Court name
Commercial Court of Uganda
Judgment date
20 December 2013

Ssemakula v Stanbic Bank U Ltd & Anor (Miscellaneous Application-2013/791) [2013] UGCommC 216 (20 December 2013);

Cite this case
[2013] UGCommC 216

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 791 OF 2013

(ARIDING FROM HCCS NO 417 OF 2007 LAND DIVISION AND HIGH COURT CIVIL SUIT NO 432 OF 2009 COMMERCIAL DIVISION)

SEMAKULA HARUNA}........................................................                                                                                                                                          PLAINTIFF/APPLICANT

VERSUS

  1. STANBIC BANK (U) LTD}
  2. REGISTRAR OF TITLES...................................                                                                                                                                                    DEFENDANTS/RESPONDENTS

BEFORE HON MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicant commenced this application under the provisions of order 46 rules 1 (1) (b) of the Civil Procedure Rules, section 98 of the Civil Procedure Act and section 33 of the Judicature Act for an order that the court reviews its judgment and orders in H.C.C.S. No 432 of 2009 formerly H.C.C.S. No 417 of 2007. Secondly for an order that the court makes consequential orders that this suit property blog 208 plots 279 and 280 be vested/transferred into the names of the Applicant and thirdly for costs of the application to be provided for.

There are four grounds for review of the judgment of the court namely:

  1. The Court pronounced judgment in H.C.C.S. No 432/2009 and ordered the titles to the suit property to be in possession of the Applicant.
  2. The titles to the suit properties are in the names of Josephine Nagadya who has no interest in the suit property.
  3. It is in the interest of justice that the court makes further consequential orders to have the property vested/transferred in the Applicant’s names.
  4. No one shall be prejudiced in anyway if the application is allowed.

The grounds of the application are further supplemented by the affidavit in support of Hajji Haruna Semakula, the Applicant herein. His deposition is that he sued several Defendants jointly and severally namely Josephine Nagadya, DFCU Bank (U) Ltd and Pearl Oils (U) Ltd. The suit property was registered in the names of the Applicant. The Applicant used the property to secure a loan from Gold Trust Bank Ltd under the company Wheels (U) Ltd. In the year 1991 the Applicant through Messrs General Parts (U) Ltd used the same security to secure another bigger loan from Uganda Commercial Bank Ltd. Gold Trust Bank released the title deeds for the second loan. Uganda Commercial Bank on 17 August 1991 executed a mortgage for block 208 plots 279 and 280. The property was subsequently advertised by Key Agencies and Auctioneers for alleged default of the Applicant to service the loan on 15 July 1993. That sale was challenged in H.C.C.S. No. 386 of 1993 and a temporary injunction was issued maintaining the status quo. H.C.C.S No 386 of 1993 was later on resolved in favour of Uganda Commercial Bank. The judgment and orders of the High Court were further appealed to the Court of Appeal in Civil Appeal No. 20 of 1993 in which the Court of Appeal upheld the decision of the High Court. The matter was further appealed to the Supreme Court in Civil Appeal No 005 of 1999 in which the Applicant won the appeal and the court ruled that the Receiver was not properly appointed among other orders. There was a further application for review of the judgment of the Supreme Court in Civil Appeal number 005 of 1999.

The suit property was re-advertised and sale resisted through court action in H.C.C.S. No 1470 of 2000 and the claim of the debt was declared res judicata. The judgment of the High Court in HCCS 1470 of 2009 was appealed by the successor in title of UCB to the Court of Appeal but the appeal was eventually withdrawn. The court ordered that the property title deeds exhibited in court be returned to the Respondent. However the suit property was not included on the list of titles to be returned. Gold trust bank (U) Ltd sued one of the Applicants companies for recovery of the Applicant’s indebtedness by way of foreclosure. The Applicant paid off the debts after the court made a ruling. Alleged purchase of the suit property by Josephine Nagadya was contested in H.C.C.S. No 680 of 1997. Subsequently Josephine Nagadya is said to have sold the property to Pearl Oils (U) Ltd. Pearl Oils (U) Ltd which got registered as a transferee in title from Josephine Nagadya. They went ahead to mortgage the suit property to Messieurs Stanbic (U) Ltd. The Applicant filed HCCS No 417 of 2007 against the Respondents together with Josephine Nagadya, DFCU bank (U) Ltd and Pearl Oils (U) Ltd for recovery of the title. When H.C.C.S. No 417 of 2007 was still pending Pearl Oils (U) Ltd filed a suit against Josephine Nagadya for recovery of Uganda shillings 185,000,000/= being consideration for the money paid for the suit property on the ground that Nagadya Josephine did not have good title. This was in H.C.C.S. No 87 of 2009.

The Applicant sought the leave of court to withdraw H.C.C.S. No 417 of 2007 against Josephine Nagadya, DFCU bank (U) Ltd, Pearl Oils (U) Ltd and the Registrar of Titles and application was allowed in Miscellaneous Application number 542 of 2011. The Applicants subsequently applied for leave to amend the plaint and the application for amendment was allowed. Preliminary objections were raised by Counsels for the fourth Respondent which were overruled. Subsequently H.C.C.S. No 432 of 2009 was heard on merit and judgment was delivered. In the judgment, and order was made for the Applicant to have possession of his duplicate certificate of title for the suit property which had been in court custody during the proceedings and the Applicant is now in possession of the title deeds. However the title deeds as held in the names of Josephine Nagadya. Consequently the Applicant’s application is for review of that judgment is to have the second Respondent have the titles vested/registered into his names.

