allege that their right was violated, but that violation was certainly not by either DFCU Bank or Bank of Uganda. Accordingly,

20 they cannot validly allege that either DFCU Bank or Bank of Uganda is liable for any such violation, and in any event, Bank of Uganda is by law protected against suits of this sort, save in instances of bad faith.

Counsel further argued that no allegations of bad faith as against the Third Party are pleaded; additionally, no evidence alleging bad faith on the part of the Third

- 25 Party was adduced. That the 1st Defendant is managing the Global Trust Bank portfolio on behalf of Bank of Uganda in its capacity as Statutory Liquidator of Global Trust Bank. It follows therefore that even if the Plaintiffs had a tenable claim against DFCU Bank and conversely Bank of Uganda (which they contend the Plaintiffs don't and can only claim against the Party with whom they contracted), - 30 then such claim can by law only be made against Global Trust Bank Limited (in liquidation) and neither of DFCU Bank nor Bank of Uganda.

#### Decision

The well-established principles to be considered in determining whether there is a cause of action has been stated in a plethora of cases.

- 35 A cause of action was defined as every fact which is material to be proved to enable the Plaintiff to succeed or every fact which, if denied, the Plaintiff must prove in order to obtain a judgment. *(See*: *Tororo Cement Co. Ltd Vs Frokina International Ltd (Civil Appeal 2 of 2001) [2002] UGSC 24 (24 April 2002)*, which cited with approval the case of *Auto Garage Vs Motokov No.3 (1971) EA 514, at* - 40 *519)*

- 5 The following questions, as guided in the case of *Auto Garage Vs Motokov No.3* (supra), must be determined to establish whether a cause of action has been disclosed by the Plaintiff(s); - 1. Whether the Plaintiff enjoyed a right? - 2. Whether that right has been violated? and - 10 3. Whether the Defendant is liable?

It's trite law that the plaint must allege all facts necessary to establish the cause of action. *(See: Sullivan Vs Alimohamed Osman (1959) EA 239 at 240)*

The settled position of the law is that, in determining whether a plaint discloses a cause of action, the Court must look only at the plaint, and its annextures, if any,

- 15 and nowhere else upon the assumption that any express or implied allegations of fact in it are true. *(See: Narottam Bhatia & Another Vs Boutique Shazimi Ltd [2010] UGSC 7 (17 August 2010); Tororo Cement Co. Ltd Vs Frokina International Ltd(supra); Madhvani International SA Vs Attorney General, C. A. C. A No. 48 of 2004* **(unreported)** and *Jeraf Shariff & Co. Vs Chotai Fancy Stores [1960] E. A 374 at 375)* - 20 I have looked at the plaint dated 6th March 2018, in particular, paragraphs 2, 4, 6(k), 7, 9, and 10, wherein the Plaintiffs averred inter alia;

"That the 1st Defendant is a company duly incorporated under the Laws of Uganda, a successor in title of Global Trust Bank Uganda Limited (GTB) now under liquidation, with the capacity to sue and be sued, and the Plaintiffs' advocates 25 undertake to effect service of court process.

The Plaintiffs' claim against the 1st Defendant is for a release of the Mortgage Instrument for Land comprised in and known as Block 171 Plot 37 at Nakwero, measuring approximately 8.96 acres. In the alternative, without prejudice, a claim against the 2nd Defendant is for an order of court requiring the 2nd Defendant to 30 transfer the suit property into the Plaintiffs' respective names.

That Global Trust Bank went into liquidation and was taken over by DFCU Bank Uganda Limited, and the actions of the 1st Defendant are intended to defeat their legitimate claim and interest in the suit property. That the letters issued by the 1st Defendant wrongly imply that the 1st Defendant has never recovered monies

35 under the mortgage as reflected under the consent order.

The Plaintiffs aver that they have no outstanding obligations with the 1st Defendant, and that the Plaintiffs have been continuously deprived of the use and quiet enjoyment of their land, and prevented from dealing with the said land, 5 whereof they have suffered and continue to suffer loss and damage, for which they claim general damages."

