THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KABALE
LAND CIVIL SUIT NO. 0034 OF 2015
KICONCO PRUDENCE ---------------------------------------PLAINTIFF
2.COMMISSIONER LAND REGISTRATION-----------DEFENDANTS
Before: Hon. Lady Justice Olive Kazaarwe Mukwaya
The plaintiff brought this claim against the defendants seeking;
1. A declaration that the land comprised in Lease Hold Register Volume 2299 Folio 15, land at Jackson Road, Kabale Municipality (suit land) was fraudulently and illegally acquired by the 1st defendant;
2. An order for cancellation of the entry of the 1st defendant from the certificate of title of the suit land and restoration of the plaintiff thereon.
3. Special and general damages
4. Mesne profits, interests and costs.
When this matter came up for hearing, 2nd defendant had not filed a defence and the suit proceeded ex parte.
The plaintiff, PW1, testified that was the registered proprietor of the suit land. She was in need of a loan to settle some financial difficulties she was facing. PW2, Karabahite Valence testified that the plaintiff telephoned him saying she needed money from the 1st defendant, who was a money lender in town. PW2 shared the 1st defendant’s contact with her. In a transaction dated 26th January 2011, the plaintiff borrowed money from the 1st Defendant and handed over the certificate of title to the suit land plus two passport photographs as security for the loan of UGX 60,000,000/= plus interest.
In the same transaction, the plaintiff purchased a piece of land from the 1st defendant situate at Nyakahita. The plaintiff explained that the agreement, which was tendered into Court and marked Exb. P.7, was drafted as a sale agreement. This, was, according to the plaintiff, the 1st defendant’s method of operation. She added that it was not the first time that she had borrowed money from the 1st defendant. A few years earlier, on the 18th September 2009, she had entered a similar arrangement with the 1st defendant, to borrow money using the suit property as security. Exb. P.1 was admitted to support this assertion. That transaction was concluded amicably.
Ms. Kiconco, the plaintiff, told this court that she was not able to repay the loan advanced to her by the 1st defendant as agreed. However, on the 26th May 2011, she made a payment of UGX 50,000,000/= to the 1st defendant, and later on the 26th October 2011, she made a payment of UGX 40,000,000/= to the 1st defendant’s advocate, the late Wilfred M. Murumba. From the plaintiff’s calculations of the loan and the interest rate accrued, those payments left her with an outstanding balance of approximately UGX 3,360,000/= owing to the 1st defendant.
On the 20th September 2011, the plaintiff, in an agreement with the 1st defendant, Exb.P.9, sold back to him the property in Nyakahita at the same purchase price of UGX12,000,000/=.
When the plaintiff tried to conclude the payment to the 1st defendant, he proved elusive. Later, the plaintiff’s tenant on the suit property was forced to vacate the premises by the 1st defendant. A search conducted at the land registry as at 24th June 2014, Exb P.5, indicated that the suit property had been transferred into the name of the 1st defendant on the 17th August 2011 and it had a mortgage with Post Bank Limited entered on the 24th July 2013.
Since the plaintiff and the 1st defendant were friends, she sought the help of intermediaries to settle the matter amicably. These included the bank manager at Centenary Bank, Ishaka branch and the Resident District Commissioner. The letter from the Mr. Rogers Maninga, the bank manager to Mr. Wilfred Murumba, the 1st Defendant’s advocate, dated 14th June 2011, was tendered into court and marked Exb. P.6.
The plaintiff then instituted this suit on the 7th August 2015, reported the matter to the Commission of Inquiry into land matters on the 23rd January 2018, Exb. P.4, and attempted unsuccessfully to file caveat on the suit property on the 18th March 2019.(Exb P.3)
She is desirous of having the sale of the suit property to the defendant declared illegal and the property returned to her by this Court. Several household items were destroyed when the 1st defendant forcefully took occupation of the suit property and she made a claim of special damages for the loss.
The 1st defendant, DW1, denied the plaintiff’s claims. He testified that he was not a money lender. The agreement between himself and the plaintiff was agreement for the sale of land of the suit property. He testified that the plaintiff bargained for a higher price for the suit property but he was not able to meet her request. Eventually, he agreed to pay UGX 48,000,000/= cash for the property and to add a piece of land at Nyakahita, for UGX 12,000,000/=, which brought the total consideration to UGX 60,000,000/=.
