Metropole Holdings Limited v Uganda Land Commission and Another (Civil Suit 132 of 2013) [2024] UGHCLD 221 (23 August 2024)

## 5 **THE REPUBLIC OF UGANDA**

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

#### **CIVIL SUIT NO. 132 OF 2013**

#### **METROPOLE HOLDINGS LIMITED :::::::::::::::::::::::::::::::: PLAINTIFF**

#### **VERSUS**

#### 10 **1. UGANDA LAND COMMISSION**

## **2. THE ATTORNEY GENERAL OF UGANDA :::::::::::::::: DEFENDANTS BEFORE: HON. LADY JUSTICE IMMACULATE BUSINGYE BYARUHANGA JUDGMENT**

15 The plaintiff brought this suit against the defendant for the following orders;

- a. Indemnification by way of reinstatement and grant of alternative or substitute land in the same locality with the same size and value as plot 85A Prince Charles Drive, Kololo comprised in Leasehold Register Volume 4005 folio 14; - 20 b. Replacement and/ or reinstatement value of plot 85A Prince Charles Drive, Kololo free of encumbrances at current market value together with interest at commercial bank rate compounded monthly. - c. Mesne profits and/ or loss of user earnings from time of purchase to date. - d. Special and compensatory damages. - 25 e. Costs of the suit.

#### **Background**

The facts constituting the plaintiff's cause of action are to the effect that on 27th August 2009, the plaintiff purchased property comprised in LRV 4005 folio 14 plot no. 85A, Prince Charles Drive Kololo Kampala from a one George Semambo who had leased the same from the 1st 30 defendant. The plaintiff further contended that

Page **1** of **24**


5 shortly after the plaintiff had transferred the property into its names, the Registered Trustees of Arya Pratinidhi Sabha Eastern Africa lodged a caveat against the same property on 27th October 2009 under instrument number 419636 claiming that title for LRV 4005 folio 14 plot No. 85A Prince Charles Drive Kololo was issued in error by the 1st defendant as it was issued for land part of which was comprised in LRV 10 250 folio 12 plots 55-99 Prince Charles Drive, Kampala.

The plaintiff averred that through its advocates, it was established that plot no. 85A Prince Charles Drive and the adjacent plot 83 Prince Charles Drive were a subject of a dispute between Government and the caveator arising from houses which the Inter- University Council of East Africa had put up on the upper part of plot No. 83

15 way back in the 1970s.

The plaintiff further stated that in its response of 15th December, 2010, the 1st defendant acknowledged the problem and advised that the plaintiff's claim would be properly considered after Government had sorted out its claim over the said plots with the caveators.

The plaintiff went ahead to state that the 1st 20 defendant further promised to consider compensating the plaintiff with a piece of land out of Uganda Railways Corporation land at Nsambya but the defendants have failed to compensate the plaintiff either in monetary terms or with another piece of land. The plaintiff contends that the defendants are fully responsible for the loss that the former has suffered and as such 25 are entitled to adequate compensation.

On the other hand, the defendants filed a joint written statement of defence denying the contents of the plaint and went ahead to contend that the suit is bad in law and that the same does not disclose any cause of action. Furthermore, the defendant averred that they never promised to compensate the plaintiff and neither did they


5 acknowledge any liability arising out of the suit land as being alleged by the plaintiff. The defendant also contended that they leased out the suit land to a one George Semambo for a period of five years with effect from 1st July 2009. It should be noted that before the hearing of this case, the parties entered into a consent for a sum of Uganda Shillings 8,458,905,000 (Eight Billion, four hundred fifty-eight million, nine hundred five thousand shilling) on 10 10 th May 2016. However, before the execution of the said consent could be effected, the defendants applied to set aside the said consent vide Miscellaneous Application No. 1577 of 2019 and the same was set aside 31st January 2022 hence the hearing of the entire suit on merits.

Court directed the parties to file a joint scheduling memorandum, trial bundles and 15 witness statements. At the scheduling, the parties agreed on the following issues:

# *1. Whether the plaintiff is entitled to indemnification by way of reinstatement on plot 85A Prince Charles Drive Kololo or grant of alternative land.*

## *2. What remedies are available to the parties.*

The plaintiff adduced evidence from two witnesses Karim Somani **(PW1)** and 20 Mwanje Nassir **(PW2)** while the defendant adduced evidence from two witnesses who were Andrew Nyumba **(DW1)** and Gilbert Kermundu **(DW2).**

The parties also relied on documentary evidence which was marked and exhibited. The plaintiff relied on the following documents;