The grounds are that Josephine Nagadya who is the registered proprietor has no interest in the suit property having sold the same for Uganda shillings 185,000,000/= to Pearl Oils (U) Ltd. DFCU bank (U) Ltd does not have an interest in the property and released the mortgaged in favour of the Applicant in 1991. Thirdly Pearl Oils (U) Ltd was deregistered from the suit property by the Commissioner for land registration after its registration thereon was found to be irregular/illegal/unlawful because of an existing caveat by the Applicant forbidding dealing in the property. Messrs Stanbic bank (U) Ltd does not have an interest in the property since it was simply a mortgagee. Since delivery of judgment on 7th of December 2012 in H.C.C.S No 432 of 2009, none of the parties against whom the suit had been withdrawn have come forth to challenge or appeal or apply for review of the orders of the court. In H.C.C.S No 417 of 2007 DFCU Bank (Uganda) Ltd conceded that as the predecessor in title of Gold Trust Bank (Uganda) Ltd, the predecessor in title had released the certificate of title for plot 279 and 280 block 208. As far as Pearl Oils (U) Ltd is concerned, their written statement of defence is that their registration on the title deed was cancelled for being fraudulent. The first Respondent’s mortgage registered on the suit property was later withdrawn or cancelled. The second Respondent never filed a written statement of defence and ex parte judgment was entered against it. There was an existing court injunction at the time of the purchase of the suit property by Josephine Nagadya. The suit property is in possession of the Applicant.

In a further supplementary affidavit the Applicant avers that the duplicate certificates of title for Kyadondo block 208 plot 279 and 280 are now in his possession pursuant to the court order. In the affidavit he reiterates submissions made in HCCS 432 of 2009. On 24 September 2013 the Applicant filed a further supplementary affidavit in support of the application. In the affidavit the Applicant reiterates submissions and evidence he gave in the main suit.

At the hearing of the application Messieurs Stanbic bank was represented by Counsel John Fisher Kanyemibwa while the Applicant was represented by Moses Kuguminkiriza. Both Counsels agreed to address the court in written submissions.

The gist of the Applicant’s submissions is that the Respondents were served but none of them opposed the application by filing an affidavit in reply. Consequently the averments and deposition of the Applicant remains unchallenged. Counsel further submitted that the remedies sought by the Applicant do not concern Messieurs Stanbic Bank (U) Ltd. I have perused a copy of the written submission of the first Respondents Counsel and his short reply to the submissions is that the Applicant is seeking an order of review of the judgment of this court dated 7th of December 2012 in H.C.C.S. No 432 of 2012. The Applicant successfully secured a court award for possession of the certificates of title in respect of plots 279 and 280 which were in the custody of the court though registered in the names of Josephine Nagadya. The fourth Respondent was joined to the application merely on the ground of being a party to the main suit. However the first Respondent has no interest in the property or the estate of Josephine Nagadya in whose name the titles are registered. In the premises the first Respondents Counsel prayed that the outcome of the application should not in any way prejudice the first Respondents interests and secondly that the first Respondent should be awarded costs of the application.

In light of the above submission, all the submissions of the Applicants Counsel in relation to the first Respondent are not necessary.

The Applicant’s case is that H.C.C.S. No 432 of 2009 was heard on the merits and judgment delivered in favour of the Applicant. In the judgment the court ruled that the Applicant was entitled to possession of the duplicate certificate of title of the suit property which had earlier on been in the custody of the court. The title deeds were consequently handed over to the Applicant but remained in the names of Josephine Nagadya. In this application the Applicant seeks for a vesting order of the suit property into his names. The Applicant's case is that a judgment can only be reviewed where no appeal has been preferred against the judgment by the party seeking a review. The Applicant never appealed from the judgment sought to be reviewed.

The basis of the application is the conduct of the second Respondent and actions taken in respect of the suit property by the second Respondent. The Applicant’s case is that the Commissioner for land registration authorised the issuance of a substitute certificate of title on the ground that Josephine Nagadya had the duplicate certificate of title and had applied for it. Upon the issuance of a substitute certificate of title for the Applicant’s property, the Commissioner for Land Registration transferred it from Josephine Nagadya to Pearl Oils (U) Ltd were said to be buyers. The entries on the substitute certificate of title and transfer to Pearl Oils (U) Ltd were made without notice of the caveat that had been noted earlier on the suit property by the Applicant and which were not reflected on the substitute title made by the registrar. When the registrar discovered that the transfer to Pearl oils (U) Ltd was made when there was a subsisting caveat by the Applicant, Pearl Oils (U) Ltd was given notice to show cause why its name should not be cancelled from the title deed. The registrar accordingly and after issuing due notice cancelled the names of Pearl Oils (U) Ltd. It was therefore a grave error/mistake on the part of the second Respondent to revert the property into the names of Josephine Nagadya. The Respondent had to satisfy himself that the said Josephine Nagadya had repurchased the property from Pearl Oils (U) Ltd or the reversion had been directed by the court or by mutual consent. The action of the Respondent to transfer the suit property back to Josephine Nagadya was not barred by any instrument or evidence of payment of the relevant transfer taxes etc. It amounted to donating the property to Josephine Nagadya which was not only unlawful but also illegal. The said registered proprietor had no registrable interest in the suit property at that time the warrant having the titles revert back to her. Moreover she did not have the duplicate certificates of title (owners copy) up to date.

