TSMP (U) Limited v Commissioner Land Registration & 2 Others (Civil Suit 14 of 2016) [2024] UGHC 318 (14 May 2024)

Full Case Text

## THE REPUBLIC OF UGANDA

### IN THE HIGH COURT OF UGANDA AT JINJA

### **CIVIL SUIT NO. 14 OF 2016**

**TSMP (U) LTD::::::::::::::::::::::::::::::::::::**

### **VERSUS**

- 1. COMMISSIONER LAND REGISTRATION - 2. NANTAMBALA JOYCE - 3. JINJA DISTRICT LAND BOARD ::::::::::::::::::::::::::::::::::::

# BEFORE: HON. LADY JUSTICE FARIDAH SHAMILLAH BUKIRWA NTAMBI

#### **JUDGMENT**

## **Background**

The Plaintiff filed this suit for a declaration that it is the owner/proprietor of the land and property comprised in plot 24 Spire Road, Jinja (herein after referred to as the suit land/property); a declaration that the Defendants are trespassers and a nuisance on the suit land; an order to the 1st Defendant to cancel the Freehold certificate of title issued on the suit property in the name of the $2nd$ Defendant; a permanent injunction restraining the $2nd$ and $3rd$ Defendants, their successors. assigns, agents, employees/servants and anyone acting in their stead however described from dealing, entering, transacting or doing anything on the land comprised in plot 24 Spire road. Jinia: general damages for trespass and nuisance; exemplary/ punitive damages; interest; and costs.

It is the Plaintiff's case that on the 28th December 1995, it purchased the suit property from Jinja Garage Ltd for a consideration of Ugx 31,500,000/= which executed a transfer deed in its favour. The Plaintiff contends that Jinja Garage Ltd had a 49-year lease on the suit property effective 1st December, 1955 but in 1972, the said property was expropriated by the then government of Uganda. However, on 1st April 1992, the said property was repossessed by Jinja Garage Ltd.

It is further contended that on 28th December 1995, Jinja Garage Ltd sold the suit property to the Plaintiff who since then to-date has been in possession of the same and has been paying its property rates and utility bills. In 2001, the suit property was gutted by fire which burnt original documents relating to the ownership of the suit property among others. The same was reported to the Police Fire Brigade which eventually put out the fire.

The Plaintiff alleges that the 2nd Defendant illegally and fraudulently obtained a freehold certificate of title to the suit property since there was and still is a substituting lease on the suit property

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acquired by the Plaintiff from Jinja Garage Ltd. The said freehold Certificate of Title was issued in violation of an order to the High Court maintaining the status quo.

The 1st Defendant in its defence contended that it rejected the application for a special certificate of title whereupon the reasons were forwarded to the applicants. It contended that the Plaintiff never availed it with a copy of the repossession certificate as proof of ownership since the land in question is affected by the Expropriated Properties Act.

The $2nd$ Defendant in her defence contended that the Plaintiff is not entitled to the prayers sought. She also contended that the Plaintiff does not have a certificate of repossession and that there is no minute or valid lease or title or other proof of ownership in favour of the Plaintiff and as such, the Plaintiff has no cause of action. She further contended that she applied for a freehold title in 2014 and the same was granted under minute Number JDLB/044/2015 which offer was accepted through payment of the premium. She also contended that the offer initially made to the Plaintiff had been rescinded by the Jinja District Land Board. It was the 2nd Defendant's contention that the Plaintiff does not have any minute that granted it a lease over the suit property or any clearance from the Area Land Committee and as such has no claim over the 2nd Defendant's land.

The 3rd Defendant contended that in its capacity as a successor in title to the former controlling authorities, it received an application from Okalang Law Chambers dated 3rd March 2008 on behalf of Jinja Garage Ltd, applying for a lease extension in favour of the said Jinja Garage Ltd for Plot No. 24 Spire Road. It also denied that the Plaintiff's lease was still running since the lease of Jinja Garage Ltd had expired in 2004. It contended that it processed the application and granted a lease extension in favour of the Plaintiff but that later, it received a letter from Departed Asians Property Custodian Board claiming that the suit property comprised in Plot No. 24 Spire Road was under its management. In that view, it rescinded minute JDLB 45/22/08 upon which the lease renewal was granted to the Plaintiff and that the Plaintiff was at liberty to sort out its matters with the Departed Asians Property Custodian Board. It also denied that the Plaintiff's lease was running up to 2024. It further contended that on the recommendation of the Area Land Committee and given that the lease of the suit property had expired in 2004, the 3rd Defendant granted the 2nd Defendant's application.

#### **Legal Representation**

The Plaintiff was represented by Counsel Godfrey Malinga and Juma Kinyiri of M/s Malinga, Kinyiri & Co. advocates, the 1st Defendant was neither present nor represented, the 2nd Defendant was represented by Counsel Martin Asingwire of Asingwire & Partners while the 3rd Defendant was represented by Counsel Onesmus Tuyiringire of Tuyiringire & Co. Advocates.

Counsel filed a Joint Scheduling Memorandum in which the following issues were framed for resolution by the court: -

- 1. Whether the suit property was repossessed by its former owner, Jinja Garage Ltd. - 2. Whether the purchase of the suit property by the Plaintiff from Jinja Garage Ltd was valid.

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- 3. Whether the lease on the suit property expired. - 4. Whether the Defendants have trespassed on the suit property. - 5. Whether the Defendants jointly and severally committed fraud against the Plaintiff in respect of the suit land. - 6. Whether the parties are entitled to the reliefs prayed for.

# Summary of the evidence by the Plaintiff.

At the hearing, the Plaintiff presented two witnesses, Kamayo Rashid who testified as PW1 and Bob Napinder Singh Dhillon who testified as PW2.

PW1, Kamayo Rashid, during his cross-examination testified that it was D/ASP Nasongo who authored the fire accident report and not him.

PW2, Bob Napinder Singh Dhillon testified that the Plaintiff owns the suit property having purchased it on 28th December 1995 from Jinja Garage Limited, the then registered proprietor for a consideration of UGX 31,500,000 and that a transfer deed was executed in its favour by Jinja Garage Ltd. That the Plaintiff assumed possession of the suit property and has since then used the building thereon as a store for its business and has also been paying property rates for the suit property to Jinja Municipal Council.

It was also his testimony that on 1st April 1992, Jinja Garage Ltd repossessed the suit property from the Government of Uganda after the same had been earlier expropriated in 1972 by the then military Government of Uganda and that the repossession was verified by the Plaintiff company before purchase. That on 11th November, 2001, the suit property was engulfed by a fire which destroyed the property including all the valuable documents relating to the ownership of the suit property and that the incident was reported to the Police fire brigade the day it happened. On 10th September 2004 the Plaintiff through its lawyers applied for the issuance of a special certificate. That a lease extension registered in the names of the Plaintiff as transferees thereof which was granted by Jinja District Land Board.

While pursuing the issuance of a special certificate of title, the Plaintiff learnt that the 2nd Defendant had applied to the Departed Asians Property Custodian Board for the suit property falsely claiming that she was in occupation of the same and yet the Plaintiff has been in occupation of the suit property since its purchase from Jinja Garage Ltd in 1995. That the 2nd Defendant applied to the Departed Asians Property Custodian Board (DAPCB) seeking a recommendation and allegedly obtained a temporary allocation from DAPCB. That the Departed Asians Property Custodian Board wrote to the 1st Defendant claiming that the suit property was under its management and therefore a certificate of title should not be issued to the Plaintiff unless clearance was given by it.

