Tanna v Sr. Munyinza and Another (CIVIL APPEAL NO. 12/92) [1993] UGSC 51 (12 January 1993)

# IN THE SUPREME COURT OF UGANDA

AT MENGO

CORAM: S. W. W. WAMBUZI, C. J., A, ODER, J. S. C., H. PLATT, J. S. C.) $\epsilon$ d:

### CIVIL APPEAL NO. 12/92

### **BETWEEN**

APPELLANT GORALDAS LAXIMIDAS TANNA : $\mathbf{r}$ $\mathbf{1}$ $\sim$ $\cdot$

#### A N D

SR. ROSEMARY MUNYINZA) $D. A. P. C. B.$

是读 5月

$10070$

$\mathcal{W}^{\mathrm{out},\mathrm{in}}_{\mathcal{H}}$ $\sqrt{8}$ $\mathcal{C}^{(1)}_{\alpha\beta}$

$\mathbb{S}^{\infty}_{\mathrm{irr}}.$ $\frac{1}{2}$

記言

$\mathcal{L}^{\mathcal{L}}$

$\mathbb{R}$

$\mathcal{L}^{\text{max}}$

$\mathbb{C}^{d_{n-1}+}_{\mathbb{C}}$ $\mathbb{E}[\mathcal{G}(\mathcal{G})] =$

Balla

$\mathcal{O}_{\mathcal{O}_{\mathcal{O}_{\mathcal{O}_{\mathcal{O}}}}}$

$\cdot \cdot$ $\mathbf{1}$ $\colon$ RESPONDENTS

$\delta$

P. O. Fox 10304

(Appeal from the Judgement and decision of the High Court of Uganda at Kampala **SOWATA** (Mr. Justice A. O. Ouma) dated 28th March, 1991)

$I$ N

HIGH COURT CIVIL SUIT NO. 707 OF 1987

JUDGEMENT OF WAMBUZI, C. J.

$\mathbf{A}(\mathbf{f})$ I have had the opportunity reading in draft the judgement prepared by Oder J. S. C. which sets out the facts. The three grounds of appeal argued before us were,

- $"1.$ The learned trial Judge failed to adequately interprete the various legislations governing assets of Departed Asians and hence erred in law holding that Uganda Commercial Bank, a in mortgagee of the suit property could not realise its security by sale and in holding that its only $\cdot$ remedy was to sue the 2nd Respondent. - The learned trial Judge erred in law in holding 2. the Mortgage Decree, 1974 was inapplicable to the suit property. - $\overline{3}$ . The learned trial Judge erred in law in holding that the required procedures were not followed in exercising the power of sale by the mortgagee and in not holding that as a purchaser of property in a public auction, the appellant could not be affected by any irregularity followed prior to the sale and therefore the appellant obtained good title."

Before dealing with the arguments relating to these three grounds, I must observe that Mr. Sekandi, learned Counsel for the the Expropriated respondents, relied on section 1 of two Properties Act. 1982. I observe also that as far as is relevant to this appeal, the agreed facts between the parties in the lower court were stated as follows,

> $"1.$ Before 16/6/86 the suit property was registered in the names of Vipinchandra Dhavantal Desai a 'departed Asian' and thus the property has since August, 1972 been expropriated by Government and under the control of the 2nd defendant.

> > . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . .

The 2nd defendant became legal owner of the suit 4. property all circumstances.

. . . . . . . . . . . . . . . . . . . .

- 6. On the 22nd February, 1982 the suit property was advertised for sale in Uganda Times newspaper and was sold the same day to the plaintiff. U. C. B. executed a transfer for the property into the names of the plaintiff and released the mortgage. On 6th May, 1982 the plaintiff was registered as proprietor of the land. $-15$ - The plaintiff's registration as proprietor was $7.$ subsequently cancelled upon which he sued the<br>Chief Registrar of Titles by High Court<br>Originating Summons No. 28 of 1983. The plaintiff was then registered as proprietor pursuant to an order by the court in that cause. Instrument No. 226117 upon which the plaintiff was registered as a Court Order. - 8. At the time the plaintiff was registered, the suit property was being occupied by the 1st<br>defendant as a tenant of the 2nd defendant who<br>had been the legal owner of the property by<br>virtue of Decree No. 27 of 1973 which vested all<br>the expression of the property by the expropriated properties of the departed Asians under the 2nd defendant. - $9.$ The 1st defendant refused to recognise the plaintiff's claim for ownership and thus refuse: to enter into a tenancy agreement with the plaintiff.

