Mbooli v Nabawanuka and Another (Civil Suit 1753 of 2000) [2023] UGHCLD 126 (9 May 2023)

#### THE REPUBLIC OF UGANDA

### IN THE HIGH COURT OF UGANDA AT KAMPALA

### (LAND DIVISION)

#### **CIVIL SUIT NO.1753 OF 2000**

#### JOHN BAPTIST MBOOLI::::::::::::::::::::::::::::::::::: 5

#### **VERSUS**

## 1. ANNET NABAWANUKA NAMUSWE

#### 2. MUWANGA JOHN MUSISI:::::::::::::::::::::::::::COUNTER DEFENDANTS

#### Before: Justice Alexandra Nkonge Rugadya.

#### 10

#### Judgement (ex-parte)

#### Background and introduction.

This suit has gone through a checkered history. It was initially filed by the $1^{st}$ counter defendant sometime in 2007 against the counter claimant seeking among others, a declaration of breach of contract, an order of vacant possession of land comprised in **LRV 1846 Folio 20 Kyaggwe Block 193**

## plot 350, land at Mukono.

Following the counter claimant's failure to respond to the summons to file a defence, the matter was set down for formal proof, and proceeded *ex-parte* against the counter claimant. Judgment was entered in favour of the 1<sup>st</sup> counter defendant.

Court held that the suit belonged to the plaintiff/ $1^{st}$ counter defendant, that there was a contract/memorandum of sale the terms of which regulated transactions, and binding to the parties.

The judgement was however set aside, and the matter reinstated for the same 25 to be heard inter party. By the time of reinstatement of the suit however, the suit property had been sold and transferred to the $2^{nd}$ counter defendant.

(Inloy)

The counter claimant then filed Cttil Sutt No,6O4 of 2OO7 against both counter defendants upon which the two suits were consolidated following a consent of the parties.

On 30ft September 2013, this court presided over by Lady Hon. Justice Eva K Luswata (as she then was) dismissed the matter for non-appearance of either party.

The same was however later reinstated. On Sft December 2074, the suit and counter claim were both dismissed for a second time, for non-appearance. The counter-claimant then filed Mlscellaneous Appllcatlon 1637 of 2017 seeking to have the matter reinstated.

This court by an order dated i9e February 2020 then reinstated the counter claim, and set it down for hearing. When the matter last came up for hearing, 12fr March 2022, neither the counter defendants nor their counsel entered appearance and upon satisfying itself that counsel for the counter claimant

had taken all the necessary steps to engage the counter defendants with no results, this court set the matter down for formal proof. 15

The counterclaimant did not however file written submissions, as directed by court.

## Representatlon:

The counter claimant, John Baptist Kizito Mbooli who was initially represented by M/s Ruakafuuzl Co. Adaocates was during the trial represented by M/s Lubega Babu & Co. Adaocates, who filed notice of instructions on 23'd January, 2019. 20

The l"t counter defendant, Ms Nabawanuka Namuswe Annet filed a defence to the counter claim which she however never followed up despite the fact that on 4n October, 2O2l and 16fr November,2027 respectively, she had been duly served with notices of the hearing date. 25

On 21st February, 2022 the firm of M/s SekabanJa & Co. Adaoccrtes which at a1l material times was representing the 1"t counter defendant acknowledged receipt of a letter trom M/s Lubega Babu & Co. Aduocates requesting for <sup>a</sup>

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meeting, for a possible settlement, which apparently never materialised. Subsequently on 4fr Apri1, 2022 they acknowledged receipt of the counter claimant's witness statement.

The 2"d counter defendant, John Muwanga Musisi was represented by M/s

- 5 Nganzl, Klboneka, Mbabazl Aduocqte. He did not file a defence to the counter claim despite the fact that he was served with both the witness statement on 4fi April, 2022 and a counterclaim scheduling conferencing notes on 6ft April, 2022, whrch, the firm had duly acknowledged receipt of on both occasions. - On 12u April, 2022, the date iixed for the formal trial, this court having satisfied itself that all necessary steps had been taken by the counter claimant side to make the two counter defendants aware of the proceedings proceeded exparte against them. 10

## Counter-clalmantt s case.

The gist of the counter claimant's action is that on 24ft January 1996, he entered into an agreement with the lst counter defendant to purchase land comprised in LRV Follo 20 Kgaggute Block 793 plot 35O at Mukono (hereinafter referred to as the 'suit land')as weil as the developments thereon for a total consideration of Ugx 4O,OOO,OOO/= (Uganda shllltngs Jortg 15

mtlllon only). 20

> The counter claimant made an initial payment of Ugx 2O,OOO,OOO/= (Uganda shillings tuentg mlllion onlg), whl1.e the balance of Ug.x 2O,OOO,OOO/= (tlganda shllllngs tuentg million onty,f was to be paid on, or before the 3'd day of May, 1996, but not later than 3'd June 1996.

