Nalubega and Another v Jackson Kakayira (Civil Appeal No. 40 of 2004) [2004] UGCA 49 (26 November 2004)

**I**

**I £ i**

# —^^PUBEICTDnJGANDA <sup>~</sup>

# IN THE COURT OF APPEAL OF UGANDA

## at Kampala

### CORAM: HON. MR. JUSTICE G. M. OKELLO, JA HON. LADY JUSTICE A. E. MPAGI-BAHIGEINE, JA HON. LADY JUSTICE C. K. BYAMUGISHA, JA

J

### CIVIL APPEAL NO. 40 OF 2004

### BETWEEN

### APPELLANTS 1. ROSEMARY NALUBEGA 2. YAHAYA WALUSIMBI 1

### AND

### JACKSON KAKAYIRA RESPONDENT

*{Appeal from the judgment and orders of the High Court of Uganda at Kampala (Bbosa, J), dated 5/05/2003 in High Court Civil Suit (HCCS) No. 119 of1999.*

### JUDGMENT OF G. M. OKELLO, JA.

This is an appeal from the decision ofthe High Court of Uganda at Kampala (Bbosa, J), dated the 5th, May 2004, whereby the respondent's suit against the appellants was allowed with the following orders:-

- (a) are bona fide occupants of the The plaintiff (respondent) and his siblings land comprised in KLA Instrument 201910. - (b) prised in Block 5 Plot 584 be restored to the register. The original land com - **(c)** Its subdivision into Plots 1120 and 1121 is hereby cancelled. - (d) The first defendant (appellant) as administrator of the estate of late Tito Lukanika to satisfy the interest of the estate of the late Erisa Musoke in accordance with the caveat lodged in 1932 in accordance with Succession Act. - (e) Instrument 21006 dated 22nd December, 1932 KLA 189917, dated 1st August 1997 and 190472, dated 16th September, 1997, signifying caveats by the late


**1**

*J*

uybnTbya; EfisaTVIusol the register. irgu and the plaintiff, be restored on eTLevt

- **(0** his title is hereby <sup>3</sup> \*)Ona'^^<sup>e</sup> Purchaser for value of Plot 1120 and - (g) ^e^occu^athjn<sup>8</sup> fth ^C™anent^ restrained from disturbing the plaintiff on - (h) <sup>59</sup> The defendants will pay the costs of this suit to the plaintiff.

The facts which gave rise to this appeal may be summarised as follows:-

The respondent, Jackson Musoek Kakayira,, brought the original suit in the High Court as one of the beneficiaries to the estate of his late father, Erisa Musoke. The late Erisa Musoke had by an agreement of sale, Exh P2, in 1932 bought a piece of land measuring 6.33 acres from the late Tito Lukanika. The land is situate at Kalerwe, Gayaza Road. It was curved out of Plot 584. After executing the sale agreement, no transfer was effected in the names ofthe buyer, the late Erisa Musoke and he lodged a caveat on the title ofthe late Tito Lukanika on 22/12/1932 in order to protect his interest. The caveat prohibited any dealing with the and before the interest ofthe late Erisa Musoke was satisfied. The caveat was registered under Instrument No. 21006. Additional similar caveats were subsequently entered on the same title by the Registrar of Titles and also by order of the High Court.

When Erisa Musoke later died, his son Levi Luyombya and daughter Margaret Namisango lodged further caveats on the same title as beneficiary and administrator respectively to protect the interest ofthe interest ofthe estate ofthe late Erisa Musoke in the land. These further caveats were registered under Instrument Nos KLA 18997 of 1/08/1997 and KLA 190472 of 16/09/1997.

In 1994, the first appellant, a granddaughter of the late Tito Lukanika, obtained grant of Letters of Administration from the Chief Magistrate's Court of Mengo to administer the estate of her late grandfather. Subsequently, she got her name registered as administrator of Plots 582, 25, 777 and 584 on Block 5. As the registered administrator ofthese plots, the first appellant applied in 1997 through M/S Kaala & Co advocates, to the Registrar of Titles to have all caveats on the title ofthe late Tito Lukanika removed. This was done in 1997 Thereafter, by a sale agreement, EXD2, the first appellant sold part of plot 584 to the second defendant without first satisfying the interest of the estate of the late Erisa Musoke Plot 584 was accordingly subdivided into plots 1120 and 1121. Plot 1120 was transferred to the second appellant, while plot 1121 was registered in the name ofthe first appellant.

The respondent was aggrieved first by the removal ofthe caveats from the title ofthe late Tito Lukanika which he said was without notice and secondly, by the sale of part of plot 584 to the 2nd appellant before the interest of the estate of his late father Erisa Musoke


was satiMfedr--ffe--ar^^ . appellants seekinT^^^ in the High . Court against, the interest and costs ofthe suit deC aratOry orders<sup>&</sup>gt; 8eneral and exemplary damages with

on the following ™dsS-tiCe Bb0Sa heard the SUit and allowed <sup>h</sup>' hence this <sup>a</sup>PPeal

