Mohammed v Roko Construction Limited (Civil Appeal 1 of 2013) [2014] UGSC 411 (25 March 2014)

Full Case Text

^^MlCOF uganda

IN THE HIGH COURT OF UGANDA

HOLDEN AT MBALE

CIVIL SUIT No 0090 OF 2004

### **1. MOHAMEDALI RAJABAU KHIMJI**

**2. DEOGRATIAS MARIA LAURA MORAES**

**3. AMIRALI RAJABAU KHIMJI**

**4. AMIRALI RAJABAU**

**5. FIDA HUSSEIN IBRAHIM LADH Suing through their lawful Attorney PYARALI RAJABHALI KHIMJI**

**6. PYARALI RAJABHAI KHIMJI**

**Versus**

#### **ASHIQ HUSSEIN**

#### **DEFENDANT**

**PLAINTIFFS**

#### **Judgment**

This is a suit for recovery of property comprised in LRV 617 Folio'25, plot 59/63, Nkonkonjeru Court, Mbale. The plaintiffs who are six in number empowered ' Pyarali Rajabahi Khimji, the sixth plaintiff to act as their Attorney throughout this suit and he is for the purposes of these proceedings referred to as the plaintiff. • The suit is brought against Ashiq Hussein who for the purposes o 'these proceedings is referred to as the defendant.

The plaintiffs sued the defendant claiming that the defendant had taken advantage and turned what they had coined as a deceit to tenants so as to force them to pay rent, into a sale of property to the defendant.

The following facts emerge from the pleadings.

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The plaintiffs repossessed the property in plot 59/63 Nkonkonjeru in July 1992 $\,$ and as most repossessed properties they were in occupation by tenants. Plot 59/63 Nkokonjeru is hereinafter referred to as the property. The plaintiffs then on the request of the defendant appointed him (defendant) to manage the

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property including collection of rent. Subsequently the tenants proved difficult and were not willing to pay rent to the defendant possibly because they doubted his authority. The defendant suggested to the plaintiffs that if they executed a $% \left( \mathcal{L}\right)$ sale agreement that 'represented' him as the new owner, the tenants would look at him in different light which would simplify rent collection. The plaintiff agreed and executed a sale agreement and even passed over the certificate of title to the property to the defendant. The sale agreement was just to deceive and convince the tenants to take seriously the defendants demands for rent. That in actual sense there was no sale. On receipt of the agreement and the certificate of title the defendant assumed ownership and shut the plaintiff and his co-plaintiffs from the property and the proceeds.

The defendant, by his written statement of defense filled on October 15, 2004, claims that the plaintiffs by their own volition, will and consent, through the plaintiff, on April 30, 1999, sold the land to him at an agreed price of shillings 100 million which sum he fully paid in installments that had been agreed upon.

The plaintiff contending that there had never been any intention of sale and that in any case no consideration was supplied by the defendant instituted this suit.

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The issues to be resolved were agreed as follows:

- 1. Whether there was a sale - 2. Whether the defendant paid the purchase price - 3. Whether the plaintiffs are in breach of the sale agreement - 4. Remedies available.

# Whether the defendant paid the purchase price

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To deal with this issue it is necessary to look at that upon which the defendant claims ownership. The defendant claimed he had bought the property and in that regard tendered a sale agreement Exh D1 executed on 30th April 1999 together with the Power of Attorney Exh D3 dated 16th June 2000. The sale agreement was to the effect that the plaintiff had sold the property to the defendant at a price of shillings one hundred million (100,000,000), it recited;

"That the seller, Mr. P. R. Khimji of Kampala agrees to sell to Mr. Ashiq Hussein of Mbale who agrees to purchase residential plot known as Plot Nos. 59/63, Nkokonjeru Court. Mbale"

The defendant also tendered an acknowledgement of the money having been paid to and received by the plaintiff, Exh D4.

From the response of the plaintiff it was not necessary for the defendant to seek a handwriting expert to prove that the plaintiff was the author of the acknowledgement. The plaintiff admitted that he was a party to Exh D1 and that he had indeed executed and given the defendant the Power of Attorney Exh D3. The plaintiff clearly admitted in the acknowledgement Exh D4 that he had received the consideration but this admission was not conclusive evidence of such payment because it could still be rebutted by parol evidence of nonpayment. The acknowledgement and the recital in the sale agreement however raised a very strong presumption that the defendant had paid the consideration and as such the onus was on the plaintiff to rebut it

There is no doubt that the plaintiff instructed the defendant to manage the property. He gave evidence in which he said that after instructing the defendant to manage the property, the defendant came back to him and said he had encountered resistance from the tenants. That the two should pretend that the defendant was now the owner of the property which would enable him to exert pressure on the tenants. The plaintiff contended that the acknowledgement and the sale agreement where fictitious documents intended to look something real in order to trick the tenants and that he had never received any money from the $\overline{\phantom{a}}$

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defendant in respect of the sale. The defendants case was that the plaintiff had received all the consideration as agreed

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In the absence of any other intervening circumstances the agreement $\operatorname{Exh}\operatorname{D1}$ and the acknowledgement Exh D4 would by themselves lead to conclusions that the plaintiff sold and the defendant bought the property. What however makes it necessary to look beyond the two documents is the conduct of the parties after the said sale and the mode of payment.

