Muluba Farm Limited v Mugisha Nyarikindi (Civil Appeal 50 of 2010) [2018] UGCA 240 (14 August 2018)


THE REPUBLIC OF UGANDA

## IN THE COURT OF APPEAL OF UGANDA

### AT KAMPALA

### CIVIL APPEAL NO. 50 OF 2010

Muluba Farm Ltd ::::::::::::::::::::::::::::::::::: 15

#### **VERSUS**

Mugisha Allan Nyarikindi :::::::::::::::::::::::::::::::::::

Coram: Hon. Lady Justice Musoke Elizabeth, JA Hon. Mr. Justice Barishaki Cheborion, JA Hon. Mr. Justice Remmy Kasule, Ag. JA

# **JUDGMENT**

$\Gamma$

In the Court below, High Court at Nakawa, His Lordship Judge Joseph Murangira, dismissed, on the basis of three preliminary objections, Civil Suit No. 31 of 2005: Muluba Farm Ltd, now the appellant, -vs- Mugisha Allan Nyarikindi, now the respondent in this appeal.


The three preliminary objections upheld by the learned trial Judge were first, that the said suit was barred by law and 30 therefore was unmaintainable against the respondent as defendant. Second, that the same suit was also time barred and third, that the said suit lacked a plaintiff because $M/s$ Muluba Farm Ltd, the plaintiff company, had ceased to exist, or if it was in existence, then it had not authorised by a resolution a Dr. 35 Jack Luyombya, the only surviving director in the company, to sue the defendant.

The preliminary objections were raised on the basis of only the pleadings and written submissions filed in Court, without any of the parties or their witnesses testifying in Court.

In the said HCCS No. 31 of 2005, the appellant claimed to have had a lease for 49 years on mailo land situate at Bunamwaya Kyadondo, Kampala District, from the late Stanley Kisingiri. The suit land was originally comprised in LRV 913 Folio 19 and later became Kyadondo Block 263 Plots 88, 89 and 90. The lease was executed on 20<sup>th</sup> March, 1975. The appellant further claimed in the plaint that in 1976 the plots the subject of the lease were sub-divided into other plots and the leasehold register was amended accordingly to reflect the sub-division and the changed plots.

In February, 1980, the late Stanley Kisingiri, passed on his interests as lessor/mailo owner in the suit land to his daughter, one Evelyn Nattembo.

The appellant alleged in his plaint to Court in the said suit, that while the lease was still obtaining in the appellant's favour, in

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1988 one Victor Asumani became registered proprietor of the mailo interest on plot 89 of the suit land, the subject of the lease. The appellant as plaintiff in the suit maintained that this was done fraudulently because, as a result of and by reason of a resurveying of the suit land, this plot of which Victor Asumani became registered proprietor, had ceased to exist.

Later, on the demise of Victor Asumani, his widow Beatrice Mukarurongi became registered proprietor of the said plot of land whose existence was in dispute. She however proceeded to sell this apparent plot of land to Isa Kamanzi, who in turn sold to the respondent.

When the title of the respondent to the suit land was challenged by the appellant, the respondent asserted that the appellant no longer had a valid lease upon the said land.

On 19th February, 2004, the respondent demanded of the 70 appellant to vacate the said land. The appellant refused to vacate whereupon, according to the appellant's plaint, the respondent forcefully entered upon the suit land, cut down eucalyptus trees and destroyed an in-fill elephant grass zone on the said land, all the properties of the appellant. 75

The appellant sued the respondent in the Court below seeking a Court declaration that the appellant is the lawful lessee of the suit land, that the plot of land the respondent claims to own does not exist, or if it exists then it is subject to the appellant's The appellant also prayed for cancellation of the lease. certificate of title that the respondent purported to have in respect of the plot whose existence was being disputed, an order

of eviction of the respondent from the appellant's land, a permanent injunction restraining the respondent from using the suit land, special damages being the value of the destroyed eucalyptus trees and elephant grass, general damages and costs of the suit.

The respondent through his written statement of defence denied the appellant's claims and counter-claimed praying for a declaration that he is the owner of the suit land. He also prayed to be paid general damages for the inconvenience caused to him by the appellant and for a permanent Court injunction barring the appellant from using the suit land. He prayed that the appellant's suit be dismissed with costs and judgment be given on the counter-claim in his favour and also with costs on the counter-claim

The trial Judge on the basis of the preliminary objections raised on behalf of the respondent, which he accepted, dismissed the appellant's HCCS No. 31 of 2005 with costs to the respondent and held that the respondent's counter-claim had been overtaken by events.