- 1. The yarned judge of the High Court erred in fact and law when she found a e espondent and his siblings are bona fide occupants of land comprised in Kampala Instrument No. 201910. - 2. the pleadings and the entire proceedings to wit; The learned judge of the High Court erred in fact and law when she awarded and granted to the Respondent remedies which had not been prayed for in - That the 1st defendant as administrator of the estate of the late Tito Lukanika satisfy the interest of the estate of the late Erisa Musoke in accordance with the caveat lodged in 1932 in accordance with S.288 Succession Act. "(a) - (b) The plaintiffs siblings are bona fide occupants of the land comprised in Kampala Instrument No. 201910. - 3. learned trial judge erred in law and fact when she found that the The purchase agreement exhibit P2 was not chargeable with stamp duty. - 4. The learned trial judge erred in law and fact when she found that the 1st defendant committed fraud against the Respondent. - 5. The learned trial judge erred when she found that the 2nd defendant was not a bona fide purchaser for value and fraudulent after her finding that the evidence against the 2nd defendant was wanting. - 6. The learned trial judge erred in fact and law when she found that the caveats under instrument No. 21006, dated 22nd December 1932, Kampala 189917, dated 1st August 1997, and 190772, dated 16,h September, 1997 signifying caveats by Erisa Musoke, Levi Luyombya, Namisango and the plaintiff were improperly removed from the register. - 7. The learned judge of the High Court erred in fact and law when she relied on particulars of fraud, which had not been pleaded and strictly proved and in cancelling the title of the 2nd defendant. - 8. The learned trial judge erred in law and fact when she failed to properly evaluate the evidence."

I


Counsel for the parties filed written submissions in accordance with rule 97 of the Rules of this court. Mr. Kavuma-Kabenge acted for the appellants, while Mr. P. Ayigihugu appeared for the respondent.

In his written submissions, Mr. Kavuma-Kabenge dealt with the above grounds in this

- Ground 3 separately. $(1)$ - Ground 6 also separately. $(2)$ - Grounds 5 and 7 jointly. $(3)$ - Grounds 1 and 2 also jointly. $(4)$ - $(5)$ Ground 4 separately. - $(6)$ Finally, Ground 8 also separately.

In reply, Mr. Ayigihugu followed that order. I propose to do likewise.

### $Ground 3.$ </u>

This ground challenges the trial judge's findings that the purchase agreement, Exh P2. was not chargeable with stamp duty. The gist of Mr. Kavuma-Kabenge's argument in this regard is that the trial judge erred in receiving in evidence the sale agreement, Exh P2, when no stamp duty had been paid on it. He criticised the trial judge for admitting that document in evidence merely because counsel for the 1<sup>st</sup> appellant had not crossexamined PW4, the Registrar of Titles, during the trial on whether stamp duty had been paid on the agreement or not. According to Mr. Kavuma-Kabenge, a document speaks for itself, unless it is ambiguous. If the document does not bear evidence of payment of stamp duty, then the duty has not been paid. Unstamped document which is liable to stamp duty can not be relied on in court even for examining a witness, nor can parole evidence of such a document be received. Where unstamped document is admitted in evidence, the court should not make use of it. For this proposition, counsel relied on section 42 of the Stamp Act. He pointed out that sections 3(1), 32(5) and 35(1) of the Stamp Act indicate that duty is payable on a sale agreement. Items 5, 24 and 28 of the schedule to the Act also indicate that duty is payable on agreement or memorandum of an agreement, a transfer or conveyance. He submitted that there is no law which exempts sale agreement from stamp duty. He criticised the trial judge for acting on the unstamped sale agreement to reach her decision.

Mr. Ayigihugu, learned counsel for the respondent, did not agree. He contended that the trial judge was right in finding that the sale agreement Exh P2 was not chargeable with stamp duty. He argued that the sale agreement was admitted in evidence by consent. According to him, all the sections of the Stamp Act relied on by Mr. Kavuma-Kabenge


relate to sale agreement for conveyance, mortgage or settlement, but not sale perse. He stated that the schedule to the Act does not show that a sale agreement of land was chargeable with stamp duty.

He argued that even if the stamp duty was payable, section 43 of the Stamp Act was applicable. The section prohibits challenging at any subsequent stage of the proceedings, on ground of non-payment of stamp duty, admission in evidence of a document, except under section 68. According to him, there is ample evidence that the late Lukanika had sold the suit land to the late Erisa Musoke. That sale was not in issue.

The issued raised by the above arguments is whether or not sale agreement is liable to stamp duty under the Stamp Act (CAP 342) as amended by Stamps Act No. 12 of 2002. the trial judge answered that "a sale agreement is not."

Whether or not a sale agreement is liable to stamp duty is a matter of law. The following sections of the Stamp Act (CAP 342) as amended are relevant for determining this question:

Section $2(1)$ (a) provides thus:-

- $"(1)$ Subject to this Act and the exemption contained in the schedule to this Act, the following instruments shall be chargeable with duty of the amount indicated in the schedule as the proper duty therefore respectively: - every instrument mentioned in that schedule which, not having $(a)$ been previously executed by any person, is executed in Uganda after the commencement of this Act and relates to any property situate, or to any matter or thing done or to be done, in Uganda; 73<br>\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

The schedule to the Act referred to mentioned in item 5 as follows:-

"Agreement or Memorandum of an agreement (stamp duty 5,000/=)

Section 3(1) provides thus:-

Where, in the case of any sale, mortgage or settlement, several instruments $\cdot$ 1. are employed for completing the transaction, the principal instrument only shall be chargeable with the duty prescribed in the schedule to this Act for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of two shillings instead of the duty, if any, prescribed for it in that schedule, except that a power of Attorney empowering a person to execute or to register such instrument or


argeaDle wlth~chny prescribed in Ute schedule for the power ofAttorney.

