Registered Trustees of Kampala Institute v Departed Asians Property Custodian Board (Civil Suit No. 610 of 1992) [1993] UGHC 94 (10 May 1993)

Full Case Text

# The How. Mr. Justice F. M. S. Mtende THE REPUBLIC OF UGANDA

### IN THE HIGH COURT OF UGANDA AT KAMPALA

### CIVIL SUIT NO. 610 OF 1992

THE REGISTERED TRUSTEES OF PLAINTIFF KAMPALA INSTITUTE

## **VERSUS**

DEFENDANT

THE DEPARTED ASIANS PROPERTY CUSTODIAN BOARD

### BEFORE: THE HON. MR. AUSTICE G. M OKELI

#### JUDGMENT:

The Plaintiff, the Registered Trustees of Kampala Institute, brought this suit for a declaration by this court of their rights. They in particular sought declaratory orders:-

(1) That the expropriated properties Act 1982 applies to the suit land.

(2) That the Plaintiff are entitled to a certificate of repossession in respect of the suit land and

(3) Cost of the suit.

The background to this suit is briefly as under:- The Plaintiff is a corporate Trustees having been registered in 1932 under the Trustees Incorporation Act new ap. 147 of laws of Uganda. It was entrusted inter alia with the holding of properties for the benefit of the members of the Kampala Institute which is a non propfit making members club. These properties include lands on plot No. 1 Bombo "oad and on plot No. 38 Buganda Road. On plot No. 1 Bombo Kaad were constructed a Tennnis court and Badminton court for the recreation of members. On plot No. 38 Buganda Road was constructed the club house. These lands were together known as LVR 127 Folio 24. They were held by the Plaintiff on a lease for 49 years as from 1932. For ease of reference I shall henceforth refer to these properties

The club was originally for the Goan Community in Uganda. But, in 1968, the membership was thrown open to all races. It thus became a multiracial club. With the expulsion in 1972, by the Military Recime of non citizen Asians from Uganda, most of the manners of this club as well as members of the Board of Trustees left the country. On the Board of Trustees, only one member, a British citizen can remained in the country.

On $4/12/\sqrt{2}$ , the prisons Department of the Ministry of Internal Affairs tock over the suit land and converted the club Merso into a Mess for the prisons Senior Officers. Following that take-over by the Government of the day of the suit land, the management thereof was rested in the defendant custodian Board.

In 1983, the plaintiff applied to the defendant under the provisions of the exprenriated properties Act 1982 for repossession of the suit land. But, the defendant rejected the Plaintiff's application on the ground that the Plaintiff's lease over the suit land had already expired and the land had reverted to the controlling authority. Dissatisfied with that decision. The Plaintiff instituted this suit.

At the commencement of the hearing of the case. four issues were framed as under:-

- (1) Whether the expropriated properties Act 1982 applies to properties held by Trustees registered under the Trustees Incorporation Act. - $(2)$ Whether the suit property was acquired by the military Regime so as to bring it under the provisions of the Expropriated Properties Act 1982. - $(3)$ Whether the defendant was entitled to refuse the Plaintiff's application for repossession and - $(4)$ Whether the Plaintiff is entitled to the reliefs sought.

The Plaintiff called the evidence of two witnesses in an attempt tc establish its case. The witnesses testified on the Plaintiff's ownership of the suit land. A certificate of title showing the plaintiff as the registered proprietor of the suit land was received in evidence and marked Exh. Pl. They also testified on how the prison Department tock over the suit land from the Plaintiff on 4/12/72 when most of the Plaintiff's members had fled the country. They further testified on how the management of the suit land was by law vested in the defendant custodian Board. The witnesses further testified on their subsequent application to the defendant for the repossession of the suit land and how the defenant rejected their application and their reason for the refection. A letter dated 15/7/92 from the defendant in proof of the rejection by the defendant of the Plaintiff's application was received in evidence and marked Exh. P2.