The appellant, dissatisfied with the ruling of the trial Judge appealed to this Court on five grounds, namely

- 1. The learned trial Judge erred in law when he held that the appellant could not bring a suit for ejectment against the respondent. - 2. The learned trial Judge erred in law when he considered and relied on documents attached to the respondent's submission in arriving at his decision on preliminary

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grand to

$\mathbf{I} = \mathbf{I}$

- points when these documents were not forming part of the plaint. - 3. The learned trial Judge erred in law and fact when he held that there was an effective re-entry on the suit land - 4. The learned trial Judge erred in law and fact when he held that the appellant's suit was time barred.

# 5. The learned trial Judge erred in law and fact when he held that HCCS No. 31 of 2005 lacked a plaintiff.

The duty of this Court as an appellate Court of first instance, is to re-appraise and draw inferences of fact, where appropriate, 120 from the materials that were presented and constituted the basis of the decision of the trial Court. This Court, re hears the case and reconsiders the materials that were placed before the trial Court and then resolves whether or not the trial Judge was justified to rely on those materials to arrive at the decision he 125 arrived at.

# See: Banco Arabe Espanol vs Bank of Uganda: Civil Appeal No. 8 of 1988 (SCU).

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The parties filed written submissions in the appeal and the appeal is being determined on the basis of those written submissions after the same have been carefully considered by the full Coram of the Court.

#### Ground 1

In this ground, the appellant faults the trial Judge as having erred in law when he held that the appellant could not bring a suit for ejectment of the respondent.


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Appellant's Counsel submitted that the trial Judge ought to have held that the appellant's suit against the respondent was maintainable under Section 176 of the Registration of Titles Act, Cap. 230, which allows the institution of a suit for ejectment as long as that suit is based on fraud attributable to the party sought to be ejected. This was the case in the appellant's case whereby the appellant alleged in paragraph 3(j) of the plaint that the respondent had committed fraud in becoming registered proprietor of the suit land in respect of which the appellant claimed to have had leasehold interests even before the respondent became registered proprietor thereof. The particulars of the fraud committed by the respondent in the process of becoming the registered proprietor of the said suit land were specifically pleaded in this paragraph of the plaint.

For the respondent, his Counsel submitted, in opposition to appellant's Counsel above submission, that under Section 176(b) of the Registration of Titles Act, a lessee cannot sue a lessor for ejectment based on fraud or at all. This is so because if the lessee were to be allowed to do so, then the said lessee would be denying the landlord's title. As soon as the lessee so sues the lessor, then the lease between the two would be forfeited.

This Court has given serious consideration to the submissions of both Counsel for the appellant and for the respondent.

It is observed that the learned trial Judge, on the basis of the materials that were before him, came to the conclusion that the predecessor in title of the suit land before the respondent

$6$

$155$

$\mathbf{1}$

became registered proprietor of the same, one, Beatrice Mukarurongi Asumani, had lawfully re-entered the suit land and thus terminated the leasehold interest of the appellant in the suit land. The learned Judge then concluded that:

"..................................... registered proprietor is protected under Section 176 of the RTA from ejectment by a party which was in breach of the lease agreement. Under Section 176 of the RTA it is only the lessor who is permitted to sue the lessee and not vice-versa for ejectment.

Wherefore, from the above analysis and consideration of the law and the said documentary evidence, I do agree with the 175 submissions by Counsel for the defendant. And I hereby uphold the first preliminary objection in the affirmative".

With the greatest respect to the learned trial Judge, this Court finds that the procedure that the learned trial Judge adopted in resolving ground 1 of the appeal, was contrary to the law. The 180 learned Judge resolved this ground of the appeal, as well as the others, on preliminary objections. $\ln$ **Mukisa Biscuit** Manufacturing Company v West End Distributors Ltd, [1969] EA 696, at page 697 the then East Africa Court of Appeal held that: 185

> "A preliminary objection is in the nature of what used to be a demurrer. It raises a preliminary point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion."