On 27fr April 1996, the counter claimant paid the l"t counter defendant Ug. Shs, 74,OOO,OOO/= (Uganda shllllngs Jourteen million only,f, leaving <sup>a</sup> balance of Ug x6,OOO,OOO/= (Ugand.a shillings sk mllllon onlgl, for which no date of payment was set. 25

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It was agreed that the same would be paid after the counter claimant had returned from the Kenya side of the lake where he had gone to check on his workers.

The 1"t counter-defendant then gave him a note to deliver to a one Mrs. Kayizi Margaret, who was in possession of part of the property introducing him as a purchaser, asking her to hand over the keys of the property to the counter claimant

With the permission of the lst counter defendant he took possession of the suit property from July 1996, until sometime in May 2O07 when he was evicted by court bailiffs, on behalf of the lst counter defendant.

The counterclaimant alleged that at the time he took possession of the suit premises, he found a huge electricity bill of over Ug. Shs. 52O,OOO/= (Uganda Shillings Jlue hundred twentg thousand on ty/ which he had cleared and although he brought the same to the attention of the 1"t counter defendant, she refused to refund the money.

The counter-claimant contends that the counter claimant's attempts to pay the balance of the purchase price had failed. The 1"t counter defendant instead sold and transferred the suit premises to the 2'd counter defendant on 1Oft November 2006.

According to him, the subsequent agreement had varied the original agreement which ceased to bind him, and that since he had by the consent of the l"t counter claimant taken possession of the suit premises, the property therein had passed onto him. Thus the lst counter claimant had no title to pass onto the 2.d counter defendant. 20

# 25 Partlculars of fraud:

The counter claimant claimed that fraud had been committed. The particuiars were that the vendor purported to seli the suit property to the 2"4 counter defendant, well knowing that the property in the goods had already passed to him; also aware the counterclaimant had taken possession of the suit <sup>30</sup> property, having already paid her 95o/o of the purchase price.

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Against the 2'd counter defendant, the counter claimant alleged fraud on grounds that he purported to purchase the suit property without conducting a search so as to establish the actual status of the premises at the time.

That he also failed to inquire from the counterclaimant who was in physical possession of the suit property at the time, so as to establish the circumstances of the counter claimant's occupation of the property.

The counter claimant further contended that trespass had been committed owing to the fact that he was evicted from the suit propert5z which he had occupied for anumberof years by virtue of the lst counter defendant's consent who iater passed possession to the 2"a counter defendant.

That by evicting him, the counter claimant not only suffered physiological torture and mental anguish, but also suffered loss of business and profits for which he claims general damages.

That while the counter claimant lost over Ug.x 9,OOO,OOO/= (Uganda

- Shillings nlne million only,f because he was not given a chance to personally remove his property from the suit land, he was entitled to receive approximately Ug,x 739,5OO,OOO/= (Uganda Shillings One Hundred thirtg-nlne mlllTon fiue hundred thousand onlg), money that the counter defendants have been collecting from the suit premises since May 2005. 15 - The counter claimant then prayed that judgement be entered in his favour, and against the counter defendants in the following terms; 20 - a. An order directing the Registrar of titles to cancels the certificate of title for the propertA comprised in Leasehold Register Volume 1846 Folio 2O Kgaggue Block 193 plot 350 land at Mukono, notu in the names of the 2"d counter defendant; - b. An order of specific performance of the contract in respect of the 1d counter defendant; - c. An order that the l.t counter defendant is onlg entitled to the balance of Ug. SLts. 6,000,000/ = (Uganda Shillings six million onlg); 30

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- d. An order directing the counter defendants to pag the counter claimant Ug. Sfls. 139,500,000/= (Uganda Shillings One Hundred thirtg-nine million fiue hundred thousand onlg) being moneg receiued bg them from rent collection from the suit propertg for ttrc time theg haue been in control of the same as utell as the moneg that was lost during the euiction carried out bg the 7.t counter defendant; - e. Interest on (d) aboue at the commercial rate of 25o/o from the date of judgment till pagment in full; - f. General damages; - g. Costs of tlte suit.

When the matter carne up for hearing on 12ft Apr1l 2022, this court noted that all the necessary steps had been taken to engage the counter defendants who were non-responsive. The counter claimant was allowed to proceed ex parte. 15

Court then directed counsel for the counter claimant to file written submissions by 26u Aprtl 2O22. However, the same was not complied with, upon which court proceeded to determine this matter without the submissions.

