Walugendo v M/s Ngaano Millers Limited and Another (Civil Suit 9 of 2012) [2023] UGHCLD 337 (20 July 2023)

Full Case Text

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT MASINDI **CIVIL SUIT NO. 009 OF 2012**

**PLAINTIFF** WALUGENDO MOSES :::::::::::::::::::::::::::::::::::

#### **VERSUS**

#### 1. M/s NGAANO MILLERS LTD

#### 2. MASINDI DISTRICT LAND BOARD ::::::::::::::::::::::::::::::::::::

### Before: Hon. Justice Byaruhanga Jesse Rugyema

#### JUDGMENT

- In this suit, the plaintiff sued the Defendants jointly and severally for; $[1]$ - declaration that the purported transaction between the $\mathsf{A}$ j., Defendants and Nathan Mugambanyi Rwakikamba was null and void. - A declaration that the land title for plot 193 Kibanda Block 9 at ii. Kinyara 11 Vol.4188 Folio 11 was created fraudulently. - An order for cancellation of title described as plot 193 Kibanda iii. Block 9 at Kinyara 11 Vol.4188 Folio 11. - An order directing the $2^{nd}$ Defendant to create a freehold interest in iv. respect of the suit land in favour of the plaintiff. - A permanent injunction restraining the Defendants or their agents $V$ . from interfering with the interest of the plaintiff. - An order of eviction of the $1^{st}$ Defendant and or its agents. vi. - Mesne profits, General damages and costs of the suit. vii. - It is the Plaintiff's case that he is the Administrator of the estate of his $[2]$ late father, Mulisi Isingoma who settled on the suit land (situate at Kinvara 11, Kiguma, Kirvandongo District).

- In 1974, a one the late Bagarekayo John Muvubi came to look for pasture $[3]$ in the area and was accommodated on the suit land by the plaintiff's late father but in 1982, the said Bagarukayo and his father left the suit land and settled in Katamarwa. - In 1992, when Bagarukayo's father died, he returned on the suit land $[4]$ where he was still accommodated to live with the Plaintiff's family. Later, the Plaintiff's father sought to acquire land title to the said suit land and made an application in that regard and was granted a lease offer (of 500 acres of land). The Plaintiff's father entrusted the said Bagarukayo to follow up the title acquisition process. - The said Bagarukayo instead brought cattle keepers on the suit land, $[5]$ illegally evicted the Plaintiff's father, destroyed his houses, gardens and took all his cows. - The Plaintiff objected to the said Bagarukayo's conduct and involved the $[6]$ Local Government authorities, Central Government Representatives and later filed a complaint with the Land Tribunal, later with the Chief Magistrate's court vide Claim No.03 of 2002 which was concluded in his favour. - In 2009, the $1^{st}$ Defendant purported to buy the suit land from a one $[7]$ Rwakikamba Nathan Mugambanyi, brother of Bagarukayo John Muvubi who had died in 1994. - The plaintiff aver and contend that the Defendants have denied him his [8] right to quiet enjoyment of his land and property. - The Defendants denied the Plaintiff's allegations. The $1^{st}$ Defendant $[9]$ contended that it lawfully bought the suit land from a one Mugambanyi Nathan Rwakikamba and the 1st Defendant is therefore a bonafide purchaser for value while the 2nd Defendant contend that on the 10/12/1992, Nathan Mugambanyi Rwakikamba applied for Rural land approximately 220 hectares and he was granted a lease offer on the 23/6/1993 by the Uganda Land Commission upon which he complied

with the terms of the lease offer. That later, the said Nathan **Mugambanyi** applied to the $2^{nd}$ Defendant to have his offer transferred to the 1st Defendant which was approved upon the 1st Defendant on new terms which the 1st Defendant complied with.