- 2. e parties may determine for themselves which of the instruments so emp oye shall, for the purpose of subsection (1), be deemed to be the principa instrument; but the duty chargeable on the instrument so etermined shall be the highest duty which would be chargeable in respect of any ofthe instruments employed. - 3. <sup>35</sup>

**I**

Un er section 1(a) above, every instrument that is mentioned in the schedule to the Act and which is executed in Uganda after the coming into force of this Act, and relates to property situate, or thing done or to be done in Uganda, is liable to stamp duty. This Act came into force on 30/04/1915. The amendment, which only substituted the first part of the schedule to the Act, came into force on 1/07/2001. The amendment only increased the rate of stamp duty shown in the schedule. Agreement or Memorandum of an agreement is mentioned as item 5 in the schedule to the Act.

However, in case of sale, mortgage or settlement, where several instruments are employed to complete the transaction, section 3(1) of the Act restricts the charge of stamp duty at the rate prescribed in the schedule to only the principal instrument. As to which of the document is regarded as the principal instrument is determined by the parties. The other instruments are charged a duty of only two shillings instead of the amount prescribed in the schedule to the Act.

It would seem clear to me from the above that a sale agreement is liable to stamp duty, the amount ofwhich is dependent on whether it is treated as a principal instrument or not. In my opinion, the trial judge should not have found that the sale agreement, Exh P2, was not chargeable with stamp duty.

That error however, is not fatal to the case because ofsection 43 ofthe Stamp Act. This section prohibits challenging at any subsequent stage of the proceedings, on ground of non-payment of stamp duty, the order admitting in evidence of an instrument, except under section 68. This section requires appellate court to take into consideration the order made by the trial judge admitting an instrument in evidence, either as duly stamped, or as not requiring stamp or upon payment of duty and penalty under section 42. Upon that consideration, to declare its opinion thereon. Where it is of the opinion that the instrument should not have been admitted in evidence without payment of duty and penalty under section 42, to determine the amount, to enable the party liable to pay. That declaration does not invalidate the lower court's order admitting in evidence, the unstamped instrument.

I have considered the order made by the trial judge in the instant case admitting the sale agreement in evidence, as not requiring stamp duty. In my opinion, that agreement should not have been admitted in evidence without payment of duty and penalty under

*4*


section 42. The amount payable is at least two shillings. That declaration does not invalidate the lower court's order admitting in evidence the unstamped instrument. Ground 3 would thus fail.

## Ground 6

The complaint in this ground is about the finding by the trial judge that the caveats under instruments Nos 21006 of 22/12/1932, 189917 of 1/08/1997 and 190772 of 16/09/1997 were improperly removed from the register.

Mr. Kavuma-Kabenge stated that the trial judge had noted that those caveats were removed without the notices of their removal having been served on Mr. Luyombya, the caveator. Learned counsel submitted that that finding was not correct because here is evidence on record showing that the notices of removal of these caveats had been posted to Mr. Luyombya in accordance with section 210A of the Registration of Titles Act (RTA). He criticised the trial judge for failure to properly evaluate the evidence of Edward Karibwende (PW4), the Registrar of Titles, and that of Luyombya. He urged us to find that the notices for the removal of the caveats were duly posted to Luyombya and consequently, the caveats were properly removed after the lapse of the requisite 60 days. In his view, there was no evidence that the first appellant, the holder of Letters of Administration of the estate of the late Lukanika, had applied for the removal of these caveats. As for the $2^{nd}$ appellants, learned counsel submitted that by the time he bought the suit land, there was no caveat on the title.

Mr. Ayigihugu supported the trial judge's findings that the caveats were improperly removed. He pointed out that there were two categories of caveats that had been placed on the title: The first category were:-

- One lodged by Levi Luyombya as son and beneficiary of the **1.** $(a)$ estate of the late Erisa Musoke: - Another one was lodged by Margaret Namisango, the daughter $(b)$ of the later Erisa Musoke, but had lodged the caveat as one of the administrators of his estate.

According to Mr. Ayigihugu, the removal of these caveats required notice to the caveators before removal. He contended that the trial judge considered the evidence of Edward Karibwende (PW4), the Registrar of Titles, together with the evidence of Luyombya (PW7) and found that the notices ha not been posted by registered mail to the addresses pointed out in the caveats. The procedure adopted by the clerk to post the notices was contrary to the usual procedure, whereby a receipt of postage of a registered mail was put on the copy of the notice remaining on the file as evidence of service. Mr. Ayigihugu submitted that the trial judge had properly evaluated the evidence on record and considered the relevant law before making that finding. He stated that the criticism of the trial judge was not justified as she rightly believed the evidence of PW4 and found that the notices for the removal of the caveats had not been duly served on the caveators.


**» \***

Ido not a§ree I think counsel for the appellant's contention was that the trial judge was °+i,in \ at caveats were improperly removed. In that regard, <sup>I</sup> will const er e re evant law and evidence to determine whether that finding can be supported. °

Mr. Ayigihugu, however, tried to affirm the decision ofthe trial judge that the removal of the caveats was improper on other grounds in addition to those relied on by the trial judge.

In my view, this is not acceptable. Learned counsel did not give the necessary notice of affirming the decision on additional grounds as required by rule 91(1) ofthe Rules ofthis Court which provides:-

"A **Respondent who desires to contend on an appeal in the court that the decision of the High Court should be affirmed on grounds other than or additional to those relied upon by the court** *shall give notice to that effect specifying the grounds ofhis or her contention. " (emphasis added.)*

The above rule **is** couched in a mandatory form. Since counsel for the respondent did not comply with it, I can not allow him to argue the point. I shall therefore, not consider his written arguments on the point.