Additionally the Applicant’s Counsel submitted that the court went into great detail to examine how the same instrument number was used to cancel the mortgages that were on the suit property by examining the titles of the suit property which had been exhibited in court. The sum total of the finding of the courts was that there were illegalities which were evident in the entire process of having Josephine Nagadya registered on the title deeds. Counsel relied on the case of Makula International versus His Eminence Cardinal Nsubuga [1982] HCB 11. There are therefore sufficient reasons for this honourable court to exercise its inherent powers and order that the property is vested in the Applicant’s names.

Additionally in the judgment of the court it was held that Gold Trust Bank had no further interest in the suit property. Consequently the purported sale of plots 279 and 280 for purposes of realising an outstanding sum of Uganda shillings 15,132,128/= was irregular and inconsistent with the acts of Gold Trust Bank. The successor in title of Gold Trust Bank namely DFCU Bank Ltd also claims to have no interest in the property at the time of its purported sale. Consequently there are sufficient grounds for the court to review its judgment and issue the order sought in the review.

In rejoinder to the submissions of the first Respondents Counsel on the question of costs, the Applicants Counsel submitted that the first Respondent was only added as a party to the application because the judgment sought to be reviewed includes the second Respondent as a party. In that judgment no costs were awarded to either party. Each party was ordered to bear its own costs despite the protracted trial in which the Applicant got back his certificate of title after 22 years. In any case the first Respondent did not pray for dismissal of the application with costs. Counsel contended that the Applicants titles were handed over to the then UCB who is the predecessor in title of the first Respondent when they were in the names of the Applicant. It was only fair and just that the Applicants property is vested into his names on the orders of this court. There was culpability on the part of the first Respondent and it does not warrant awarded costs to the first Respondent. Finally Counsel submitted that the Applicant spent eight years in litigation pursuing his title deeds which he had initially deposited with the predecessor in title of the first Respondent and therefore ought not to be condemned in further costs.

Ruling

I have carefully considered the Applicants application and the submissions of the Applicants Counsel. I have already indicated above that the first Respondent has submitted that it has no interest in the application and provided that the outcome of the application does not affect the interest of the first Respondent. On the other hand the second Respondent was served with the application notwithstanding the fact that this suit proceeded ex parte against the second Respondent.

At the hearing of the application, I raised the issue of the property being in the names of Josephine Nagadya (deceased) which was the same concern of the court in the application for withdrawal of the suit against her estate. At the time of the withdrawal the court had not been notified about the appointment of any administrator of the estate. The Applicant had applied in miscellaneous application number 542 of 2011 to withdraw this suit inter alia against Josephine Nagadya who is the current registered proprietor of the suit property. The application was withdrawn against DFCU Bank (U) Ltd and Pearl Oils (U) Ltd with the consent of the parties. As far as the estate of Josephine Nagadya (deceased) is concerned the court made its ruling at page 15 and 16 of the ruling. The ruling in that application was delivered on 28 October 2011 and is as follows:

"As far as the first Defendant is concerned I see no prejudice to the estate if the suit is withdrawn against the estate of the deceased without a hearing. What is material is that the question of whether costs should be awarded and how should be left to the Administrator of the estate of the first Defendant/Respondent to be appointed by court in future. As opposed to withdrawal by consent, withdrawal against the first Respondent is made under order 25 rules 1 (2) with leave of court.  Order 25 rule 3 leaves it to the discretion of a Defendant to enter judgment for costs for a suit withdrawn against it. The Administrator to be appointed may be heard on this question and no prejudice would be occasioned to the estate. The suit stands withdrawn against the first Respondent and the question of costs of the first Respondent is stayed pending the appointment of an administrator to the estate of the deceased.”

What was left was the question of costs incurred by the estate of the deceased. This suit had however been withdrawn against the estate of Josephine Nagadya. Costs were the costs of the withdrawal and remained a matter pending before this court. I have further observed that there was no counterclaim against the Applicant in this suit brought by the estate of Josephine Nagadya.

The second Respondent was the 5th Defendant in the main suit and had not filed a written statement of defence. In miscellaneous application number 542 of 2011 the court was informed and noted that the 5th Respondent who is now the second Respondent did not file a defence and the application proceeded ex parte against it after judgment.

I have carefully considered the question of parties to this application. The application is substantially against the second Respondent who is the Commissioner for Land Registration. It cannot be against the estate of Josephine Nagadya against whom the suit had been withdrawn and in whose names the title is registered.

Secondly in the previous rulings I did make comments that proceedings for cancellation of title have to be taken against the registered proprietor. My comments however could not have been the subject of controversy between the Applicant and the second Respondent who is the Commissioner for land registration. It was made in light of the fact that Messieurs Stanbic Bank (U) Ltd was not the registered proprietor of the suit property and such an order for cancelation of title could not be made against it.