- [10] The $2^{nd}$ Defendant contend further that the lease offer of Mulisi Isingoma (the plaintiff's father) was never regularised and therefore remained and is still ineffective, illegal and cannot be enforced. That otherwise, the lease granted to the $1^{st}$ Defendant is completely and materially different from the lease the Plaintiff claims. - [11] The 2nd Defendant filed a Counter claim against the plaintiff for cancellation of lease offer issued on the 28/7/1993 in respect to 500 acres of land at Kinyara II for residential and mixed farming in the names of Mulisi Isingoma, reversion of interest in the land to the counter claimant, compensation for lost revenue, mesne profits, punitive and general damages. - [12] It is the Counter claimant's case in the counter claim that on the 29/12/1992, Mulisi Isingoma applied for rural land and the Uganda Land Commission gave him a lease offer of approximately 500 acres at Kinyara 11 at a rent of 40,000/= per annum and at a premium of $400,000/$ = and other fees totalling to $543,000/$ =, land being for residential and mixed farming but the said Mulisi Isingoma did not at any time or thereafter as required by the offer, accept the offer in writing or make any payments and or later on comply with the terms of the offer. - [13] That the non-payment of the requisite fees is an irregularity and if allowed will permit the illegal use of the land yet the administrator of the estate of the said Mulisi Isingoma and beneficiaries who have to date not shown any interest in settling the above debt continue to derive profits and benefits from the same illegality. - [14] In the joint scheduling memorandum of the parties, though counsel for the plaintiff in submissions formulated them otherwise, the following issues were formulated for determination of this suit:

1. Whether the suit land was available for leasing by the $2^{nd}$ Defendant.

- 2. Whether the lease process of the suit land by the $2^{nd}$ Defendant to the $1$ st Defendant was lawful. - 3. Whether the $1^{st}$ Defendant is a bonafide purchaser for value. - 4. What remedies are available to the parties.

## **Counsel legal representation**

[15] The plaintiff was represented by Mr. J. P. Baingana of M/s J. P Baingana & Associated Advocates, Kampala while the 1st Defendant was represented by Mr. R. Okalang, later assisted by Ms. Kevin Amajong, both of M/s Okalang Law Chambers, Jinja and the 2nd Defendant was represented by Mr. Simon Kasangaki of M/s Kasangaki & Co. Advocates, Masindi. Both team of counsel filed their respective written submissions as permitted by this court for consideration in the determination of this suit.

## **Standard and Burden of proof**

[16] It is trite law that the burden of proof in civil matters is on the plaintiff to prove his/her case on a balance of probabilities. Whoever desires court to give judgment as to his/her legal right or liability must produce evidence to prove the existence of the facts he asserts exist; Ss.101-103 of the Evidence Act and Lugazi Progressive School & Anor Vs Serunjogi & Ors [2001-2005] 2 HCB 12 and Sheik Hussein Mayanja Vs Mubiru Christopher, HCCS No.129/2010.

## **Preliminary objection**

[17] Counsel for the $1^{st}$ Defendant raised a preliminary objection to the effect that the Plaintiff sued a non-existent entity in the names of Ngaano Millers Limited and therefore, the suit is barred in law and ought to be struck out with costs. He relied on the authority of **Registered Trustees** of Rubaga Miracle Centre Vs Mulangira Ssimbwa, HCMA No.655 of 2005 where it was held thus:

> "A suit in the names of a wrong plaintiff or defendant cannot be cured by amendment. The law does not allow that as in reality there is no valid plaint in the suit."

- [18] In his reply to the $1^{st}$ Defendant's preliminary objection, counsel for the plaintiff submitted that the plaint inadvertently omitted letter "E" from the word "Engaano". That the defence was filed also in the name of "Ngaano" not "Engaano". The case proceeded interparty and all exhibits presented in court over the same matter are in the name of "Engaano". He concluded therefore that the preliminary point is an afterthought and that the 1st Defendant is estopped from denying that "Ngaano Millers Ltd" is the very "Engaano Millers" in the plaint since the 1st Defendant filed its Defence in the names of "Ngaano Millers Ltd" and the trial proceeded in the names of "Ngaano Millers Ltd" with all in regard to the suit land. - [19] Upon perusal of the plaint, I indeed find that the suit was filed in the names of "M/s NGAANO MILLERS LTD" a non-existent entity instead of ENGAANO MILLERS LTD as reflected in the annextures to the reply to the $2nd$ Defendant's written statement of Defence (WSD) to wit; lease/sublease offer to the $1^{st}$ Defendant and the impugned Agreement of sale (D. Exh.1). Under Article 126(2)(e) of the Constitution, this court is enjoined to administer substantive justice and not technicalities. I find that the omission of the letter "E" on Ngaano by the plaintiff in his pleadings where all evidence show "Engaano" are issues of form not substance, the omission did not affect the substance of the identity of the parties to the suit; Registered Trustees of Rubaga Miracle Centre Vs Mulangira Ssimbwa (supra). - [20] In the premises, it can safely be said that the omission of letter "E" on the name of "Ngaano" was therefore through an honest and /or bonafide mistake which this court can safely ignore for purposes of enabling this court effectively and completely adjudicate upon and settle all questions involved in the suit. - [21] In light of the above, I accordingly dismiss the preliminary objection and proceed to consider the merits of the suit.