On the main issue, whether or not the caveats had been improperly removed, the learned trial judge said ofthe removal ofthe caveats in the first category, those that were lodged by Levi Luyombya and Margaret Namisango, as follows:-

**"there is no mention of postage by registered post and certainly no evidence was tendered ofthis. It is pertinent to refer to section 210A of the RTA and section 35 of the Interpretation Decree 1976. Section 210A ofthe RTA provides as follows:**

- 1. **Any notice under the provisions of this Act may be served or given by letter or posted to the person concerned at his address for service.** - 2. - 3. **The address appointed in caveat is the place at which notices relating to the caveat may be served shall be the address for service of the caveator.**

**4**

| | $\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots$ | |------|----------------------------------------------------------------------------| | $5.$ | $\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots$ | | 6. | "<br>. <b>.</b><br>$\cdots$ |

Then section 35 of the Interpretation Decree 1976 provides that where any Act or Decree authorises or requires any document to be served by post, the service shall be deemed to be effected properly by addressing, prepaying and posting by registered post a letter containing the document and unless the contrary is proved, to have been effected at the time which the letter would be delivered in the ordinary course of the post.

In this case, Mr. Karibwende has proved the contrary, that there was infact no evidence of postage. Moreover, the first defendant failed to call Mr. Opio who handled this whole transaction. His evidence was crucial and since he was not called and no reasons were advanced for the failure to do so, this court is entitled to draw and adverse inference against the first defendant that the evidence was prejudicial to her case."

With regard to the caveats in the second category, those which were lodged by the Registrar on his own volition as well as on the High Court order, the trial judge said:-

"Section 178 RTA allows the RT to lodge the caveats, but only to remove them without first complying with the law as stated in section 150 RTA, which I have already set out and section 168 of the same Act. The latter section provides that if it is proved to the satisfaction of the RT that an encumbrance notified on any certificate of title has been satisfied, extinguished or otherwise determined and no longer affects the land, extinguished or otherwise determined and no longer affects the land, he may either endorse a memorandum to that effect on the certificate of title or permit any subsequent certificate of title to the same land to be issued free from such encumbrance.

There is no evidence in this case that Mr. Opio satisfied himself that the caveats lodged on the orders of the High Court were satisfied, extinguished or otherwise determined. He therefore acted illegally in removing them.

In light of the above, my answer to the first issue must clearly be in the negative namely, that the caveats though properly lodged, were nevertheless improperly removed."

Mr. Kavuma-Kabenge criticised the learned trial judge for invoking section 35 of the Interpretation Decree 1976 (Act) (CAP 3) to aid determining evidence of service by post. According to him, RTA is a special Act and takes precedence over the Interpretation Act which is a general law. Secondly, that there was no ambiguity in section 210A of the RTA to necessitate invoking section 35 of the Interpretation Act.

With all dues respect to Mr. Kavuma-Kabenge, I do not support this criticism of the trial judge. It is not justified. First of all, although I agree that RTA is a special Act dealing with registered land and that the Interpretation Act is a general law, the question of which of the two takes precedence over the other does not arise here because there is no conflict between the two. All that the trial judge was searching for was clarification of section 120A which is ambiguous. It does not state how the service by post can be proved. That was the ambiguity which compelled the trial judge to invoke section 35 of the Interpretation Act for clarification. That section made it clearer that service by post is proved by evidence of postage of a registered mail.

This is confirmed by the evidence of PW4 that the established practice in the office of the Registrar of Titles was to effect such a service by registered mail and retaining the receipts thereof as evidence of its postage. The practice was infact in line with the procedure provided for in section 35 of the Interpretation Act.

In the instant case, it is not in dispute that the caveats that were lodged by Levi Luyombya and Margaret Namisango are removable upon notice to the caveators. The learned trial judge found that there was no evidence that the notices were posted to the caveators by any registered mail. In term of section 35 of the Interpretation Act, the evidence of service was therefore, unsatisfactory. The learned trial judge was accordingly justified to hold that no notices for the removal of the caveats were served on the caveators.

As regards the caveats in the second category, those that had been lodged by the Registrar of Titles on his own volition and on the order of the High Court, their removal is governed by section 168 of the RTA. Under this section, when it has been proved to his satisfaction that an encumbrance notified on any certificate of title has been satisfied, extinguished or otherwise determined and no longer affects the land, then the Registrar of Titles may either:

- endorse a memorandum to that effect on the certificate of title, or **1.** - permit any subsequent certificate of title to the same land to be issued $2.$ free from such encumbrance.

In the instant case, the Registrar of Titles permitted the issuance of subsequent certificate of title to the same land in the name of the $1<sup>st</sup>$ appellant, free from all those previous encumbrances, without an iota of evidence that the interest of the estate of the late Erisa Musoke had been satisfied, extinguished or otherwise determined and that it no longer affected the land. He clearly acted contrary to the clear provision of section 168 of the RTA. 

In those circumstances, I can not fault the findings of the learned trial judge as the caveats were clearly improperly removed. Ground 6 would therefore fail.