In those circumstances the application for review seems on the first glance to be very narrow in scope. I have carefully considered the Applicants application on the basis of the proper parties to the application for review. I will confine myself to the judgment of the court dated 7th of December 2012. I am consequently of the considered view that the court did not make any comments about any interlocutory judgment said to have been entered by the registrar against the second Respondent/the Commissioner for Land Registration. In so far as the suit against the Commissioner for land registration was not addressed conclusively there is a cause for reviewing the record to establish whether there is merit in this application as against the Commissioner for land registration/Registrar of titles.

I have carefully considered the grounds of the Applicant’s application for review of the judgment of the court in H.C.C.S. No 432 of 2009. The first ground is that the court ordered the titles to the suit properties to be in possession of the Applicant. On the first ground the basis of the order of the court is the fact that the Applicant deposited his title deeds with Uganda Commercial Bank the predecessor in title of Messieurs Stanbic bank. Subsequently there was a suit between the parties that went up to the Supreme Court. The suit property still had the encumbrance of Messieurs Gold Trust Bank (U) Ltd. However Messieurs Gold Trust Bank and the successor in title agreed that the bank had no interest in the two plots namely plots 279 and 280 of block 208. It was established through the evidence that Gold Trust Bank had written to Uganda Commercial Bank indicating that they had no interest in the title. There was a suit between Gold Trust Bank (U) Ltd and Wheels (U) Ltd H.C.C.S. No 433 of 1996 for foreclosure of the plots deposited by the Applicants with the bank. The suit dealt with plots 1141 and 1330 which is also part of block 208. The evidence was consistent with the fact that Messieurs Gold Trust Bank (U) Ltd released plots 279 and 280 to the Plaintiff who mortgaged it to UCB. The Applicant is a general manager of Messieurs General Parts (U) Ltd and the company was involved in another suit. This was H.C.C.S. No 386 of 1993 between Uganda Commercial Bank as Plaintiff and Messieurs General Parts (U) Ltd as the Defendant in which the plots 279 and 280 was part of the suit property. There was an attempt by Uganda Commercial Bank to sell the properties and the same was restrained by injunction. This suit went up to the Supreme Court after Messieurs General Parts (U) Ltd lost the case in the High Court. This suit involved in execution of the mortgage on the suit property among others things and the mortgage was declared to be executed in disregard of law. Subsequently there was an order releasing the property/title deeds to Messieurs General Parts (U) Ltd. By that time the suit was between Non-Performing Assets Recovery Trust the successor in title of the defunct Uganda Commercial Bank. The Supreme Court had held that the mortgage document was not validly executed. Subsequently in H.C.C.S No 1470 of 2000 the Applicant and Messieurs General Parts (U) Ltd as Plaintiffs sued the Trustee of the Non-Performing Assets Recovery Trust and Key Agencies and Auctioneers with others. This was because there was an attempt through advertisement to sell the suit property again. The High Court held and declared that the first Defendant improperly instructed the Defendant's to sell the Plaintiffs property. Secondly the sale by the Defendants of the Plaintiffs property to recover Uganda shillings 2,288,821,473/= was not authorised by a legal mortgage. The decision was delivered on 28 October 2002. Plots 279 and 280 were among the plots advertised by Non-Performing Assets Recovery Trust for sale. Subsequently Non-Performing Assets Recovery Trust appealed against the judgment of the High Court to the Court of Appeal in Civil Appeal No 29 of 2003. The appeal was withdrawn as reflected in the order of the court dated 18th of May 2005. The order of the court for withdrawal of the appeal includes an order awarding costs of the appeal to the Respondents and also an order that all titles of the suit properties exhibited in court are returned to the Respondents.

Subsequently even though plots 279 and 280 were included in the suit property and had been advertised for sale and successfully challenged by the Applicant and Messieurs General Parts (U) Ltd in H.C.C.S. No 1470 of 2000, the Trust Administrator of The Non-Performing Assets Recovery Trust did not return the plots. In other words the Applicant had not enjoyed the fruits of his litigation spanning over a period of one and a half decades. In the intervening period the property had been sold. In the judgment of this court which is the subject of this application I ordered the return of the title deeds which were by that time in possession of the court. This was the final result of the Applicants litigation in which the matter of whether Uganda Commercial Bank or Non-Performing Assets Recovery Trust could sell the asset had been resolved in favour of the Applicant who in H.C.C.S. No 1470 of 2000 was the first Plaintiff. The title deeds had been deposited with Messieurs Stanbic bank after Messieurs Pearl Oils (U) Ltd had deposited it as the registered proprietor having bought the property from Josephine Nagadya (deceased).