I have further looked at the Third Party Notice dated 25th July 2014 in DE-1, which reads as follows:

### **BANK OF UGANDA**

#### **NOTICE TO THE PUBLIC**

**WINDING UP ORDER OF THE AFFAIRS OF GLOBAL TRUST BANK(U) LTD (UNDER SECTIONS 17(f), 89(2)(f) & (7)(c), AND SECTION 99(1) OF THE FINANCIAL INSTITUTIONS ACT, 2004)**

- 15 **FOLLOWING THE BANK OF UGANDA TAKE OVER OF GLOBAL TRUST BANK(U) LTD, BANK OF UGANDA HAS DECIDED TO REVOKE THE LICENCE OF GLOBAL TRUST BANK(U) LTD AS A FINANCIAL INSTITUTION AND ORDER THE WINDING UP OF ITS AFFAIRS UNDER SECTIONS 17(f), 89(2)(f) & (7)(c), AND 99(1) OF THE FINANCIAL INSTITUTIONS ACT, 2004.** - 20 **IN EXERCISE OF ITS POWERS AS A LIQUIDATOR, BANK OF UGANDA HAS CONCLUDED A PURCHASE AND ASSUMPTION AGREEMENT WITH DFCU BANK LTD. DFCU BANK LTD HAS TAKEN OVER ALL THE DEPOSITS OF GLOBAL TRUST BANK(U) LTD IN FULL. THE DEPOSITORS WILL BE ABLE TO ACCESS THEIR DEPOSITS AND OPERATE THEIR ACCOUNTS FROM ANY BRANCH OF DFCU BANK LTD, AND THE FORMER GLOBAL** - 25 **TRUST BANK (U) LTD BRANCHES AT OWINO, BWAISE, PALLISA, PHAIDA, NATEETE, AND KIKUUBO WITH EFFECT FROM THE FIRST WORKING DAY OF NEXT WEEK.**

**ALL FORMER GLOBAL TRUST BANK(U) LTD BORROWERS MUST CONTINUE TO SERVICE THEIR LOAN OBLIGATIONS WITH DFCU BANK LTD.**

**BANK OF UGANDA REASSURES THE PUBLIC THAT WE WILL CONTINUE TO PROTECT** 30 **DEPOSITORS INTERESTS AND MAINTAIN THE STABILITY OF THE FINANCIAL SECTOR.**

## **SIGNED GOVERNOR BANK OF UGANDA 25TH** 35 **JULY 2014**

5 With regard to Annexture T2(3T2-1), the Consent Decree in Originating Summons No.1 of 2013; *Global Trust Bank Ltd Vs Hosanna Real Estates Ltd*, it reads in part;

"…by consent of the parties, it is hereby agreed in settlement of an outstanding loan debt of Shs 3,153,770,323 owed by the Defendant to the Plaintiff, plus expenses incurred of Shs 412,364,558 as follows.

10 i)The Plaintiff shall sell 34,26 out of 43.32 acres of the security situate at Lugala Kyadondo, Wakiso for Shs 1,805,780,000. The balance of 8.96 acres shall be returned to the Defendant…

Dated at Kampala this 7th day of November 2013"

DRAWN & FILED BY

15 M/s Mugenyi & Co. Advocates, Plot 52, Kampala Road, King Fahd Plaza, P. O. Box 5600 Kampala.

In addition, this Court has looked at paragraphs 6(i) (j) and (l) of the plaint, in which the Plaintiffs averred that on 26th May, 2014, Global Trust Bank Uganda Limited in pursuance of the Consent Order forwarded the duplicate certificate to Block 171 Plot 37 Lugala, Kyadondo and measuring 43.22 acres to the

- 25 Commissioner Land Registration for purposes of mutation in accordance with the consent order. A copy of the letter forwarding the title for mutation is attached as Annexture "D"; under the mutation exercise, 32.26 acres were retained by the Global Trust Bank Uganda Limited, while 8.96 acres of land were indeed returned to Hosanna Real Estates Ltd. Consequent upon which the said land was sub- - 30 divided into 37 plots and allocated to the Plaintiffs. Each of the 37 subdivided plots (titles) is in the name of Hosanna Real Estates, having obtained the same from the Land Protection Unit of the State House, which oversaw the subdivision exercise as seen in copies of the titles marked E1 to E33. - 35 A successor in title refers to an individual or entity, who takes over the ownership to property, rights or assets from the previous owner, which may be through a sale, inheritance or other legal means.