The Plaintiff complained to the Police and the Inspectorate of Government with the belief that the actions of the 2nd Defendant and the Departed Asians Property Custodian Board all pointed to a fraudulent scheme to deprive it of its property. That the Police carried out its investigations and

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conclusively reported that the Plaintiff owns the suit property. Subsequently Departed Asians Custodian Board wrote to the Registrar of Titles asserting that it had accordingly withdrawn its letter dated 4th August 2015. The Plaintiff then wrote to the 1st Defendant bringing to its attention all the aforementioned concerns but that the 1st Defendant has declined to issue a special certificate of title to the Plaintiff to date. That the 1st Defendant together with the 3rd Defendant collided and issued the 2nd Defendant with a freehold certificate of title to the suit property even when the Plaintiff was in occupation with a subsisting lease and yet there was a subsisting interim order granted by this court restraining the 2nd Defendant or any other person from doing anything on the land.

In the Plaintiff's additional witness statement, PW2 further testified that the acting Senior Land Management Officer wrote to the 1st Defendant detailing the history of the dealings on the suit land and also confirmed the existence of a repossession certificate. That the property was no longer a matter of Departed Asians Property Custodian Board and sought the advice of the 1st Defendant on how to conclusively handle the matter. The 1st Defendant then clearly advised that the suit property had been dealt with under the Expropriated Properties Act and advised and the 3rd Defendant to proceed with titling in favour of the Plaintiff.

That it is on the basis of the interaction between the 1st and 3rd Defendant in the letters of 28th October 2015 and 16th December 2015 and the internal memo of 22nd December 2015 that the duo facilitated the 2nd Defendant in obtaining a freehold title while the Plaintiff's lease was subsisting. The process of the 2nd Defendant acquiring the freehold certificate of title was tainted with illegalities and fraud.

In cross-examination, he told court that he couldn't remember if he had obtained the Minister's consent before purchasing the repossessed property. That the Plaintiff purchased the property with the knowledge that it had been repossessed.

# Summary of the 2nd Defendant's evidence.

The 2nd Defendant presented herself only as witness to support her claim. She stated that she is the owner and registered proprietor of the suit land comprised in Freehold Register volume JJA 249 folio 10 Plot 24 Spire Road, Jinja. She applied for the said certificate in 2014 and under minute number JDLB/044/2015, she was given an offer in respect of the suit property which she accepted and paid the required premium. That this offer was preceded by a communication from the 3rd Defendant that the offer of the suit property to the Plaintiff under minute JDLB/45/22/08 of $22/10/2008$ which had been issued in error and had been consequently recalled.

Prior to her application, she conducted a search and discovered that there used to be a title LRV 375 folio 9 that was registered in the names of Jinja Garage Limited which had run for 49 years but that this lease had expired in 2004 and that there was nothing on its pages that mentioned the Plaintiff, neither was there any entry of any repossession on the title. At the time of her application, the property was bushy and unoccupied and that therefore, she did not participate in any fraud.

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In cross- examination, she told court that she applied to the Departed Asians Property Custodian Board to find out whether anyone had repossessed the suit property. She told court that the property was not repossessed at the time of her application. She stated that she was not in possession of the suit property and that the suit property is an empty space with no building.

She took possession of the suit property upon getting a letter from the 3rd Defendant to occupy the property and that she lost possession of the suit property when she found the Plaintiff's guards at the suit property. She told court she had a demarcation form for a certificate of customary ownership.

Counsel for the 2nd Defendant prayed to withdraw the witness statement of DW2, Kalangwa Moses Kalisa from the court record which prayer was granted by this court.

# Summary of the 3rd Defendant's evidence.

The 3rd Defendant called one witness to support its claim. This was Mr. Edward Nume who testified that he is a Senior Assistant Town Clerk stationed at Bugembe. That between 2012 and 2017, he was the Secretary of the 3rd Defendant. That according to the available records, the 3rd Defendant had issued a lease to the Plaintiff dated 22/07/2015 under minute No. JDLB 45/22/08 and it was duly executed. The Departed Asians' Property Custodian Board claimed to be managing the said property and for this reason, the 3rd Defendant rescinded the minute upon which it had allocated/ leased the suit property to the Plaintiff and granted a free-hold interest to the 2nd Defendant under minute JDLB/044/2015 following which the Acting Director Land Management/Commissioner Land Registration cleared the processing for the grant of the certificate of title in favour of the 2nd Defendant and as such, there was no fraud committed by the 3rd Defendant.

In cross- examination, he told court that the 3rd Defendant had issued a lease to the Plaintiff. That extension and renewal are two different things as an extension of lease occurs when the lease still has some time left before its expiry and renewal occurs where the lease totally expired. He told court that an application for conversion of customary tenure to freehold would be approved without some information being filled. That he was not in office at the time the Plaintiff acquired the property.

### Preliminaries.

Before I proceed to resolve the issues raised, Counsel for the Plaintiff in his submissions argued that the Plaintiff had obtained leave of court to amend its plaint which it did and served all the three Defendants. He argued that it was only the 3rd Defendant that filed a defence to the amended plaint and that the 1st Defendant did not while the 2nd Defendant opted to adopt its original defence despite the fact that there were additional paragraphs in the amended plaint that would require specific responses by her. It was his contention that as a requirement by law under Order 8 rule 3 of the Civil Procedure Rules (CPR) and Order 6 rule 8 CPR, allegations in a plaint must be specifically or by necessary implication stated to be not admitted and where that is not done like

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in the instant case, the same shall be taken to be admitted. He cited the case of **Prof. Oloka Onyango & Others Vs Attorney General Constitutional Petition No. 8** where it was held that every allegation in a plaint if not specifically or by necessary implication denied by an opposite party, shall be taken to be admitted. He also argued that the said Defendants cannot depart from their pleadings as per Order 6 rule 7 of the CPR and relied on the case of **Interfreight Forwarders** (U) Ltd Vs. East African Development Bank UCCA No. 33/1992 in support this position.

He then prayed that since the said paragraphs in the amended plaint were not specifically traversed by the $2^{nd}$ and $1^{st}$ Defendants, the same should be deemed admitted.

I have taken into consideration the submissions of Counsel for the Plaintiff. It should be noted that the amended plaint shows an amendment of Paragraph 9 concerning the particulars of fraud by the 2nd Defendant. It should be noted that the 2nd Defendant in her Written Statement of Defence responded to the particulars of fraud alleged by the Plaintiff in the initial plaint. The 2nd Defendant therefore chose to maintain the original Written Statement of Defence as the defence in respect to the amended plaint. This court therefore finds that there is a defence from the 2nd Defendant in respect to the amended Plaint and shall proceed to decide the case on its merits.

During the hearing of the case, the 1st Defendant never entered appearance despite having filed its defence. The Plaintiff prayed to proceed ex parte against the 1st Defendant which prayer was granted by this Honourable Court.

### **Resolution of the issues**

#### **Issue one:**

### Whether the suit property was repossessed by its former owner, Jinja Garage Ltd.

Counsel for the Plaintiff contends that according to PEXI (the letter of repossession dated 1st April 1992), the suit property was repossessed by Jinja Garage Limited. It was his argument that the said letter is as good as a certificate of repossession of property to its former owner and that repossession is effective from the date on the same repossession letter. He cited a number of cases to support this position; Jaffer Brothers Ltd Vs Mohammed Maijd Bagalaliwo & 2 Others CACA No. 43/1997; Firdoishali Madafali Keshwani Habib & Another Vs Departed Asians Property Custodian Board & 2 Others H. C. M. C No. 11/2019; Balbinder Singh Gill (Suing through his lawful Attorney) Property Angels Ltd Vs Shadia Ahmed t/a Destiny Beauty Parlour and Departed Asians Property Custodian Board H. C. C. S No. 209/2014 among others.