- *1. Lease Agreement between the plaintiff and the 1st defendant admitted and* 25 *marked as exhibit PE1* - *2. Lease offer form to George Ssemambo admitted and marked as exhibit PE2* - *3. Letter from Uganda Land Commission to George Ssemambo admitted and marked as exhibit PE3*


- 5 *4. Letter from Uganda Land Commission addressed to the Commissioner Land Registration marked as exhibit PE4* - *5. Certificate of Title marked admitted and marked as exhibit P.5* - *6. Letter by Uganda Land Commission to Mr. Haider Somani admitted and marked as exhibit PE6* - 10 *7. Sale agreement between George Ssemambo and Metropole Holding Ltd admitted and marked as exhibit PE7.* - *8. Appraisal and Valuation report of plot 85A Prince Charles Drive Kololo for compensation purposes admitted and marked as exhibit PE8* - *9. Stanfield valuation summary dated 31/10/2023 admitted and marked as* 15 *exhibit PE9* - *10. Letter to the Solicitor General about the valuation of the suit land dated 30/3/2016 admitted and marked as exhibit PE10*

## **Representation**

At trial, the plaintiff was represented by the **Counsel Mbabazi Mohammed** while

20 the defendants were represented by **Counsel Kallemera George and Counsel Barbara Mirembe.**

## **Burden and standard of proof in Civil Cases**

In civil matters like the instant case, the burden of proof rests on the plaintiff since it is trite that he who alleges ought to prove his claim. The standard of proof is on a 25 balance of probabilities.

According to **Section 101(1) and (2) of the Evidence Act Cap.6 Laws of Uganda**,

"*Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts, which he or she asserts must prove that those facts exist.*


5 When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. **Section 102 of the Evidence Act** goes on to provide that;

*"The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side and Section* 10 *103 provides that "the burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence unless it is provided by any law that proof of that fact shall lie on any particular person"*

With this background, I shall proceed to evaluate the evidence on record and resolve

15 the issues raised by the parties.

# **Preliminary objection**

Counsel for the defendants raised a preliminary objection to the effect that the plaintiff's late filing of its submissions violated Order 17 rule 4 of the Civil Procedure Rules. In rejoinder, counsel for the plaintiff submitted that the law

20 regulating submissions by the parties at a trial is Order 18 rules 1 and 2 of the Civil Procedure Rules. Counsel went ahead to contend that this is a procedure that is never used by the courts.

Counsel for the plaintiff further submitted that whereas, he filed his submissions belatedly, counsel for the defendant was able to file his submissions in reply all

25 before this Court could deliver its Judgment. It should be noted that Order 18 rules 1 and 2 referred by counsel for the plaintiff are about the right to begin hearing and statement and production of evidence. The rules referred to are in respect of hearing of a civil case and not submissions.

While in court, counsel for the parties were directed to file written submission. The

plaintiff's submissions were supposed to have been filed by the 18th 30 of June 2024, the defendants by 9th July 2024 and rejoinder if any by 15th July 2024 and the same


- 5 was not done. However, according to the ECCMIS data base, the plaintiff filed its submissions on 9th July 2024 at 3:36pm, the defendants filed their joint submissions on 31st July 2024 at 9:36am and the rejoinder was filed on 8th August 2024 at 12:32pm. - This court made timelines for the filing of submissions in the presence of both counsel on 27th 10 of May 2024. None of the parties complained about the time allocated within which to file said submissions. The plaintiff's counsel had over a month to file his submissions on or before the set timeline, and the same was not adhered to and subsequently, the reply by the defendants and the rejoinder all came late protruding into the time during which court ought to have been preparing its 15 Judgment. Timelines give order and structure to court's schedule and proceedings and the same should be adhered to. It should be noted that following the timelines set by court is a very important aspect of case resolution. According to the case of *Patrick Mukasa versus Andrew Douglas Kanyike, SCCA No. 13 of 2022*, Prof. - Tibatemwa-Ekirikubinza, JSC, held that given the fact that the respondent did not 20 comply with the filing schedules as directed by court, the award of costs is declined. For purposes of disposing of the case, I shall proceed and take into account all the submissions in this case in accordance with the provisions of section 98 of the Civil Procedure Act Cap 282 Laws of Uganda 2023 for ends of justice to be met. I will make further orders in the judgment regarding this issue.

#### 25 **Resolution of issues**

*Issue 1: Whether the plaintiff is entitled to indemnification by way of reinstatement on plot 85A Prince Charles Drive Kololo or grant of alternative land.*

5 It is counsel for the plaintiff's submission that his client Metropole Holdings limited is entitled to indemnification. Furthermore, counsel for the plaintiff argued that **DW1** (the Ag. Secretary of the 1st defendant) conceded that Uganda Land Commission made an error in leasing the suit land and in order to correct the said error, it offered the plaintiff alternative land, which was to serve as indemnification 10 or reinstatement, however the same has not been done to date.