5 From the above facts and Annextures attached to the plaint, this Court finds that the 1st Defendant is a successor in title to Global Trust Bank(U) Ltd for the following reasons;

Firstly, the 1st Defendant, having asserted that it's the successor in title in the various 10 correspondences with the 2nd Defendant and Third Party, the 1st Defendant is bound by the terms in the said documents in the absence of fraud or misrepresentation. *(See: L'Estrange Vs E. Graucob Ltd [1934]2 KB 394)*

Secondly, the 1st Defendant cannot approbate and reprobate on the said 15 documents. In the case of *Simbamanyo Estates Limited Vs Equity Bank(U) Limited & 2 Ors, Misc. Applic. No 0414 of 2022(Arising from Civil Suit No. 198 of 2020,* Mubiru. J expounds on the maxim of "approbate and reprobate" as follows;

*"The maxim* of "approbate and reprobate" *reflects the principle whereby* 20 *a person cannot both approve and reject an instrument, often more commonly described as blowing hot and cold, or having one's cake and eating it too. It traces its roots to the laws of Scotland and is essentially a principle of equity. In English law, the Courts readily refer to the principle of approbate and reprobate, although this is generally done under the English* 25 *doctrine of "election". The term "election" has two distinct categories, as described in Halsbury's Laws of England, Vol.16(2), 4th ed. Reissue, 2003, para 962: firstly, "the common law principle which puts a person to his election between alternative inconsistent courses of conduct" and secondly, "the equitable doctrine of election". It is, therefore, further based* 30 *on the rule of estoppel... This category of election generally reflects the scope of approbate and reprobate as traditionally applied in England. Where a person knowingly accrues the benefits of an instrument, he or she is estopped from denying the validity or the binding effect of such instrument. The doctrine of approbation and reprobation requires for its* 35 *foundation inconsistency of conduct; as where a man, having accepted a benefit given him by a judgment, cannot allege the invalidity of the judgment which conferred the benefit."* [Emphasis is mine]

Thirdly, it's trite that a third party may not enforce a contract except where it was 40 made expressly for his or her benefit in such circumstances that it was intended to be enforceable by him or her. **(See:** *Gulf Cross Limited and Anor Vs Shree Hari Tiles Limited and Anor (Civil Suit 753 of 2018) (2021) UGCommC 134 (18 March 2021)*

- 5 In the instant case, this Court finds that the 1st Defendant was not a party to the transactions between Global Trust Bank Limited and Hosanna Real Estates Limited vide Originating Summons No.1 of 2013, in which a consent Decree was entered by the Court as agreed by the parties thereto. Consequently, annextures E1-E33 the titles in respect of Block 171, which were subdivided into 33 plots from the 8.96 - 10 acres that was returned and registered in the name of Hosanna Real Estates Limited as a result of the consent was meant to benefit the Plaintiffs, which did not materialize when GTB went into liquidation, a process that brought the 1st Defendant on board as a successor in title to GTB in liquidation.

The question that ensues with regard to the provision of section 95 of the Financial 15 Institutions Act, Cap 57, is whether DFCU Bank Limited was a successor in title for a partial transfer of the assets and liabilities of GTB in liquidation?

Section 95(1) of the Financial Institutions Act, Cap 57 provides that:

# "**95. Options available to receiver**

(1) The Bank of Uganda or a person appointed by the Bank of Uganda shall, within 20 twelve months from the date of taking over as a receiver, consider and implement any or all of the following options either singly or in combination-

- (a) arrange a merger with another financial institution; - (b) arrange for the purchase of assets and assumption of all or some of the liabilities by other financial institutions; - 25 (c)arrange to sell the financial institution; - (d) liquidate the assets of the financial institution. [Emphasis is mine]

From the above provision, it is my understanding therefore, that the phrase "successor in title" in the instant case implies that DFCU Bank, which acquired another bank (GTB in liquidation), does not automatically acquire all the assets

30 and liabilities of the defunct financial institution. The critical document in such a transaction is the Purchase and Assumption Agreement, in which the Court is to interpret the terms and conditions (scope of transfer) to determine the transferee's legal obligations, which is established on a case-by-case basis.