. . . . . . . . . . . . . . . . . . . .

$\sim$

$\mathcal{L}$

$\mathcal{H}^{\text{L}}_{\text{L}}(x)$

$11.$ 2nd defendant further The claims that t.he transaction between the Uganda Commercial Bank and the plaintiff in respect of the suit property was nullified by the Expropriated Properties Act of 1982 and the property continues to be vested in Government and under the management of the 2nd defendant........."

I observe lastly that in paragraph 3 of the respondent's written statement of defence, it is pleaded that,

> "The 2nd defendant avers that the suit property was affected by the Expropriated Properties Act which vested the legal ownership to the 2nd defendant."

It is fairly clear that the 2nd respondent by its pleadings and also by the agreed facts, its claim of ownership was based on the Expropriated Properties Act, 1982. Both parties agreed that the suit property was originally registered in the names of a-"departed Asian", under agreed fact 1. Both parties agreed the 2nd respondent became legal owner of the suit property under agreed fact 4. The appellant recognises the claim by the 2nd respondent that the transaction between the Uganda Commercial Bank and the appellant in respect of the suit property was nullified by the Expropriated Properties Act, 1982 under agreed fact 11.

It follows in my view that as the sale of the property was admitted by both parties under agreed fact, 6, one of the issues in the lower court should have been whether or not the sale was nullified by the Expropriated Properties Act, 1982.

This position notwithstanding the parties agreed as follows in the lower court,

"We therefore severally bind ourselves that upon finding the issue in the positive (i) Judgement should be entered in favour of the plaintiff. And upon finding the issue in the negative (ii) Judgement should be entered in favour of the defendants."

> $\overline{\mathbf{i}}$ $\overline{a}$

As I see it judgement thus given is not correct in law unless the issue relating to the effect of section 1 of the Expropriated Properties Act, 1982 is answered one way or the

I do not think that parties can agree to oust the other. jurisdiction of the court to return the proper verdict on the pleadings and facts of the case.

Further I must observe that even if all the grounds of appeal were to succeed, that is, if this Court found,

- $1.$ That Uganda Commercial Bank as mortgagee had power to sell and realise its security, and - That the Mortgage Decree, 1974 was applicable to 2. the suit property, and - That a purchaser of property at a public auction $3.$ is not affected by any irregularity followed prior to the sale and that the appellant obtained a good title,

the conclusion to be reached is that there was a valid sale. This would leave the question whether such a sale was nullified by the Expropriated Properties Act of 1982, as the 2nd respondent claims unanswered.

It | would have been preferable for counsel for the respondents to have given notice under rule 91 of the Rules of this Court of grounds for affirming the decision of the superior court on grounds other than or additional to those relied by that court. However, in the circumstances of this appeal we allowed learned counsel for the respondents to put forward arguments relating to section 1 of the Expropriated Properties Act, 1982 to enable the court re-appraise the issues and decide the real issue between the parties.

As far as I can gather from the judgement of the lower court, the trial Judge does not appear to have considered the provisions of section 1 of the Expropriated Properties Act. He : did however, set out the provisions of section 5(2) and concluded. as follows,

> "I would find it hard to think of any reason, legal or $\overline{\mathbb{Q}}$ otherwise, justifying the Act protecting a mortgage subsisting at the commencement of the Act, that is to say, when the Act came into force on 21st February, 1983, and throw overboard or nullify a mortgage which