Counsel for the plaintiff went ahead to argue that had the 1st defendant allocated land that dully belonged to it without any encumbrance, the plaintiff would have ably complied with the development covenant so as to qualify for an automatic extension of the lease for a full term of 49 (forty-nine) years. Counsel went on to submit that,

- as a result of the 1st 15 defendant's error, the plaintiff was given land that already belonged to the Trustees of the Arya Pratinidhi Sabha Eastern Africa and the Inter-University Council of East Africa, and as such the plaintiff was unable to develop the suit land and subsequently could not acquire a full term lease. - It is counsel for the plaintiff's submission that the Uganda Land Commission cannot 20 be allowed to chest-pump and hide under the pretext that the lease expired and was not renewed since the same Commission acknowledged it error. It is counsel's conclusion that as a result of the 1st defendant's actions, the plaintiff suffered great loss and damage by losing plot 85A which it had purchased for a sum of USD 481,000 (four hundred, eighty-one thousand US Dollars) - 25 Counsel for the plaintiff went head to submit that, it is diversionary to argue that since the lease expired, the suit land purchased by the plaintiff, has no value since the lease expired. Counsel argued that even the plaintiff's initial lease of five years which has since expired is of great value under the legitimate 'expectation' principle. Counsel went ahead to argue that basing on the automatic renewal clause upon - 30 fulfillment of the development covenant, the legitimate expectation doctrine imposes


5 on a public authority the duty to act upon the occurrence of a particular event to grant what the citizen expects.

Counsel submitted that in this case, the 1st defendant was under a duty to automatically extend the plaintiff's lease once the plaintiff fulfilled the building covenant, however, by the fault of the Uganda Land Commission, it committed an 10 error by allocating land that did not belong to it to the plaintiff's predecessor in title and as a result, the plaintiff could not fulfill the building covenant so as to be entitled to automatic renewal.

In addition, counsel for the plaintiff submitted that the defendant would be blowing hot and cold when on one hand, the 1st defendant was ready to offer an alternative 15 plot of land to the plaintiff and on the other hand, the same Commission pleads that the plaintiff is not entitled to anything since its lease has since expired. While relying on the Supreme Court decision of **Attorney General versus Henley Property Developers Ltd SCCA No. 5 of 2023,** counsel for the plaintiff concluded that the issue of indemnification is answered in the affirmative, since it is necessary to 20 indemnify the plaintiff by way of giving it alternative land to put it back in its position before it lost Plot 85A. Uganda Land Commission acknowledged its error of giving out land and granting a lease of plot 85A to the plaintiff that did not belong to it. Counsel went ahead to submit that the plaintiff purchased the suit land as a developer in real estate with the intention to develop the suit land as it had done previously in its other businesses in real estate, however, due to the 1st 25 defendant's error, the plaintiff's investment could not yield hence a loss on investment and as such, for the loss incurred, the plaintiff is entitled to indemnification.

In reply, it is counsel for the 1st and 2nd defendants' submission that the suit land was never available for allocation. In addition, counsel for the defendants submitted that

30 Section 49 of the Land Act (currently section 50 (a) mandates the Commission to

 - 5 hold and manage any land in Uganda vested in the Government according to the Constitution. Counsel for the defendants contended that the suit land was not available for allocation by the Uganda Land Commission since the same was not vested in the Commission but rather was owned by the Registered Trustees of Arya Pratinidhi Sabba Eastern Africa. - 10 Counsel submitted that it is immaterial that Uganda Land Commission did not acknowledge or stipulate knowledge of its error until the registered proprietor lodged a caveat since the transaction was a nullity to begin with and the same could not be enforced by court. Counsel for the defendants relied on the nemo dat principle cited in the case of **Fred versus Kagga Limited No. 530 of 2004** and contended the 1st 15 defendant and George Semambo (the plaintiff's predecessor in title) did not have good title to pass on to the plaintiff because the suit land was not available for allocation in the first place. Counsel went ahead to argue that an illegal grant cannot give rise to a valid interest in land and as such, counsel maintained that this court cannot sanction what is illegal as cited by the Supreme Court in **Makula** - 20 **International versus His Eminence Cardinal Nsubuga case.**

Secondly, counsel for the defendants contends that the plaintiff does not have an enforceable interest in land for the reason that it did not conduct sufficient due diligence before acquiring the suit land from George Semambo, hence the purchase of the suit land by the plaintiff was not done in good faith. In addition, counsel 25 argued that there is no evidence on court record to prove that the plaintiff or his predecessor in title conducted a search, because had the same been done, it would have been revealed that that the suit land belonged to the Registered Trustees of Arya Pratinidhi Sabha and not Uganda Land Commission.