## Issues ralsed 7n the counterclalrn:

The following were identified as the issues in the counter claim for determination:

- 7) Whether the counter ctcim is entltled to the sult propertg; 25 - 2) Whether the 7"t counter detendant lawfullg sold the sult propertg to the 2"d counter defendant; - 3) Whether there la.as fraud attrlbutable to counter defendants.

## Consideratlon of the tssues.

I will deal with the first two issues jointly.

The counter claimant who was a sole witness to his claim testified as Put7. From the evidence on record, it is not in dispute that there was a contract for

5 sale of the suit premises between the counter claimant and the lst counter defendant.

The counter claimant presented a copy of the memorandum of sale of land dated 24m January 1996 (PExh.2) wherein it was agreed that the counter claimant would purchase the suit property at Ugx. 4O,OOO,OOO/= (Uganda

Shtlltngs fortg mllllon onlyl, which was to be paid in two instalments. 10

Under the terms of payment, it was stated that:

,. Shs. 2O,OOO,OOO (shtlltngs tuentg mllllon onlg) has been pald bg the purchaser to the uendor lmmedlatelg after executlon of thls o.greement, the recelpt uhereof the uendor herebg acknourledges.

2, The last and final balo,nce o.;tshs. 2O,OOO,OOO/= (shllllngs tuentg mllllon onlg) sho.ll be pald on, or before 3'd Mdgt 7996 but not later than 3d June 7996.

The counter claimant in his evidence in chief stated that three weeks to the deadline of paying the 2.a instalment of the purchase price, he called the lst counter defendant whom he requested that he pays Ugx. 74,OOO,OOO/= which she accepted; and that the same was given to a one Robert Senyonnjo to deliver to the 1"t counter defendant, who acknowledged that she had received the money.

He further stated that after paying the aforementioned monies, he again requested the lst counter defendant to give him part of the building on the land which was empty, to use as a store to keep flour imported from Kenya, and which he wanted to sell in order to pay the balance ol Ugx. 6pOO,OOO/=; and that the lst counter defendant agreed to the counter claimant's request. 25

She then sent him to a one Mrs, Kayizzr who was a tenant on the premises to give her the keys to the rooms which were empty.

According to the clause relating to the issue of vacant possession in the agreement, it was agreed that the vendor, would only hand over vacant possession of the property to the purchaser after payment of the full purchase price.

The outstanding balance was to be paid by 3'd May, 1996, but not later than 3.d June, 1996.

The gist of the counter claimant's case is that the original written agreement

had been varied verbally between himself and the lst defendant to the counter claim suggesting therefore that there was a major change in the character of the sale agreement. 10

Section 67 oJ the Contracts Act (Vorlatlon of contracts/ provides as follows:

Where ang rlght, duty, or ltabtlltg would rlse under agreement or contract, lt mag be oarled bg the express agteement or bg the course oJ deallng betweetu the partles or bg usage or custom lf tt@ usage ot custom uould blnd both partles to the contract. 15

It is important to note that any such variation of the contract by the parties must be agreed upon between them and once any such variation is denied by one of them, it cannot stand unless it is proved against the party in denial. (See: Makubuga Enock Wlllg vs Songdoh Ftlms & Another Civil Suit No.349 of 2017). 20

The counter claimant herein argued that the original agreement of sale of the suit property was varied when the 1"t counter defendant allowed to be paid the Ugx. 74,OOO,OOO/- (Uganda shllllngs fourteen mllllon onl, instead of the total balance of Ugx. 2O,OOO,OOO/= (Uganda shtlltngs tuentu mllllon onlg). 25

u'}4 The date for the payment of the balance of Ugx. 6,0O0,O00/= (Uganda Shillings tuentg milllon only) was not provided for, thereby varying the terms of payment agreed upon in the memorandum of sale.

Further, the lst counter defendant also allowed the counter claimant to take possession of the suit property without paying the full purchase price, contrary to the original agreement.

ln Globe Motors Inc. & others a TRW Lucas Varltg Electrlc Steering Limited & another 2016 DWCA Cirt 396, court noted that an oral variation or a variation by conduct could be effective where the evidence establishes on the balance of probabilities - that the variation was agreed. As long as the law or the contract itself does not say otherwise, parties to a contract can change it by oral or written agreement.

In the present case, it was more likely than not in the above circumstances that the contract of sale between the counter claimant and the lst defendant to the counter claim was indeed varied.

The 1"t defendant to the counter claim agreed to the payment of the balance of the purchase price on terms other than what was agreed upon in the original agreement.