## Merits of the suit

Issue No.1: Whether the suit land was available for leasing by the 2nd Defendant.

- [22] Counsel for the Plaintiff submitted that in evidence, the plaintiff testified that his later father Mulisi Isingoma came in the area in 1945 and settled on the suit land. - [23] That in 1992, the Plaintiff's late father **Mulisi Isingoma** applied for lease of the 500 acres of the suit land and entrusted the late **Bagarukayo John Muvubi** to help him in the pursuance of his land title and a lease offer was granted to the deceased dated $29/12/1992$ . - [24] That the said Bagarukayo John Muvubi trespassed on the suit land and he sued him in the L. C Courts and then in the Chief Magistrate's court vide Claim No $\overline{3}/2002$ where he was decreed as the rightful owner of the suit kibanja (P. Exhs.4 and 5 respectively). However, that in the due course, the said **Bagarukayo** evicted the plaintiff's father from the suit land. It is then that a fictitious Nathan Muganbanyi Rwakikamba sold the suit land to the $1^{st}$ Defendant, a non-Ugandan company. - [25] Counsel for the $1^{st}$ defendant on the other hand submitted that there is no evidence adduced that the plaintiff's father settled on the suit land since 1945 and that the subject matter in the Chief Magistrate's Claim No.003 of 2002 between the plaintiff & Anor Vs Geresome Bagarukayo (Muvubi) was different from the suit land. That the $1^{st}$ Defendant purchased the suit land from a one Mugambanyi Nathan Rwakikamba on the 12th day of Nov.2009 (D. Exh.1), the owner of the suit land as confirmed by his developments thereon, the L. Cs of the area and the neighbours to the suit land. That besides, further proof that the suit land belonged to the said Nathan Mugambanyi is the fact that the Plaintiff's father Mulisi Isingoma was one of those that recommended the grant of the lease to Nathan Mugambanyi (D. Exh.7) as supported by the evidence of Abili Francis (DW2), the area L. C1 Secretary and Kisakye Ruth (DW4), the Secretary District Land Board which board had also processed the lease offer for the Plaintiff's father. - [26] Upon perusal of the judgment vide Masindi Chief Magistrate's Court Claim No.003 of 2002 between the plaintiff's father and Walugendo Moses and his father Mulisi Isingoma Vs Geresome Bagarukayo, it is

clear that the Plaintiff was decreed land measuring approximately 500 acres in Kinyara II village, Kigumba sub county, Masindi (Now Kiryandongo) District which the plaintiff's father settled on in 1945. It is the same land he later acquired a lease offer dated $29/12/1992$ (P. Exh.2).

- [27] It is the Defendant's case that the lease offer granted to **Mulisi Isingoma**. the plaintiff's father (P. Exh.2) is materially different from the suit land, i.e, the lease offer granted to **Nathan Mugambanyi** (D. Exh.7). - [28] As proof that the lease offer of the plaintiff's father is different from that of Nathan Mugambanyi which was sold to the 1st Defendant, the Defendants led the following evidence: - 1. The plaintiff's father Mulisi Isingoma recommended the grant of Nathan Mugabanyi lease (D. Exh.7). There is nowhere in the Plaintiff's evidence or during cross examination of DW1 and DW4 that this piece of evidence is either denied and or challenged or rebutted. As rightly submitted by counsel for the $1^{st}$ Defendant, the fact that the Plaintiff's father recommended Nathan mere **Mugambanyi** to get title defeats the Plaintiff's claim because even at the time of his father's death, he had never had any dispute with Nathan Mugambanyi. - 2. Evidence of Moses Walugendo (PW1).