In the instant case, the Purchase and Assumption Agreement was referred to by 35 the Third Party in their amended defence, in particular paragraph 3(viii), in which the Third Party averred that pursuant to the Purchase and Assumption Agreement between DFCU Bank and BOU, DFCU Bank agreed to complete the process, which was begun by GTB on behalf of BOU, as Liquidator. At the time of DFCU's takeover, neither DFCU nor BOU had physical possession of the Certificate of title,

40 the same having been deposited earlier with the Lands Registry by GTB prior to its

5 Liquidation however the said Purchase and Assumption Agreement was neither attached to the Third Party's amended written statement of defence nor adduced in evidence.

The proposition of law is that whoever alleges a given fact, and desires the Court to give judgment on any legal right or liability dependent on the existence of any

- 10 fact, has the burden to prove that fact unless it is provided by law that the proof of that fact shall lie on another person. *(See: sections 101 and 103 of the Evidence Act, Cap 8; Senkungu & 4 Ors Vs Mukasa (Civil Appeal 17 of 2014) [2017] UGSC 14 (6 April 2017)*, and *Jovelyn Barugahare Vs Attorney General, SCCA No. 28 of 1993[1994] KALR 190)* - 15 Notably, in DE1 above, the Third Party's notice to the public specifically indicated that in exercise of its powers as a liquidator, Bank of Uganda has concluded a purchase and assumption agreement with DFCU Bank Ltd. DFCU Bank Ltd has taken over all the deposits of Global Trust Bank (U) Ltd in full. The depositors will be able to access their deposits and operate their accounts from any branch of - 20 DFCU Bank Ltd, and the former Global Trust Bank (U) Ltd branches at Owino, Bwaise, Pallisa, Phaida, Nateete, and Kikuubo with effect from the first working day of next week. All former Global Trust Bank (U) Ltd borrowers must continue to service their loan obligations with DFCU Bank Ltd. Bank of Uganda reassures the public that we will continue to protect depositors' interests and maintain the 25 stability of the financial sector. [Emphasis is mine]

From the above notice, this Court finds that DFCU Bank Ltd had taken over all the deposits of Global Trust Bank (U) Ltd in full (assets), and all the borrowers of former Global Trust Bank (U) Ltd, were urged to service their loan obligations with DFCU Bank Ltd(liabilities).

- 30 Accordingly, this Court finds that DFCU the successor in title, took over the assets and liabilities of GTB in liquidation, and not that DFCU Bank was contracted by the Third Party to manage certain assets of Global Trust Bank Limited on behalf of the Third Party and take over only deposits, as Counsel for the 1st Defendant wants this Court to believe in the absence of contrary evidence. - 35 In addition, this Court finds that where the acquiring institution was appointed to manage certain assets on behalf of the receiver (Bank of Uganda), in such arrangements, it may give rise to a principal-agent relationship however, the terms of the agency must be expressly stated in the Purchase & Assumption Agreement, which was not adduced in evidence by the 1st Defendant. 5 For the foregoing reason, this Court finds that the principle of agent and principal relationship cannot be established in the given circumstances of this case.

All in all, from the above facts and annextures, this Court finds that the Plaintiffs have established that they enjoyed a right to the said subdivided plots in Block 171, which was violated by DFCU Bank Limited the 1st Defendant (the successor

10 in title to GTB in liquidation) for failure to release the Mortgage Instrument for land comprised in Block 171 Plot 37 at Nakwero, measuring approximately 8.96 acres, and the 1st Defendant is held liable.

In addition, this Court finds that the Plaintiffs' have established that their right to use and quite enjoyment of the said subdivided plots was violated by the 2nd

15 Defendant's failure to effect release of the Mortgage Instrument, and subsequent transfer of the certificates into the names of the Plaintiffs over land comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres, for which the 2nd Defendant is held liable.

Accordingly, this Court finds that the plaint discloses a cause of action against the 20 Defendants.

With regard to the Third Party proceedings, which was conceded by Counsel for both the Plaintiffs, and the 1st Defendant, this Court finds that the procedure was flawed however, this was not prejudicial to the Third Party, who was served with the notice, in which, it submitted to the jurisdiction of the Court by filing their 25 defence and participating in the scheduling proceedings.

