Nazmudin Gulam Hussein Viram v Nicholas Roussos [2006] UGSC 21 (23 November 2006)

THE REPUBLIC OF UGANDA

IN THE SUPREME COURT OF UGANDA

AT MENGO

(CORAM: ODOKI, .C.J, TSEKOOKO, KAROKORA, KANYEIHAMBA, KATUREEBE, JJ.S.C.)

CIVIL APPEAL NO. 01 OF 2006

BETWEEN

NAZMUDIN GULAM HUSSEIN VIRAM :::::::::::::::: APPELLANT

AND

NICHOLAS ROUSSOS :::::::::::::::::::::::::::::::::::: RESPONDENT

[Appeal from the judgment and orders of the Court of Appeal, (Mukasa-Kikonyogo, D.C.J, Kitumba & Kavuma, J.J.A) dated 11^th November 2005, in Civil Appeal No.70 of 2002].

JUDGMENT OF KANYEIHAMBA, J.S.C

The facts of and background to this appeal may be summarized as follows:

No. 30 Windsor Crescent, Kampala which is registered as lease No. 37670 on Leasehold Register Volume 240 Folio 3 is the suit property. The suit property was originally owned by one De Souza who sold it to the late Mrs. Eugenia Genovefa Roussos whose surviving son is the respondent. Mrs. Roussos was the acknowledged registered proprietor of the suit property from 19^th July, 1961 to 22^nd April 1969. In August 1972, the respondent's family was expelled from Uganda by the military regime of Idi Amin. Before then however, on 22^nd April 1969, the 1^st appellant, now deceased and his son, the second appellant came to be registered as tenants in common of the suit property under a deed of transfer. On that same day they were registered as tenants, they mortgaged the suit property to the Registrar of the Trustees of the Vithaldas Hindas Lohana Vidyarth Bhava. In the same month, on 25^th April 1969, the two joint tenants took yet another mortgage in favour of one D. Pradhar. A year later, on 13^th March 1970, the appellants mortgaged the suit property to the Housing Finance Company of Uganda. In 1972, during the expulsion of Asians from Uganda by the military regime, the appellants left Uganda. The suit property, like so many other abandoned property after the expulsion of the Asians, was placed under the management of the Departed Asians Property Custodian Board. The Custodian Board allocated the suit property to the Prisons Department of Uganda and came to be occupied by the staff of that department. The Roussos family returned to Uganda in 1980. On discovering what had happened to the suit property, the late Mrs. Genovefa Roussos filed a suit in the High Court against the appellants for the recovery of the suit property. Her major contention was that the transfer of the suit property to the appellants had been effected through fraud. She asserted that the signature on the transfer document (exhbt. P2), though purporting to be hers, was in actual fact, a forgery.

On 18^th August, 1982, Kantiti J (R.I.P) believed her evidence and entered an ex parte judgment in her favour. He ordered the Registrar of Titles to cancel the appellants' names from the certificate title and to substitute hers as the registered tenant. The Prisons Department complied with the court's order and gave her vacant possession.

Later, on their return to Uganda, the appellants successfully contested the ex parte judgment and decree. On 12^th October 1995, Berko J., as he then was, set aside the ex parte judgment and ordered that the suit between the parties be heard inter-partes. Mrs. Genovefa Roussos died before the commencement of the new proceedings. The present respondent stepped in as the administrator of her estate and was substituted as plaintiff in the suit and filed an amended plaint in court.

In the High Court, the appellants filed written submissions in defence and a counter claim. In their defence, the appellants claimed that they had bought the suit property from the late Mrs. Roussos. In the counterclaim they prayed for vacant possession of the suit property, mesnes profits with interest from the date they could have got the repossession certificate. They also prayed for costs of the suit and the counter claim.

Evidence was adduced and presented by the parties before Tabaro, J. The crucial issue upon which the whole case eventually hinged was whether or not the transfer from Mrs. Genovefa Roussos to the appellant was genuine or forged. After careful analysis of the signatures of Mrs. Roussos which were availed to him and her purported signature on the transfer forms of the suit property. Mr. John Baptist Muguzi, P.W.I a handwriting expert, concluded that the signature on the transfer document was not that of Mrs. Roussos but a forgery. The appellants and their witnesses also gave evidence both oral and documentary.

The learned trial judge found that the signature of Mrs. Roussos had been forged on the transfer deed. Consequently, the judge held that since the purported transfer to the appellants was a result of fraud, they did not validly acquire the title deeds. He ordered that the Registrar of Titles cancel the names of the appellants from the certificate of title of the suit property and substitute it with that of the respondent. He granted a permanent injunction preventing the appellants from purporting to be the owners of the suit property or trying to take possession of the same. He dismissed the counterclaim by the appellants. The appellants were dissatisfied with the decisions of the trial court. They appealed to the Court of Appeal which found no merit in their appeal and dismissed it with costs to the respondent. Hence this appeal.

It appears that by the time this appeal came to be filed in this court, the first appellant in the Court of Appeal had died. Hence his son is the sole appellant in this court. The Memorandum of Appeal contains seven grounds framed as follows:

1. The learned Justices of Appeal erred in confirming the finding of the trial judge that the transaction in the suit property was fraudulent.