There was no serious dispute from the defendant of the above evidence. In fact the defendant adduced no evidence to rebut these given by the plaintiff's witnesses. The defence raised by the defendant in paragraph 6 of its WSD. and which was later argued at the hearing is based on law rather than on facts. It is that the defendant had a valid power to manage the suit land before the lease thereon expired. But, that when the lease the expired, the defendant lost or relinguished management and land to controll. ing authority - KCC and was therefore justified in rejecting the Plaintiff's application since it (defendant) no longer had legal authority or power to deal with the suit land.

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I propose to consider the issues in the order in which they were xramed. Issue No. 1 is whether the expropriated properties . Act 1932 applies to properties held by -Trustees registered under the Trustees incorporation Act. In my understanding, the question raised in this issue can simply be put thus ''whether the expropriated properties Act 1982 applies to properties held by a corporate body or a company.

Hr. Maloba for the defendant contended that a corporate body wi? perpetual succession holds its properties also in perpetuity. That its properties can not be taken over under the decree, governing expropriation. He submitted that such a taking-over would be illegal and the expropriated properties Act 1982 could not apply to it, He relied on Lutaaya vs. Gandesha and Anor. (1986) HOB 46 where it was held in effect that where the taking over of property by the. military Regime was illegal, it was of no legal effect.

Counsel submitted that in the instant case, the plaintiff was a corporate body with perpetual succession having been registered under the trustee Incorporation Act now Cap 147 Laws of Uganda. That the purported take-over of the suit land held by the Plaintiff on 14/12/72 was illegal and of no legal effect. That the expropriated properties Act I982 therefore can not apply to it. *r*

/\* x For the,Plaintiff, it was retorted by Mr. Byenkya that there was nothin^'in the expropriated properties Act 1982 of any Decree eovernino expropriation of properties that excluded the acquisition of properties held by corporate bodies. He dismissed the decission in Gandesha\*s case above as in -applicable to this case because the take over did not become illegal merely because the property taken was held by a corporate body. He argued that section 1 (2) of the

expropriated properties Act 1982 did not limit the application of the Act so long as the property was taken over by the Military Government. in whatever mannner. That the incident of 4/12/72 fell, squarely within the meaning of section 1 (1) (CC) of the expropriated properties Act 1982 which covered anyform of appropriation. He relied on the Supreme court civil Appeal No. 12/92.

Gokaldas Laximidas Tanna Vs, (1) Sr. Rosemary Munyinza $(2) D. A. P. C. B.$ $.14$

From the above arguments of both counsels, it is fairly clear to me, that both counsels agreed that properties or businesses to which expropriated properties Act 1982 applied werethose which had first been vested in the Government under the Asset of Departed. Asians Decree 27/73 and later under the same Decree revested in the custodian Board for management. I share that view. Section 4 of Decree 27/73 spelt out those properties or businesses which vested in the Government. These were properties or businesses of ncn citizen Asians in respect of which properties no information. and accuments had been submitted to the Minister under section 2 of the Decree, Section 12 (2) of Decree 29/73 introduced two caterories of properties or businesses that could vest in the custodiam Board by statutory Instrument. Thesewere properties which. were abandoned by a departed Asian. Secondly, those properties. which were left by a departed Asian in such a way that no adequate arrangement was made for its proper and efficient management. These last two categories of properties and businesses covered the properties or businesses of non citizen Asian as well as citizen Asians. The Key word is Asian. The owner of properties affected under section 4 of Decree 27/73 must be a non citizen of Asian extraction. Similarly the properties affected under section 12

In Gan<5zesha!s case above, the 1st defendant was a Ugandan citizen Asian. The second defendant was a company whose shares were wholly owned by the 1st defendant arid his wife. The wife owned only two of the many shares. The rest wore held by the 1st defendant.

It was held that the properties of the\* second defendant . company were owned by the 1st defendant and his wife.

temporarily The 1st defendant and his wife had '• : / left the country \* for some reasons. But, before leaving, the 1st Defendant instructed someone in the country to manage his businesses. Consequently, the shares of the 1st defendant in the 2nd Defendant could not vest in the Government under section 4 of Decree 27/73 because he was an Asian of Ugandan citizen. His properties could not also.vest in the custodian Board under section 12 (2) of Decree 29/73 reasons:—

(1) there was nd evidence that the Board had issued statutory Instrument investing the properties in it.