Notably, in Third Party proceedings, it is for the Defendant to satisfy the Court that there is a proper question to be tried as to the liability of the Third Party. In other words, for a Third Party to be legally joined to a suit, the subject matter as between the Defendant and the Third Party must be the same as that between the 30 Defendant and the Plaintiff, and similarly the cause of action between the Defendant and the Third Party must be the same as the original cause of action. *(See: Sango Bay Estates Ltd and Others Vs Dresdner Bank AG(No.2) [1970] E. A 307 at 315)*

In the circumstances of this case, I find that the 1st Defendant has not indicated 35 the real question to be determined as to the liability of the Third Party.

For the foregoing reason, this Court finds that there is no cause of action against the Third Party by the 1st Defendant, and that the Third Party was wrongly joined as a party to the suit.

## 5 **Issue No.2:** Whether the land purchased by the Plaintiffs was part of the land returned to Hosanna Real Estates Ltd pursuant to the consent in Civil Suit. No. 1 of 2013 (OS)?

It was the Plaintiffs' evidence that they hold an equitable interest in land comprised in Block 171 Plot 37 Lugala, Kyadondo, Wakiso, measuring 10 approximately 8.96 acres, subdivided into plots E1-E33, from which plots 278 and 275 in PE4 were allocated to PW1 and PW2 respectively, having purchased the same from Hosanna.

That prior to the above mentioned transaction, Hosanna had mortgaged the said land with GTB, which was taken over by DFCU Bank when the former was placed 15 under liquidation by Bank of Uganda. That Hosanna did not inform them of the mortgage on the suit land before they purchased the same, and Hosanna went into financial difficulties before it could settle its outstanding financial obligations to GTB and process titles for the Plaintiffs.

That GTB consequently sued Hosanna vide Originating Summons No.1 of 2013, 20 seeking foreclosure on the mortgaged suit property and recover monies owed under the said mortgage amounting to UGX 3,153,770,323. That a consent in PE1 was entered into between the parties; GTB and Hosanna, in which it was agreed inter alia that GTB, the Plaintiff shall sell 34,26 out of 43.32 acres of the security situate at Lugala Kyadondo, Wakiso for UGX 1,805,780,000. The balance of 8.96

25 acres shall be returned to Hosanna the Defendant.

That Global Trust Bank authorized the subdivision, and also issued a release of Mortgage instrument to Hosanna Real Estates Ltd in PE5 on 11th April, 2014, which discharged it from all obligations and conditions under the mortgage. Following the mutation, 32.26 acres were retained by Global Trust Bank Uganda Limited,

30 whereas 8.96 acres of the land was returned to Hosanna Real Estates, which was eventually sub-divided into 37 plots and allocated to the Plaintiffs. Each of the 37 subdivided plots (titles) is still in the name of Hosanna Real Estates Ltd in E1-E33, and not the Plaintiffs, who are beneficiaries.

That the 1st Defendant was fully aware of, and acknowledged the subdivision 35 exercise after GTB went into liquidation, and the 1st Defendant wrote to the Commissioner Land Registration on 1st June 2015, requesting for a mutated title. That on 23rd January 2017, the 1st Defendant wrote a letter in PE7 to their lawyers and subsequently to the 2nd Defendant, indicating that the subdivision of the property was done contrary to their instructions, and requested the Commissioner 5 Land Registration to cancel all titles created out of Kyadondo Block 171 Plot 37 Land at Nakwero.

That the actions of the 1st Defendant are intended to defeat their legitimate claim and interest in the suit land, and that the release of Mortgage instrument issued by Global Trust Bank, later taken over by the 1st Defendant is indisputable

10 evidence that by the time, the 1st Defendant took over Global Trust Bank, all formal obligations owed by Hosanna Real Estates Limited were fully extinguished and there's no reason for the 1st Defendant to refuse to release the mortgage.

It was the 1st Defendant's evidence that it did not either directly or through its agents or representatives, transact with the Plaintiffs in regard to the suit land 15 comprised in Block 171 Plot 37, Kyadondo Land at Nakwero.