I now turn to grounds 5 and 7, where the gist of the appellant's complaint is that the trial judge having found that the particulars of the fraud alleged by the respondent were somewhat wanting, ought to have found for the appellant. Mr. Kavuma-Kabenge contended that the findings of the trial judge was outside what the respondent had pleaded as fraud. He stated that there was no evidence to show that the $2^{nd}$ appellant knew that the land in question, in law, belonged to the late Erisa Musoke or his beneficiaries, nor that they had legal or equitable interest in that land which the 2<sup>nd</sup> appellant only knew belonged to the late Lukanika. In counsel's view, except for fraud under section 186 of the RTA, knowledge of existence of unregistered interest does not impute fraud. The $2^{nd}$ appellant having got registered after the removal of the caveats, is protected under section 186 of the RTA and under the indeasibility of the provisions. He cited Mills vs Stokman (1967) 116 CLR 61. (an Australian decision)

He pointed out that the 2<sup>nd</sup> appellant never had any notice of the equitable interest created by the sale agreement. Therefore, once he got registered, his title was no longer open to attack, except for fraud, which must be directly attributed to him.

He pointed out that fraud means actual fraud, dishonesty of some sort, not constructive or equitable fraud. He criticised the trial judge for what he called resorting to presumed fraud – when she stated that the $2<sup>nd</sup>$ appellant had notice of occupation and development on the land by the respondent. He submitted that fraud can not be presumed, nor does occupation impute notice as to ownership of the land. He concluded that the 2<sup>nd</sup> appellant is therefore, a bona fide purchaser for value.

Mr. Ayigihugu did not agree. He supported the trial judge's findings. He stated that the trial judge did not find that the evidence against the $2^{nd}$ defendant was wanting, but, rather that the particulars of fraud were somewhat lacking. She however, held that as along as fraud was pleaded and there was evidence to support it, court was entitled to find that it exists. She relied on the authority of Israel Kabwa vs Martin Baniba Musigwa, Supreme Court, Civil Appeal No. 52 of 1995.

On evidence, Mr. Ayigihuga stated that there was evidence on which the trial judge found that the $2^{nd}$ appellant knew the beneficiaries of the late Erisa Musoke when he lived in the vicinity of the land which the beneficiaries occupied. According to him, the appellant had actual notice of occupation and development on the land by the beneficiaries of the estate of the late Erisa Musoke. The evidence which the trial judge considered attributed fraud directly to the 2<sup>nd</sup> appellant. He cited Kampala Botllers Ltd vs Damanico (U) Ltd. Supreme Court Civil Appeal No. 22 of 1992. In his view, the acts of the 2<sup>nd</sup> appellant as disclosed by the evidence, constituted dishonesty on his part intended to defeat the interest of the respondent and the estate of the late Erisa Musoke in the land.


Mr. Ayigihugu conceded however, that the $2<sup>nd</sup>$ appellant bought the land after the caveats had been removed, but submitted that before he was registered as proprietor of the land, the $2^{nd}$ appellant had notice of the respondent's interest in the land.

. In my view, the questions postulated by the above arguments are the following:-

- **1.** whether the trial judge was justified to entertain the issue of fraud when the particulars were inadequate and not proved. - $2.$ whether the $2^{nd}$ appellant had notice of the respondent's interest in the land. - $3.$ whether knowledge by the 2<sup>nd</sup> appellant of the respondent's unregistered interest in the land affect the 2<sup>nd</sup> appellant's title obtained in disregard of that interest.

The first issue is a matter of law. The trial judge found that the particulars of the fraud pleaded were somewhat lacking, but held that so long as there was evidence to support the fraud, court was entitled to find that it exists. She found comfort in the decision of the Supreme Court in Israel Kabwa vs Martin Banoba Musigwa, SCCA No. 52 of 1995.

The facts of that case were briefly as follows:-

Erikanjeru Kabyebara was the registered proprietor of the land which included the suit land. Yosefu Banoba, the deceased father of the respondent, had purchased the suit land, some 10 acres, from the said Kabyebara. He paid for it by instalments from 1958 to 1967. Banoba was unable to have the land registered in his name before he died. Kabyebara himself died before Banoba.

Appellant later claimed to have also purchased 32 acres of land which included the suit land from the same Kabyebara between 1960 and 1965, but that he could not have it registered in his name until 1977 when Mukidi, the son and executor of Kabyabara's estate signed the necessary papers. At the time of the trial, Mukidi had died.

The respondent's parents had built a semi permanent house on the land they bought. Appellant conceded to that fact and that the respondent's parents were his neighbours. At some point, that house of the parents of the respondent was burnt down. This was after Banoba had died. Dispute over the suit land erupted between the appellant and the respondent between 1985 and 1987 when the respondent attempted to survey the land for purpose of being registered as its proprietor. The appellant who was holding an influential position of a District Administrator (DA) in Hoima District, a neighbouring district to Kabarole District, chased away the respondent's surveyors. The appellant was later registered as proprietor of the land amidst protest.


The respondent however, subsequently successfully challenged the appellant's title in the High Court. He alleged fraud without giving in any detail the particulars thereof. At the trial, fraud was not specifically framed as an issue. However, evidence had been given on it and counsel on both sides addressed court on it. In the course of his judgment, therefore, the trial judge found that there was fraud.

On appeal, the Supreme Court approved the procedure adopted by the trial judge because despite the inadequacy of the particulars of the fraud pleaded, evidence had been led on it and counsel on both sides had addressed court on it. on the evidence, the Supreme Court agreed with the trial judge that there was evidence to show that the appellant had notice of the unregistered interest of the respondent when the appellant purchased the same land from Mukidi. There had been a live dispute between the appellant and the respondent over the suit land between 1985 and 1987 when the respondent's surveyors were chased away by the appellant who was then DA of Hoima, a neighbouring district to Kabarole district.