Counsel for the $2^{nd}$ Defendant argued that the letters issued by the Minister are sufficient to give effect to the law regarding expropriated properties and that although Jinja Garage Ltd repossessed the suit property, it failed to effect the repossession on the title.

Counsel for the 3rd Defendant submitted that the suit property was repossessed by its former owner and the evidence to that effect is the letter dated 1st April 1992 (PEX1) authorizing Jinja Garage Ltd to repossess the property situated at Plot No. 24 Spire Road.

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The law governing the repossession of expropriated property is the Expropriated Properties Act Cap 87 specifically section 4 of the Act states that;

#### Application for repossession.

"Any former owner of property or business vested in the Government under section 2 may, within ninety days of the commencement of this Act, apply to the Minister in writing, and in such form as may be prescribed, for repossession of the property or business".

# Section $6(1)$ of the same Act provides that;

"On receipt of an application made under section 4 relating to property or business in which the Government does not wish to participate, the Minister shall, subject to subsections (2) and (3), after satisfying himself or herself with the merits of the application, issue a certificate authorising the former owner to repossess the property or business."

Regulation 10(3) of The Expropriated Properties (Repossession and Disposal) (No. 1) **Regulations states;**

"Where the Minister has been satisfied with the merits of an application for repossession, he or she shall under his or her hand issue to the applicant a certificate in the form set out in the Second Schedule to these Regulations."

It has not been disputed that Jinja Garage Ltd applied for repossession of the property located on Plot 24 Spire Road LRV 375 Folio 9, Jinja. The application was granted vide a letter marked PEX 1 dated 01.04.1992 from the Departed Asians Property Custodian Board to M/S Jinja Garage Limited. I will quote the contents of the letter below;

"The Custodian Board has confirmed that the documents you submitted regarding the above mentioned property (ies) appear to be in order.

It is therefore in accordance with the law to inform you that you are free to repossess the property and that the repossession is effective from the date of this letter."

One of the questions that arose was whether the letter marked PEX 1 written by the Departed Asians Custodian Board and signed by the Minister of State for Finance is sufficient to act as the certificate of repossession issued by the Minister.

In Jaffer Brothers Ltd Versus Mohamed Magid Bagalaliwo and 2 others CACA No. 43/1997, Engwau JA held that;

"In my view, those letters authorizing the appellant to repossess his property under dispute, have the same legal effect as repossession certificates issued by the same Minister to the former owners pursuant to the provisions of No.9 Act of 1982."

A similar position was held in Firdoshali Mada Tali Keshwani Habib & Another V Departed Asians Property Custodian Board and 2 others, HCMC No. 11/2019;

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I am inclined to agree with my learned brother that the issuance of a letter allowing a former owner to repossess his property suffices as a certificate of repossession envisioned under The Expropriated Properties (Repossession and Disposal) Regulations.

Consequently, I do find that the letter dated 01.04.1992 from the Departed Asians Property Custodian Board to M/S Jinja Garage Limited effected the repossession of Plot 24 Spire Road to M/S Jinja Garage Limited.

### Issue two:

# Whether the purchase of the suit property by the Plaintiff from Jinja Garage Ltd was valid?

It was counsel for the Plaintiff's submission that the suit property was validly purchased from Jinja Garage Ltd, the registered proprietor who had repossessed the same. He argued that the evidence of purchase was the Transfer Deed (PEX2) dated 28/12/1995 which also doubled as the contract between Jinja Garage Ltd and the Plaintiff. That the consideration for the suit property which was paid by the Plaintiff to Jinja Garage Ltd amounted to a sum UGX 31,500,000/=. He further argued that all the elements of a valid contract were present in the transaction evidenced by the Transfer Deed (PEX2) between the two contracting parties and therefore, for all intents and purposes, the purchase of the suit property by the Plaintiff was valid and lawful.

Counsel for the 2nd Defendant cited Section 8 of the Expropriated Properties Act which provides that any property transferred from the Government to a former owner under the Act shall not be sold or otherwise disposed of without the written consent of the Minister until after 5 years from the date of the transfer. He argued that Jinja Garage Ltd repossessed the suit property effective 01/04/1992 as per PEX1 and that the Plaintiff claimed to have purchased the land in December 1995 as per PEX 2 which is only 3 years and 6 months after the date of repossession clearly before the expiry of 5 years provided for in Section 8 of the Expropriated Properties Act. He further argued that the wording of the said section is couched in mandatory terms and that the purpose of the law was to avoid people claiming repossession or purchase and immediately re-selling the land as it would encourage fraud especially in such a transaction as in the instant case where the sale happened in Kenya and Uganda and yet no representative of Jinja Garage Ltd has given any evidence or authority, where there are no original documents and where such transaction of 1995 was not effected on the certificate of title.

He submitted that it is important that the court finds the words of this section mandatory to protect former owners, which is what the law intended. He cited section 54 of the Registration of Titles Act and argued that while Jinja Garage repossessed the suit property under the law, such repossession cannot pass any interest until it is registered and that the same applied to the transfer form. He also argued that the argument that the Plaintiff acquired an equitable interest is not tenable because the suit land is registered land with a title deed and not by the transfer deed.

He also cited Section 95 of the Registration of Titles Act and wondered why the Plaintiff never answered the queries of the Registrar who declined to transfer the suit property to the Plaintiff

Page 8 of 24 without seeing the proper transfer forms or repossession certificate. He further went on to list his concerns (red flags) against the transaction which according to him proved that the Plaintiff did not purchase the property but was rather using court as a conduit for illegalities; which I have taken note of. He then concluded by saying there was no valid purchase between Jinja Garage Ltd and the Plaintiff.

Counsel for the 3rd Defendant, on this issue, also cited Section 8 of the Expropriated Properties Act and argued that the suit property was repossessed on 1st April 1992 and sold to the Plaintiff on 28th December 1995 which was after 3 years and 8 months after repossession before the expiry of 5 years and therefore the sale required the written consent of the Minister.

He went on to submit as to whether the sale was void or not and relied on the case of **Shamsherali** Zaveri Virji Vs F. L. Kadhabhai & 3 Others Civil Appeal No. 81 of 2004 where the Court of Appeal observed that;

"The section (section 8) of the Expropriated Properties Act) does not provide for the effect or consequences of failure to obtain the Minister's consent. That it does not provide whether the transaction shall be null and void and therefore illegal or that it will constitute an offence; and agreed with the liberal interpretation given by the counsel of the appellant, that lack of Ministerial consent would not render the transaction/contract of sale void, but voidable at the instance of the Minister."

He submitted that on the strength of the **Shamsherali Zaveri Virgi case (supra)**, the purchase of the suit property by the Plaintiff from Jinja Garage Ltd was not void but voidable at the instance of the Minister; he/she may grant it at a later stage or withhold it, but as of now, he argued that the sale was not illegal but valid.

I have taken into consideration the submissions of all the parties and note that it is prudent that I begin by referring to Section 8 of the Expropriated Properties Action which provides that:

## 8. Restriction on sale, etc.

"Any person or business transferred to a joint venture company or to a former owner under this Act shall not be sold or otherwise disposed of without the written consent of the *Minister until after 5 years from the date of the transfer.* "

I will agree with Counsel for the 2nd Defendant that this provision is couched in mandatory terms and required the vendor of the land to seek consent in writing from the Minister before they could sell it to the purchaser.