The Plaintiff (PW1) testified that during the pendency of the Chief **Magistrate's Court Claim No.03/2002** between the plaintiff and his father against **Geresome Bagarukayo Muvubi**, the said **Bagarukayo** sold the suit land to **Dr. Gerald Mwesigye** (200 acres), **Kabilai James** (20 acres) and **John Oketch** (8 acres). As clearly submitted by counsel for the 1st Defendant the above PW1 evidence confirm that his father's land is distinct from the suit land since the said Bagarukayo Muvubi could not have sold land on which Nathan Mugambanyi had an interest or Nathan Mugambanyi selling land where **Bagarukayo Muvubi** and the plaintiff's father are contesting without open protest from the Plaintiff and his father.

3. Evidence of Balikagira Edward (PW2)

During cross examination by counsel for the $2^{nd}$ Defendant, he was shown the application for lease of the suit land by **Nathan Mugambanyi.** He confirmed that the application was endorsed by L. C1, II and III and then also by the Mutongole, Muruka and Gomborora Chiefs. He did not make any suggestion that the endorsements were either false or fraudulently obtained.

4. Evidence of Fredrick William Mukoka (DW1)

This witness was the representative of the $1^{st}$ Defendant's company, the Personal and Administrative manager who was involved in the purchase of the suit land by the $1^{st}$ Defendant. In the presence of a one Walter Matte (DW3) a land broker, Jede Francis (DW2), the Secretary L. C1 of the area and neighbours of the suit land, the vendor Nathan Mugambanyi toured them around the suit land where they found his developments to wit: houses (homestead), maize and cassava crops and the rest of the land was his grazing area.

5. Evidence of Abili Francis (DW2), the Area Secretary since 1996.

This witness corroborated the evidence of DW1. He named the neighbours who were present during the tour of the land. They included Sunday Katereha, Kabibi James, Ben Kiwanuka, Olanya **Francis** and **Omara Felix**. During cross examination, he clarified that neither the plaintiff nor his father Mulisi Isingoma stayed or had a home on the suit land. Mulisi Isingoma's home was near the suit land. He acknowledged that the plaintiff's father used to have a land wrangle with Bagarukayo John Muvubi but it was on a different land and not the one in dispute. He explained that the suit land was separated from **Isingoma's** land by a swamp. His evidence stood unchallenged by the Plaintiff.

**6. Evidence of Ruth Kisakye (DW4)**

This witness was the Secretary District Land Board that processed the leases of both the plaintiff's father and Nathan Mugambanvi which he sold to the $1st$ Defendant. She clearly stated that the lease processed for **Isingoma Mulisi** was different from the lease that was later on owned by the $1^{st}$ defendant.

[29] From the totality of the foregoing, I find that the suit land is totally different from the land that was subject of dispute before the L. Cs and in the Chief Magistrate's Court vide Claim No.003 of 2002 out of which the Plaintiff claim interest in the suit land. The suit land at all material time belonged to **Nathan Mugambanyi** who successfully applied for its

leasing and later sold his lease interest to the $1^{st}$ defendant. It follows therefore in the absence of any $3^{rd}$ party claim over the suit land, it was available for leasing by the $2^{nd}$ defendant. The plaintiff had no interest at all in the suit land. He is found not to be the owner of the suit land.

## Issue No.2: Whether the lease process of the suit land by the 2nd defendant to the $1^{st}$ defendant was lawful.

- [30] Counsel for the Plaintiff submitted that the $1^{st}$ Defendant's purchase of the customary interest or unregistered land as per **D. Exh.1** is illegal for it contravened Article 237(2) of the Constitution and S.40 of the Land Act. - [31] 2ndly, that the $1^{st}$ Defendant's title created in 2011 (D. Exh.10) was based on the 1993 application for rural land under the repealed Public Land Act where the 1995 Constitution and the Land Act with the Regulations there under were operational. It is his contention that the Land **Regulations (Regulation 21)** provides for Public hearing before the bringing of the land under the Operation of the Registration of Titles Act which never took place in the instant case as per the evidence of **Balikagira Edward** (PW2), the Chairperson Area Land Committee, Kigumba Sub County. That had the process under the law been complied with, the Defendants would have easily ascertained that the suit land belonged to the plaintiff; he relied on the authority of **Wokorach Justine** & 339 Ors Vs Dr. Luka Oketch Abe & 3 Ors, HCCS No.059 of 2011. - [32] Both counsel for the Defendants submitted that the defendants followed the legal procedure to process **Nathan Mugambanyi's** lease which was transferred to the 1st Defendant and the 2nd Defendant processed the certificate of title in favour of the $1^{st}$ Defendant. - [33] What is apparent is that **Nathan Mugambanyi** applied for lease over the suit land. The cluster of documents comprised in D. Exh.7 disclose his application and recommendation for rural land endorsed by the then RCs and Chiefs, the Inspection Report by the Area Land Committee endorsed by the members of the committee and then the lease offer dated $23/6/1993.$