$\frac{1}{\alpha} = \frac{1}{\alpha}$

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From the pleadings of the parties, the fact whether or not the respondent's predecessor in title had carried out a re-entry on the suit land, whereby the appellant's interests as lessee, had been extinguished was one that had to be ascertained and resolved upon by the trial Court. This is because, while the respondent had pleaded in paragraph 10 of his written statement of defence that:

"The defendant shall aver and contend that the plaintiff's land and the sublease of $M/s$ Mutyaba & Co. Limited was terminated and cancelled upon the application to note re-entry by Mrs. Mukarurongi and therefore the plaintiff ceased to have any interest in the suit land. A photocopy of the application is attached as annexure "B".

the appellant through paragraph 5 of his reply to the amended written statement of defence and counter-claim had responded by denying paragraph 10 thus:

> "In reply to paragraph 10 of the amended written statement of defence, the plaintiff shall aver and contend that there has never been any re-entry".

Therefore on the basis of the pleadings, the learned trial Judge was under obligation to ascertain and make a decision by receiving evidence from the parties to the suit, on the issue of whether or not a re-entry had been effected on the suit land. This required a full hearing of the suit.

The learned trial Judge however did not hold such a hearing. Instead, he proceeded to determine the issue by relying on 215 documents introduced by the respondent by attaching them to the respondent's written submissions as R1, R2, R3, R4, R5A, R5B1.

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$\mathcal{L} = \begin{pmatrix} 1 & 1 & 1 & 1 & 1 & 1 & 1 & 1 & 1 & 1 & 1 & 1 & 1 &$

$\mathcal{A} = \mathcal{A}$

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R5B2, R6, R7, R8, R9, R10, R11, R14 and R15. The learned trial Judge then concluded that a re-entry had been effected and the appellant's interests as lessee in the suit land had been 220 extinguished. Therefore the appellant could not sue the respondent for ejectment.

It is the holding of this Court, that the above stated documents on re-entry of the suit land were never part of the written statement of defence of the respondent. The respondent only introduced 225 them to Court by attaching them to his submissions. Their authenticity and circumstances of their making and production were never established. The appellant never made any admission of any one of them. The learned trial Judge thus erred to rely on any one of them to reach the decision that he reached. 230

With regard to Section 176 of the Registration of Titles Act, the same provides:

## "176. Registered proprietor protected against ejectment except in certain cases

No action of ejectment or other action for the recovery of 235 any land shall lie or be sustained against the person registered as proprietor under this Act, except in any of the following cases-

- a) the case of a mortgagee as against a mortgagor in default; - b) the case of a lessor as against a lessee in default; - c) the case of a person deprived of any land by fraud as against the person registered as proprietor of that land through fraud or as against a person deriving otherwise than as a transferee bona fide for value from or through a person so registered through fraud;

- d) the case of a person deprived of or claiming any land included in any certificate of title of other land by misdescription of the other land or of its boundaries as against the registered proprietor of that other land not being a transferee of the land bona fide for value. - $e$ ) the case of a registered proprietor claiming under a certificate of title prior in date of registration under this Act in any case in which two or more certificates or title may be registered under this Act in respect of the same land,

And in any case other than as aforesaid the production $\mathcal{L}$ of the registered certificate of title or lease shall be held 260 in every Court to be an absolute bar and estoppel to any such action against the person named in that document $\frac{1}{2}$ as the grantee, owner, proprietor or lessee of the land described in it, any rule of law or equity to the contrary notwithstanding".

The appellant's case, as can be ascertained from the pleadings lodged in Court by the appellant as a plaint and reply to the written statement of defence, is that through fraud attributable to the respondent, the appellant was deprived of or had his leasehold interest negatively interfered with by the respondent. This had resulted in the appellant suffering loss and inconvenience for


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which he claimed damages. The appellant set out in his stated pleadings the particulars of the fraud attributable to the respondent and also those particulars in respect of which he claimed general and special damages.

The respondent denied the claims of the appellant and he, in turn, through a counter-claim claimed against the appellant a declaration that he, the respondent is the owner of the suit land, as well as a permanent injunction against the appellant not to use the suit land, general damages and costs of the suit.

It follows therefore that the appellant's suit against the respondent fell under any of the categories of Section 176(c), (d) or (e). The pleadings brought it out clearly that the appellant claimed to be one deprived of a leasehold land tenure interest through fraud attributable to the respondent, the registered proprietor of the suit land. The appellant's case could also be under category (d) or (e) of Section 176 of the Registration of Titles Act, depending on what the evidence, if adduced before Court, can exactly establish.

$\mathcal{R} = \mathcal{R}$

It was therefore an error on the part of the learned trial Judge to hold that Section 176 of the Registration of Titles Act barred the appellant from bringing a case for ejectment, amongst other prayers, against the respondent.