(2) The 1st defendant had left adequate arrangement for the proper and efficient management of his properties or businesses in the country during his absence.

The shares of the wife of the 1st defendant in the 2nd Defendant • I company could not also vest in the Government under section 4 of Decree 27/73 because of.lack of proof of her race. It was not established that she was of Asian extraction.

It was\,held therefore that the purported take over of the 1st defendant's properties was illegal and of no legal effect.

I am persuaded by the reasoning in that case. I agree with it. In the instant case, there is no dispute that the suit land was held by the Plaintiff on 4/12/72 when armed prison officers took it over from the Plaintiff. The Plaintiff is a corporate body. It is not disputed. But, no evidence was led as to who the other members of the Board of trustees were or their race at the time of the take over. Joseph ftlmeida PW1 a Goan of British Citizen was one of the members of the Board of Trustees at the material time. The membership qf the club was however multiracial. Some members- were f African Ugandans, some were Europeans and others wefe Asians of diverse citizenship. It is not clear from the evidence what race the members of the Board of Trustees\*were. In those circumstances the properties held by such a corporate body could not. vest in the Military Regime under section 4 of Decree 27/73 because of lack of proof of their race.. As stated here earlier, this section applied only **to** properties of non Ugandan citizen Asians,

In this case, it was not. established that the members of the Plaintiff Board of Trustees were all of Asian extraction. To that extent the Plaintiff can not be construed to be\* an Asian, Consequentlyt . the- properties held by it could Hot have been vested in the Government under section 4 of Decree 27/73\* It could not have alse been vested in the Government under the properties and business (acquisition) Decree 11/75 because it was. npt included in the schedule to the decree as havinr been so acquired,

I ,

I need also add that the properties held by the Plaintiff could not have been vested in the custodian Board under section 12 (2) of Decree 29/7J. **for fiiftllai**

(a) It was not established that the Corporate body eould be construed as Asian ( The Interpretation Special Provision - Act) S. 2. ' '

(b) There was no evidence that a Statutory Instrument was over issued vestinc: the properties in the custodian Board•

As stated above, the expropriated properties Act 1982 applied to .hose properties which had vested .in the Government by virtue of section 4 of Decree 27/73 and later re-vested in the custodian Board for management or those which were vested in the custodian Board by statutory Instrument under section 12 (2) of Decree 29/73\* It can. not therefore apply to the ■'suit' land because it was never vested in the Government either under Decree 27/73 or under Decree 11/75 nor in the custodian Board under section 12 (2) of Decree 29/73\*

On whether the suit property was acquired by the military Regime so as to bring it within the provisions of the expropriated properties Act, Mr. Muloba contended for the defendant that the military Regime did not acquire the suit property in view of section 2(3) of the Trustees Incorporation Act now Cap. 147 of Laws of Uganda. This section gives to an incorporated Trustees perpetual succession.

Section 1 (1)(c) of the expropriated properties Act appears to be wide., It appears to cover properties in whatever manner appropriated or , taken over by the military Regime. This provision was considered in Gandesha's case above. ' The interpretation given of the extent of that section in that case was that it covered only properties which were lawfully acquired by the Military- Regime. I agree with that interpretation. For a property to be covered under section 1 (1 )(c) of the Expropriated Properties Act, it must have been appropriated or taken over by the Military Regime either under section 4 of Decree 27/73\*•».or acquired under Decree 11/75 or by the Custodian Board under section 12 (2) of Decree 29/75.

In the instant case, the act of 4/12/72 when the armed prisons officers took over the suit land could not fall under any of the provisions mentioned above. It was therefore an illegal act. The

ownership of the property was not established to be Asian\* That illegal act had not legal consequence. The property of the Plaintiff was not lawfully acquired and The Sxpropriated properties Act 1982 was not'applicable tn it..

The third issuewas whether the defendant was entitled to refuse the Plaintiff's application for- repossession.