The Applicant was not privy to transactions involving the suit property neither was Uganda Commercial Bank or Non-Performing Assets Recovery Trust. The property had been sold by the parties allegedly on instructions of Messieurs Gold Trust Bank (U) Ltd. It was established in my judgment that Messieurs Gold Trust Bank (U) Ltd had no interest in the property having released it to the Applicant who subsequently deposited it with Uganda Commercial Bank. However there was no formal release of mortgage encumbrance on the title deed. This was taken advantage of by third parties not before the court. The Applicant was therefore entitled to his property on the ground that the matter of the mortgage of Uganda Commercial Bank and the successor in title Messieurs Non-Performing Assets Recovery Trust had terminated in favour of the Applicant and there was an order of the Court of Appeal to return the title deeds to the Applicant and Messieurs General Parts (U) Ltd. The titles were found initially in possession of Messieurs Stanbic bank and they duly handed it over to the court. The applicant has all along been in possession of the suit property.

By this time the title deeds were in the names of Josephine Nagadya who had sold it to Messieurs Pearl Oils (U) Ltd. The second Respondent reversed the registration into the names of Josephine Nagadya. In the meantime there is a suit pending between Pearl Oils (U) Ltd and Josephine Nagadya. Josephine Nagadya is the nominal and legal owner of the suit property while the Applicant remained the true equitable and beneficial owner of the suit property under the various judgments of the court and having effective possession of the suit property.

The second ground of the application is that the estate of Josephine Nagadya has no interest in the suit property having sold it to Pearl Oils (U) Ltd. On this ground the Applicant’s contention obviously is that the second Respondent who is the Registrar of Titles/Commissioner for land registration ought to have reversed the title deeds back to the Applicant who was originally the registered proprietor by the time the property was mortgaged to the defunct Uganda Commercial Bank. In the judgment of the court, the subject matter of the application for review, the following facts have been established namely:

  1. Messieurs Wheels (U) Ltd had deposited the title deeds for plots 279 and 280 with Gold Trust Bank (U) Ltd.
  2. Messrs Gold Trust Bank released the title to plots 279 and 280 to the Applicant with a covering letter dated 16th of July 1991 as it had other plots to secure the indebtedness of Messieurs Wheels (U) Ltd which had been deposited with it. Messieurs Gold Trust Bank (U) Ltd filed civil suit number 433 of 1996 against Messieurs Wheels (U) Ltd by way of originating summons for foreclosure of plots 1141 and 1330 block 208 which had been deposited secure an advance of a sum of Uganda shillings 10,000,000/= with interest. The order for foreclosure was made on 1 November 1996.
  3. Messieurs General Parts (U) Ltd went ahead after the release of title deeds for plots 279 and 280 by Messieurs Gold Trust Bank (U) Ltd to mortgage the property to UCB among other plots.
  4. UCB through Messieurs Key Agencies and Auctioneers advertised the property for sale and indicated that it would be sold on 15 July 1993 for the indebtedness of Messieurs General Parts (U) Ltd and included plots 279 and 280 belonging to the Applicant for the intended sale.
  5. Messieurs UCB also filed H.C.C.S. No 386 of 1993 against Messieurs General Parts (U) Ltd for recovery of sums of money owed to it under the loan/mortgage.
  6. General parts obtained a temporary injunction order against UCB restraining the threatened sale on 20 July 1993 in the same suit.
  7. The suit was decided in favour of UCB on the 12th of May 1998. The court ordered that the appointment of Messieurs Key Agencies and Auctioneers as receivers was proper and UCB would exercise powers under the mortgage by appointment of receivers and the proceeds of any recoveries had to be paid to the Non-Performing Assets Recovery Trust.
  8. Messieurs General Parts (U) Ltd appealed the decision to the Court of Appeal and lost the appeal.
  9. Messieurs General Parts (U) Ltd further appealed to the Supreme Court in Civil Appeal number 5 of 1999. The Supreme Court partially allowed the appeal and rejected the declaration of the High Court that UCB properly appointed Messieurs Key Agencies and Auctioneers.
  10. Messieurs Non-Performing Assets Recovery Trust applied for review of the Supreme Court judgment and application for review was dismissed with costs. The Supreme Court further observed that the mortgage had not been lawfully executed.
  11. Subsequently the Non-Performing Assets Recovery Trust re-advertised the suit property inclusive of plots 279 and 280 for sale. Consequent to the advertisement, Messieurs General Parts (U) Ltd and the Applicant sued Non-Performing Assets Recovery Trust (the trustee thereof) and Messieurs Key Agencies and Auctioneers in H.C.C.S. No 1470 of 2000. The Plaintiffs suit succeeded with a declaration that the first Defendant improperly instructed the Defendant's to sell the Plaintiffs property and secondly that the sale by the Defendants of the Plaintiffs property was not authorised by a legal mortgage.
  12. The Non-Performing Assets Recovery Trust appealed against the decision of the High Court in Civil Appeal number 29 of 2003 to the Court of Appeal. However on the 18th of May 2005, the Non-Performing Assets Recovery Trust withdrew the appeal.
  13. The order of the Court of Appeal that was extracted included an order that all the titles to the suit property exhibited in court are returned to the Respondents one of whom is the Applicant in this matter.
  14. The appellants in that matter failed to return plots 279 and plot 280 which were among securities advertised for sale and also the subject matter of appointment of receivers and the impugned mortgage.
  15. The evidence on record shows that on 17 August 2007 the Commissioner for Land Registration wrote to the lawyers of Pearl Oils (U) Ltd on the matter of Kyadondo block 208 plots 279 and 280 in which he stated that they were registered wrongly when the Applicant had a caveat forbidding registration under instrument number KLA 294430 of 21 April 2006. The Registrar of titles gives notice of cancellation of title under section 91 (8) (d) of the Land Act cap 227. The Register of Titles went ahead to revert the title back to Josephine Nagadya (deceased).