Exh D2 is a letter not only forwarding the title deed to the defendant but it also shows that the two also had other dealings namely unpaid money by the defendant to the plaintiff in respect of a car and TV. An agreement in respect of the vehicle was written, Exh P9. These dealings are also evidenced by Exh P8 of 16th May 1999 in which the defendant bought a Tata lorry at an agreed sum of Shs 10,000,000 to be paid in seven installments, six of which would be 1,500,000 each and the Seventh of 1,000,000. These transactions resulted into the plaintiff writing to the defendant Exh P10 on the 28th April 2000.

In the letter he communicated to the defendant the balances unpaid on the lorry and the smaller car. This document together with Exh P11 was brought to court by the defendant although it's the plaintiff who chose to put them in evidence. The defendant does not dispute them. The significance of these documents in this case is that they show whether the defendant made payments towards the property. During cross examination the defendant relied on Exh P11 to show that he effected payments towards the property. The plaintiff denied ever writing such acknowledgement. It was however the evidence of the handwriting expert that the person whose handwriting appeared in Exh P11 was significantly similar to the one in Exh P 10. There was however telling tale signs that one of the documents was produced from the other. Exh P10 was in respect of Lorry A/C. It was very noticeable that where the words Lorry A/C was, had been replaced by the words House A/C. According to the report the words "Lorry and Car" had been substituted with "59/63 Nkonkonjeru" and the words "Lorry A/C" were replaced with "House A/C". The findings of the handwriting expert Exh Ct 1 were not disputed by the defense. The report was admitted by consent of both parties. Exh

Ct 1 showed that there had been substitution, interpolation, additions and other document falsification and then photocopying of Exh P10 to get Exh P11. This evidence remained undisturbed since the defendants advocate chose not to cross examine the expert.

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If the defendant had indeed made such payments towards the purchase of the property as shown in Exh D4 why would he go through the illegal rigors of falsifying documents to prove the payments. The only answer to his conduct was that he was trying to prove what was not true. He had not made the payments.

## Whether there was a sale

From the evidence the sale is supposed to have been executed on the 30th April 1999. By the testimony of the defendant himself, he instructed his lawyer Messer Magirigi & Company Advocates to draw a Power of Attorney Exh D3 which was done on 16th June 2000 in which the Plaintiff appointed the defendant to manage the property. In his evidence the Defendant said that by the time he sought the powers of attorney he had already bought the property.

The defendant said that the power of attorney was drawn by his advocate on instructions of the plaintiff but on further cross examination by the plaintiffs advocate he admitted that he was the one who had instructed his advocate to draw it. At this stage it is important to say something more about Exh D3. The defendant in his evidence said the plaintiff refused to sign the power of attorney but Exh D3 which he offered court in evidence bore a signature purportedly of the plaintiff. It means the plaintiff really endorsed the power of attorney or the signature on it was a forgery. Whatever the case the Power of Attorney empowered the defendant to;

"entering into any agreements and the execution of all documents necessary for the completion of the duties to be performed by my attorney including the sale or rental of the said lands".

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It is however important to note that subsequent to Exh D3 another Power of Attorney Exh P1 was allegedly, on the 10th July 2000 executed this time on the instruction of the plaintiff to his Advocate Kawanga & Kasule Advocates which

was signed by the plaintiff, defendant and witnessed by the defendant's $\frac{1}{2}$ . advocate. In this power of attorney, the defendant was amongst other things to;

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"put tenants, fix rents execute tenancy agreements and collect rents"

The question that seeks an answer is, if the defendant had bought the property as $\frac{1}{2}$ . early as $30^{\rm th}$ April 1999 and even had the title to the property, why would the plaintiff give him a power of attorney to fix rent, execute tenancy agreements and collect rent. Moreover the tenants had earlier refused to recognize the defendant without a sale agreement. This, the defendant may say was a gimmick by the plaintiff in drawing Exh P1. But the defendant's advocate also witnessed it. The signing by both the defendant and his advocate of a document which referred to the defendant as the attorney for the plaintiff amounted to the confirmation that the plaintiff was indeed the owner of the property. Moreover Exh D3 was drawn by the defendant's advocate himself and signed by the defendant. Exh D3 also referred to the defendant as attorney of the plaintiff. It is inconceivable that the defendant would have wanted to be a mere holder of powers of attorney after spending Shs 100 million as purchase price. Why then would the defendant ask his advocate Magirigi & Co Advocates to prepare a Power of Attorney for the plaintiff to empower him to manage the property? This must have happened because the owner was still the lawful owner of the property. Exh D4 which the plaintiff wrote acknowledging receipt of the money was merely an extension of their method of convincing the tenants to pay rent promptly.

Having found that the acknowledgement of payment was a sham, that the defendant falsified documents so as to be believed, and having concluded that the powers of attorney were being given to the defendant as late as July 2000 because he was not the owner of the Property, it's the finding of the court that there was no sale.

# Whether the plaintiffs are in breach of the sale agreement

It was found above that the agreement $\operatorname{Exh} \operatorname{D1that}$ was written by the plaintiff and not signed by the defendant was a sham from the very beginning. Since a sale was not the intention of the nartiQc fLA, , , . .. - w j Ponies, there was no breach occasioned. It is therefore also courts finding and do hold that there was no breach of agreement

**Remedies.**

It is ordered that

/ The plaintiffs having been found the registered proprietors of the Property are f entitled to vacant possession.

1 The defendant is hence forth restrained from interfering in the plaintiffs | enjoyment of the property.

The duplicate certificate is returned to the plaintiffs.

E *r* The costs of this suit are borne by the defendant.

't **Judge \**