In the case before us, the trial judge found that there were similarities between Kabwa's case (supra) and the instant case, and followed the decision of the Supreme Court in Kabwa's case. She entertained the issue of the fraud pleaded despite the inadequacy of its particulars. I agree with the learned trial judge. The facts of Kabwa's case (supra) and the facts of the instant case are strikingly similar. Like in Kabwa's case, fraud in the instant case was pleaded, but the particulars had not been given in any detail. Evidence however, had been led on it and counsel on both sides did address court on the issue. In my view, the trial judge was justified to have made a finding on the issue of fraud.

Mr. Kavuma-Kabenge contended that there was no evidence to show that the 2<sup>nd</sup> appellant knew of the respondent's interest in the suit land when he bought it and subsequently, had his name registered as its proprietor.

I perused the evidence on record as it is my duty so to do under rule 29 of the Rules of this court. I found that the evidence of Musoke Kakayira (PW1), Abdu Ssimbwa (PW3),<br>Musisi Sekyaya PW6, and Levi Luyombya (PW7) indicates that Walusimbi, the 2<sup>nd</sup> appellant, had notice of the respondent's interest in the land when he bought it from the $1^{st}$ appellant and subsequently, had his name registered as its proprietor. He had lived in the vicinity of the land for 13 years before he bought it and knew that the respondent and his siblings were occupying and or developing the land. When he went to survey the land, the 2<sup>nd</sup> appellant encountered stiff resistance from the children of the late Erisa Musoke. They reported the matter, not only to the Local Council (LC) of the area, but also to the police. DW1 (1<sup>st</sup> appellant) admitted that there was such a resistance to the survey. DW3, the husband of the 1<sup>st</sup> appellant even went further. He stated that he had told the $2^{nd}$ appellant everything before selling him the land. He told the $2^{nd}$ appellant that people were making claim over the land. According to DW3, the $2^{nd}$ appellant replied that he knew that those people had no claim. They were thieves and squatters. In<br>this testimony as DW4, the $2^{nd}$ appellant, admitted that his wife had informed him of a light resistance.

These pieces of evidence, particularly that of DW3, leave no doubt that the 2<sup>nd</sup> appellant had notice of the respondent's interest in the land before he bought it and subsequently, registered himself as its proprietor.

Mr. Kavuma-Kabenge submitted that knowledge of unregistered interest perse does not impute fraud. It does not affect a title obtained in disregard of such an interest. He relied on an Australian case of Mills vs Stokman (1967) 116 CLR 61 as authority for that proposition. I must point out that foreign decisions are only persuasive authorities. Where there is a local decision of a superior court on a point contrary to the foreign decision, the local decision prevails because it is binding on the local courts.

In the instant case, Kabwa's case (supra) on which the trial judge relied, cancelled a certificate of title obtained in disregard of an unregistered interest. That is the decision of the Supreme Court of this country. On the doctrine of stare decisis, therefore, it is binding on all courts in this country until it is otherwise overruled. In these circumstances, therefore, I would not fault the trial judge's finding that the 2<sup>nd</sup> appellant was not a bona fide purchaser for value without notices. Grounds 5 and 7 would therefore fail.

This now leads me to ground 4, where the gist of the complaint is that the trial judge erred in relying on the sale agreement on which no stamp duty had been paid. Mr. Kavuma-Kabenge submitted that such a document could not be used for any purpose including lodging a caveat. In the absence of the sale agreement, he argued, there was no evidence to support the respondent's claim. For instance, there was no evidence to show that the suit land formed part of estate of the late Erisa Musoke. The respondent (PW1) himself expressed doubt as to whether the suit land formed part of the estate of the late Erisa Musoke, yet to succeed, the respondent had to prove that it formed part of his late father's estate. According to learned counsel, even the caveats lodged on the order of the High Court could not advance the respondent's case because it was not clear what it was about. In any case, it was not removed at the instigation of the $1^{st}$ appellant. The only remedy available to the respondent was under section 183 of the RTA.

For the respondent, Mr. Ayigihugu contended that there was overwhelming evidence that the 1<sup>st</sup> appellant committed fraud and the trial judge rightly found so. He pointed out that the trial judge found that the evidence on record revealed that:-

- The 1<sup>st</sup> appellant and her husband (DW3) needed money badly. Then **1.** DW3 told the 1<sup>st</sup> appellant about the land and she visited it in 1990, where she found people and building on the land. - She then went to the Land office, where she found 3 land titles in the $2.$ name of her grandfather the late Tito Lukanika. - The information from the Land office revealed the presence of caveats $3.$ and supporting document showing that the late Tito Lukaninka had sold part of the land to the late Erisa Musoke.

$\cdots \geq 1$

$siz$

**SE TO MODELLA SE SE**

- $4.$ The 1<sup>st</sup> appellant, through her lawyers, caused the caveats to be removed in disregard of the late Eria Musoke's interest. - $$ Thereafter, she sold part of the land to the 2<sup>nd</sup> appellants without first satisfying the interest of the estate of the late Erisa Musoke.