The record of the court shows that in a letter dated 8th of January 2008 the Applicant’s lawyers wrote to the Deputy Registrar High Court, (Land Division) applying for judgment under Order 9 rule 8 of the Civil Procedure Rules to be entered against the 5th Defendant in H.C.C.S. No 417 of 2007. The 5th Defendant is the second Respondent in this application. Fees for interlocutory judgment were paid on 9 January 2008. There is however no evidence of endorsement of the Registrar entering judgment. On 26th of October 2009 the honourable judge of the Land Division Anna Magezi made an order transferring the suit to the Commercial Court Division for expeditious handling on the application of Counsels for the parties.

The original plaint in paragraph 7 (e) contains averments for an order that the Plaintiff is reinstated as the registered owner of the suit land. Secondly it is averred in paragraph 7 (g) that an order is issued for 5th Defendant/now the second Respondent to this application to implement the orders and alter the register accordingly. In other words the only order sought in the plaint by the time the Applicant applied for interlocutory judgment against the second Respondent to this application is for altering the register by restoring the names of the Applicant on the title deeds of plots 279 and 280, the subject matter of the suit. I have carefully considered Order 9 rule 8 of the Civil Procedure Rules which provides for the entry of interlocutory judgment against a Defendant who has not filed a defence. The head note of the rule is "assessment of damages". After entry of interlocutory judgment, the suit would be set down for assessment by the court of the value of the goods and damages or the damages only as the case may be. The rule is inapplicable as against the second Respondent in the circumstances of the case and it can be appreciated that the registrar did not endorse the letter seeking for entry of interlocutory judgment.

The applicable rule is Order 9 rule 10 of the Civil Procedure Rules which provides that the suit may proceed as if the party had filed a defence. Given the nature of the order sought, cancellation of title or restoration of the Applicant in those circumstances required leading evidence for the remedy.

In most cases an order for restoration of the Applicants name would be a consequential order flowing from the finding of inter alia fraudulent registration. The application proceed on the basis that the court seemingly never considered the suit as against the 5th Defendant/second Respondent to this application. The question therefore is whether in the circumstances this court has any jurisdiction to make an order of cancellation of title and restoration of the Applicant on the title deed that may be enforced by the second Respondent.

The evidence and the judgment of the court clearly showed that Gold Trust Bank (Uganda) Ltd had no further interest in the suit property by the time certain agents purported to sell the property to Josephine Nagadya. The argument that Josephine Nagadya has no interest in the property is untenable on a procedural point. It is a requirement of natural justice that a party should not be condemned unheard. However, the Applicant is innocent of the transactions that took place when the matter was pending in court. The question is whether there was an illegality and whether the Respondent ought to have considered the issue under section 91 of the Land Act cap 227. Section 91 of the Land Act provides as follows:

            “91. Special powers of registrar.

(1) Subject to the Registration of Titles Act, the registrar shall, without referring a matter to a court or a district land tribunal, have power to take such steps as are necessary to give effect to this Act, whether by endorsement or alteration or cancellation of certificates of title, the issue of fresh certificates of title or otherwise.

(2) The registrar shall, where a certificate of title or instrument—

(a) is issued in error;

(b) contains a misdescription of land or boundaries;

(c) contains an entry or endorsement made in error;

(d) contains an illegal endorsement;

(e) is illegally or wrongfully obtained; or

(f) is illegally or wrongfully retained, call for the duplicate certificate of title or instrument for cancellation, or correction or delivery to the proper party.”

Several questions may be determined by the Commissioner for land registration under the above section. This include whether the registration of Josephine Nagadya was made in error. Obviously Gold Trust Bank (U) Ltd still had a registered mortgage on the title deeds of plots 279 and 280 and agents purported to sell and transfer the property under a mortgage. Any suit in respect thereof has not been tried. Secondly there is a question of whether there was any illegal endorsement on the title deeds. Thirdly whether the title was illegally or wrongfully obtained or illegally or wrongfully retained. In the previous proceedings the second Respondent’s Commissioner for land registration only considered the fact that there was a caveat of the Applicant on the said property by the time it was transferred from Josephine Nagadya Pearl Oils (U) Ltd. The registered proprietor is entitled to notice before any cancellation under section 91 of the Land Act. By the time proceedings terminated in favour of the Applicant after a period of over 12 years when the matter was still in court, it would be difficult for the Applicant to commence other proceedings in respect of the same title when the Court of Appeal decreed that they should be returned to him. He had deposited the titles with Uganda Commercial Bank and when the order to return the titles was made finally by the Court of Appeal after succeeding in the action against the successor of Uganda Commercial Bank namely Non-Performing Assets Recovery Trust the order of the Court of Appeal to return the title deeds to him could not be implemented because there was a transfer of the property first to Josephine Nagadya and later from her to Pearl Oils (U) Ltd. However the Applicant had proceeded against Josephine Nagadya who subsequently passed away and withdrew his action against her estate after she passed away primarily because an administrator of the estate had not been appointed leading to more delays.