In conclusion this Court finds merit in ground 1 of the appeal. The same is allowed.

## 295 Ground 2

This ground faults the learned trial Judge for relying and considering documents attached to the respondent's written


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submissions in arriving at his decision on preliminary points when these documents were not forming part of the plaint or any other written statement of defence or pleadings in the suit. 300

Subject to the law as to the raising of preliminary objections, which has already been set out earlier when resolving ground 1 of the appeal, a Court of law resolves matters in dispute between parties to a cause on the basis of evidence adduced before the Court by the parties and their respective witnesses, if any.

Evidence is the means by which an alleged matter of fact, the truth of which is subjected to investigation, is proved or disproved. It includes statements, usually made on oath or affirmation by the parties to the cause and their respective witnesses, admissions, matters of which the Court takes judicial notice, presumptions of law and ocular observations by the Court in its judicial capacity. Evidence must be properly adduced before the Court, otherwise

Court will not act upon it.

As already stated, the learned trial Judge reached his decision of allowing the preliminary objections by relying on documents that 315 the respondent attached to his written submissions and marked them R1, R2, R3, R4, R5A, R5B2, R6, R7, R8, R9, R10, R11, R14 and R15. These documents were not annexures to the written statement of defence of the respondent. The appellant, never admitted or consented to any one of those documents to be part of 320 the Court pleadings, let alone as to their authenticity. They were not part of any agreed upon documents at any stage of the hearing of the case. Indeed the Court record shows that no conferencing was done in the case. The said documents were therefore not


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evidence and were not part of the pleadings in the suit. The fact 325 that the appellant in his reply to the submissions of the respondent did not specifically answer back to each one of these documents does not qualify them to be evidence at all. Accordingly the learned trial Judge erred in relying upon the said documents as valid evidence in reaching the decision of allowing the preliminary 330 objections. Ground 2 of the appeal is thus allowed.

## Ground 3

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In this ground the learned trial Judge is held to have erred when he held that there was an effective re-entry on the suit land. 335

It was the submission of the appellant that no re-entry could have been effected on plot 89, when the suit land did not have the said plot in existence.

- For the respondent, it was contended that the re-entry was effective because it had been registered, a fact which had been 340 brought to the attention of the appellant when on 16<sup>th</sup> May, 1996, Dr. Jack Luyombya, a director of the appellant, was so informed of the re-entry by the Revenue Section, Mpigi District Council. - This Court has carefully considered the Court record and the submissions of both Counsel. From the pleadings on record the 345 trial Court was required to receive evidence and determine whether or not plot 89 existed, at the material time, as part of the suit land. The Court was also required to determine on the basis of credible valid evidence whether or not any re-entry of the suit land on plot 89 thereof, or at all, had taken place. 350

内

The learned trial Judge, with respect, took no steps to direct the parties to adduce proper evidence before Court so that the Court was in a position to resolve the stated issues. Instead, the learned trial Judge, proceeded to decide the points at issue by reading and relying on documents referred to Court by being attached to the 355 written submissions of the respondent. These documents were R5(A) a letter allegedly from the surveys and mapping department to the effect that plot 89 was intact. The author of this letter never testified to Court. Its authenticity was never established. The letter was also never tendered as an exhibit in the case. So too 360 was the case with the document attached as R5B2 to the respondent's submissions whereby the appellant, through the appellant's director is said to have been informed about the reentry. The trial Judge in the same measure proceeded to rely on document R7 purporting to be a letter from the Commissioner, 365 Land Registration, dated 31<sup>st</sup> May, 1996, to the Inspector General of Government, to the effect that the appellant's lease and the sublease of M/s Mutyaba & Co. Ltd had been terminated and cancelled.

All the above documents were never part of the pleadings, were 370 never tendered as evidence to Court and as such the trial Judge was in error to act on them and draw conclusions that he drew that led him to allow the preliminary objections. Ground 3 of the appeal also succeeds.

## Ground 4: 375

The appellant contends in this ground that the learned trial Judge erred in holding that HCCS No. 31 of 2005 was time barred.

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$\mathcal{A} \in \mathcal{A}$

It is contended for the appellant that the said suit was not time barred because its subject matter was land interest and the same was not yet caught by the Law of Limitation.

For the respondent, on the other hand, it was argued that the cause of action in the suit was founded on a lease, which is essentially a contract, and as such, given the time when the cause of action in contract arose, the suit was time barred.