According to Mr. Ayigihugu, the trial judge found the conduct of the 1<sup>st</sup> appellant as revealed by the evidence on record, contrary to the duties of an Administrator of an estate of a deceased. Learned counsel submitted that the 1<sup>st</sup> appellant did not depend exclusively on the sale agreement to know about the interest of the estate of the late Erisa Musoke in the suit land. She had been confronted by Levi Luyombya (PW7) who told her that the land belonged to his father. The building and the people on the land were evidence of Musoke's interest in the land. It was therefore, an act of dishonesty on the part of the 1<sup>st</sup> appellant to sell the land to the $2^{nd}$ appellant without first investigating and/or satisfying the claim.

Mr. Ayigihugu dismissed the argument that the land did not form part of the estate of the late Erisa Musoke as untenable. He submitted that there was overwhelming evidence to show that the land belonged to the late Erisa Musoke. The respondent's case did not depend exclusively on the sale agreement. There was evidence of exclusive possession and management of the land by the late Erisa Musoke and his children for 63 years without any adverse claim from anybody. The 1<sup>st</sup> appellant had the caveats on the titles of the late Lukanika fraudulently removed. As Administrator of the estate of the late Tito Lukanika, the 1<sup>st</sup> appellant was bylaw bound to first satisfy the interest of the estate of the late Erisa Musoke before selling the land.

Mr. Kayuma-Kabenge submitted that the caveats lodged by order of the High Court were not removed at the instigation of the 1<sup>st</sup> appellant. Mr. Ayigihugu rejected that submission as not supported by evidence. He submitted that the letter written by Ms Kaala & Co Advocates on behalf of the $1<sup>st</sup>$ appellant asked for the removal of all the caveats. Therefore, he argued, section 183 of the RTA was not applicable since the removal of the caveats was not a result of negligence or mistake of the Registrar. It was the result of a collusion between the $1<sup>st</sup>$ appellant and the Registrar to defeat the interest That was why the caveats were removed without serving the of the respondent. necessary notices to the caveators. It was fraud.

I have already adequately dealt with the issue of the unstamped sale agreement earlier in this judgment. I discussed whether or not it is liable to stamp duty under the Stamp Act. If it is liable and was admitted in evidence unstamped, what happened? Can it be challenged in the subsequent stage of the proceedings? What is the effect of section 68 of the Stamp Act? I have explained these earlier in this judgment. I shall not repeat it.

On whether the suit land formed part of the estate of the late Erisa Musoke, it is important to point out that the petition for grant of Letters of Administration was not tendered in evidence. It therefore, does not form part of the evidence on record. However, there is


overwhelming evidence that the late Erisa Musoke had interest in the land in question. For example, Nakiganda Kate (PW5) knew the late Erisa Musoke was the owner of the land because he sold her the lower part of the land which extended across the road. She is still occupying it undisturbed. Abdu Nviiri Ssimbwa (PW3) who grew up with some of the children of the late Erisa Musoke, knew that the land belonged to the late Erisa Musoke. He had eucalyptus trees on it and used to sell the eucalyptus trees. Donoxio Musisi Sekyaya (PW6) knew the land as belonging to the late Erisa Musoke who had lent a part of the witness to brew local beer and grow sweet potatoes and yams.

The evidence of DW3 revealed that when they needed money badly, he told the 1<sup>st</sup> appellant about her grandfather's land. On that information, the 1<sup>st</sup> appellant visited the land in 1990, where she did not only find people and development on the land, but also informed by Levi Luyombya that the land belonged to his late father, Erisa Musoke. The 1<sup>st</sup> appellant confirmed this information when she went to the Land office. There, she found caveats and supporting document showing that her grandfather the late Tito Lukanika, had sold part of the land to the late Erisa Musoke.

Upon obtaining grant of Letters of Administration of the estate of the late Tito Lukanika, the 1<sup>st</sup> appellant properly had her name registered as the administrator of his estate. However, instead of first satisfying the interest of the estate of the late Erisa Musoke as she found through the caveats, the 1<sup>st</sup> appellant through her lawyers, M/s Kaala & Co Advocates, applied for the removal of all the encumbrances on the titles. It is therefore, not true that the caveats were not removed at the instigation of the $1^{st}$ appellant. Thev were removed at her request. As stated earlier in this judgment, the removal was done without giving the necessary notices to the caveators. Even the caveats lodged by order of the High Court were removed without compliance with section 168 of the RTA. Thereafter, the 1<sup>st</sup> appellant sold part of the land to the 2<sup>nd</sup> appellant, fully aware that the interest of the estate of the late Erisa Musoke in the land had not been satisfied. This was clearly an act of dishonesty on the part of the 1<sup>st</sup> appellant. It is fraud.

Ground 4 would therefore, also fail.

Learned counsel on both sides did not in their written submissions address court on ground 8. The complaint in this ground is that the trial judge erred in law and fact when she failed to properly evaluate the evidence. I do not agree. I have re-appraised the evidence on record and could not fault the trial judge's evaluation of the same. This ground would therefore, also fail.

Finally, I now consider grounds 1 and 2. The gist of the complaint in these grounds is that the trial judge gave to the respondent reliefs that had not been prayed for, nor that had been supported by evidence.

Mr. Kavuma-Kabenge contended that there was no prayer for specific performance to support the order that the 1<sup>st</sup> appellant as the administrator of the estate of the late Tito Lukanika was to satisfy the interest of the estate of the late Erisa Musoke in accordance with caveat lodged in 1932. He complained that there was no evidence to support the

**IN STREET OF STREET**


finding that the respondent and his siblings are bona fide occupants of the land comprised. in KLA Instrument 201910.