Therefore, it is Counsel for the defendants' submission that the plaintiff's claim for 30 grant of an alternative plot of land or indemnification is not viable on grounds that


5 the title upon which the plaintiff's claim is based expired in 2014 and was illegal from the onset owing to the wrongful allocation to George Semambo.

Having considered Counsel's submissions, I shall proceed to resolve the issues before Court. Before the issue of indemnification can be resolved, I ought to determine whether the plaintiff acquired a lawful interest in the suit land.

It is a pleaded fact that Uganda Land Commission (1st 10 defendant) allocated the suit land to the plaintiff's predecessor in title (George Semambo) by way of lease on 12th August 2009 as per exhibits PE1(lease agreement between Uganda Land Commission and George Semambo) and PE2 (lease offer from to George Semambo). This fact was not contested by the defendants and the documents speak 15 for themselves.

It should be noted that the Uganda Land Commission allocated this land in accordance with its mandate. According to **Section 49 (a) and (c) of the Land Act Cap 227 (as amended)**, which is now section 50 (a) and (c) of the Lad Act Cap 236 Laws of Uganda 2023, among the functions of the Uganda Land Commission, is to 20 hold and manage land in Uganda which is vested in or acquired by the Government in accordance with the Constitution and procure certificates of title for any land

vested in or acquired by the Government.

Secondly, it was not contested that according to exhibit PE7 (sale agreement between George Semambo and Metropole Holdings Limited dated 27th August

25 2009), the plaintiff bought the suit land comprised in LRV 4005 Folio 14 Plot No. 85A Price Charles Drive Kampala from George Semambo. Similarly, the defendants did not contest the fact that they granted consent to the George Semambo to transfer his lease in the suit land to the plaintiff vide **Minute 13/2009 (a) (488) of 27/08/09** as per exhibit PE4.

- Lastly and most importantly, it is an admitted fact that the 1st 5 defendant allocated the suit land to George Semambo (the plaintiff's predecessor in title) in error since the suit land is actually owned by the Registered Trustees of Arya Pratinidhi Sabha of East Africa who have had a valid lease over the suit land running from 1st January 1949 for 99 years (Exhibit PE6 and evidence of DW1). - 10 Having acknowledged the error committed by Uganda Land Commission, it is important to determine how the said error affects the plaintiff who holds a parallel title to the suit land issued by the same Commission and then determine the issue of indemnification.

In the case of *Vivo Energy Uganda Limited versus Shire Petroleum Company* 15 *Limited & ors HCCS No. 0008 of 2016,* the Hon. Justice Stephen Mubiru, while referring to District Land Board noted as follows;

*"The Boards are expected in the first place to ascertain that the land is available for leasing. Land is available for leasing by a District Land Board to an applicant when it is either; (i) vacant and there are no* 20 *conflicting claims to it, (ii) or is occupied by the applicant and there are no adverse claims to that occupation, (iii) or where the applicant is not in occupation but has a superior equitable claim to that of the occupant, (iv) or where the applicant is not in occupation but the occupant has no objection to the application. It is thus incumbent on a*

25 *District Land Board when issuing a new lease, extending an existing one or renewing a lease to ascertain the availability of the land for that purpose".*

Part 4 of the Land Act (supra) provides for the different forms of land management in Uganda's Torren system. **Section 46 (now section 47)** establishes the Uganda 30 Land Commission while **Section 56 (now section 57)** establishes District Land


- 5 Boards. Whereas, these bodies have different mandates, they are both vested with the power to allocate '**available'** *(emphasis on the highlighted word)* land to qualified persons and authorities as the case may arise. (See **Section 49 (a) and 56 (1) (a) of the Land Act Cap 227 as amended).** - Whereas, the Honourable Justice Mubiru, was referring to the responsibilities of 10 District Land Boards in the Vivo Energy case (supra), I find that the responsibilities cut across to the Uganda Land Commission, since these are all Government Land management bodies vested with the power of allocating available land to qualifying persons in their respective jurisdictions. The District Land Boards deal with Local Governments Land which the Uganda Land Commission deals with Central Government Land. Essentially, this means that the 1 st 15 defendant keeps a record of all the land vested in it and similarly, the Commission must have a record of all the land that has been leased out to third parties and that which is available.