意識 was in force at the expropriation of such property even if the mortgage was discharged or released as was $\frac{1}{2}$ the case in this present case." $\%$ With respect, I am unable to say that the decision of the t was in respect of section 1 of the Expropriated Properties Ford. $\sim$ In so far as is relevant, section 1 of the Expropriated operties Act provides as follows, (1) Any property or business which was, $\mathbf{!!1}$ . $\mathbb{R}^{n-1}$ 经行工 vested in the Government and transferred to $(a)$ the Departed Asians Property Custodian Board under the Assets of Departed Asians Decree, 1973, $(b)$ . . . . . . . . . . . . . . . . . . . $(c)$ . . . . . . . . . . . . . . . . . . . . shall, from the commencement of this Act, remain vested in the Government and be managed by the Ministry of Finance. avoidance $\verb|of|$ doubt, and $(2)$ $\quad \text{For} \quad$ the notwithstanding the provisions $\quad\texttt{ of }\quad$ any written law governing the conferring the title to land, property or business and the passing or transfer of such title it is hereby declared that, (a) any purchases, transfers and grants of, or dealings $\quad \texttt{of} \quad$ any whatever kind in, such property or business are hereby nullified; and (b) where any property affected by this section

$\overline{a}$

$\ddot{\cdot}$

was at the time of its expropriation held under a lease or an agreement for a lease, or any other specified tenancy of whatever description, and where such lease, agreement for a lease or tenancy had expired or was terminated, the same shall be deemed to have continued, and t o continue in $\hspace{0.1cm} \texttt{force}$ until such property has been dealt within accordance with this Act; and for such further period as the Minister may by regulations made under this Act prescribe.

$(3)$ The Minister may, by statutory order, appoint, any person or body to manage any<br>property or business vested in the Government under sub-section (1) of this section."

Having regard to these provisions I have no doubt in my mind that the sale and transfer of the property in this appeal were nullified and accordingly I would agree that this appeal should $\cdot$ . $\overline{a}$ fail.

As Platt J. S. C. agrees with judgement and orders proposed by Oder J. S. C. this Court orders as proposed by the learned Justices of the Supreme Court.

Given under my hand and the Seal of this Court this 12th Day of $\mathbf{1}$ January, 1993.

> Sad: S. W. W. WAMBUZI CHIEF JUSTICE

I CERTIFY THAT THIS IS A TRUE COPY OF THE ORIGINAL.

**B. F. B BABIGUMIRA** REGISTRAR SUPREME COURT

Certify that this is a true Cepy of the Urightal Suffered Court of Ufere.

$\mathbf{6}$

IN THE SUPREME COURT OF UGANDA

. AT MENGO

RAM: WAMBUZI, C. J., ODER, J. S. C. & PLATT, J. S. C.)

# CIVIL APPEAL NO 12 OF 1992

## **BETWEEN**

KALDAS LAXIMIDAS TANNA : $\cdot \cdot$ $\mathbf{1}$ **APPELLANT** $\ddot{\phantom{a}}$

A N D

SR. ROSEMARY MUNYINZA

$\div$ **RESPONDENTS** $\ddot{\phantom{a}}$

DEPARTED ASIAN PROPERTY CUSTODIAN BOARD

$2.$

(Appeal from the Judgement and decision of the High Court of Uganda at Kampala (Ouma, J.) Dated 28th March, 1991).

$\mathbf{I}-\mathbf{N}$

## HIGH COURT CIVIL SUIT NO. 797 OF 1987

### JUDGEMENT OF ODER, J. S. C.

This is an appeal against the Judgement of the High Court of Uganda at Kampala, dated 28th March, 1991 in Civil Suit No. 707 of 1987. The Appellant was the unsuccessful plaintiff in the suit and the respondents the successful defendants. Originally only the 1st respondent was sued. The 2nd respondent was joined subsequently.

The appellant's claim gainst the respondents were for vacant possession of a house on Plot No. 12 Hannington Road, Kampala (hereinafter "the suit property"), arrears of rent, mesne profits, damages and declaration that the 2nd respondent had no interest, legal or equitable in the suit property. The claims were countered by the respondent in their respective written statements of defence, the combined effect of which was that the suit property was subject to the Expropriated Act, 1982 which had vested it in the 2nd respondent. It was also averred that by reason of the provisions of that Act, the appellant's registration as the proprietor of the suit property had been illegal and of no effect.

$\mathbf{1}$

suit property was occupied by the 1st respondent as the **it** of the 2nd respondent, but the former refused to recognise ppellant's claim of ownership or to enter into a tenancy ment with him. Consequently, he brought the action in this

At the trial of the suit only one issue was framed by $It$ was:ment of both the parties.

"Whether or not given the agreed facts that the suit property could law in the plaintiff by $B\tau$ . the Uganda ommer the mortgagee and the plaintiff obtained good title or nothing passed and property still belongs to the 2nd defendant and the 1st defendant a mere tenant of the 2nd defendant."