Mr. Ayigihugu did not agree. He contended that the trial judge properly gave those reliefs because one of the issues framed at the commencement of the trial required her to consider whether the respondent was entitled to any remedies/reliefs that were supported by evidence. He concluded that the reliefs that were granted were all supported by

The complaint in these grounds arose from the following orders of the trial judge:-

- $(a)$ .<br>.......................... - $(b)$ .<br>. . . . . . . . . . . . . . . . . . . - The first defendant as administrator of the estate of late TITO $(c)$ LUKANIKA to satisfy the interest of the estate of the late ERISA MUSOKE in accordance with the caveat lodged in 1932 in accordance with section 285 of the Succession Act."

The respondent's plaint was concluded thus:-

"WHEREFORE the plaintiff prays for judgment inter alia:

- $(a)$ As against the first defendant: - $(i)$ for a declaratory order that the plaintiff is a bona fide occupant of the land comprised under instrument # KLA 201910; - for an order restoring land in original Block 5 Plot #584 out of $(ii)$ Block 5 Plot # 777, 1120 and 1121 and/or tracing the same as is directly affecting the estate of Erisa Musoke for registration by the Registrar of Titles unto the Plaintiffs' names, jointly with other administrators of the estate of the late Erisa Musoke: - for a declaratory order that instrument # 21006 of 22/12/1932 and (iii) KLA 189917 were wrongfully removed or cancelled; - general damages for declaration of land/interest aforesaid; $(iv)$ - exemplary damages for determination of the caveats in issue, and $(v)$ for perpetuation of fraud; - interest on (a) (iv v) above at 30% p.a. from the date of removal $(vi)$ of the caveats aforesaid till payment.

**计图题图图**

#### As against the said defendant: $(b)$

- (i) For a declaratory order, that he is not a bona fide purchaser for value without actual notice. - $(ii)$ For an order cancelling the title deed of Block 5 Plot 1120 and/or vesting the same unto the plaintiff with other administrators of the estate of the late Erisa Musoke. - $(iii)$ General damages for trespass. - $(iv)$ Interest on (d)(iii) above at 30% p.a from the date of filing suit till payment in full. - $(v)$ An order for permanent injunction doth issue. - $(c)$ Costs of the suit against the defendants:

Issue No (iv) framed at the beginning of the trial reads thus:-

# "Whether the plaintiff is entitled to any remedies/reliefs."

It is clear from the above extract that the Plaint does not contain prayers for specific performance. However, issue No. iv above sufficiently required the trial judge to consider from the evidence adduced if the plaintiff was entitled to any remedies/reliefs. I think that the trial judge was justified to make the orders she made. There is evidence that the interest of the estate of the late Erisa Musoke had not been satisfied. There is also evidence showing that after purchasing the land, the late Erisa Musoke took possession of it. He and his children made some development thereon. The evidence of their occupation of the land after purchase supports the trial judge's findings that the respondent and his siblings were bona fide occupants of the land.

In the result, I would dismiss the appeal with costs here and in the court below. As Mpagi-Bahigeine and Byamugisha, JJA both agree, the appeal is dismissed on those terms.

Dated at Kampala this....................................

# G. M. OKELLO **JUSTICE OF APPEAL**

## **REPUBLIC OF UGANDA**

**\*** *\$*

*1*

## **IN THE COURT** OF **APPEAL** OF **UGANDA**

## **AT KAMPALA**

#### **CORAM: HON MR JUSTICE G. M. OKELLO, JA HON LADY JUSTICE A. E. N. MPAGI-BAHIGEINE, JA HON LADY JUSTIC C. K. BYAMUGISHA, JA**

## CIVIL APPEAL **NO. 40** OF **2004**

## BETWEEN

## **1. ROSEMARY NALUBEGA**

**APPELLANTS 2. YAHAYA WALUSIMBI:::**

### AND

# **JACKSON KAKAYIRA RESPONDENT**

[Appeal from the judgment and orders ofthe High Court ofUganda sitting at Kampala (Bbosa J) dated 5th May '03 in High Court Civil Suit No. 119/99].

## **JUDGMENT OF A. E. N. MPAGI-BAHIGEINE, JA**

**<sup>I</sup>** have read the draft judgment of Okello, JA. I entirely agree with it and have nothing useful to add.

. November, .2004 day of. Dated at Kampala this .26th

> **A. E. N. Mpagi-Bahigeine Justice ofAppeal**

> > **SS**."<sup>X</sup>

**4**

## THEREPUBI. ICOFTXfANDA

## IN THE COURT OF APPEAL OF UGANDA

## AT KAMPALA

*CORAMy*

**3**

*HON. MR. JUSTICE G. M. OKELLO, JA HON. LADYJUSTICEA. E. N. MPAGI-BAHIGEINE, JA HON. LADYJUSTICE C. K. BYAMUGISHA, JA*

## CIVIL APPEAL NO 40/04

## BETWEEN

1. ROSEMARY NALUBEGA

APPELLANTS 2. YAHAYA WALUSIMBI:::

## AND

JACKSON KAKAYIRA RESPONDENT

*[Appealfrom thejudgment and orders ofthe High Court ofUganda sitting at Kampala (Bbosa J) dated 5th May '03 in High Court Civil Suit No. 119/99*

## Judgment of Byamugisha, JA

I had the benefit ofreading in draft form the lead judgment that was prepared by Okello, JA. I agree with the reasons he has stated in dismissing the appeal. I, would therefore, dismissed the appeal in the terms proposed by him.

'.2004;

•November;. of-•••--

C. K Byamugisha Justice of Appeal