'Available' is an English word which translates into, "*able to be used or obtained at someone's disposal'.* Synonyms of available include obtainable, accessible, at-hand,

- ready-for-use' among others. Returning back to the case at hand, at the time the 1st 20 defendant allocated the suit land to George Semambo, the assumption was that the 1 st defendant consulted its' records and established that the suit land was vacant and that there were no conflicting claims to it, at which point that would mean that the same was 'available' for allocation hence the award of a lease to George Semambo. - 25 As custodians of the all the land transaction records for land vested in central Government, the assumption is that the suit land was available for allocation, hence the grant of a lease to the plaintiff's predecessor in title George Semambo for a term of five years commencing from 1st July 2009. Unfortunately, this does not seem to be the case.


- DW1 who is the Acting Secretary of the 1st 5 defendant, testified in paragraph 5 of his witness statement that according to ULC minute (*Min/13/2009) (a) (210) of 16/03/2009,* the Uganda Land Commission executed a lease agreement with George Semambo on 12th August 2009. According to the contents of exhibit PE4, which is a letter from the 1st defendant dated 27th August 2009, as per **Minute 13/2009 (a)** - 10 **(488) of 27/08/09,** the Commission went ahead and granted George Semambo consent to transfer his lease to the plaintiff and subsequently, the latter was registered on the title vide instrument number 417648 on 04th September 2009.

In paragraph 9 of DW1's witness statement, the deponent testified that Uganda Land Commission discovered that they issued the suit land to the plaintiff's predecessor

15 in title in error after a caveat had been lodged on the suit land on grounds that the same formed part of a bigger chunk of land comprised in LRV 4250 folio 12 plots No. 55-99 Prince Charles Drive Kampala belonging to the Registered Trustees of Arya Pratinidhi Sabha, Eastern Africa.

According to the timelines presented by DW1 in his witness statement, paragraph 9,

- 20 by the time the Registered Trustees of Arya Pratinidhi Sabha, Eastern Africa lodged their caveat on the suit land on 27th October 2009, the plaintiff was already the registered proprietor of the suit at that point. DW1 further testified that the Uganda Land Commission duly informed the plaintiff and according to the latter, the plaintiff could not proceed to utilize the suit land for any development. - 25 During re-examination, DW1 testified that Mr. Semambo paid a premium of Uganda Shillings 100,000,000 (Uganda Shillings one hundred million) and the plaintiffs only paid an annual ground rent fee of Uganda Shillings 2,500,000 (two million- five hundred thousand). This is the money that the plaintiff and his predecessor in title paid, before the 1st defendant realized the error in allocation, not excluding the


5 purchase price of the suit land of USD 481,000 (four hundred eighty-one US Dollars).

None the less, it is counsel for the defendants' submission that George Semambo never passed any good title to the plaintiff since the suit land should never have been allocated to George Semambo. Furthermore, counsel for the defendants contended

- 10 that the plaintiff and George Semambo never conducted any sufficient due diligence before purchasing the suit land, because had the same been done, it would have been discovered that the suit land belonged to the Registered Trustees of Arya Pratinidhi Sabha, Eastern Africa. Counsel cited several cases to support his arguments and I had the opportunity read the said authorities. - 15 As cited by Counsel for the defendants, in the case of *Livingstone Ssewanyana versus Aliker Martin S. C. C. A No. 4 of 1990,* Oder J. S. C as he then was stated as follows;

*"…. The Uganda Land Commission approved Sewanyana's application when there was an existing lease. The Commission* 20 *might have been misled….it was invalid when it was made because the suit property which it applied for was not available for leasing …. While relying on the case of The Departed Asians Property Custodian Board versus Benjamin Anyadra SCCA No. 8 of 1989, it was noted that the Commission granted a lease* 25 *and issued a title to the suit property to the appellant while the respondent's title to the same was already in existence and when it had no proprietary interest in the suit land until the expiration of the respondent's title hence the title issued was therefore null and void…"*


5 Following the guidance of the Supreme Court in the above authorities, whereas, the 1 st defendant issued a leasehold title to George Semambo on the understanding the suit land was available for allocation, and subsequently, transferred the same to the plaintiff. During cross examination, DW1 and DW2 testified that the plaintiff purchased the suit land and got registered on the same in error since the suit land 10 comprised in LRV 4005 folio 14 Plot 85A Prince Charles Drive formed part LRV 4250 folio 12 plots No. 55-99 Prince Charles Drive Kampala registered in the names of the Registered Trustees of Arya Pratinidhi Sabha, Eastern Africa.

