THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
LAND DIVISION
CIVIL SUIT NO. 724 OF 2003
THE LAW DEVELOPMENT CENTRE ::::::::::::::::::::::: PLAINTIFF
VERSUS
DAN WASSWA SERUFUSA:::::::::::::::::::::::::::::::::::::: DEFENDANT
BEFORE: THE HON MR. BASHAIJA K. ANDREW
JUDGMENT
The Law Development Centre (LDC) (hereinafter referred to as the “plaintiff”) filed this suit against Dan Wasswa Serufusa (hereinafter referred to as the “defendant”) seeking a declaration that the plaintiff is the owner of the suit land comprised in Block 9 Plot 222 Makerere (hereinafter referred to as the “suit land”); an order directing the Registrar of Titles to cancel the defendant’s name in the certificate of title for the suit land and to register the plaintiff as proprietor thereof; a permanent injunction restraining the defendant, his servants, or any other person acting on his behalf from trespassing upon or carrying out any construction or development of any nature in the suit property, general damages, interest, and costs of the suit.
Background:
The plaintiff is an educational institution. It was established by an Act of Parliament, the Law Development Centre Act, Cap.132. It is a body corporate with perpetual succession, and may sue or be sued in its corporate name. It was established for the functions, inter alia, of carrying out legal education and training in Uganda. The then Minister of Lands, Housing & Surveys exercising powers conferred by subsection (1) of Section 2 and Section 7 of the Land Acquisition Act, 1965; and pursuant to the Land Acquisition (Makerere) Instrument, 1987 S.I No. 74 of 1987, declared land measuring approximately 4.05 hectares in Kyadondo, Mengo, comprised in Plots Nos. 34, 89, 154-166, 170, 221-222, 245, 450-451, 464-467, 481-482, 507-508, and 510-511 to be land required by Government for a public use. The suit land comprised in Block 9 Plot 222 measuring 0.28 acres which belonged to the defendant was also part of the land compulsorily acquired by Government for the said plaintiff’s public purpose. The plaintiff was, in June, 2003 issued with a 99-year lease on the suit land now comprised in LRV 3112 Folio 7.
Initially, the suit land belonged to late Yokana Lwanga the grandfather to the defendant. Late Yokana Lwanga had a certificate of title for the suit land issued in February, 1955. Thereafter, the title it was transferred to the Administrator General in August, 2002 following death of Yokana Lwanga, and thereafter to the defendant. The defendant has never been notified of any acquisition by Government or compensated for the suit land.
In November, 2005 the plaintiff sued the defendant. Pending the final determination of the suit, the plaintiff also obtained an order of a temporary injunction restraining the defendant from developing the suit land. The suit land thus remains undeveloped to date. The Chief Government Valuer valued the suit land together with the development thereon at Shs. 579,600,000/= and made a report to that effect dated 22nd January, 2013.
At the commencement of hearing of the suit, the plaintiff made an ex parte application for a Third Party Notice to be issued against the Attorney General as a necessary party to the suit for purposes of indemnifying or otherwise contributing to the liability that may be imposed on the plaintiff in the event that judgment was entered against the plaintiff for compensation. The application was granted and the Attorney General served with summons to file a defence. On numerous occasions, however, the Attorney General failed to file a defence despite being duly served. A default judgment was accordingly entered against the Attorney General. Pursuant to Order 12 CPR, the parties filed a joint scheduling memorandum. They adduced evidence by filing witness statements to prove their respective claim and defence. The parties were also advised by court to explore possibilities of settlement of the case. The parties agreed and came up with a settlement particularly on the compensation amount, and costs. However, while they agreed that the defendant was entitled to general damages, they could not agree on the quantum and asked court to determine the same which was, at any rate, the only outstanding issue. The parties adduced evidence in respect of that particular issue. Their lawyers also made submissions which I summarize below.
Submissions:
Mr. George Omunyokol, learned counsel for the plaintiff, submitted that it was agreed that in light of the fact that the Attorney General against whom a default judgment was entered; should pay the compensation due to the plaintiff as the value of the suit land. Further, that the value should be paid on the basis of the valuation report by the Chief Government Valuer for the suit land and developments thereon at Shs.579,600,000/=. Mr. Omunyokol submitted that under Section 6 (4) of the Land Acquisition Act (supra) it is a responsibility of the Government to pay compensation to persons whose lands have been compulsory acquired under the Act, and that in this case the suit land was compulsory acquired by Government pursuant to the Land Acquisition (Makerere) Instrument, S.I 74 of 1987.
Mr. Omunyokol also submitted that upon payment by Government of the value of the suit land in accordance with the Chief Government Valuer’s report, the defendant shall surrender his certificate of title to the Chief Registrar of Titles, who by order of court shall cancel the name of the defendant thereon upon confirmation of receipt of the amount stated in the Chief Government Valuer’s report.