That the 1st Defendant Company is not the successor in title of GTB; the 1st Defendant only assumed some of the assets and liabilities of the former GTB. That the assets and liabilities, which were not assumed by the 1st Defendant, were retained by the liquidator of GTB. That the land in dispute and the assets and

20 liabilities attached hereto were never assumed by the 1st Defendant but were retained by the liquidator of GTB.

That the Plaintiffs are strangers to the transaction between the 1st Defendant, Third Party, and any other party, and at no time has the 1st Defendant ever dealt with them. That the Plaintiffs have no cause of action against the 1st Defendant.

25 The 2nd Defendant did not enter an appearance therefore, the evidence adduced by the Plaintiffs remained unchallenged against the 2nd Defendant.

### Submissions of Counsel for the Plaintiffs

Counsel submitted that the subdivided plots of land (titles) are part of the land returned to Hosanna Real Estates Limited. That the Plaintiffs bought the suit land

- 30 from Hosanna, and the Plaintiffs have adduced evidence in receipts for the suit land marked PE9; Transfer forms for the various subdivided plots of land given by Hosanna Real Estates Limited to the Plaintiffs marked PE10, and the two sale agreements between Hosanna and the Plaintiffs' witnesses marked PE11, and PE12. - 35 Counsel further submitted that Global Trust Bank even attached a proposed mutation for the land, and the Certificate of Title was consequently mutated, and several plots created. That these Certificates of Title arising from mutation are collectively marked as PE4, as a result, the Plaintiffs were supposed to transfer the titles into their names.

5 Counsel contended that unfortunately, the release of the mortgage in PE2, originally issued by Global Trust Bank disappeared in the lands office, and efforts to secure a fresh release of the mortgage from the 1st Defendant, as seen from the letters by the Plaintiffs' lawyers marked PE6 and PE8, were futile.

Counsel further contended that the subdivision of land and issuance of the 10 release of the mortgage instrument happened before Global Trust Bank went into liquidation; it's therefore, not true that the plots given to the Plaintiffs were carved out of land meant for Hakeem Lukenge and Real Marketing.

Counsel argued that Banks are reputable institutions, and it's not possible that the Bank would authorize the subdivision and even issue a release of mortgage to 15 Hosanna over land it purportedly gave to Hakeem and Real Marketing; no evidence was adduced to show the specific area to be taken by each party or their assignees.

Counsel further argued that had the subdivision been done contrary to the consent, then Global Trust Bank wouldn't have authorized the subdivision, issued

a release of a mortgage and even forwarded the mother title to the 2nd 20 Defendant for mutation but it did so, well aware of the contents of the consent judgment it entered into with Hosanna.

#### Submissions of Counsel for the 1st Defendant

Counsel submitted that the parcels of land that was sold to the Plaintiffs by 25 Hosanna Real Estate Limited was part of the land that was to be sold by GTB to recover the outstanding loan pursuant to the consent order in Civil Suit (OS)No. 1 of 2013. That DW1 referred to a meeting in 2019 between Hosanna Real Estate Limited, the 1st Defendant, Third Party, shareholders of GTB, and the 1st Plaintiff, in which it was established that the certificates of title held by the Plaintiffs were 30 curved out of the portion of land earmarked for Real marketing and Hakeem Lukenge contrary to the consent order, as seen in 3TE-13 a survey report showing clearly which portion of the suit land was to be occupied by a given party according to the consent order in Civil Suit (OS)No. 1 of 2013.

Counsel further submitted that the above testimony was corroborated by 3TE-6, a letter written by the 1st Defendant on behalf of the Third Party, wherein the 1st 35 Defendant complained to the Commissioner Land Registration about the irregular creation of titles out of Plot 37, and 3TE-7, which is a notice to effect changes on the register, wherein the Commissioner Land Registration outlined the fact that the subdivision was carried out by state House officials contrary to the instructions

40 given by GTB to the surveyors.

