Victoria Tea Estates Limited v Bemba and Another (Civil Appeal 49 of 1996) [1998] UGCA 44 (27 April 1998)

## THE REPUBLIC OF UGANDA OF APEAL

COURT OF UGANDA AT KAMPALA $\cdots$ IN THE

S. T. MANYINDO, DCJ; ENGWAU, J. A AND TWINOMUJUNI, J. A CORAM:

## CIVIL APPEAL NO. 49 OF 1996

VICTORIA TEA ESTATES LTD.::::::::::::::::::::: APPELLANT

## **VERSUS**

JAMES BEMBA & ANOTHER::::::::::::::::::::::::::: RESPONDENT

(An appeal from the judgment and decree of the High Court of Uganda (C. K. Byamugisha J.) in Civil suit No. 822 of 1992 dated 1st April 1996)

## JUDGMENT OF TWINOMUJUNI - JA:

This is an appeal from a decision of the High Court in which that court held that the appellant was trespassing on the respondents land comprised in Buddu Block 326 volume 881 Folio 8 situated at Mutemula Buddu in Masaka district and awarded the following further reliefs:-

- a permanent injunction, $(a)$ - an eviction order. $(b)$ - General damages of shs. $5,000,000/=$ , $(c)$ - interest at court rate until payment in full and $(d)$ - costs of the suit. $(e)$

The memorandum of appeal raises six grounds of appeal which are: -

The learned trial judge erred in law after having held 1. that the suit property had been Expropriated in terms of Expropriated Property Act 1982 and thus affected by the provisions of the Act but to have subsequently held that when eventually a Certificate authorizing


Repossession was issued t.o E.he Appellant by MinisEer of Finance E,he properEy was no longer protected by the provisions of Ehe AcE and Ehus no longer categorized as expropriaEed proPerEy.

- The learned tsria1 judge erred in 1aw Eo have implled in her judgment EhaE, a property affected by Ehe Provisions of ExpropriaE.ed properEy AcE could lose iEs st.aEus under Ehe AcE before Ehe same is deaLE, wit,h under Ehe Provisions of the Act. 2 - The learned Erial judge erred in law in negaEing Ehe effecE of Ehe Cert.ificaEe auEhorizing Repossession of suic property issued Eo Ehe Appellant by the Minister when Ehe issuing of Ehe said certificaEe had noE been challenged by Ehe ResPondenta by way of an appeal under Ehe AcE and no prayer had been made by the RespondenEs Eo declare the said cerEificate null and void. 3 - The learned crial judge erred in 1a\$, to have held cha! t.he Appellant. who was on suiE property by virEue of CercificaEe auEhorizing Repossession issued to iE wae a !respasser liab1e for evictsion and payment of damages t.o Ehe RespondenE. 4 - The Iearned crial judge's award of general damages of shs. 5,ooo,ooo/= was noE supporEed by any evidence or sufficienc evidence and was Ehus arbiErary. 5 - The learned trial judge erred in failing to hold EhaE unEil the CerEificat.e auEhorizing Repossession vras issued Ehe Government as lega1 owner of suit propert,y 5

')

lease was fully in control and the respondent had not gained control of the same.

The memorandum of appeal ends with a prayer that the court allows the appeal, sets aside the judgment and orders of the High Court and awards the costs of the suit here and below in the High Court. The facts which constituted the despute that was before the learned trial judge are outlined in the text of her judgment and I shall be content to reproduce them here:-

> "By a lease dated the 22nd October 1943 the suit property was leased to one George Clauson Shamael for a period of 49 years. The lease agreement was attached to the plaint. It was part of the covenants in the lease that the lessee will pay ground rent to the lessor and the power of reentry was reserved if rent was six months in arrears. It is the plaintiffs case that since 1970 the lessee breached the terms of the lease by not paying ground rent and no consent was given by them or anyone else to the lessee to the leased property to any party transfer including the defendants. As a result of these breaches the plaintiff re-entered the leased property and this re-entry was noted on the register on or about the 23rd March 1991 as instrument No. 247528. On the 28th November 1991 the Minister of Finance issued a certificate of the repossession to the defendant under provisions of the Expropriated Properties act. Then one Patel as agent or manager of the<br>defendant entered upon the land and started utilising it by growing tea thereon. Counsel for the plaintiffs M/S Kayondo & co. Advocates wrote to Patel seeking to know the basis of his occupation of the land. In reply counsel for the defendant wrote claiming that the land was leased to the defendant and the same has been allocated On receipt of this letter the to them. plaintiffs instituted this action complaining that their rights, use, possession and enjoyment<br>of the land has been interfered with by the defendants acts of trespass."