2. The learned Justices of Appeal failed to properly evaluate the evidence and hence erred in law by holding that Pattni and his superiors, Patel and Metha were the appellants' agents.

3. The learned Justices of Appeal erred in law in holding that the appellants were privy to the alleged fraudulent sale.

4. The learned Justices of Appeal erred in law in holding that the appellant and his deceased father were not bona fide purchasers.

5. The learned Justices of Appeal erred in holding that the transfer deed in respect of the suit property was not properly attested.

6. The learned Justices of Appeal improperly rejected the defence evidence and hence erred in holding that the appellant and his deceased father did not take possession of the suit property.

7. The learned Justices of Appeal erred in holding that the suit property did not vest in Government.

In his prayers, the appellant further claims mense profits in respect of the suit property, from the time of repossession till the time of handing over vacant possession.

The appellant is represented by M/S Nangwala, Rezida & Co, Advocates who chose to file written submissions under Rule 93 of the Rules of this Court. The respondent is represented by M/S Didas Nkurunziza & Co. Advocates who, likewise, filed written submissions in opposition to the appeal. Counsel for the appellants argued grounds 1, 2, 3 and 4 together. The thrust of their submissions is that the appellants were bona fide purchasers for value without notice.

In the Court of Appeal, also by written submissions, Counsel for the appellants went to great lengths to show that both the appellants and their agents had been meticulous and diligent and had properly and transparently dealt with the original registered owner, Mrs. Roussos and especially her children, Nicholas, her son and respondent and Elizabeth, his sister, and for that reason, they could not be anything else other than bona fide purchasers for value without notice. However, this contention of innocence and diligence is answered correctly, in my opinion, by the learned trial judge in his judgment when after reviewing the evidence, he remarks:

"P.J. Pattri was an agent for both Elizabeth Roussos and the defendants (now appellants) and therefore the notice or knowledge he had is inevitably ascribed to the parties to the fraud - both Elizabeth Roussos and the defendants (appellants). Although the defendants (appellants) most likely furnished consideration in form of money for the property to which they could have paid Elizabeth Roussos, they cannot be said to be bona fide purchases for value without notice."

Although Counsel protests about the presence of Elizabeth Roussos in the passage cited above, there is no doubt from the rest of the evidence that Elizabeth Roussos was a significant participant in the transfer of the suit property to the appellant and his late father. In the first instance, Mr. Pattni, the agent of the appellants in the suit property, is the same Pattni, DW1, who acted for the mother of the respondent when she bought the suit property from Mr. De Souza. At the trial, Mr. Pattni testified thus;

"At the time of getting instructions for sale of the property from Elizabeth, Gulamhussein Virani, and Nazimudin Virani were present. I explained to Elizabeth at the time of giving her the documents about who should witness the documents since they were going to be signed outside Uganda. After a few weeks, Elizabeth came back with the documents bearing the name of Mrs. Roussos as having signed. I was satisfied with the signature and the witnessing of the documents. Then we prepared a mortgage for the Lohana Community and Mrs. Pradhan. They took them to Viranis for mortgages. I think I witnessed the signatures. After that, we lodged the documents for registration. From the purchase price, we paid off the mortgages made by Mrs. Roussos from C. Kanji Ltd. and Tejani. After paying the mortgages, the balance was drawn in form of a cheque in favour of Mrs. Roussos and given to Elizabeth."

In my view, it is inexplicable that the appellants should not have called Elizabeth Roussos as a material witness to testify whether she had indeed sent the transfer forms to her mother in Cyprus and whether she (Mrs. Roussos) had received the purchase money entrusted to her (Elizabeth). I am not persuaded by the arguments of Counsel for the appellants that it should have been the respondent to call Elizabeth Roussos as a witness.

For the respondent, Counsel also combined grounds 1,2,3 and 4 and argued them together. In Counsel's view, the learned Justices of Appeal and the trial judge put emphasis on the salient principles in the concept of fraud. In this regard the learned trial judge

observed;

"I accept his (the handwriting expert) findings that the person who signed the land transfer in favour of the defendants forged the signature of E.G.Roussos. With this finding, it follows that the transfer of the land to the defendants was a result of a fraud since it was a result of dishonesty."

The learned Justice of Appeal who wrote the lead judgment re­evaluated the evidence herself and concluded, "I am unable to fault the learned judge on that finding." The other learned Justices of Appeal confirmed the findings of the trial judge and agreed with the lead judgment of their colleague. The two courts also found overwhelming evidence that Pattni and his superiors, Patel and

Metha, Advocates were the appellants' agents in the fraudulent transaction.

I agree with the concurrent findings of the two courts below that the appellants failed to prove that they were bona fide purchasers for value without notice. Once fraud has been proved, and the defence of a bone fide purchaser for value without notice ruled out, no transaction can pass title to anyone under such circumstances. In my view therefore, grounds 1, 2, 3 and 4 of this appeal ought to fail. The disposal of these grounds also disposes of this appeal. I can see no further need to deal with grounds 5, 6 and 7 nor is there any necessity to consider the prayers advanced by the appellants.

All in all, I would dismiss this appeal. I would award the costs of this appeal and the costs in the courts below to the respondent.