This coupled with granting the counter claimant partial possession of the suit property amounted to a variation and a waiver of the rights set out under the original agreement. 20

Sharlf Oslman uersus Halfi Haruna lWulanguta SCC,A .t\Io.38 of 7995, wherein Tsekoko J. S. C., quoted, with approval, the observ ations of L,ord Selbortte, L,C., ln Phlltps rrs. Siftr€ster (1872) 8 Cha. A. 773 that:

4Bg the effect of the contract, accordlng to the prlnclples of equltg, the rlght to the propertg passes to the purchase4 and the rlght of the oendor ls dtrned lnto a moneg-rlght to recelae the purchase ,rutneg, he retalnlng a llen upon the land uhlch he has sold untll the purchase moneg ls pald. Tle aendor became a trustee for the purchaser". 30 25

Jr/b 9 s

Ultimately, the learned Justice of the Supreme Court observed that:

# oeoen { there remalns unpald balance, the propertg ln the lands pantsed to the purchaser when d deposlt utas made."

5 In light of the above authority, it is the finding of this court that the property in the suit property had passed onto the counter claimant at the time he made the deposit totalling up to Ugx. 34,OOO,OOO/= (Uganda Shtlltngs thlrtg-four mlllion onlg), and this was further acquiesced to by the 1"t defendant to the counter claim who went on to grant the counter claimant possession of the suit property.

It follows therefore that the suit land having passed onto the counter claimant, rendered the 1st counter defendant's ownership of that land encumbered; and for that reason she could not lawfully pass any title onto a 3.d party. 10

It is the position of the law that one cannot pass on valid title to what he did not lawfully own. The common law principle of nemo dat quod non habet }:,as

### long held that no one can give a better title than he himself possesses. (See.' Halling Manzoor vs Serutan Slngh Baram Supreme Court Cinll Appeal No.9 of 2OO1). 15

Thus Ms. Annet Nabawanuka Namuswe, the l"t defendant to the counter claim had no title to pass on to the 2nd defendant to the counter claim since she was merely a trustee as the property in the land had passed onto the counter claimant.

The question remains whether the counterclaimant under those circumstances was entitled to specific performance.

# Whether the 7st counter defendant lawfitlla sold the sult properta to 25 the 2nd counter defendant:

It is well established that fraud must relate and be attributable either directly or by necessary implication to the transferee. The transferee must be guilty of some fraudulent act or must have known of such act by someone else and taken advantage of such act. (ReJ, Florence Nc,mull Matovu as hellen

30 OgeruCACA lVo. 15 of 2006).

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\* <sup>u</sup> <sup>10</sup> 6

Fraud is such grotesque monster that courts should hound it wherever it rears its head and wherever it seeks to take cover behind any legislation. It unravels everything and vitiates all transactions. (Fcrm Internatlonal Ltd and Ahmad Farah us Mohamed El Ffth [19941 KARL 3OZ).

5 It is also trite 1aw that that fraud that vitiates a land title of a registered proprietor must be attributable to the transferee and that fraud of a transferor not known to the transferee cannot vitiate the title. See.' Wambuzl C. J, Kampala Bottlers vs Damanlco M L?D, SCCA IVo. 27 of 2012.

In the instant case, the agreement of the parties provided a specific time when the purchaser would take possession, that is, after payment entire purchase sum. The counter claimant in this case took possession before completing the payment, which was not disputed. 10

The provision for possession ought to have been strictly construed. \n Shatlf Osman vs Hafi Haruna Mulanguta SCCA 38/95 cowrt ruled that in absence 15 of a contrary intention time is of essence of a contract even though the parties have not expressly provided for it.

In that case it took two years to rescind the contract, which court took as evidence that time of payment of the purchase price was not of essence to the contract and therefore the purchaser was not in breach of the contract for failure to pay the balance by the agreed date. In alignment with the above authority therefore, no breach was committed by the counter claimant.

In the case of Uganda Posts & Telecommunlcatlon V. Abraham Katumba (supra) citing Taglor us. Stllbbert [1803-131 ALLDR 432 courl held that failure to make reasonable inquiries of persons in possession and use of the

land or the purchaser's ignorance or negligence to do so formed particulars of fraud and the purchaser acquires and takes such purchased land subject to its equities let alone a finding that he or she committed fraud. 25

The counter claimant in this case alleged that the 2nd defendant at the time of purchasing the suit property failed to inquire from the counter claimant who was in occupation of the suit property so as to establish the circumstances under which he occupied the same.

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It follows therefore that the 2"d defendant acquired the suit land with the aim of defeating the counter claimant's interest therein which amounts to fraud by necessary implication.