In his considered judgement the learned trial Judge found the respondents and answered the issue in the negative, smissing the suit. Hence this appeal.

judgement of the learned trial Judge has been attacked in $\cdot$ ee grounds of appeal, stated in the memorandum as follows:-

The learned trial Judge failed to adequately interpret the various legislation governing assets of Departed Asians and hence erred in law in holding that Uganda Commercial Bank, a mortgagee of the suit property could not realise its security by sale and in holding that its only remedy was to sue the 2nd respondent.

The learned trial Judge erred in law in holding that the Mortgage Decree was inapplicable to the suit property.

The learned trial Judge erred in law in holding that the required procedure was not followed in exercising the power of sale by the mortgagee and in not holding that as $\overline{a}$ purchaser of property in a public auction, the appellant could not be affected by any irregularity followed prior to the sale and, therefore, the appellant obtained good title.

$\Gamma$ Before considering the grounds of appeal. I wish to say something about what I consider to have been errors in the manner in which this case was handled at the trial and on the grounds of appeal. As I understand it, the main, and perhaps the only, point for decision in this case was whether the sale and transfer of the suit property to the appellant was nullified by the provisions of Section 1 of the Expropriated Properties Act of Both the respondents in their written statements of 1982. defence relied on the effect of that Act as the ground for resisting the appellant's claims. In the agreed facts the second reiterated its contention that the transaction Respondent between the Uganda Commercial Bank and the appellant was nullified by the provisions of the Act. In view of all this, I find it amazing, to say the least, that the only issue which was framed at the trial did not mention the effects of the Act on the transaction.

In their submissions before the learned trial Judge, Counsel for the appellant and the respondents also referred to the Expropriated Properties Act 1982. The appellant's Counsel contended that the mortgage in question having been executed in 1966 and the subsequent sale of the same property having been the result of an enforcement of the mortgagee's rights that mortgage, sale, in his view, was nullified by the Act. the The respondents's Counsel, on the other hand, reiterated the respondents' reliance on the Act for contending that the transaction was nullified. In these circumstances, it is also surprising that the learned trial Judge omitted to consider the effect of the Act at all on the transaction in question which, with respect, I think it was his duty to do. As it happened, the learned trial Judge found that the sale of the suit property to the appellant was nullified, apparently not because of the application of Section 1 of the Act to the situation before him, but because the mortgagee was prohibited by Sec. 28 of the Assets of Departed Asians Decree, 1973 the only remedy available to the mortgagee being to recover the debt by court action.

$\boldsymbol{4}$

The grounds of appeal as set out in the memorandum are also vague on what I have referred to as the main issue in this case. One would have expected the grounds of appeal to have stated in what way (if any) the decision being appealed against was wrong (if that was the contention) regarding the effect of Section 1 of the 1982 Act. In addition, I also think that the respondents should have given a notice for confirming the decision of the trial court under Rule 91 of the Rules of the Court, given that the suit could have failed for reasons other than those on which it was dismissed by the learned trial Judge. Another irregularity worth of note is that at the commencement of the trial the parties purported to agree in the following terms.

> "We therefore severally bind ourselves that upon finding the issue in the positive (i) Judgement should be entered in favour of the plaintiff. AND upon finding the issue in the negative (ii) Judgement should be entered in favour of the Defendants."

We found such agreement objectionable on at least two grounds.

The first is that by doing so the parties sought to tie in advance the hands of the learned trial Judge in his judgement. The parties also appeared to have attempted to oust the function of the court to arbitrate fairly the dispute between the parties and to come out with decisions that appeared just in the opinion of the court. This, in my opinion, parties cannot and should not do.

The second objection is that the agreement would have the effect of asking for a judgement in favour of one or other of the parties whether or not such a judgement was contrary to any legal provisions.

In the circumstances, this court thought that there were grounds on which we could have refused the parties to argue the appeal and to have ordered a retrial of the suit. We, however, did not do so. We instead gave leave to the appellant and the respondents under Rule 101 of the Rules of this Court to argue the effect of Section 1 of the Expropriated Properties Act, 1982

on the sale of the suil property, though the same had not been made a ground of appeal, a cross appeal or for a notice of the judgement of the trial Court, under Rules 90 and 91 respectively of the Rules of this Court.