It is evident that the 1 st defendant made a lease offer to the plaintiff's predecessor in title vide exhibit PE2 for the suit land subject to the same being available and yet

15 there was no such land available for the said lease to begin with. The Uganda Land Commission was not in the position to pass any title to George Semambo since the former had already leased out the subject land to Registered Trustees of Arya Pratinidhi Sabha, Eastern Africa on 1st January 1949 for ninety-nine years.

In the cases of *Justine E. M. N Lutaya versus Sterling Civil Engineering Company*

20 *Limited S. C. C. A No. 11 of 2002,* and Livingstone **Ssewanyana Case**, the Supreme Court held that an illegal grant will not give rise to a lawful certificate of title.

However, it should be noted that the 'nemo dat quod non habet rule" which was raised by counsel for the defendants relating to the nature of title transferred from the 1st defendant to the plaintiff does not apply to registered land under the torrens

25 system. In the case of *Patrick Mukasa versus Andrew Douglas Kanyike S. C. C. A No. 13 of 2022,* **Prof. Tibatemwa Ekirikubinza JSC** had this to say about the application of this principle in Uganda's Torren system;

> " …*the Court of Appeal incorrectly applied nemo dat quod non habet, a rule which should be limited to sale of goods transactions*


5 *and not extended to land transfers. Nemo dat quod non habet is a legal rule whose effect is that the transferor of goods cannot pass a better title than they possess. The lack of ownership/ right to goods by the seller denies the purchaser any ownership title".*

The Honorable Justice went ahead to state that;

10 *"it remains an overriding principle in Uganda's Torrens system that a bonafide purchaser for value without notice is an established defence against challenge to one's title who may have acquired it form another with a defective title as long as the conditions (purchaser for value, good faith, without notice) are approved. This* 15 *is a clear indication that under the Torrens system, nemo dat quad non habet does not apply since there are saved circumstances under which a good title can be held while arising from a defective title. The principle of nemo dat quad habet does not apply to transactions in land registered under the RTA.*

20 *In fact, the bonafide purchaser for value without notice principle negates the nemo dat quod habet rule in as much as it is to the effect that as long as the purchaser gave value, in good faith and without notice of the defect in title, they can acquire title from a person whose title is defective. Whereas nemo dat is to the effect that you cannot* 25 *give a good title if you do not have it. A bonafide purchaser for value principle protects the purchaser from imperfections in title that they did not know about."*

In the instant case, the plaintiff never pleaded to be a bonafide purchaser for value, and whereas, I am alive to the fact that the parties are bound by their pleadings, I

 - 5 shall invoke the powers of this court under **Section 33 of the Judicature Act and Section 98 of the Civil Procedure Act** to conclude this issue since counsel for the defendants raised the nemo dat rule which is related to the bonafide purchaser for value principle. Most importantly, it is a resultant issue that shall aid court to determine whether the plaintiff has any valid interest in the suit land. - 10 It was counsel for the defendants' submission that the plaintiff never conducted sufficient due diligence before he purchased the suit land from Semambo George which, if it had, the plaintiff would have discovered the fact that the Registered Trustees of Arya Pratinidhi Sabha, Eastern Africa held a valid lease on the suit land. Counsel for the defendants went ahead to submit that the plaintiff never adduced any 15 evidence to prove that it had conducted a search.

It is a known principle of law that land is very valuable and as such proper investigations must be conducted. In the famous case of *Sir John Bagaire v. Arsi CACA No. 7 of 1996,* **Okello J**- held that;

"land *is not vegetables, properties bought from unknown sellers are* 20 *valuable properties, buyers are expected to make investigations not only of the land but also of the sellers before the purchase."*

In the case of *Attorney General versus Henley Property Developers S. C. C. A No. 5of 2023*, which was cited by Counsel for the plaintiff, it was noted by Mwondha JSC that according to the Halsbury's laws of England Volume 26 on inquires and

25 inspection states that, "*before entering into a formal contract, the purchaser must take an inspection of the property since he is deemed to buy with notice of patent defects of title."*

Having perused the record of court, it is evident that the plaintiff never adduced any evidence to prove that it had conducted any due diligence either from the land

Page **17** of **24**

- 5 registry or physically on the suit land prior to its purchase from George Semambo. PW1 who is who is a shareholder in the plaintiff company simply testified that George Semambo was known to him and that he had prior dealt with the latter before purchasing the suit land from him. Furthermore, PW1 also testified that he was unaware when Semambo purchased the suit property. Following the guidance of - 10 Okello J in the Sir *John Bagaire* case, PW1's testimony is proof that sufficient due diligence was not conducted.