That if he had conducted sufficient due diligence before purchasing the suit property, he would have discovered that the counter claimant was in physical occupation ofthe same and that he had already purchased the suit property.

The circumstances however as shown in this case indicate that the 2"d counter defendant got registered on the title on 10ff November, 2006. On 10ft April, 2006, counsel for the 1st counter defendant wrote to the Registrar of this court referring to the warrant to give vacant possession of the suit iand which was dated 1Sfr July, 2OO4.

In that correspondence he also referred to an interim order issued vrde MA No, 658 of 2OO4, dated 1 lft August 2004, which had expired and no further orders had been issued in the above matter. Counsel thus sought renewal of the execution warrant.

Court in a hand written response to him dated 18ft April, 2006 had this to say:

Ttre interim order has been ertended for more than 3 times uithout fixing the main application. That is an abuse of court process. So execution is fo issue accordinglg.

Execution/ eviction therefore arose out of a lawful order of court upon which the 2"d defendant became registered on the title on 1Ofr November, 2006. This implies that by the time the counter claimant filed Cluil Suit JYo. 604 oJ 2OO7, wl:.ich (by consent of the parties dated 16ft December, 2010) was consolidated with the reinstated Ctvll Sult No, 1753 oJ 2OOO, the execution had already been ordered, concluded and property already passed onto the 2"d counter defendant.

This therefore makes the order sought for specific performance impracticable to implement.

<sup>30</sup> \',-b4 L2

### Issue No. 3: Remedies

In this counter claim which succeeds in part, the following were sought as reliefs:

| | 1) An order directing the Registrar of titles to cancel the certificate of | |----|----------------------------------------------------------------------------| | 5 | title for the property compised in LRV 7846 Folto 20, Kgaggwe | | | Block 793, plot 35O land at Mukono nou in the names of the | | | 2"d dekndant on the counterclaim; | | | 2) An order for specific performance of the contract in respect of the | | 10 | l"t defendant on the counterclaim; | | | 3) An order that the 1.t defendant on the counterclaim is onlg entitled | | | to the balance of Ugx 6,000,000/=; | | 15 | | | | 4) An order directing the defendants to paA to the counter claimant | | | Ugx 739'OOO. OOO/= being moneg receiued by them from rent | | | collection from the suit propertg for the time they haue been in | | | control of the same ond money that u.tas lost during the euiction | | 20 | exercise carried out bg the 1{ defendant; | | | 5) Interest at commercial rate of 2 5o/o from the dote of judgment till |

## General damageg

25 General damages are awarded at the discretion of court. In Uganda Commerclal Bank Vs Klgozl (2OO2)l EA 3O5, the consideration for an award of damages was based mainly on the value of the subject matter, the economic inconvenience that a party has been put through and the nature and extent of the breach or injury. The record is does not give any clear 30 indication of the value, leaving all in the discretion of court.

paAment in full; general damages and costs.

#### Refund of rent collection:

The counter claimant also sought an order directing the defendants to pay him *Ugx* **139,000,000/=**, being money received by them from rent collection from the suit property for the time they have been in control of the same and money that was lost during the eviction exercise carried out by the 1st defendant.

Court however was not provided with any information as to how the counter claimant had arrived at that figure. There were no specific details as to how much rent was collected each month; how many tenants and rent payable by each tenant. For lack of adequate proof, I would therefore decline to grant the prayers sought for that amount.

He also sought another sum of $Ugx$ 9,000,000/= as cash lost during the eviction claiming that he was never given a chance to remove his property. There were however no supporting documents or other evidence to back up

15 that claim.

$\mathsf{S}$

### Order for specific performance:

As already noted by court, by the time the counterclaimant had filed his suit in 2007, the subject matter was no longer in existence. Court orders are not issued in vain.

- 20 In light of the above, the counter claim succeeds in the following terms. - 1. The counter claimant is entitled to a refund from the $1^{st}$ counter defendant of Ugx $34,000,000/$ =, the money paid as purchase price for the suit property comprised in LRV 1846 Folio 20, Kyaggwe Block 193, plot 350, land at Mukono; - 25

2. The 1<sup>st</sup> counter defendant shall pay a sum of Ugx 30,000,000/= (thirty million shillings) as a compound sum for the compensation and damages to the counter claimant, payable with interest of 15% from the date of the eviction, until the date of delivery of this judgment; and $f_{\omega}$ :

## 3. Costs of the counter claim.

I so order.

$\mathsf{S}$

$\mathfrak{r}$

Ohbey $\cdots \cdots \cdots \cdots \cdots$

Alexandra Nkonge Rugadya

Judge

9<sup>th</sup> May, 2023. $10$