In the instant case, I noted that the purchase of the suit property by the Plaintiff was done after 3 years and 8 months clearly before the requisite 5 years' period. It should further be noted that this agreement to sell was entered without the consent of the Minister as required under Section 8 of the Expropriated Properties Act. As rightly pointed out by Counsel for the 3rd Defendant, this raises a question as to whether the contract of sale becomes invalid since Ministerial consent was not

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sought. Needless to say, it was the vendor's responsibility to obtain the Minister's consent to transfer the suit property to the purchaser.

In Shamsherali Zaver Virji v F. L. Kadibhai & Ors (Civil Appeal No. 81/2004) [2007] UGCA 6 (11 November 2007), Bahigaine JA was tasked to determine whether the trial Judge erred when he held that the failure by the vendor (former owner of the expropriated property) to get consent from the Minister before entering into a land sale agreement rendered the agreement invalid. He held as follows:

"Any property or business, transferred to a joint venture company or to a former owner," under the provisions of this Act, shall not be sold or otherwise disposed of without the consent of the Minister until after 5 years from the date of transfer." Commenting on a similar provision in Section 22 (5) of the Public Lands Act, 1969 (Act No 13/69) in Francis Butagira V Deborah Namukasa SCCA No 6 of 1989, Odoki JSC as *he then was had this to say;*

"..................................... consent. It does not provide whether the transaction shall be null and void and therefore illegal, or that it will constitute an offence. Nor does it say that the transaction shall be *voidable. But it says that the covenant shall be enforceable by the controlling authority.*"

Section 22 (5) (c) of the Public Lands Act 1969 that was discussed in the Francis Butagira case (supra) provides as follows;

In every lease of Public Land,

(a) $\dots \dots \dots \dots \dots \dots \dots \dots \dots \dots$

(*b*) ....................................

(c) there shall be implied except where expressly varied or excepted, as covenants in the lease enforceable by the controlling authority against the lessee that the lessee shall,

(i) Not assign except by will, or sublet the land leased or any part thereof **without** the prior consent of the controlling authority in writing which consent shall not be unreasonably withheld"

A scrutiny of both Section 22 (5) (c) of the Public Lands Act and Section 8 of Expropriated Properties Act demonstrates a common aspect where in both laws, there is a restriction on the transfer of interests in land without the consent of the controlling authority under the Public Lands Act and that of the Minister under the Expropriated Properties Act. Under section 22 (5) (c) of the Public Lands Act, a lessee was not allowed to assign or sublet public land without the consent of the controlling authority. Similarly, the import of section 8 of the Expropriated Act is that a former owner of expropriated property shall not sell the property within 5 years of the repossession except

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with consent from the Minister responsible for finance. It is also important to note that both provisions do not provide for consequences of failure to get the required consent.

Much as the facts slightly differ, they share a principle concerning how this provision was drafted into law. Even when it is couched in mandatory terms, section 8 of the Expropriated Properties Act does not provide for the consequences for failure to adhere to it. It does not provide whether the transaction shall be null and void and therefore illegal or that it will constitute an offence. Neither does it state whether such transaction shall be voidable.

It is important to note that the Minister had up to the 2004 to challenge the validity of the transaction between the Plaintiff and Jinja Garage Ltd. Once the suit land reverted to the Jinja District Land Board, the Minister was functus officio and could not bring proceedings voiding the transaction as it would be moot. Perhaps it is the reason why there is no evidence before this court that the Minister has at anyone one time challenged the said transaction. For that reason, I find it very difficult to move and nullify a transaction where the concerned party did not find a problem with it.

Consequently, I will adopt the approach taken on by my learned brother Bahigaine JA and hold that this contract in this instant is voidable at the instance of the Minister responsible for finance. Consequently, I find that the sale of the suit property between Jinja Garage Ltd and the Plaintiff is valid and enforceable.

I resolve this issue in the affirmative.

## **Issue three:**

## Whether the lease on the suit property expired?

Counsel for the Plaintiff relied on Section 2 (2) (b) of the Expropriated Properties Act to assert that a lease shall continue in force until such a time when the property is dealt with in accordance with the Act. He also cited Regulation 13 of the Expropriated Properties (Repossession and Disposal) No. 1) Regulations S. 1 87-8.

He argued that the leases that were expropriated stopped running from the time they were expropriated in 1972 and resumed running when the Minister of Finance dealt with the property. He argued that Jinja Garage Ltd by virtue of its lease agreement attached to its certificate of title (PEX 13) had a running lease of 49 years effective $1/12/1955$ and by the time of expropriation of the suit property in 1972, the said lease had only run for approximately 17 years leaving an unexpired period of 32 years. He argued that by the time of repossession of the suit property by Jinja Garage Ltd on 1/4/1992, the unexpired period of that lease resumed running and the same would expire approximately on 1/04/2024. To support this position, he cited the case of May Belerio Namiganda & Another Vs Nurban w/o Gulam Hussein Moledina & Another H. C. C. S No. 99/2011 and Hanne Kamulegeya (suing through her agent, Irene Nabiataka Kisingiri) Vs Haji Siragi Zaribwende H. C. C. S No. 417/2006.

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He further argued that even if the lease on the suit property had expired as the Defendants seem to suggest and which the Plaintiff denies, the Plaintiff was to have the right of first renewal as a tenant in possession as held in the decision of **Kampala District Land Board & Another Vs National** Housing and Construction Corporation SCCA No. 2/2004. He contended that the Plaintiff would under the law enjoy the first right to renew its lease on the suit property in preference to any other party, which the 3rd Defendant failed to do when it recommended to the 1st Defendant that a freehold title be granted to the 2nd Defendant.

Counsel for the 2nd Defendant, on this issue, submitted that the lease was granted in 1955 for 49 years and it therefore expired in 2004. He argued that the Plaintiff's argument that the lease was extended by law is misleading. He argued that for the lease to benefit, it must have expired before the minister had dealt in the land and that the lease in question was dealt with in 1992 prior to its expiry in 2004. He also argued that PEX5 is a letter in which the lawyers of Jinja Garage Ltd were asking for a renewal of the lease, the earlier lease having expired and as such the Plaintiff is estopped from denying that the lease never expired. He cited the case of Dr. Adeodanta Kekitinwa and 3 Others Vs Edward Maudo Wakida Civil Appeal no. 3 of 2007 [1998] UGGA 13 where it was observed that when a lease expires, the land automatically reverts to the controlling authority. Any person who remains on the land after expiry of the lease becomes a tenant at sufferance. A tenant at sufferance arises by implication of law not by contract. A tenant at sufferance acquires no interest in the land he/she occupies. He concluded by arguing that the land reverted back to the controlling authority that has since given interest to the $2nd$ Defendant who is the registered proprietor of the suit property.

Counsel for the 3rd Defendant, on this issue, submitted that the suit property was the subject of a lease of 49 years as per PEX 13. He argued that by the time the suit property was repossessed in 1992, its lease was still running, it had run for 37 years remaining with a period of 12 years to expire and therefore Section 2 (2) of the Expropriated Properties Act and Regulation 13 of SI No. 87-8 referred to by counsel of the Plaintiff does not apply to it. He submitted that the lease in respect of the suit property expired in 2004.

I have considered the parties' submissions. Section 2(2) (b) of the Expropriated Properties Act stipulates;

"Where any property affected by this section 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 the 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 the 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."

Regulation 13 of the Expropriated Properties (Repossession and Disposal) Regulations goes ahead to expound on $S.2$ (2) of the Act as follows;

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"For the purposes of section $2(2)(b)$ of the Act, every expired lease, agreement for a lease or other tenancy shall be deemed to continue, after the property has been dealt with in accordance with the Act, for a further period of two years or a period equivalent to the unexpired period of the lease, agreement for a lease or tenancy at the time of expropriation of the property whichever is the greater period."