- [34] There is no suggestion from either the Plaintiff (PW1) or Balikagira **Edward** (PW2) that the endorsements thereon are either forgeries or were otherwise fraudulently obtained. The acquisition of the lease was definitely governed by the Land Reform Decree and not the 2004 Land **Regulations** under the **Land Act.** - [35] 2ndly, it is clear from D. Exh.8, that the said Nathan Mugambanyi authorised the transfer of his lease offer to the $1^{st}$ Defendant upon execution of the sale agreement of the suit land. Upon the transfer of his lease, a fresh one was prepared in the names of the $1st$ Defendant (D. Exh.9) upon which a lease land title was subsequently processed $(D. Exh.10)$ . - [36] As per the foregoing, there was no need for a fresh processing of the lease offer by involving the Area Land Committees created/and or public hearing as required under the **Land Act** for the process had already been concluded during the application process by Nathan Mugambanyi under the **Land Reform Decree** legal regime. - [38] As disclosed by the Secretary District Land Board (DW4), the $1st$ Defendant appear to be a non-Ugandan. Indeed, under Article 237(2)(c) of the Constitution and S.40 of the Land Act, non-citizens are prohibited from acquiring land save for leases in land: Formular Feeds Ltd & Anor Vs KCB (U) Ltd, HCCS No.289/2014. - [39] In the instant case, it is clear that the $1st$ Defendant bought an already existing lease offer acquired through legal process bv Nathan Mugambanyi, the vendor, upon which a lease hold title was processed in favour of the $1^{st}$ Defendant (D. Exh.10). A non-citizen can legally purchase a lease offer for processing a lease hold title, the purchase and conversion being part of the process of acquisition of the lease. - [40] It follows therefore, the lease process of the suit land by the $2^{nd}$ Defendant to the $1^{st}$ Defendant was lawful. There is no evidence of any fraud committed during the creation of land title comprised in LRV 4188

Folio 11 Kibanda Block 9, Plot 193 at Kinyara 11 in favour of the 1st Defendant.

## Issue No.3: Whether the 1st Defendant is a bonafide purchaser for value

[41] A bonafide purchaser for value is defined in the **Black's Law Dictionary** $9th$ Edition to mean:

> "One who buys something for value without notice of another's claim to the property and without actual or constructive notice of any defects or inequities against the seller's title."

- [42] In the case of Hannigton Njuki Vs G. W. Musisi [1999] KALR 794 it was held that for a plea of bonafide purchaser for value to stand, one must prove the following 4 elements: - i) That the defendant holds a certificate of title. - ii) That the purchaser purchased the property for valuable consideration. - iii) That he or she bought in good faith without any such defect in title. - iv) That the vendor was the former registered owner of the property. - [43] In the instant case, I find evidence that the 1st Defendant is the registered proprietor of the suit property (D. Exh.10). The $1^{st}$ Defendant purchased the suit property from Nathan Mugambanyi Rwakikamba at a consideration of Ugx 290,000/= per acre (D. Exh.1). As per the evidence of DW1, DW2 and DW3, it was Nathan Mugambanyi, the vendor in occupation and use of the suit land. The local council authorities and neighbours and the officials of the $2^{nd}$ defendant/DExh.3) confirmed that Nathan Mugambanyi was the rightful owner of the suit land and during the survey of the suit land, there is no evidence that the plaintiff or any other person raised any objection or that a caveat was in the due course lodged to prevent the registration of the suit land. All this is evidence regarding the due diligence that was conducted by the $1st$ defendant before purchase in order to ascertain true ownership of the suit property and confirm that the $1^{st}$ Defendant at all times acted in good faith; **John** Bagire Vs Ausi Matovu CACA No.07 of 1996. Lastly, Nathan

Mugambanyi was the registered owner on the lease offer which was later transferred to the $1^{st}$ defendant.