Counsel for the plaintiff relied on the Henley Property Developer case (supra) where the Supreme Court was faced with an appeal whose facts were to some extent similar to the instant case. Having perused this very recent Supreme decision, I agree with

- 15 Counsel for the defendant that the *Henley* case is distinguishable from the current suit. In the *Henley case*, the supreme court acknowledged the fact that the plaintiff/ respondent conducted three different land registry searches from the Mukono Land Office on 23rd February 2012, 4th October and 20th October 2012, and all the searches showed the respondent's (*Henley Property Developer Ltd*) predecessor in title - 20 (Nantume Flomera Nakalema) as the registered proprietor of the suit land. Furthermore, the Justices of the Supreme Court also acknowledged the fact the respondent had also engaged the services of a surveyor for purposes of opening boundaries dated on 21st July 2011 and 1st September 2011, and the findings of both reports showed that Natume Flomera Nakalema as the registered proprietor. This - 25 informed the respondent's decision to believe that Nakalema was the registered proprietor and was assured that vacant possession would be obtained.

The Supreme Court found that the inquires made by the respondent were sufficient for the former to go ahead and purchase the suit land from the vendor. The Supreme Court Justices found that the respondent had conducted reasonable due diligence

30 before the purchase of the suit land and as such the respondent had good title.

- 5 On the other hand, in the instant case, there is no proof of any due diligence conducted by the plaintiff prior to the purchase of the suit land. While the facts in the instant case and the Henley case may be similar, the failure to conduct due diligence by the plaintiff in the instant case makes the outcome of these two cases very distinguishable. It was never contested by the defendantsthat they issued a lease 10 to the plaintiff on the suit land. It is equally admitted by the first defendant that by it's error, it leased unavailable land to the plaintiff. Whereas, the plaintiff never adduced any evidence of conducting sufficient due diligence, the 1st defendant is equally at fault for allocating unavailable land. - Uganda Land Commission is a one of the Government bodies responsible for land 15 management in Uganda. The commission is a custodian of all the documentation relating to land owned by Government and any transactions relating to the same. Following the different authorities, I have perused with similar facts to the ones in this instant case, this is clearly not the first time the Commission is allocating unavailable land to persons hence causing cancellation of title. - 20 Uganda Land Commission was privy to the fact that the suit land formed part of land in LRV 4250 folio 12 plots No. 55-99 Price Charles Drive Kampala which is owned by the Registered Trustees of Arya Pratinidhi Sabha, Eastern Africa. Even before the Registered Trustees of Arya Pratinidhi Sabha lodged a caveat on the suit land on 21th October 2009 vide instrument number 419636, the Commission should never - 25 have allocated the suit land to the plaintiff and his predecessor in title, considering the fact that the 1st defendant is the one who issued a lease to the Registered Trustees of Arya Pratinidhi Sabha, Eastern Africa on 1st January 1949 and as such was aware of the fact that this land was unavailable for allocation.

Therefore, both parties bear some blame for the error in allocation. The plaintiff does 30 not qualify as a bonafide purchaser for value given the fact that it did not adduce any

- 5 evidence of conducting sufficient due diligence before purchase of the suit land. The plaintiff did not produce any search certificate from the Ministry of Lands Housing and Urban Development in respect of the suit land before purchase. The plaintiff equally never produced any evidence regarding physical visitation to the suit land before purchase. - 10 I shall now proceed to the issue of **indemnification.** The Black's Law Dictionary, 8 th Edition, page 2247, defines indemnification as the action of compensating for loss or damage suffered. In the case of *Eastern Shipping Co. Vs. Quah Beng Kee (1924) AC 177 at 18***2** it was held that: - *"A right to indemnity generally arises from contracts express or* 15 *implied, but is not confined to cases of contract. A right to indemnity exists where the relationship between the parties is such that either in law or in equity there is an obligation upon the one party to indemnify the other. ... These considerations were all dealt with by the Lords Justices in Birmingham and District Land Co. Vs. London and North* 20 *Western Ry Co."*

## In **Birmingham and District Land Co. Vs. London and North Western Railway Co. (1887) 34 Ch. D 261 at 271**, Cotton LJ had clarified:

*"Of course if A requests B to do a thing for him, and B in consequence of doing that act is subject to some liability or loss, then* 25 *in consequence of the request to do the act the law implies a contract by A to indemnify B from the consequence of his doing it. In that case there is not an express but an implied contract to indemnify the party for doing what he does at the request of the other."*


5 In the same case (**Birmingham** supra), Bowen LJ drew a distinction between the right to indemnity as against the right to damages in the following terms and stated that;

*"A right to indemnity as such is given by the original bargain between the parties. The right to damages is given in consequence of the* 10 *breach of the original contract between the parties."*

The foregoing decisions were applied in *Edward Kironde Kaggwa vs. L. Costaperaria & Another (1963) 1 EA 213* where the plaintiff sued the defendant for damages arising from the latter's trespass on his land, in the course of which he removed some soil therefrom. The defendant sought indemnification from a third 15 party who had allegedly given him a license to enter onto the land and remove the soil. It was held that the defendant could establish a claim against the third party for damages for breach of contract or misrepresentation but not indemnity.