My learned brother Justice Stephen Mubiru in West Nile Teachers Credit Cooperative Society V Tabu Civil Suit No. 001 of 2011 deciphered section 2(2)(b) of the Expropriated Properties Act below;

"..................................... Act, Cap 87; -

where any property affected by this section 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 the 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 the 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.

The contested property in this suit having been expropriated property, the lease which expired on 1st September 1975, was by operation of the law deemed to have continued in force and managed by the DAPCB until the property was dealt with by the Minister of Finance in accordance with the Act. This dealing occurred on $3^{rd}$ July 1997 when the Minister issued a Certificate of Purchase in the joint names of Agotre Charles and the Plaintiff, as tenants in common in equal shares (Exhibit P. E.12). That became the commencement date for the extended term "for such further period as the Minister may by regulations made under this Act prescribe."

According to Regulation 13 of The Expropriated Properties (Repossession and Disposal) (No.1) Regulations S. I. 87-8;

For the purposes of section 2 $(2)$ $(b)$ of the Act, every expired lease, agreement for a lease or other tenancy shall be deemed to continue, after the property has been dealt with in accordance with the Act, for a further period of two years or a period equivalent to the unexpired period of the lease, agreement for a lease or tenancy at the time of expropriation of the property whichever is the greater period.

Since the expropriation of this property occurred in 1973 with the coming into force of The Assets of Departed Asians Decree, 1973, at which time the lease was left with two years to run, the two-year extension conferred by the above provision means that the lease finally expired on 3rd July 1999, being two years after it was dealt with by the Minister."

Page 13 of 24

In the instant case, it should be noted that the suit property was leased out in 1955 for a term of 49 years ending in 2004. The property was expropriated in 1973 when it still had 31 years left on the lease. The property was effectively repossessed in 1992 when the lease had 12 years left. Regulation 13 of The Expropriated Properties (Repossession and Disposal) (No.1) Regulations above envisions two scenarios concerning leases in respect of expropriated properties. The first scenario is where a lease had expired, it shall be extended for a period of two years from the date of the property having been dealt with by the Minister. The second scenario is where a lease still had an unexpired term at the time of expropriation. In this situation, the property upon being dealt with by the Minister, the former owner shall be allowed to repossess the property for the period of the unexpired lease.

In the instant case, the lease had an unexpired term of 12 years running till 2004 which Jinja Garage Limited was to enjoy when it effectively repossessed the suit property. The decision to sell the property to the Plaintiff in 1995 meant that the Plaintiff had a term of close to nine years left on the lease. The lease expired in 2004 and consequently reverted to the 3rd Defendant as the body that replaced the former controlling authorities.

Counsel for the 2nd Defendant righty cited the case of Dr. Adeodanta Kekitinwa and 3 Others Vs Edward Maudo Wakida Civil Appeal no. 3 of 2007 [1998] UGGA 13 where it was noted that when a lease expires, the land automatically reverts to the controlling authority. Any person who remains on the land after the expiry of the lease becomes a tenant at sufferance. A tenant at sufferance arises by implication of lawvand not by contract. A tenant at sufferance acquires no interest in the land he/she occupies.

I agree with the above decision and assert that when the lease expired in 2004, it reverted to the Jinja District Land Board. The continued stay on the property by the Plaintiff rendered it as a tenant at sufferance with no legal interest in the property. Consequently, I do find that the lease expired in 2004.

However, it is prudent to note that even when the lease expired, the Plaintiff continued to be in possession of the suit land. This therefore initially made the Plaintiff a tenant at sufferance. The Plaintiff attached receipts showing that he has been making payments of ground rent to Jinja Municipal Council annually which are evidenced and marked as A4, A41, A42, A43, A44 in the Plaintiff's trial bundle. This then means that the Plaintiff graduated from being a tenant at sufferance to a tenant at will and therefore had an equitable interest in the suit property.

Conclusively, I find that the lease on the suit property expired in 2004 and since then, the Plaintiff has been in possession of the suit property in the capacity of a tenant at will.

**Issue four:**

Whether the Defendants have trespassed on the suit property?

Page 14 of 24

Counsel for the Plaintiff defined trespass in accordance with the case of **Justine E. M. N Lutaya** vs Stirling Civil Engineering Company SCCA No. 11 of 2002. He submitted that above definitions go a long way in confirming that the Plaintiff having purchased the suit property from Jinja Garage Ltd, the registered proprietors thereof, who also duly repossessed it, it acquired an equitable interest therein and is the owner and therefore can sue in trespass. He cited the case of Halima N. Wakabi Vs Asaba Selevano H. C. C. S No. 64 of 2008 which he argued illustrated the Plaintiff's equitable interest in the suit land as evidenced by the transfer deed (PEX 2) which defined the Plaintiff as the then owner of the suit land. He also argued that the suit property has been in occupation by the Plaintiff since 1995 and to-date utilizes the same as a carpentry workshop and the main store for the imported goods of the company hotel, paying all utility bills and property rates as per PEX 3.

He argued that the $2nd$ Defendant falsely claimed that she was in occupation of the suit property yet the Plaintiff has always been in possession thereof as evidenced by PEX 7, PEX 8, PEX 9 and PEX 10. That the 2nd Defendant obtaining a temporary allocation of the suit property from the DAPCB and thereafter assumed the position of a landlord to the Plaintiff and went ahead to demanding for rent from the Plaintiff coupled with threats of eviction from the suit property through her lawyers in a letter marked PEX 14. That the 2nd Defendant applied for and secured a freehold certificate of title to the suit land while there was still a running lease as per DEX 4 and PEX 13. He further argued that the 3rd Defendant under minute JDBL/044/2015 marked as DEX3 granted a freehold interest to the 2nd Defendant because the file was initiated by the Area Land Committee and forwarded the same to the Board for action and management and on condition that there was no running lease and upon clearance from the DAPCB. He also argued that the 3rd Defendant deliberately ignored the entry on the application form which was admitted and marked PEX 18 by the Area Land Committee to the effect that;

## "the land is premising a commercial house. The committee has not ascertained ownership status....."

He argued that upon that revelation by the Area Land Committee, the 3rd Defendant ought to have carried out proper due diligence particularly with respect to ownership of the suit property, considering that it can only allocate land which is not owned by anybody. That the 3rd Defendant deliberately disregarded the flaws in the 2nd Defendant's application form apparently and went ahead to allocate the suit land to her.

He submitted that 1st Defendant had admitted the allegations of trespass. He also raised a list of concerns which I have taken note of.

Counsel for the $2^{nd}$ Defendant, on this issue, argued that the $2^{nd}$ Defendant is the registered proprietor of the suit land and cannot be called a trespasser. He argued that the 2nd Defendant testified at the locus visit that following her application, she came to the land with workers whom she deployed to fence off the suit land and remove any bushes. That however, the guards of the Plaintiff had her guards forcefully removed. That no evidence of trespass was adduced by the

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Plaintiff and as such, he prayed that court finds that no trespass was proved or can be proved against the 2nd Defendant.

Counsel for the 3rd Defendant, submitted that the Plaintiff is in possession of a building on the suit land. He argued that the only accusation counsel for the Plaintiff can lay against the 3rd Defendant is an act of negligence; that the 3rd Defendant failed to take due care regarding the management of the process that led to the 2nd Defendant being allocated the suit property and as a result suffered loss and damage but that the accusation of trespass does not arise. He also argued that given the fact that the lease over the suit property had expired by the time the 3rd Defendant allocated the suit land to the 2nd Defendant, the Plaintiff would have a hard time to prove negligence because the 3rd Defendant would plead that the suit property had reverted to it as the controlling authority.