- [44] The $1^{st}$ Defendant satisfies the 4 conditions for the plea of bonafide purchaser for value. The claims by counsel for the plaintiff in his submissions that the 1st Defendant cannot qualify to be a bonafide purchaser on the grounds that Walugendo Moses (PW1) testified that there were attempts by Bagarukayo Muvubi, Mukoka (DW1) and Walter (DW3) to try and settle the matter so that he accepts to sell his land are mere statements without proof. Lastly, the claims that the vendor is fictitious or had died in 1994 before the sale and transfer of his lease are not supported by any evidence be it a death certificate or otherwise. The 1st Defendant presented the identification of the vendor and the plaintiff failed to rebut such evidence. - [45] Whereas the burden of proving the case lied on the plaintiff, it is well established that the onus of establishing the plea of bonafide purchaser lies on the person who set it up, David Sejjaka Vs Rebecca Musoke [1992] KARL 736 and in this case, the 1st Defendant. In the instant case, I am satisfied that the $1^{st}$ Defendant has proved that it is a bonafide purchaser for value without any notice of fraud being proved by the Plaintiff.

## Issue No.4: Whether there are remedies available for the parties.

- [46] This court having found that the suit land was available for leasing by the $2^{nd}$ Defendant to the 1st Defendant, the lease process of the suit land by the 2nd Defendant was lawful and the 1st Defendant was a bonafide purchaser for value from Nathan Mugambanyi, the rightful owner of the suit land, it follows that the Plaintiff is found to have failed to prove his case and as a result, he is not entitled to the reliefs sought. The suit is in the circumstances dismissed with costs to the defendants. - [47] As regards the $2^{nd}$ Defendant's Counter claim, Ruth Kisakye (DW4), the Secretary Land Board led uncontroverted evidence that whereas the plaintiff's father Mulisi Isingoma successfully applied for land was granted a lease offer of approximately 500 acres dated 28/7/1993 by the

Uganda Land Commission, the said **Mulisi Isingoma** did not at any time or thereafter as required by the offer accept the offer in writing or make any payments of the relevant required fees or later on, comply with the terms of the offer. The Plaintiff himself admitted these omissions during cross examination.

[48] In Charles Lwanga Masengere Vs Godfrey Kabagambe & 2 Ors CACA No.58/2008, it was held that: $\frac{1}{2}$

> "Once there is a lease offer that was never accepted the land remained at the disposal of the commission to lease it to anyone else."

- [49] In the present case, in the premises that there is evidence that the Plaintiff's father did not accept the lease offer granted to him by the Uganda Land Commission and the Plaintiff has not taken any steps to regularise or take up the lease by complying with the lease offer terms, $2nd$ Defendant/Counter claimant is entitled to an order for the cancellation of the lease offer dated 28th day of July 1993 in respect to 500 acres land at Kinyara 11, Masindi (now Kiryandongo) District residential and mixed farming in the names of **Mulisi Isingoma** (P. Exh.2). In the premises, the lease offer in the names of Mulisi Isingoma dated $28/7/1993$ (P. Exh.2) is accordingly cancelled and the land subject to the lease offer reverted to the 2nd Defendant/counter claimant for noncompliance with the terms of the offer. - [50] No orders are made as regards the Counter claimant's claim for compensation for lost revenue, punitive damages and mesne profits for it is the Counter claimant who sat on her rights by failing to re-enter the land subject of the lease upon the plaintiff's non-compliance with the terms of the offer. Besides, no evidence was adduced to support the claim. - [51] As regards costs, the counter claimant is granted costs of the suit as the successful litigant since costs follow the event (S.27 of the CPA). - [52] In conclusion, the Plaintiff's suit is dismissed with costs to the judgment $2nd$ Defendants favour and is entered in $of$ the

Defendant/Counter claimant with an order for cancellation of the lease offer dated 28/7/1993 for land at Kinyara 11 Kiryandongo (formerly Masindi) District in the names of Mulisi Isingoma and costs of the Counter claim.

Dated this....................................

Byaruhanga Jesse Rugyema **JUDGE**

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