With regard to the possibility of a retrial, we thought that if the court of retrial might reach the same conclusion regarding the application to this case of the provisions of Sec.1 of the Expropriated Properties Act as this Court would do, then a retrial would serve no useful purpose. In the event we declined to order a retrial.

Mr. Nangwala, learned Counsel for the appellant in his submissions appears to have made the following points: First. that since the mortgage agreement gave U. C. B. as the mortgagee the right to sell the Suit Property in case of default by the mortgagor, the bank had properly exercised that right under Sec. 9 of the Mortgage Decree, 1974 by selling it to the appellant; second, that the learned trial Judge came to the wrong conclusion by holding that under Sec. 28 of Decree No.27 of 1973, the bank as the mortgagee of a Departed Asian was prohibited from selling the Suit property; third, that the appellant having bought the suit property as the highest bidder at a public auction, his title was not vitiated by any irregularity concerning notice to U. C. B. as the mortgagee, to the 2nd respondent as the mortgagor prior to the sale; fourth, that neither the mortgage in question which was exercised in 1965, nor the sale of the Suit Property which was carried out on 22nd January, 1982 were nullified by the Expropriated Properties Act which came into force on 21st February, 1983; and fifth, that by virtue of the provisions of Section 56 of the Registration Titles Act, the appellant's registered title to the Suit Property cannot be defeated as no fraud was alleged and provided against him.

Mr. Sekandi, Counsel for the respondents submitted that as the Suit Property was an expropriated property, it was vested in the Government. This meant, therefore, that it was affected by the provisions of Section 1 of the Expropriated Properties Act.

$-$

Consequently, the registration of the transfer of the Suit Property to the appellant having been carried out after the Act had come into force, it meant that the sale and transfer was nullified by the Act. Regarding Sec. 56 of the Registration Titles Act, Mr. Sekandi submitted that that Section did not apply due to the operation of the 1982 Act.

As I have said elsewhere in this judgement the main point for decision in this appeal, in my view, is the effect of Section 1 of the Expropriated Properties Act, 1982. What is the validity of the sale of the Suit Property to the appellant in relation to the provisions of the Act? The relevant provisions of Section 1 of the Act state as follows:-

"1. Any property or business which was,

- $(a)$ Vested in the Government and transferred to the Departed Asians Property Custodian Board under the Assets of Departed Asians Decree, 1973 - $(b)$ . . . . . . . . . . . . . . . . . . . .

$\cdot$ $\cdot$

$(c)$ . . . . . . . . . . . . . . . . . . . .

> shall from the commencement of this Act, remain vested in the Government and be managed by the Ministry of Finance.

- 2. For the avoidance of doubt, and notwithstanding the provisions of any written law governing the conferring of title to land, property or business and the passing or transfer of such title it is hereby declared that, - $(a)$ any purchases, transfers and grants of, or any dealings of whatever kind in, such property or business are hereby nullified; and - Where any property affected by this Section was at the $(b)$ time of its expropriation held under a lease or an agreement for a lease, or any other specified tenancy of whatever description, and where such lease, agreement for a lease, or tenancy had expired or was terminated, the same shall be deemed to have continued, and to continue in force until such property has been dealt with in accordance with this Act; and for such further period as the Minister may by regulations made under this Act prescribe."

This Act, in my view, was the culmination of various statutes which had previously applied to what is commonly known as the property or business of "Departed Asians". It's purpose,

$\mathbf{1}$ .

## as stated in the preamble, was

"to provide for the transfer of the properties and businesses acquired or otherwise expropriated during the Military regime to the Ministry of Finance, to provide for the return to the former owners or disposal of the same by Government and to provide for other matters connected with or incidental thereto."