I have taken into consideration the submission of all the parties and hold as follows.

I take cognizance of the Supreme Court case of Justine E. M. N. Lutaaya vs Sterling Civil **Engineering Co. SCCA No.11 of 2002** where it was held that trespass to land occurs "when a person makes an unauthorized entry upon land, and thereby interfering, or portends to interfere, with another person's lawful possession of that land". Court in that case added that the tort is committed not against the land but against the person who is in actual or constructive possession of the land.

In order to succeed in this case, the Court of Appeal in Sheikh Muhammed Lubowa versus Kitara Enterprises Ltd CA No. 4 of 1987 observed that one must prove;

- (a) That the disputed land belonged to the Plaintiff. - (b) That the Defendant had entered upon it. - (c) That entry was unlawful in that it was made without permission or that the Defendant had no claim or right or interest in the disputed land.

I have analyzed the Plaintiff's evidence and submissions in support of its claim of trespass against the Defendants. In respect to the first aspect, it has already been resolved that at the end of 2004, the Plaintiff ceased to be the owner of the suit land as it reverted to the 3rd Defendant. I take important notice of the fact that Plaintiff has always been in possession of the suit property. However, the Plaintiff has not adduced adequate evidence to prove that the 1st, 2nd and 3rd Defendants trespassed or entered possession of the suit land during the Plaintiff's occupation and possession of the same.

In the premises, I find that the 1st, 2nd and 3rd Defendants did not trespass or interfere with the Plaintiff's lawful possession of the suit land.

**Issue five:**

Whether the Defendant Jointly and severally committed acts of fraud against the Plaintiff in respect of the suit land?

Page 16 of 24 Counsel for the Plaintiff relied on the case of F. J. K Zaabwe US Orient Bank & 5 Others to define fraud as the conduct of a party calculated to deceive, whether by a single act or combination or by suppression of truth is dishonest. He cited the authority of **Kampala Bottlers Vs Damanico** Ltd SCCA No. 122/1992 where it was held that a party must prove fraud was attributed to the transferee either directly or by necessary implication, that is; the transferee must be guilty of some fraudulent act or must have known of such act by somebody else and taken advantage of such act. He argued that it is a fact that the 2nd Defendant is currently registered as a proprietor of the suit land in freehold and that the Plaintiff is a purchaser of a leasehold interest granted earlier. He cited Section 176 (c) of the Registration of Titles Act Cap 230 which protects a registered proprietor of land against ejected except for fraud, which in the instant case, the 2nd Defendant did by processing and obtaining a freehold certificate in her name while there was a subsisting lease with a leasehold certificate of title.

He argued that the 2nd Defendant during cross-examination stated that she had been to the suit property in 2014 and when asked to describe the suit land, she stated that it was an empty space and that there was no building thereon. This is contrary to the remarks on the application form (PEX 18) by the Area Land Committee which remarked that the land is premising a commercial building," a fact which was established by this court at the locus visit. He also argued that the $2nd$ Defendant in her letter to the DAPCB (PEX 7) stated that she was occupying the suit property and asked for it to be allocated to her and yet during cross-examination, she stated that she was not in possession of the suit land.

He argued that in the instant case, the failure by the $2nd$ Defendant to make reasonable inquiries about the suit property to ascertain whether it was repossessed and whether the lease thereon was still running, who was in occupation thereof and if such person had any interest thereon, and the 2nd Defendant's ignorance or negligence since she admitted not making those inquiries constitutes particulars of fraud on her part. He cited the case of Konde Mathias Zimula Vs Byarugaba Moses & Another H. C. C. S No. 66 of 2007 to support this position.

He also argued that fraud also boiled down to the 3rd Defendant having omitted to establish the ownership status of the suit land even when it was entered on the application form PEX 18 as an observation by the Area Land Committee before granting the freehold certificate of title to the 2nd Defendant coupled with the 1st Defendant having disregarded the reservations pointed out in PEX 16 by the Senior Land Management Officer. He further argued that in effect, all the transactions and processes leading to the grant in freehold and registration of the 2nd Defendant on the suit land were flawed, illegal, null and void for contravening the law.

He also argued that the functions of the 3rd Defendant in regard to allocating land are limited to land that is not owned by any person or authority as provided for under Section 59 (1) (a) of the Land Act, and that the grant of the suit land to the 2nd Defendant by the 3rd Defendant under DEX3 was therefore illegal because the suit land was already owned by the Plaintiff in equity having bought the same from the registered proprietor and lessee, Jinja Garage Ltd.

Page 17 of 24

It was also his argument that the entries on form 23 under PEX 18 were therefore not truthful as the 2nd Defendant has never held the said land customarily or at all, a fact which the 1st and 3rd Defendants ought to have known and that when asked during cross examination about her interest in the suit land, the $2nd$ Defendant stated that she had a lease interest in the suit property.

Counsel for the 2nd Defendant argued that section 176 of the Registration of Titles Act is only relied on by persons deprived of land through fraud. He contended that the Plaintiff did not legally purchase the suit land and the alleged lease expired long ago and that the minute it received from the 3rd Defendant was rescinded which is a contractual issue and not a proprietary interest issue. He contended that the Plaintiff did not plead any fraud on the part of the 2nd Defendant and to support his position, he cited the case of Progressive Group of Schools Ltd Vs Barclays Bank **CACA No. 349 of 2020** that fraud must be pleaded and proved to the required standard. Averments on their own without elaboration on what is dishonest are not sufficient to establish fraud to the required standard.

It was his contention that the 2nd Defendant came onto the land and asked workers to clear the area and that the Plaintiff instead deployed its guards and forcefully removed her. That the Plaintiff's lease was granted in 1955 for 49 years which expired in 2004 and that therefore was no fraud in the claim. His contention was the recommendation of the Area Land Committee that visited the property on application for a freehold certificate of title by the $2nd$ Defendant demonstrated that the land was not occupied and that the ownership of the suit property was uncertain since no one was in possession. He contended that Section 59 of the Registration of Titles Act is very specific that errors and irregularities made in the process of creating a title are not enough to have it nullified and that the title is conclusive proof of the interest of the title holder.

Counsel for the 3rd Defendant, on this issue, argued that the correct position is that there was no running lease over the suit land except that the Plaintiff had a structure on a piece of land over which the lease had expired in 2004. He argued that the 3rd Defendant's failure to establish ownership status of the building on the land, whose lease had expired falls short of fraud but only amounts to negligence. He added that all the Plaintiff had attempted to prove was carelessness or incompetence on the side of the 3rd Defendant but not fraud. He further argued that it was the duty of the 3rd Defendant to act with due diligence so that the Plaintiff's interests are not prejudiced. He added that the 3rd Defendant ought to have investigated as to whom was the owner of the building on the suit land and ought to have made a decision on that point and on finding that the building belonged to the Plaintiff given that the Plaintiff was in possession of the land, then the application of the 2nd Defendant should have failed for there was no customary interest vested in the 2nd Defendant that she was converting into a freehold interest.

He argued that it is the Plaintiff who had an unexhausted equitable interest in the suit land, by way of a solid strong building on the land who should have been considered to be granted a lease or a freehold if it qualified. However, the 2nd Defendant through the negligence of the 3rd Defendant, got allocated the suit land together with the Plaintiff's building, which building was in the process

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allocated to the $2^{nd}$ Defendant without the $2^{nd}$ Defendant paying to the Plaintiff adequate compensation which contravenes Article $26(2)(b)(i)$ of the Constitution.