In their plaint they sought the following remedies:-

Temporary and permanent injunction as herein above $(a)$ mentioned;

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- Eviction Order; $(b)$ - General damages in trespass; $(c)$ - Interest on the decretal amount at the rate of $(d)$ 49% per annum from date of filing till payment in full. - Costs of this suit. $(e)$

In a written statement of defence filed on behalf of the defendant, it was admitted that the property was leased to one George Clauson Shamael in 1943 which transferred it to the defendants on 15th July 1955. It is alleged that all the necessary consents were obtained before the transfers were It was further averred in paragraph three of the effected. written statement of defence that the defendants breached the conditions and covenants in the lease because in 1972 all its shareholders and directors were expelled from Uganda being of Asian extraction and their property was expropriated by the Uganda Government. It was also averred that the re-entry was wrong in law and a nullity. It is also the defendants case that upon the return of its directors in 1987 the property was allocated to it by the Departed Property Custodian Board pending verification and in 1991 a certificate of repossession was issued. The whole trial turned on two issues namely, whether the property was affected by the Expropriated Properties Act and if so what was the effect of the certificate of repossession issued to the defendant.

The learned trial judge considered the evidence before her and the law applicable and came to the following conclusion:-

> therefore accept the testimony of the " I plaintiffs that rent was not paid and that is why It was the lease was terminated by re-entry. however argued by Mr. Sekandi that the defendant is on the premises by venture of a repossession<br>certificate issued to it under the provisions of

> > $\overline{4}$

the (Expropriated Properties) Act. There is no The legal effect of the issuance of the certificate of repossession is found in section 6 of the Act which says:-"

The learned judge quoted in full the provision of section $6(a)$ (b) and (e) of the Expropriated Properties Act and then concluded as follows:-

"The section is silent about the restatement of a lease which has been determined by the lessor I am not for non-payment of ground rent. prepared to say what the legislature kept unsaid. My finding on the first issue is that although the property was affected by the Expropriated Properties Act, at the time when the Minister of Finance issued a certificate of repossession to the defendant the leasehold interest was no longer in existence in law. It is. cancelled from the register by re-entry. not enough in my view to say that the plaintiff should have lodged an appeal against the decision of the Minister, it was instead the duty of the Minister to satisfy himself that the defendants leasehold interest was still in existence before issuing a certificate of repossession. This disposes of the 1st and 2nd issues."

Mr. Sekandi, learned counsel for the appellant attacked this finding by the trial judge. In his written submission, he argued that the learned judge erred in law in that after holding that the suit property had been expropriated in terms of the Expropriated Properties Act 1982, to have subsequently held that when eventually a certificate of re-possession was issued to the $\alpha$ appellant by the Minister of Finance, the property was no longer protected by the provisions of the Act and no longer categorised

as expropriated property. In his view, once the learned judge held that the suit property was Expropriated, he ought to have held that $S.1(2)(a)$ of Act $9/1982$ nullified all dealings in expropriated property and vested the same in the government and any attempt by the respondents to

$\mathsf{S}$

make a re-entry on such property before the same was disposed of under the Act would be null and void, and of no legal effect. He relied on section $1(2)(b)$ of the Act and the Supreme Court decision in Civil Appeal No. 5 of 1995 Chris Aken Onapa vs Mohamed Hussein R. Panjani (unreported)

On the third ground of appeal Mr. Sekandi submitted that the trial judge erred in law in negating the effect of the certificate of repossession issued to the appellant by the Minister when the issuing of that certificate had not been challenged as required by the Expropriated Properties Act section 14 thereof. Once the certificate was not challenged, then it conferred legal rights outlined in section 6 of the Act.

In reply counsel for the respondents submitted first that M/S Victoria Tea Estates is a stranger to the entire lease offer in question in this suit and therefore the certificate of allocation of 1987 and the certificate of re-possession were issued in error and have no basis in law.

Secondly he submitted that where there was a lease and there was a breach of the conditions of the lease long before the Asians were expelled from Uganda and the government of uganda took over the properties mistakenly, it cannot be said to fall under the Expropriated Properties Act. He argued that it was the case of the respondent that the lease had been breached when the lessee transferred the property to a stranger without obtaining the necessary consent of the lessor. Further, there was no payment of rent by the lessee and by 1973 there was no evidence of payment of rents.

Thirdly he argued that the Expropriated Properties Act was not intended to operate prospectively but retrospectively and therefore could not nullify a re-entry of 1991.

Finally counsel for the respondents argued that even if it is held that the suit property was expropriated by government, then S.4(3) of the Departed Asians Decree provided that:

> liabilities attaching to anything vesting in government by virtue of the<br>foregoing provisions of this section shall "any also vest in government."

The government had a duty to pay rent to the respondents and since it did not, the respondent correctly terminated the lease by re-entry.