Mr. Maloba contended for the defendant was entitled to refuse the Plaintiff's application because the lease' on which the defendant based their power to manacre the suit land had expired. That on the expiry of the Lease, the defendant's power over the;.land..was lost to the controlling authority. He relied on section 22 (7). of .the Public Lands Act. This section reverts the leased public land to the controlling authority on expiry of the lease. Counsel also cited a passage at Page of Magery's "Manual on R^l Property. This passage states the general rule that a lease for a fixed period automatically determined when the. fixed period expired\*

He submitted that in the instant case, the Plaintiff's lease over the suit land was for a fixed period. That the period had expired and the lease was automatically determined. That the defendant was therefore justified in rejecting the plaintiff's application.

Mr. Lyenkya on his part contended for the plaintiff that the lease ovex the suit land did not expire because it was extended by section 1 (2)(b) of the Ixpropriated Properties Act 1982. He argued that the section'over-rode the provisions of other laws like the Public-lands Act. That in consequence the reversion of the land to the

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controlling authority was camelled. under section 1 (2) (a) of the Expropriated properties Act 1982. He relied, on Tanna's case above.

I am afraid I dr not arrce with Mr. Byenkya's argument because Expropriated Properties Act 1982 was not applicable to the facts of this case. The A^t applied to those properties or businesses which were lawfully vested in the Government and later transferred to the custodian Board for management. These were properties or businesses which vested in the Government under A of Decree 27/75 or under section 1 of Decree 11/75\*

Justice Oder said on pas\*e 8 of his leading judgment in Gokaladas L. Tanna vs. SR Rase Mary and Anor. Civil Appeal Mot 12 of 1992 Supreme Court as follows:- '

"The properties or business which section 1 of the Act (Expropriated Eroperties Act 1982). declared as remaining vested in the . Government -had been earlier vested in the Government by section 4 and transferred to the Departed Asians properties custodian Board by section 15 of the Assets of Departed Asians Decree 1975."

These Non-citizen Asian properties which had vested in the Government under section 4 of Decree 27/75 were those in respect of whinn nr information and documents had been submitted to the Minister under section 2 of that Decree 27/75\* As stated earlier in this judgment\* the suit land -d-i/i not fall in this category because of lack ox proof that the plaintiff was a non\*-Uganda citizen Asian. Decree *2!7/7~5* was concerned with the properties of non-Ugandan citizen Asians.

.,.../11.

The amending Decree No\* 29/73 section 12 (2) extended that category of properties of business that could vest in the abandoned Board by including properties or businesses' which were abandoned by a Departed Asian whether non citizen or citizen or those properties or businesses which no adequate arrangement for its proper and efficient management had been provided\* These, properties or businesses could vest in the abandoned Board by a statutory Instrument.

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Again the suit land did nit fall in this category because it was not4 abandoned. There was no evidence that the plaintiff left the country. The evidence on record showed that one or two members of Trustees were left in the country. The suit land was forcibly taken away' from them on 4/1,2/72. Secondly there was no evidence that a statutory order was #ver issued to vest the suit land in the custodian Board.

The Government could also acquire properties and or businesses whether belonging to a departed Asian or not under section 1 of Decree Properties or businesses acquired under this Decree were listed in the schedule to that Decree. Such properties or businesses so acquired would vest in the G^ernnient by virtue of that Decreee

The suit land did not also fall under this category because it was not included in the. list -on the Schedule to the Decree,

From the above, it is clear that the defendant never had any legal basis for managing the suit land. It had been managing it illegally from the very beginning. For that reason, it is my view that it rightly refused the plaintiff's application. It had not legal authority to manage the suit land and to entertain such application.

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On whether the plaintiff was entitled to the reliefs sought^ r.y answer is in the negative because of the findings in issues No. 1-5 above. The suit land was never lawfully vested in the Government or in the custodian Board under the law. The purported take over of the suit land from the plaintiff by the prisons officers on ^/l2/72 was an illegal act. The Expropriated Properties Act 1932 is therefore not applicable. For these reasons the Plaintiff is not entitled to reliefs sought. Consequently the. suit must be dismissed. So it is ordered, cost for the Defendant.

> ',r

V-A A M G. M. OKELLC . JUDGE ,10/5/93-

Mr. Kihika for the plaintiff

Mr. Muloba for the Defendant

( ---n V '! '• -V A -5A • • \*. •G. M. OKELLO

Judgment delivered.

JUDGE.

10/5/93.