It was further his argument that the 3rd Defendant is enjoined by Regulation 22 of the Land Regulations 2004 to have regard to Regulation No. 21 of the Land Regulations which stipulates that in making its decisions, it shall comply with rules of natural justice and so in allocating the suit property to the 2nd Defendant without any comment on the fate of the Plaintiff's building on the suit land, the 3rd Defendant had condemned the Plaintiff unheard on its right to fair and adequate compensation for the taking over of its building on the suit land. He cited the case of Hassan Ali Ahamed Vs Tororo Municipal Council & Rev. Obbokech H. C. C. S No. 362 of 1987 where it was held that Section 56 of the Registration of Titles Act states that such a certificate is conclusive evidence of the title. Although the provisions of that section are so wide as to cover any irregularity in the proceedings before the registration of the title, it must be said that such provision, is subject to the provisions of Article 13 of the Constitution which requires compensation to be paid to anybody who is deprived of his property.

He argued that the 3rd Defendant acted wrongfully to deprive the Plaintiff of property without compensation to the benefit of the 2nd Defendant for no value; so the Plaintiff should get its property back and have the plot formally allocated to it since the 2nd Defendant had no customary interest to convert to freehold. He further argued that when the lease of Jinja Garage Ltd expired, it applied for a lease extension and so the Plaintiff derives title from Jinja Garage Ltd.

He argued that in a situation like this, when a developer seeks for an extension of a lease over the property he was leasing/occupying, pending approval or consideration of the lease by the controlling authority, the developer does not become a trespasser in such land and that for all purposes and intents, he/she remains with an interest pending the regularization by the controlling authority. He cited the case of Habre International Trading Co. Ltd Vs Francis Bantariza S. C. C. A No. 3 of 1999 [1999] KALR 490-502 to support this position which favours Jinja Garage Ltd and its successor - the Plaintiff.

I have considered the submissions and authorities relied on by the parties. Before delying into the aspect of fraud, I find it pertinent to dispose of the issue concerning the rights of a lesee or tenant at will.

A lessee holding a lease for former public land at the expiry of the lease acquires an equitable interest in it on account of the principle of legitimate expectation. In the case of **Bank of Uganda** Versus Joseph Kibuuka and Others Civil Appeal No. 286 of 2016, Justice Irene Mulyangonja ably discussed the doctrine of legitimate expectation as follows;

"The doctrine of legitimate expectation has its roots in public law. But in many jurisdictions, it has been extended to apply to private law, including employment law. A legitimate expectation, whether substantive or procedural arises, where an express promise, representation, or assurance that is clear, unambiguous, and devoid of relevant qualifications is made by an authority to an individual or group of persons. It may also arise where a practice develops that is tantamount to a promise that is consistent as to

Page 19 of 24

imply clearly, unambiguously, and without qualification that it will be followed in the future."

Therefore, it extends to a benefit that an individual has received and can legitimately expect to continue or a benefit that he or she expects to receive. It is the practice by lessors of former public land, for good cause, to grant extensions or renewals of leases whose initial term has expired. A legitimate expectation arises when a public body by representation or by established practice arouses expectations that it would be within its powers to fulfil. Justice Vincent Wagona in Isingoma David V the Registered Trustees of the Church of Uganda and Another HCCS No. **0035 of 2017** defined the term established practice as follows;

"The term 'established practice' refers to a regular, consistent predictable and certain conduct, process or activity of the decision-making authority. If any representation or promise is made by an authority, either expressly or impliedly, or if the regular and consistent past practice of the authority gives room for such expectation in the normal course then the doctrine of legitimate expectation comes into play"

Claims based on legitimate expectation do not necessarily require reliance on representations and resulting detriment to the claimant in the same way as claims based on promissory estoppel. Once the legitimacy of the expectation is established, the court will have the task of weighing the requirements of fairness against any overriding interest relied upon for the change of policy. See Lagen Majorie and James Okot Okuma Civil Appeal No. 074 of 2016.

In the instant case the fact that the Jinja Garage Limited had held a lease for a period of 12 years when it repossessed the land in 1992 before the same land was offered to the 2nd Defendant. There was created, by reason of that long period of holding over, an implied promise that the lease would be renewed in the Plaintiff's favour. Acting on that representation, the Plaintiff through Jinia Garage Ltd remained in occupation of the suit property. The doctrine of legitimate expectation applies the principles of fairness and reasonableness to a situation where a person has an expectation or interest in a public body retaining a long-standing practice or keeping a promise.

In the instant case, the Plaintiff acquired an interest in the suit property in 1995 after having purchased the suit property from the former owner, Jinja Garage Ltd.. The Plaintiff possessed the land till 2004 when the lease to the property expired and reverted to the Jinja District Land Board. Upon the expiry of the lease, the Plaintiff continued to stay on the suit property which made him a tenant at sufferance before he graduated to a tenant at will. The Plaintiff's continued stay on the suit property for another twelve years while he was making payments of ground rent to the Jinja District Land Board made him a tenant at will. Having been in possession of the suit land as a tenant at will while paying the ground rent for over ten years, it is only natural that there will arise legitimate expectation that should the land be open for leasing, the current possessor would be the most suitable person to get the offer of the lease. I am convinced that there was established practice by the Jinja Land Board and other land boards that persons in possession of land managed by the land boards would be the first to receive offers for leases with respect to that land. So, I agree that indeed the plaintiff had a legitimate expectation that arose out of policy and established practice by the Jinja District land board.

Page 20 of 24

Equitable interests are created according to justice and fairness, and may be expressly created, implied by the circumstances or imposed by a court. Their existence does not conflict with legal ownership because they are recognised and enforceable in a separate jurisdiction. It is on that basis that in cases such as *Kampala Distributors Land Board and Chemical Distributors v. National* Housing and Construction Corporation S. C. Civil Appeal No. 2 of 2004, the Supreme Court held that the sitting tenants should be given the first priority to lease land if it is being leased. In that case, the respondent had occupied the suit land since 1970 and had used the land as a play ground for children residing in its adjoining estate, among other uses. It had fenced the land and constructed a toilet on it. The 1st appellant granted a lease over the suit land to the 2nd appellant ignoring the objections of the respondent and local council officials of the area. The respondent sued the appellants claiming that the grant of the lease to the 2nd appellant was unlawful and fraudulent. The respondents' claim was upheld.

The power by a land management agency such as a District Land Board to grant titles to land is restricted where a person with a valid possessory interest in the land also applies for title to the same land. In such a case the agency is required to observe and be guided by rules of natural justice. The occupant has the right to be heard if the land is to be alienated to another person or for public use (see Matovu M., Mulindwa J. and Munyanga J. v. Sseviiri and Uganda Land Commission [1979] HCB 174). In the instant case, there is no evidence to show that the Plaintiff or Jinja Garage Limited was heard before a freehold title was granted to the 2nd Defendant in respect of the suit property. I believe this is the basis of the fraud allegation brought by the Plaintiff.

A title may be vitiated by fraud, error or illegality manifesting itself at any stage of the whole process leading to and including the final registration and issuance of title. Illegality in the transaction voids the title irrespective of the fact that the transferee may not be at fault. Fraud within the context of transactions in land has been defined to include dishonest dealings in land or sharp practices to get advantage over another by false suggestion or by suppression of truth and to include all surprise, trick, cunning, disenabling and any unfair way by which another is cheated or it is intended to deprive a person of an interest in land, including an unregistered interest (see Kampala Bottlers Limited v. Damanico Limited, S. C. Civil Appeal No. 22 of 1992; Sejjaaka Nalima v. Rebecca Musoke, S. C. Civil Appeal No. 2 of 1985; and Uganda Posts and Telecommunications v. A. K. P. M. Lutaaya S. C. Civil Appeal No. 36 of 1995).