I wish to first of all dispose of two matters which were belatedly introduced in the written submissions of the respondent. These are first that the lease agreement in issue in this case was breached by transferring the lease to other persons other than one George Clauson Shamael the original lessee and secondly that before expropriation of the property in 1973, the lessee was no longer paying rent and the lessor was entitled to re-entry then.

Though these matters were raised in the pleadings of the parties they were not made issues at the trial and no evidence was adduced on them. The trial appears to have proceeded on the understanding that the appellant was a lawful transferee of the lease and that by 1972 when he left the country, the lease agreement was still validly subsisting. As a result the learned trial judge held, rightly I think, that the suit property was expropriated by government and therefore the Expropriated

$\overline{7}$

Properties Act of 1982 applied to it. I do not intend to disturb this finding which is justified by evidence.

I now turn to the consideration of the first main issue which is whether, the learned trial judge having found that the suit property was expropriated by government in 1973 was right to hold that though the Expropriated Properties Act of 1982 did affect the property, yet it did not apply because in the learned judges own words:-

> "at the time when the Minister of Finance issued a certificate of repossession to the defendant the leasehold interest was no longer in existence in law. It had been cancelled from the register by the reentry."

Before coming to this conclusion, the trial judge considered the relevant provisions of the Expropriated Properties Act in section $1(1)(2)$ thereof which we consider necessary to reproduce here which reads thus:-

$"1(1)$

Any property or business which was,

- vested in the Government and transferred to $(a)$ the Departed Asians Property Custodian Board under the Assets of Departed Asians Decree, - $(b)$ acquired by the Government under the Properties and Business (Acquisition) Decree, 1975, - in any other way appropriated or taken over $(c)$ by the Military Regime save property which had been affected by the provisions of the repealed National Trust Decree, 1971,

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

For avoidance of doubt, and not withstanding $(2)$ 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 purchase, transfers and grants of or any dealings of whatsoever kind in such property or business are hereby nullified and, - $(b)$ 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 specific 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 prescribed."

The trial judge then discussed the case of Bidandi Sali vs Attorney General Civil Suit No. 838/89 (unreported) where the above quoted provisions of the Expropriated Properties Act were considered. In that case the plaintiff bought property which had been leased to an Asian, which property was expropriated by government in 1973. In 1987 the lessor purported to terminate the lease by re-entry because of non-payment of rent. The plaintiff's efforts to gain possession of the property which was then occupied by the Army were resisted by government alleging that the same was still vested in government under Act 9 of 1982. In that case the High Court held that:-

> "On careful perusal of provisions of the Act 27/73, Assets of Departed Asians Decree and the the Expropriated Properties Act, Act 9 of 1982. I find it<br>hard to accept Miss Nasuna's submission that the provisions of $S.1(1)$ and (2) of Act 9 were intended to apply to future dealings or transactions. I would be inclined to accept Mr. Mwesigwa Rukutana's contention that the phrases "are hereby nullified" and "had expired" or "was terminated" were intended to act retrospectively and not prospectively."

Following the decision in that case, the trial judge held as follows:-

"I agree with this interpretation and perhaps I would add that Parliament could not have made a statute to nullify an act or acts which had not yet occurred. If it had wanted to do so, this would have been stated expressly."

With respect to the learned trial judge, I think both the trial court in the Bidandi Sali case (supra) and herself misconstrued the meaning and legal effect of section 1(1) and (2) of Act 9 of 1982. In my view the words used in that provision must be given their natural meaning. The words used are simple and plain and do not need any resort to external sources to understand their plain meaning. In construction of statutes courts must confine themselves to what the Act says. They must consider what the Act says and not what it ought to say. They must not read words into a statute unless clear reason for it is to be found within the four corners of the Act itself. See Vickers, Sons & Maxim Ltd vs Evans (1910) A. C. 444 which was cited with approval in Supreme Court Civil Appeal No. 21/93, Registered Trustees of Kampala vs Departed Asians Property Custodian Board (unreported). In plain language the provision of statute 9 of 1982 nullified any dealings of whatsoever kind in Expropriated properties and vested them back into government under the management of the Ministry of Finance. Properties which were held under lease or tenancy of whatever description where such lease or tenancy had expired or terminated, the same were to be deemed to have continued in force until such property was dealt with under this Act. (emphasis mine).

All this had to be "notwithstanding the provisions of any written law governing the conferring of title to property or business and the passing or transfer of such title.

were to be deemed to have continued in force <u>until such property</u> was dealt with under this Act. (emphasis mine).

All this had to be "notwithstanding the provisions of any written law governing the conferring of title to property or business and the passing or transfer of such title.