### 5 Decision

The burden of proof lies with whoever alleges a given fact, and desires the Court to give judgment on any legal right or liability dependent on the existence of any fact, to prove that fact unless it is provided by law that the proof of that fact shall lie on another person. *(See: sections 101 and 103 of the Evidence Act, Cap 8;*

## 10 *Senkungu & 4 Ors Vs Mukasa*, and *Jovelyn Barugahare Vs Attorney General, supra)*

Notably, the agreed facts during the scheduling proceedings were inter alia that;

- (i) Hosanna Real Estates Limited obtained a loan from Global Trust Bank Uganda Limited, and used the suit land as security. - 15 (ii) Hosanna Real Estates Limited failed to settle its outstanding financial obligations to Global Trust Bank Uganda Limited, and was consequently sued by GTB, in Originating Summons No.1 of 2013, seeking foreclosure on the mortgaged suit property, and recovery of monies owed under the said mortgage. - 20 (iii) The suit was settled by Consent of the parties, in which they agreed that 34.26 acres of the 43.22 acres of land be sold by Global Trust Bank Uganda Limited to recover the outstanding loan, and the remaining 8.96 acres be retained by Hosanna Real Estates Limited. - (iv) The Plaintiffs purchased parcels of land from Hosanna Real Estates Limited 25 known as Block 171 Plot 37 Lugala, Kyadondo Wakiso, and measuring 8.96 acres, from which they claim an equitable interest in part of the said land. [Emphasis is mine]

The evidence adduced by the Plaintiffs in PE2, that GTB authorized the subdivision well aware of what Hosanna Real Estate was entitled to get as per the consent;

- 30 that the bank did this well aware that it had a binding consent judgment in PE1, and that in PE3, GTB forwarded the Certificate of Title to the Commissioner Land Registration well aware of what the bank was getting; all these having been done before Global Trust Bank went into liquidation was uncontroverted by the 1st Defendant as the successor in title to GTB in liquidation. - 35 This Court has looked at the transfer forms marked PE10, duly signed by Hosanna the vendor, for the various subdivided plots to the Plaintiffs the purchasers, which do not bear any of the Plaintiffs' name.

Nonetheless, from the above agreed facts, and the evidence adduced by the Plaintiffs in PE11, PE12, the sale agreements, and PE4 Copies of titles, in which the

40 names of the Plaintiffs are inscribed, this Court finds that the Plaintiffs have

5 discharged the evidential burden of proof to the required standard, which is on the balance of probabilities, to prove that they purchased parcels of subdivided land from Hosanna, in which the latter had retained 8.96 acres according to the consent decree in Civil Suit (OS) No. 1 of 2013.

In addition, I agree with the submission of Counsel for the Plaintiffs that the 1st 10 Defendant issued mortgage releases to other parties in similar circumstances as the Plaintiffs in PE13 to Sharon Jerusha for plot 282; PE14-1, and PE14-2 to Okodi Sheila for plot 283; PE15, and PE16 for plot 284 to Hilda Natukunda, Jolly Tumukunde and Joan Mpirirwe (tenants in common) therefore, the 1st Defendant cannot be seen to approbate and reprobate when it comes to the Plaintiffs. *(See:*

### 15 *section 114 of the Evidence Act, Cap 8)*

#### **Issue No.3**: What remedies are available to the parties?

General damages are the direct natural or probable consequence of the wrongful act complained of and include damages for pain, suffering, 20 inconvenience, and anticipated future loss. *(See: Storms Vs Hutchinson [1905] A. C 515); Robert Cuossens Vs Attorney General (Civil Appeal 8 of 1999) [2000] UGSC 2 (2 March 2000); Kampala District Land Board & George Mitala Vs Venansio Babweyana, CA No.2 of 2007(unreported); Johnson & Anor Vs Agnew [1979]1 ALLER 883,* and *Dharamshi Vs Karsan [1974]1 E. A 41 at 43)* on the proposition that 25 the object of an award of damages is to give the Plaintiff compensation for the

damage, loss, physical inconvenience, mental distress, pain, or injury he or she has suffered.

It's settled law that an award of general damages is at the discretion of the Court, which should be exercised judiciously. *(See: Crown Beverages Ltd Vs Sendu*

30 *Edwards (Civil Appeal No. 1 of 2005) [2006] UGSC 2 (14 March 2006)*

In *Uganda Commercial Bank Vs Kigozi [2002] 1 E. A 305,* the factors to be considered by the Courts when assessing the quantum of general damages are enunciated as follows: - the value of the subject matter; the economic inconvenience that the Plaintiff may have been put through, and the nature and 35 extent of the injury suffered.