Mr. Omunyokol, however, opined that the particular issue of the quantum of general damages that was not agreed upon by the parties should be left to the court to exercise its discretion. Counsel was of the view that the defendant’s proposal of Shs. 450,000,000/= as general damages is on the high side considering the fact that it is the tax payer’s money is involved. Counsel instead proposed Shs. 50,000,000/= as the appropriate quantum given the time taken by Government to conclude the compulsory acquisition process.
Mr. Omunyokol also opposed the defendant’s proposal of 25% interest on the amount of the value of the suit land and general damages from the date of filing as being on the high side. Counsel instead proposed an interest rate of 8% from the date of judgment until payment in full. He submitted that costs should be paid by the Government to the defendant after taxation by court. Mr. Omunyokol argued that given that the plaintiff is still in possession of the suit land by virtue of the temporary injunction order, the plaintiff should continue to be in possession pending implementation of the areas agreed, and the defendant would relinquish the title of the suit land to the Registrar of Titles for appropriate cancellation.
In reply, Ms. Rebecca Mutumba of M/s. Mutumba & Co. Advocates, learned counsel for the defendant, submitted that the sum of Shs.579,600,000/= as compensation for the value of the suit land was acceptable as it was consented upon by the parties as payable by the Government to the defendant based on the value assigned by the Chief Government Valuer.
Regarding general damages, counsel submitted that the defendant proposed a sum of Shs.450,000,000/= since he had been deprived of the use of the suit land for the last 12 years. Further, that the figure took into account the fact that the defendant had already paid all the squatters on the suit land to the tune of Shs.25,000,000/=, and graded the suit land, and that he was going to construct a hostel and restaurant that would fetch him a sum of money per year of approximately Shs. 41,000,000/= given Shs. 450,000,000/= as the total for the last 12 years. Ms. Mutumba also submitted that it is agreed that the defendant shall file a bill of costs to be taxed, and that it shall be paid by the Government.
On the issue of interest, counsel submitted that the defendant proposed an interest rate of 25% per annum from the date of filing of the suit until payment in full on all categories of payment. That the defendant had acquired a loan which he had to pay at a commercial rate.
The following are the issues for determination;
What is the appropriate quantum of damages?
What is the applicable rate of interest?
Whether the defendant is entitled to costs.
I will resolve the issues the same order and headings.
Resolution of the issues;
Issue No.1: What is the appropriate quantum of damages?
The position of the law was restated in the case of Storms vs. Hutchison (1905) AC 515; Kampala District Land Board & George Mitala vs. Venansio Babweyana Civil Appeal No. 2 of 2007; that damages are the direct probable consequences of the act complained of. It may be a consequence due to loss of use, loss of profit, physical inconvenience, mental distress, pain and suffering. The test for the measure of damages was well stated in Assist (U) Ltd vs. Italian Asphault& Haulage & another HCCS No. 1291 of 1999 at page 35, that a party who suffers damage due to the wrongful act of another must be put in the position he or she would have been had he or she not suffered the loss or injury. In arriving at the quantum of damages, court is guided by the principle enunciated in the cases of Kibimba Rice Ltd. vs. Umar Salim, SCCA No.17 of 1992; and Uganda Commercial Bank v. Kigozi [2002] 1 EA. 305; that regard should be had of factors such as the economic/financial value of the subject matter, the inconvenience that a party was put through and the nature and extent of the injury or loss suffered.
It was also held in Takiya Kashwahiri & A’ nor v. Kajungu Denis, CACA No. 85 of 2011, that general damages should be compensatory in nature in that they should restore some satisfaction, as far as money can do it, to the injured plaintiff.
Applying the principles stated in the above decided case to facts of the instant case, the unrebutted evidence of the defendant clearly demonstrates that Government compulsorily acquired his for the plaintiff’s public purposes and leased the same to the plaintiff for 99 years. This was after the defendant had duly compensated all the squatters who were settled on the suit land, and graded the same in order to develop it into a hostel complex for students. The plaintiff filed the instant suit and obtained an order of a temporary injunction against the defendant restraining him from developing the suit land until final determination of the suit. This evidently occasioned economic and financial loss to the defendant.
Further related to the above latter, the defendant adduced evidence that he lost great economic opportunity of developing his land. He had planned to construct a hostel which no doubt given the location of the suit land would earn him substantial amount of money in rent. The compulsory acquisition of the suit land by Government for the public purpose of the plaintiff essentially had a ripple effect of negative economic and financial proportions on the defendant. This is of course not to mention of the physical and psychological stress exerted on the defendant who as a businessman who ordinarily thrives primarily on business. This entitles that defendant to general damages commensurate to the damage and loss suffered. The plaintiff suggested Shs.50 million while the defendant proposed Shs. 500,000,000/= as general damages.