If further guidance in the interpretation of these provisions of statute 9/82 is needed, it can be found in the Supreme Court decision inCivil Appeal No. 5 of 1995 Chris Okena Onapa vs Mohamed Hussein Rashid Punjani (unreported) in which Tsekooko J. S. C. when considering the same provisions held:-

> "In order for sub-section 2(b) to apply, the property affected must have vested in government, when the lease, agreement or any other specific tenancy was still in force. Subsequent expiry of such a lease or agreement for the lease or tenancy would not affect the status of the property so long as at the time of expropriation (vesting in government) the lease or tenancy was subsisting."

There is no dispute in this case that the suit property was expropriated by government in 1973. It follows that Act 9 of 1982 applies to it. The suit property became the statutory property of the government, until the Minister of Finance dealt with the property as provided for by Act 9 of 1982. Any other purported dealings in such property would be null and void. Any attempt by the lessor to re-enter the property by reason of nonpayment of rent would be null and void unless successfully done before the property was expropriated. This remains so whether government paid the ground rent or not. The lessor could of course maintain a separate action against government to recover unpaid arrears of rent, but that is another matter.

In consequence, I hold that the learned trial judge was

wrong to hold that Act 9 of 1982 could not apply to the suit property by reason that the government did not pay rent which enabled the respondent to exercise powers of re-entry before the Minister issued letters of re-possession to the appellant. The provisions of the Statute are very plain and must be construed to mean what they say and not what we may fancy that they ought to say. The first and second grounds of appeal must therefore succeed.

The other substantial ground of appeal is ground number three which is that the learned judge erred in law in negating the effect of the Certificate of Repossession of the suit property issued to the appellant by the Minister when the issuing of the same was not challenged by the respondent as provided in Act $9/1982$ .

Following my considered holding on the 1st and second grounds of appeal, it is only necessary to state here that the Minister was within his powers conferred on him by Sections 4 and 5 of Act 9 of 1982 when he issued a Certificate of Repossession to the appellant. This is because Act 9/1982 vested back into the government of Uganda the ownership of the suit property from 1982 when the Act came into force until the Minister dealt with the property in accordance with the Act. The Act however provided a right of appeal to the High Court of uganda to any person who was not satisfied by any decision of the Minister. This had to be done within thirty days from the date of the decision complained of. In this case the Certificate of Repossession was issued on 28th November 1991.

It is an undisputed fact that up to this day, that decision has

never been challenged. The certificate is therefore valid and conferred certain rights on the respondent which the trial judge was very much aware of.

Section 6 of Act 9/1982 provides:-

"A certificate issued under section 4 or 5 of this act shall be sufficient authority for:-

- the Chief Registrar of Titles to transfer title to the new joint venture company or $(a)$ the former owner as the case may be; - to institution the bank or financial $(b)$ reactivate any frozen account or pay any transferred moneys; - the Registrar of companies to re-instate on the Register a company that had been struck $(c)$ off."

The provisions of this section are self-explanatory. In my considered judgment, I cannot see how a claim for trespass can be sustained against any one in occupation of property by virtue of a repossession certificate like in the case of the appellant in the instant case. It follows that I must hold that the learned trial judge came to a wrong conclusion and this appeal would be allowed. The judgment and decree of the High Court would be set aside and appellants would have the costs of the appeal and the suit in the High Court.

Dated at Kampala this ... $2.7$ day of $\mathcal{M}$ ....................................

$u$ A. Twinomujuni JUSTICE OF APPEAL

# Judgment of Manyindo, DCJ.

I read the judgment of Twinomujuni, JA in draft and I agree with it. As Engwau JA; also agrees, the appeal is allowed. The judgment and orders of the High Court are set aside. There will be an order dismissing the suit. The "tespondent shall have the costs of the appeal and of the suit in the High Court.

DATED at Kampala this 27<sup>th</sup> day of April, 1998.

Laugindo

S. T. MANYINDO, DEPUTY CHIEF JUSTICE.

### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

#### S. T. MANYINDO, DCJ; ENGWAU, J. A. AND TWINOMUJUNI, J. A. CORAM:

### CIVIL APPEAL NO. 49 OF 1996

APPELLANT VICTORIA TEA ESTATES LTD. ::::::::::::::::::::::::::::::::::::

VERSUS

**RESPONDENT**

::::::::::::::::::::::: JAMES BEMBA & ANOTHER

> (An appeal from the judgment and decree of the High Court of Uganda (C. K. Byamugisha J.) in Civil Suit No. 822 of 1992 dated 1st April 1996)

## JUDGMENT OF ENGWAU. J. A

I had the benefit of reading the judgment of Twinomujuni, J. A. in draft and I agree with it. In my view the claim in trespass cannot be sustained against a person who is in occupation of the suit property by virtue of a repossession certificate as the appellants in the instant case.

In the premises, I would allow the appeal with costs here and in the High Court.

Dated in Kampala this 27th day of April, 1998.

$u$ S. G. ENGWAU

JUSTICE OF APPEAL