In seeking cancellation of a title on account of fraud in the transaction, the alleged fraud must be attributable to the transferee. It must be brought home to the person whose registered title is impeached or to his or her agents (see *Fredrick J. K Zaabwe v. Orient Bank and 5 others, S. C. Civil Appeal No. 4 of 2006 and Kampala Bottlers Ltd v. Damanico (U) Ltd., S. C. Civil Appeal No.* 22of 1992). The burden of pleading and proving that fraud lies on the person alleging it and the standard of proof is beyond mere balance of probabilities required in ordinary civil cases though not beyond reasonable doubt as in criminal cases (see Sebuliba v. Cooperative bank Limited [1987] *HCB 130* and *M. Kibalya v. Kibalya [1994-95] HCB 80*).

Constructive notice is the knowledge that the courts impute to a person upon a presumption so strong of the existence of the knowledge that it cannot be allowed to be rebutted, either from his knowing something which ought to have put him or her on further inquiry or from wilfully

Page 21 of 24

abstaining from inquiry to avoid notice (see *Hunt v. Luck (1901) 1 Ch 45*). Both Defendants wilfully abstained from making the necessary inquiry to avoid notice. A person who acquires title to land occupied by another for the dominant or sole purpose of defeating the occupant's equitable interest in that land acquires the title fraudulently (see *Matovu M., Mulindwa J. and Munyanga J.* v. Sseviiri and Uganda Land Commission [1979] HCB 174).

The Plaintiff's evidence is that the $2nd$ Defendant in her letter to the DAPCB (PEX 7) stated that she was occupying the suit property and asked for it to be allocated to her. However, during crossexamination, she stated that she was not in possession of the suit land which is a gross inconsistency. I found her testimony to be a false and dishonest. I find that the 2nd Defendant's act of dishonesty amounted to fraud. Further, in her testimony, she told court that there was no building on the suit property when she earlier visited the suit land which was only occupied with bushes. This court established at the locus visit that the suit property has an old building thereon and finds the 2nd Defendant's testimony dishonest.

On the part of the 3rd Defendant, the evidence on record indicates that the 3rd Defendant did not establish the ownership status of the suit land before granting a freehold interest to the 2nd Defendant. In PEX 18 which is the 2nd Defendant's application for a freehold title had an observation from the Area Land Committee that the suit land premised a commercial property. This assertion should have been a wake-up call to the 3rd Defendant to conduct the required due diligence. Conducting due diligence goes beyond mere conducting of a search and goes as far as conducting a physical visit to the land. See *Fredrick J. K Zaabwe v. Orient Bank and 5 others, S. C.* Civil Appeal No. 4 of 2006 and Kampala Bottlers Ltd y. Damanico (U) Ltd., S. C. Civil Appeal No. 22of 1992).

Much as the Land Board is clothed with powers to hold and lease out land under section 59 (1) of the Land Act, it is restricted from selling it to another person when it is already being possessed. (See Kampala District Land Board & Another Vs National Housing and Construction Corporation SCCA No. 2/2004 and Matovu M., Mulindwa J. and Munyanga J. v. Sseviiri and Uganda Land Commission [1979] HCB 174).

In light of the evidence on record, I do find that 2nd and 3rd Defendants did not make reasonable inquiries concerning the status quo of the suit property to find out whether it was repossessed and whether the lease thereon was still running, who was in occupation thereof and whether such person had any interest thereon. These actions amount to constructive notice of fraud which therefore makes the 2nd and 3rd defendants part of the fraudulent acts geared towards dispossessing the Plaintiff of the suit property.

In conclusion, I find that the freehold certificate issued to the 2nd Defendant was fraudulently procured. I therefore find that the Plaintiff has ably imputed fraud against the 1st, 2nd and 3rd Defendants.

**Issue six:**

Whether the parties are entitled to the remedies prayed for?

Page 22 of 24

The Plaintiff prayed to the court to grant it a declaration order that it is the rightful owner/proprietor of the land comprised in Plot 24 Spire Road, Jinja. From the submissions on record, I note that the purchase of the suit property by the Plaintiff was valid and that the Plaintiff has always been in possession and occupation of the suit property. I am therefore inclined to declare the Plaintiff as the rightful owner of the suit property/land.

The Plaintiff also prayed for a declaration that the Defendants are trespassers and a nuisance on the suit land. Considering the fact that the Plaintiff has failed to impute trespass onto the Defendants, I therefore do not find the Defendants to be trespassers.

In regard to exemplary/punitive damages, Counsel for the Plaintiff submitted that the Plaintiff was entitled to them considering the extremity of the fraud which was involved in the processes leading to the alienation of the suit property. He cited the case of Besimira Moses Vs Attorney General Civil Suit No. 143 of 2015 where it was held that the rationale behind the award of exemplary damages is to punish the Defendant and deter him from repeating similar conduct. I agree with this authority and submissions. The 1st and 3rd Defendants in this case are agencies of the Government. I have already noted that the acts of its officers were negligently done in contravention of its statutory duty and in utter disregard of Plaintiff's property rights. I am therefore of the opinion that this is an appropriate case for an award of exemplary/punitive damages. In the circumstances I award the Plaintiff shs. $25,000,000/=$ only (twenty-five million shillings) as exemplary/punitive damages, guided by the principle of Onegi Obel & Anor versus AG & Ors; CS No. 006 of 2002.

Turning now on the prayer of general damages, I understand that these are at the discretion of Court and are intended to place the injured party in the same position he or she would have been had the breach not occurred. Considering this case, I award the Plaintiff shs. 15,000,000/= as general damages.

Judgment is entered for the Plaintiff with declarations and orders that:

- A declaration that the Plaintiff is the rightful owner/proprietor of the land and property $i.$ comprised in Plot 24 Spire Road, Jinia. - ii. A declaration that the registration of the $2nd$ Defendant as proprietor of the land and property comprised in Plot 24 Spire Road, Jinja was procured fraudulently and therefore illegal. - iii. An order directing the 1st Defendant to cancel the freehold title issued on the suit property in the name of the $2^{nd}$ Defendant. - iv. An order directing the 1st Defendant to issue a special certificate of title in the name of the Plaintiff. - A permanent injunction is issued against the $2nd$ and $3rd$ Defendants, their successors. $V$ . assigns, agents, employees/servants and anyone acting in their stead however described

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from dealing, entering, transacting or doing anything on the land comprised in plot 24 Spire road, Jinja.

- The 1st and 3rd Defendants shall each pay UGX. 12,500,000/= million only a total of shs. vi. $25,000,000/$ = to the Plaintiff as exemplary/punitive damages. - The 1st and 3rd Defendants shall each pay ugshs. 7,500,000/= million only a total of shs. vii. $15,000,000/$ = to the Plaintiff as general damages. - The $1^{st}$ and $3^{rd}$ Defendants shall also pay costs of this suit. viii.

Before I take leave of this matter, I would like to caution the public authorities in this case specifically the 1st and 3rd Defendants who should religiously exercise due diligence prior to the issuance of certificates of title and grant of allocations of land to persons respectively. It is quite unsettling that instead of executing their profession with care and precision, they turned out to have done the opposite in this case. I observe that the 1st and $3rd$ Defendants fell short of their mandatory duties in this case.

FARIDAH SHAMILAH BUKIRWA NTAMBI **JUDGE**

Judgment delivered by email on 14th May, 2024.