I have been surprised by the number of applications which have been filed by the Applicant. Some of the applications ought not to have been filed at all. In Miscellaneous Application number 542 of 2011, the Applicant sought the leave of court for an order that the main suit proceeds against the fourth Defendant. He sought to withdraw the suit against the 1st, 2nd, 3rd, and 5th Respondent. The fifth Respondent/Defendant was the Registrar of Titles. In ground 7 of the Notice of Motion, the Applicant averred that the 5th Respondent did not file a defence but his usefulness was only to put into effect the orders of the court. The court held that as far as the 5th Respondent is concerned, it did not file a defence and the application proceeded ex parte against it after judgment in default of defence had been entered against it. The order of the court can be found at page 15 of the ruling dated 28th of October 2011. The court ruled as follows on the question of the application of the Applicant for withdrawal of the suit:

"The 5th Defendant did not put in a defence and the Plaintiff is at liberty to withdraw the suit against it without the leave of court under order 25 rule 1 (1) of the Civil Procedure Rules. Consequently the suit against the 5th Defendant stands withdrawn with no order as to costs."

In those circumstances, the court made no error of any kind that may be reviewed against the second Respondent. The second Respondent is only obliged to implement whatever orders the court issues without having to be made a party. In those circumstances bearing in mind the number of years the Applicant has spent pursuing his property, the court cannot simply ignore the Applicant’s predicament and application. It is obvious that the application to withdraw this suit against the estate of Josephine Nagadya and the Registrar of Titles at the material time was ill advised. I have further considered the provisions of section 98 of the Civil Procedure Act under which this application partially proceeded. It provides that nothing under the Civil Procedure Act shall be deemed to limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice. In those circumstances I have tried to determine the ends of justice in light of the various judgments of this court, the Court of Appeal and the Supreme Court on the same suit property namely plots 279 and 280 among other plots.

Because the suit against the second respondent/the registrar of titles has been withdrawn, this application is an originating motion commencing a fresh action against the registrar and cannot be an application for review. In the case of G.R. Mandavia vs. Rattan Singh S/o Nagina Singh [1962] EA 730 at page 735 Sir Trevor Gould JA of the East African Court of Appeal at Nairobi held: 

“The procedure, by which the December order was obtained, i.e. by originating motion under O. L of the Civil Procedure (Revised) Rules, 1948, has not been challenged at any stage. The motion therefore initiated a civil proceeding commenced in manner prescribed by those Rules, and the resultant proceeding fell within the definition of a “suit” in s. 2 of the Civil Procedure Ordinance (Cap. 5 of the Laws of Kenya, 1948).

Similarly the Applicants application commenced a fresh action against the second Respondent and is a fresh suit in terms of section 2 of the Civil Procedure Act which defines a suit to mean: "all civil proceedings commenced in any manner prescribed." The second respondent was duly served with the notice of motion according to the affidavit of service of Kiwanuka Eriab filed on court record. The second respondent never opposed the application by filing an affidavit in reply or making an appearance so as to object to the proceedings. Secondly the primary remedy sought by the applicant against the second respondent are consequential orders that the suit property block 208 plots 279 and 280 be vested/transferred into the names of the applicant.

That being the case the court will exercise its inherent jurisdiction under section 98 of the Civil Procedure Act to make such orders as may be necessary for the ends of justice. Secondly I have considered the constitutional principle enshrined in article 126 (2) (b) of the Constitution of the Republic of Uganda which provides that: "justice shall not be delayed;" the constitutional principles for the exercise of judicial power under article 126 of the Constitution is the same as the common law adage that "justice delayed is justice denied". Further proceedings in this matter will lead to a denial of justice to the applicant/plaintiff.

The termination of previous proceedings had ended with an order to return the applicants title deeds to him. The orders presupposed that there were no further dealing in the suit property namely plots 279 and 280 of block 208 after they were deposited with the defunct Uganda Commercial Bank which had filed a suit against General Parts (U) Ltd and which suit was inherited by the Non-Performing Assets Recovery Trust. The applicant all along was in possession while the dispute remained in court for resolution. The applicant under the judgment of the High Court, Court of Appeal and Supreme Court remained the beneficial and equitable owner of the suit property and in whose favour orders were made to return the title deeds to him. In the circumstances of the case it is my judgement that the applicant is entitled to declaratory judgement under order 2 rule 9 of the Civil Procedure Rules which provides as follows:

            "9. Declaratory judgment.

No suit shall be open to objection on the ground that a merely declaratory judgement or order is sought by the suit, and the court may make binding declarations of right whether any consequential relief is or could be claimed or not."