Following the guidance in *Uganda Commercial Bank Vs Kigozi* above, I find that the sum of UGX 30,000,000 (Uganda Shillings Thirty Million only) in general damages will suffice for each of the Plaintiffs, who proved that they have suffered economic loss, and inconvenience as a result of the Defendants' failure to honour 5 their obligations in the said transactions from 2011 to date. *(See: Kibimba Rice Ltd Vs Umar Salim, SCCA No. 17 of 1992)*

It's trite law that where no interest rate has been provided, then the rate is fixed at the Court's discretion. *(See: Omunyokol Akol Johnson Vs Attorney General (Civil Appeal No 06 of 2012) [2015] UGSC 129 (8 April 2015)*, and *Premchandra*

# 10 *Shenoi & Anor Vs Maximov Oleg Petrovich (Civil Appeal No.9 of 2003) (2005) UGSC 15 (17 August 2005)*

It's settled law that the basis of an award of interest is that the Defendant has kept the Plaintiff out of use of his or her money and the Defendant has had use of it instead and ought to compensate the Plaintiff.

15 For the foregoing reason, interest is awarded at the rate of 8% per annum on general damages from the date of judgment till payment in full. *(See: Mukisa Biscuit Manufacturing Co. Ltd Vs West End Distributors Ltd (No.2) [1970] EA 469)*

This Court has taken into consideration the provision of the law under subsection 1 of section 27 of the Civil Procedure Act, Cap 282 on costs, and the decision in

20 *Ushillani Vs Kampala Pharmaceuticals Ltd (Civil Appeal 6 of 1998) [1999] UGSC 36(24 February 1999)* where the Court held that:

*"There are three general principles that govern the question of costs. The first is that costs of, and incidental to, all suits are in the discretion of the Court. The second is that the costs ordinarily follow the event. The third is* 25 *that where the trial Court has exercised its discretion, the appellate Court should not interfere unless the discretion has been exercised injudiciously or on wrong principles."*

In the given circumstances, I find no reason to deny the Plaintiffs' costs, which follow the event as required under section 27(2) of the Civil Procedure Act, Cap. 30 282. The Plaintiffs are accordingly awarded the costs of this suit.

In the final result, Judgment is entered for the Plaintiffs against the Defendants in the following terms: -

- 1. A declaration that the Plaintiffs are purchasers with an equitable interest in land comprised in Block 171 Plot 37 at Nakwero measuring approximately - 35 8.96 acres and subdivided into Plots 288, 287, 239, 238, 241, 240, 271, 270, 269, 242, 243, 272, 273, 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230. - 2. A declaration that the sub division of land formerly comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres into Plots 288, 287, 239, 238, 40 241, 240, 271, 270, 269, 242, 243, 272, 273, 274, 275, 276, 277, 265, 245, 236,

- 5 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230, was lawful. - 3. A declaration that the 1st Defendant is illegally withholding the release of Mortgage to land comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres and subdivided into Plots 288, 287, 239, 238, 241, 240, 271, 270, 10 269, 242, 243, 272, 273, 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230. - 4. An order directing the 1st Defendant to issue a release of mortgage to land comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres and subdivided into Plots 288, 287, 239, 238, 241, 240, 271, 270, 269, 242, 243, 272, 15 273, 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230. - 5. An order directing the 2nd Defendant to effect release of the mortgage and subsequently transfer the certificates into the names of the Plaintiffs over land comprised in Block 171 Plot 37 at Nakwero approximately 8.96 acres - 20 and subdivided into Plots 288, 287, 239, 238, 241, 240, 271, 270, 269, 242, 243, 272, 273, 274, 275, 276, 277, 265, 245, 236, 235, 278, 279, 227, 228, 234, 231, 226, 223, 224, 225, 229, 256, 232, 233, 255, and 230. - 6. The suit as against the Third Party is dismissed with costs to the 1st Defendant. - 7. General damages for each Plaintiff of UGX 30,000,000(Uganda Shillings 25 Thirty Million only). - 8. Interest on (7) above at the rate of 8% per annum from the date of judgment till payment in full. - 9. Costs of the suit. - 30 Judgment was delivered electronically this 30th day of April, 2025.

SUSAN ABINYO **JUDGE** 35 **30-04-2025**