Section $1(1)(a)$ provides that any property or business which was vested in the Government and transferred to the Departed Asians Property Custodian Board under the Assets of Departed Asians Decree, 1973 shall, from commencement of the Act, remain vested in the Government and managed by the Ministry of Finance. The Properties or businesses which Section 1 of the Act declared as remaining vested in the Government had been earlier vested in the Government by Section 4, and transferred to the Departed Property Custodian Board by Section 13, of the Assets of Departed Asians Decree, 1973. In the circumstances all that Section $1(1)$ of the Act seems to have done is to have vested such properties or businesses back in the Government. In addition, Section $1(2)(a)$ of the Act also nullified certain transactions with regard to such properties or businesses. As I understand it, the meaning of Section $1(2)(a)$ of the Act appears to be $this:-$

- (i) It nullied any - - (a) purchases, - (b) transfers and grants of or - (c) dealings of whatever kind in - (ii) properties now vested in the Government. - (iii) Such transactions were nullified notwithstanding the provisions of any written law governing the conferring of title and the passing or transfer of such title to $(a)$ land, - $(b)$ property or - $(c)$ business.

The suit property in the instant case had been owned by a departed Asian prior to 1972. As the agreed facts at the trial indicate, the Suit Property was expropriated by the Government

Consequently February, 1983. Asians Property circumstances there and put under the control of the Departed Custodian Board since that time. In the would be no doubt that the Suit Property was one of which the Expropriated Properties Act, 1982 applied. Section 1(a) of the Act vested it back in the Government and brought it under the management of the Ministry of Finance. in my view, if any of the transactions listed in Section 1(2)(a) above was carried out in respect of the Suit Property, such transaction was nullified by that Section, if the transaction was effected between the time when the Suit Property was first vested in Government by the Assets of Departed Asians Decree, 1973 and the time when the Act of 1983 came into force, namely on 21st those to

a The Further, according to the agreed facts the Suit Property was sold to and purchased by the appellant on 22nd February, 1982 in the process of enforcement by U. C. B. of its rights of sale as mortgagee. Consequent to the sale and purchase U. C. B. transferred the title of the Suit Property to the appellant, purchase and transfer in question were, in my view, nullified by Section 1(2)(a) of the Act notwithstanding any written law under which U. C. B. was entitled to sell and transfer the Suit Property as the mortgagee to the appellant.

The sale to and the <sup>I</sup> Decree, 1 before the sale. purchase by appellant having been nullified by the Act of 1982 , <sup>I</sup> do not think that it is necessary to consider in this appeal whether or not the procedure of sale was carried out in accordance with the provisions of the Mortgage 1974 , or whether or not notice was given to the mortgagor For the same reasons, <sup>I</sup> also think that it is I not necessary to consider the effect on the transactions in jquestion of the provisions of Section 56 of the Registration of I Titles Act (Cap. <sup>205</sup> ).

In the result *I* would dismiss this appeal with costs. Dated at Mengo this 12th day of January, 1993.

> Sgd: A.fl. O. ODER JUSTICE.. OF.. TH E \_ SUPREME\_COURT

*a true* <sup>|</sup> *<sup>I</sup> Cetiiy that ^.i<; (e Copy* (.'/ (,'/c iur/p'innfll

**r**

r /

## IN THE SUPREME COURT OF UGANDA

AT MENGO

(CORAM: WAMBUZI, C. J., ODER, J. S. C, & PLATT, J. S. C.)

CIVIL APPEAL NO. 12 OF 1992

## **BETWEEN**

GOKALDAS LAXIMIDAS TANNA : : : : : APPELLANT

$A N D$

SR. ROSEMARY MUNYINZA 1.

$: \qquad : \qquad : \qquad \text{RESPONDENTS}$ $\ddot{\phantom{a}}$ $2.$ DEPARTED ASIANS PROPERTY CUSTODIAN BOARD

> (Appeal from the Judgement and<br>decision of the High Court of<br>Uganda at Kampala (Ouma, J.) date 28th March, 1991)

> > $I$ N

HIGH COURT CIVIL SUIT NO. 707 OF 1987

JUDGEMENT OF PLATT, J. S. C.

I agree with the judgement and orders proposed by Oder J. S. C. and have nothing to add. Dated at Mengo this 12th day of January, 1993.

> Sqd: H. G. PLATT JUSTICE OF THE SUPREME COURT

I CERTIFY THAT THIS IS A TRUE COPY OF THE ORIGINAL.

$\mathbf{I}$

B. F. B. BABIGUMIRA REGISTRAR SUPREME COURT

$\sim 10^{-1}$

Continut $\cdot$ this is a true Copy of $\ldots$ luriginal come Court of Upanda