A rule in pari materia with our Order 2 rule 9 of the Civil Procedure Rules was interpreted in the case of Guaranty Trust Company of New York versus Hannay and Company Limited [1915] 2 KB 536 it was held by Pickford LJ that a declaration of right could be made even where no consequential relief can be given. According to Bankes LJ at page 568 the rule “enables the court to make the declaration irrespective of whether consequential relief could be claimed or not...” The rule (in pari material with Order 2 rule 9 ) has been interpreted in Halsbury’s laws of England 3rd edition volume 22 paragraph 1610 pages 746 – 747, to give a right to declaration without reference to the enforcement of the rights in the following words:

“It is however sometimes convenient to obtain a judicial decision upon a state of facts which has not yet arisen, or a declaration of the rights of a party without reference to their enforcement. Such merely declaratory judgments may now be given and the court is authorised to make binding declarations of right whether any consequential relief is or could be claimed or not …”

In this case the applicants sought a vesting order but in lieu thereof and exercising the powers of this court under section 98 of the Civil Procedure Act, the following declarations are made under order 2 rule 9 of the Civil Procedure Rules namely:

  1. The Applicant deposited his title deeds for block 208 plots 279 and 280 with the defunct Uganda Commercial Bank wherein Messieurs General Parts (U) Uganda limited executed a mortgage with the said bank.

 

  1. Uganda Commercial Bank filed High Court civil suit number 386/1993 for recovery of the debt and the suit succeeded against General Parts Uganda Ltd with a declaration that the plaintiff properly appointed a receiver/manager namely Messieurs Key Agencies and Auctioneers. Subsequently after the matter was appealed firstly to the Court of Appeal and with a further appeal to the Supreme Court, the Supreme Court held inter alia that the appointment of the receivers was not lawful and that the mortgage was not lawfully executed.

 

  1. Subsequently the suit was handled on behalf of the defunct Uganda Commercial Bank by Non-Performing Assets Recovery Trust at the Supreme Court. The Non-Performing Assets Recovery Trust again advertised the suit property for sale after termination of the Supreme Court proceedings in October 2000.

 

  1. The applicant and Messieurs General Parts (U) Ltd filed High Court civil suit number 1470 of 2000 against the Trust Administrator of the Non-Performing Assets Recovery Trust and Messieurs Key Agencies and Auctioneers and successfully challenged the threatened sale and the proceedings terminated with a declaration that the first defendant improperly instructed the second defendant to sell the plaintiffs property secondly the sale by the defendants of the plaintiffs property was not authorised by a legal mortgage. The proceedings terminated on 28 October 2002.

 

  1. The Trustee of the Non-Performing Assets Recovery Trust filed Civil Appeal number 29 of 2003 in the Court of Appeal against the judgement of the High Court and the appeal was withdrawn on the 18th of May 2005 with costs. The Court of Appeal ordered that all the titles of the suit property as exhibited in court are returned to the respondents which includes the applicant.

 

  1. By the time the property was mortgaged to the defunct Uganda commercial bank and by the time Uganda commercial bank filed High Court civil suit number 386 of 1993 Kyadondo block 208 plots 279 and 280 were registered in the names of Hajji Haruna Semakula.

 

  1. The property is currently registered in the names of Josephine Nagadya as the nominal registered proprietor but the equitable and beneficial owner of the suit property is Hajji Haruna Semakula the applicant in this application/suit.

 

  1. The applicant has all along been in possession of the suit property up to date.

 

  1. In the circumstances the applicant is entitled not only to possession of his title deeds as ordered by the court but to full rights as the proprietor of the suit property pursuant to the order of the Court of Appeal returning his title deeds after final determination of the suit in civil appeal number 29 of 2003 on the 18th of May 2005.

 

  1. The applicant is entitled to quiet possession of plots 279 and 280 as the owner thereof and to registration on the title deed according to the registration thereon by the time the titles were deposited with Uganda Commercial Bank and the matter remained pending in court and until when the titles were ordered to be returned to him in 2005 and lately the order reaffirmed in December 2012 by this Court.

In the circumstances, the questions summarised for consideration under section 91 of the Land Act are referred to the Commissioner for land registration for reconsideration of the Applicant’s entitlement vis a vis the rights of the current registered proprietor in light of the various rulings, judgments and orders of the High Court, the Court of Appeal in withdrawal of appeal by the Non-Performing Assets Recovery Trust and that of the Supreme Court order which have been referred to in the judgement in High Court civil suit number 432 of 2009. The registrar will also consider the judgment of this court in Civil Suit number 432 of 2009 and the declarations herein.

As far as the question of costs of the first Respondent is concerned, the Applicant has not sought any remedies against the Respondent and conceded that it had no interest. The first Respondent would in those circumstances be entitled to costs for having engaged Counsel to respond to the application even if to make a representation about there being no interest being pursued against the first Respondent. The application is entitled as against the first and second Respondents and it is a requirement of procedural law that the Respondents had to be served with the Notice of Motion under Order 52 rule 2 of the Civil Procedure Rules. I am constrained to award costs to the first Respondents. I do however note that the first Respondent did not file any affidavits in reply. Costs are awarded accordingly to the first Respondent. Each party will bear its own costs as against the second Respondent.

Ruling delivered in open court on the 20 December 2013

 

Christopher Madrama Izama

Judge

Ruling/Judgment delivered in the presence of:

Kuguminkiriza for the Applicant

John Fisher Kanyemibwa for the First Respondent

Applicant Hajj Haruna Semakula in attendance

Charles Okuni: Court Clerk

 

Christopher Madrama Izama

Judge

20/12/2013