In resolving this ground of appeal, this Court takes cognisance of 385 Article $273(3)$ (d) of the Constitution which sets out leasehold as one of the land tenures under which land can be owned in Uganda. Section 2(d) of the land Act, Cap. 227 is also a repeat of Article 273(3) (d) of the Constitution. Leasehold land tenure is the holding of land for a given period from a specified commencement date on 390 such terms and conditions as are agreed upon between the lessor and the lessee: See: Sections 1(5) and 5 of the Land Act, Cap. 227.

For purposes of limitation, land includes and encompasses interests in any of corporeal hereditament, rent charges, legal or 395 equitable estate. See: Section 1(e) of the Limitation Act. Section 5 of the same Limitation Act, provides that an action to recover any land shall not be brought after the expiration of twelve years from the date on which the right of action accrued to the person bringing the action. 400

In case of cases purely founded on contract, Section 3 of the Limitation Act provides that actions founded on contract shall not be brought after the expiration of six years from the date the cause of action arose.

- The appellant asserted in his plaint, paragraph 3(5) thereof, that 405 he came to know of the alleged fraud by the respondent in the suit land in 2003 and he instituted the suit in 2005. Accordingly he was not caught by limitation as one with a cause of action in land whose limitation period is twelve years. - Indeed, even in contract, and this Court is satisfied that the 410 appellant's cause of action was in land, the appellant would not be time barred because the limitation period of six years within which to commence an action based on the leasehold as a contract had not yet expired from 2003 when the cause of action is alleged to have occurred up to 11<sup>th</sup> March, 2005 when the appellant first 415 lodged his plaint in Court which he later amended on 15th May, 2009.

The learned trial Judge thus erred when he held that HCCS No. 31 of 2005 was time barred. Ground 4 of the appeal is also allowed.

## Ground 5 420

This ground of appeal faults the learned trial Judge for holding that High Court Civil Suit No. 31 of 2005 lacked a plaintiff.

The respondent's Counsel maintained from the Bar that the appellant was the only director of the plaintiff company and as such the said company could not institute a suit against the 425 respondent by reason thereof.

This Court observes that the respondent never pleaded the above assertion in his written statement of defence as well as in his counter-claim. The Memorandum and Articles of Association of the plaintiff company had also not been made part of the pleadings

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in the suit and had not been formally tendered as an exhibit to the Court, let alone with the consent of the appellant. Both were thus not proper documentary evidence for the Court to rely on.

With the greatest respect to the learned trial Judge, this Court finds no basis in law, in the absence of formal evidence adduced 435 by the parties and their respective witnesses, if any, upon which the learned trial Judge proceeded to rely on the Articles of Association of the plaintiff company, to hold that the plaintiff company was not competent to commence legal proceedings against the respondent. Equally, the learned trial Judge had no 440 basis for not following Section 177 of the Companies Act, Cap. 110 which is to the effect that a private company shall have at least one director. The appellant company never pleaded that it was a public company in its pleadings. The learned Judge was also bound by the Court of Appeal decision of **United Assurance Co.** 445 Ltd vs Attorney General: Civil Appeal No. 1 of 1986 to the effect that:

> "..................................... board of directors of the company is not necessary to clothe the *sole director with the authority to give instructions to a lawyer* to institute the action".

This Court finds merit in ground 5 of the appeal and allows the same.

All the grounds of the appeal having been successful this appeal stands allowed. 455

The order of the learned trial Judge dismissing High Court Civil Suit No. 31 of 2005 is hereby set aside. It is hereby ordered that

the said suit be reinstated on the High Court Register and the same be heard and determined on its merits by another High Court Judge, other than the trial Judge whose Ruling has been the subject of this appeal.

As to costs since the respondent was instrumental and responsible for raising the preliminary objections, in the trial Court and also supported the decision of the trial Judge in this appeal, it is only fair that the appellant, as the successful party, be and is hereby awarded the costs of this appeal and those in the Court below as relate to the proceedings on the preliminary objections that led to the dismissal of HCCS No. 31 of 2005. It is so ordered.

Dated at Kampala this........ $\frac{1}{2}$ day of....................................

| Elizabeth Musoke | |--------------------------| | <b>Justice of Appeal</b> | | Barishaki Cheborion | | <b>Justice of Appeal</b> | | | | Remmy Kasule |

Ag. Justice of Appeal