I find that the claim of Shs. 450,000,000/= by the defendant is backed by concrete evidence as opposed to the proposal of the plaintiff which was mainly premised on the argument the tax payer’s money is involved in payment of the value of the suit land and general damages. Court takes into account the unrebutted evidence of the defendant that he had already paid all the squatters on the suit land to the tune of Shs.25, 000,000/=. Further, he had graded the suit land, and that he was going to construct a hostel and restaurant that would fetch him a sum of money per year of approximately Shs.41,000,000/=. The suit land is located in a commercial-cum-institutional zone and is mainly surrounded by hostels and the Law Development Centre.
I have also taken into account the fact that the defendant who is the registered owner has not been using the suit land for over the last 12 years now owing to the order of temporary injunction against him that was issued at the instance of the plaintiff. Considering that the measure of damages is that sum of money which ought to put the party who has been injured, or who has suffered loss in the same position as he would have been if he had not sustained the loss, Shs. 500,000,000/= would be a fair and adequate recompense and I award the same amount as general damages to the defendant.
Issue No.2: What is the appropriate rate of interest?
Section 26 (2) CPA provides for the award of interest and states as follows;
“Where and in so far as a decree is for payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit.”
In the case of Uganda Revenue Authority vs. Wanume David Kitamirike CACA No. 43 of 2010, Kasule JA in his judgment observed that while section 26 (2) of the Civil Procedure Act gives court discretion to award interest adjudged on the principal sum from any period prior to the institution of the suit, or from the date of filing the suit to the date of the decree, or on the aggregate sum adjudged from date of decree to date of payment in full, and the burden is on the party claiming interest to plead and adduce some evidence entitling that party to interest. Also, Lord Denning in the case of Hambutt’s Plasticine Ltd. vs. Wayne Tank & Pump Co. Ltd [1970]1 QB 447 held that;
“An award of interest is discretionary. It seems to me that the basis of an award of interest is that the defendant has kept the plaintiff out of his money; and the defendant has had the use of it himself. So he ought to compensate the plaintiff accordingly.”
In the instant case, the defendant prayed for an interest of 25% on the value of the land and general damages from the date of filing the suit till payment in full. Much as the defendant has suffered a great economic loss and inconvenience as a result of the compulsory acquisition of the suit land by Governments without prior compensation, an interest rate of 25% from the time of filing the suit until payment in full would be excessive. Court finds reasonable an interest rate of 8% per annum on both the sum awarded as the value of the suit land rate from the date of filing the suit till payment in full and on general damages from the date of filing until payment in full.
Issue No.3: Whether the defendant is entitled to costs.
Section 27(2) CPA (supra) provides that costs are awarded in the discretion of court but shall follow the event unless for e good reasons the court directs otherwise. See also: Jennifer Rwanyindo Aurelia &A ‘nor vs. School Outfitters (U) Ltd., CACA No.53 of 1999; National Pharmacy Ltd. vs. Kampala City Council [1979] HCB 25. In the instant case, the defendant has ably demonstrated that he suffered loss at the instance of the Government which compulsorily acquired his land without prior compensation. Article 26 (2) (i) of the Constitution provides that;
“(2) No person shall be compulsorily deprived of property or any interest in or right over property of any description except where the following conditions are satisfied—
(a) the taking of possession or acquisition is necessary for public use or in the interest of defence, public safety, public order, public morality or public health; and
(b) the compulsory taking of possession or acquisition of property is made under a law which makes provision for—
(i) prompt payment of fair and adequate compensation, prior to the taking of possession or acquisition of the property;…” (Underlined for emphasis)
In light of the above Constitutional requirement which was never complied with prior to the compulsory acquisition by Government; also given that it was the plaintiff for whose public purpose the suit land was compulsorily acquired that dragged the defendant to court even when provisions of Article 26 (2) (i) (supra) had clearly not been complied with, that constitutes a strong basis to entitle the defendant to of costs of this suit, which I award to him to be paid by Government. Accordingly, it hereby ordered as follows;
The defendant is awarded Shs.579, 600,000/= being value of the suit land.
The defendant is awarded Shs.500, 000,000 /= as general damages.
The amount in (1) shall attract an interest rate of 8% per annum from the date of filing until payment in full.
The amount in (2) above shall attract an interest rate of 8% per annum from the date of judgment until payment in full.
The defendant is awarded costs of this suit.
The defendant shall surrender the certificate of title for the suit land to the Chief Registrar of Titles for cancellation upon the Government paying the sums in (1) and (2) and (5) above plus interest as ordered in (3) and (4) above.
BASHAIJA K. ANDREW
JUDGE
04/11/2016
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