In the instant case, as earlier stated the lease agreement between the plaintiff and the Uganda Land Commission is void since the subject matter in question was never 20 available for allocation to begin with. This in itself extinguishes any express or implied obligation to indemnify the plaintiff since there is no valid contract. In my considered view, there is no legal or equitable basis for a finding that the misrepresentation by the 1 st defendant in allocating the suit land in error to the plaintiff which surmounted into a void lease agreement, created upon the 1st 25 defendant an obligation to indemnify the plaintiff for any liability arising for the impugned lease agreement.

On the contrary, the need for proper due diligence and inquiry by the plaintiff prior to any dealings in land has been duly recognized as an integral process in land transactions. (*See Kampala Land Board & Another vs. Venansio Babweyaka &*



5 *Others Civil Appeal No. 2 of 2007 (SC).* In my judgment, the error in allocating unavailable land by the 1st defendant to the plaintiff's predecessor in title and the subsequent transfer to the plaintiff, does not entitle the latter to a right of indemnity as against the defendants.

#### **Remedies**

10 As earlier stated in the previous issue, the plaintiff is not entitled to a right of indemnity but rather can claim for damages. This notwithstanding, it is already a considered fact that the plaintiff failed to adduce any evidence to prove that it conducted reasonable or sufficient due diligence before purchasing the suit land from George Semambo. Therefore, the case for damages cannot equally be 15 sustained. It is trite that he who comes to equity must come with clean hand. The plaintiff failed to play its part in ensuring the legality and sanctity of its transaction with the 1st defendant when the former did not conduct due diligence.

The award of general damages is premised on the doctrine of *'restitutio in integrum'* which means that the aggrieved party has to be restored as nearly as possible to a

20 position he or she would have been in had the injury complained of not occurred. *(See Amazima (U) Ltd versus Mahdi (HCCS NO. 453 of 2016).*

In the case of **Luzinda v. Ssekamatte & 3 Ors (Civil suit -2017/366 [2020] UGHCCD 20 (13 March 2020),** *this court held that as far as damages are concerned, it is trite law that general damages be awarded in the discretion of court.*

25 *Damages are awarded to compensate the aggrieved, fairly for the inconveniences accrued because of the actions of the defendant. It is the duty of the claimant to plead and prove that there were damages, losses or injuries suffered as a result of the defendant's actions*.

- 5 In this case, the plaintiff can only seek to recover its purchase price from George Semambo, however during cross examination the plaintiff's representative PW1 testified that the plaintiff chose to sue Uganda Land Commission that had issued a lease to the plaintiff. PW1 also testified that the plaintiff did not sue Semambo because he had guaranteed good title. During re-examination, PW1 testified that the - 1 st 10 defendant had offered an alternative piece of land in Nsambya, and had taken responsibility, which is why the plaintiff did not sue Semambo.

According to exhibit PE6, which is a letter from Uganda Land Commission to the plaintiff company dated 15th December 2010, it is my understanding that the 1st defendant never promised or confirmed that it would give the plaintiff land around

- 15 Uganda Railways Corporation, but rather the wording was that the plaintiff's claim would be properly handled after Government processed M/s Arya Pratinidhi Sabha Eastern Africa's compensation for their plots. The issue of land around Uganda Raiways Corporation was merely hanging in the air but the same was not a confirmation. - 20 Therefore, since the plaintiff did not conduct any sufficient due diligence prior to the purchase of the suit land and neither did the plaintiff adduce any evidence relating to the premium paid for the suit land and the ground rent allegedly paid to the 1st defendant, I find that the plaintiff has failed to discharge its burden to prove a claim for damages. - 25 In conclusion this case is dismissed and each party shall bear its own costs due to reason that much as the defendants are the successful party, the 1st defendant issued an erroneous lease agreement to the plaintiff company and a certificate of title was issued for unavailable land.

In conclusion, the following orders are hereby made;


- 5 a) **The plaintiff's suit is hereby dismissed** - b) **Each party bears its own costs**

### **I so order.**

Judgment delivered at High Court, Land Division via ECCMIS this **23rd day of August 2024.**

# **Immaculate Busingye Byaruhanga**

#### **Judge**

23rd August 2024