DW1 received the certificate of title, passport photographs and signed transfer forms to the suit property from the plaintiff. DW2, Byamugisha Deus testified that he was present in 2011 when both the plaintiff and defendant inspected the house at Nyakahita. He was also later called to witness the sale of land agreement between them. DW2 signed as a witness alongside, DW3, Agaba Kayogoza. He added that the lawyer Murumba drafted the agreement. Later, he gave instructions to a surveyor, to effect the transfer of the suit property into his names and gave UGX 200,000/= to the plaintiff to appear in Kampala for identification as vendor. DW1 was registered as proprietor, a few weeks later.
DW3, Agaba Kayogoza testified that the plaintiff asked him to be her witness, she wanted to buy land. He went with her to the place of the late Murumba, a lawyer. He found the 1st defendant and DW2 present. A sale of land agreement was signed between the defendant and the plaintiff. Purchase price was UGX60,000,000/=. The plaintiff received UGX 48,000,000/= leaving a balance of UGX 12,000,000/=. He signed the agreement after reading through it. DW3 later learned the balance was for a house, but he was not present.
DW4, Mworozi Justus testified that he was called by the defendant on the 20th September 2011, to be a witness to the sale of the plaintiff’s house in Nyakahita to the defendant. The transaction took place at the late Murumba’s office. The purchase price was UGX 12,000,000/=. DW4 read through the agreement and signed it. See Exb. P.9. DW4 told this court that he was not aware that the 1st defendant was a money lender, he did not visit the land and found that the agreement had already been drafted.
DW5, Rwamutebani Josiah testified that he was a surveyor. In late January 2011, the 1st defendant instructed him to pursue the transfer of the suit property into his name. He received the transfer forms and certificate of title and took them to the Lands registry in Kampala. DW5 made further inquiries in mid-July and was informed that the vendor was required for identification. He met the plaintiff at the Lands registry and took her before the registrar for identification and the suit property was transferred into the name of the 1st defendant. DW5 told this court that the UGX 35 M was put the transfer form by the Chief Government Valuer.
Court Witness- Registrar of Titles- Kabale
This Court found it necessary to call the Registrar, Lands from the Kabale Ministry Zonal Office to clarify on the transactions on the suit property. Mr. Vincent Nyonzima, Registrar of Titles testified that he was in possession of the registry copy of the suit property. The lease commenced on the 1st April 1988 for 49 years. The 1st registered proprietors were George and Chris Bagamuhanda registered on 5th October 1994. By transfer, the plaintiff, Mugenyi Kiconco Prudence was registered on the title on 23rd December 2010. In yet another transfer, Mugenyi Prudence was crossed and Tumuramye Bernard was registered on the 17th August 2011. The Registrar testified that when the vendor appears, he/she is required to identify themselves by identity card and he/she signs the photocopy. In the transaction before court, there was a driving permit of the plaintiff with three signatures below it. This witness was presented with Exb.P.3, the caveat documents, and he stated that he had never seen them before but they were received by the office in Kampala.
Mr. Nyonzima was questioned about the consideration for the suit property on the transfer form, Exb, D.2 and how it was arrived at. He replied that the Chief Government Valuer does an assessment, to compute the value of the land, based on a set of values for each region, for purposes of assessing stamp duty. The presumption is that the buyer would help in ascertaining the value of the property. He clarified that a sales agreement is not required to carry out a transfer.
The plaintiff who was unrepresented made brief submissions at the close of the hearing and Mr. Godwin Masereka who represented the 1st defendant filed written submissions. This court has taken both into consideration.
1. Whether the transaction between the plaintiff and the 1st defendant was an agreement for sale of the suit property?
2. Whether the transfer of the suit property into the name of the 1st defendant was lawful?
3. What remedies are available to the parties?
Since Issue 1 and Issue 2 are related, I shall resolve them simultaneously.
1.Whether the transaction between the plaintiff and the 1st defendant was an agreement for sale of the suit property?
2. Whether the transfer of the suit property into the name of the 1st defendant was lawful?
Whether the transaction between the plaintiff and the 1st defendant was an agreement for sale of the suit property and whether the transfer of the suit property into the name of the 1st defendant was lawful?
S. 2 of The Contracts Act No.7 of 2010 defines a ‘contract’ as follows;
‘contract means an agreement enforceable by law as defined in s.10’
S.10 provides that;
(1) A contract is an agreement made with the free consent of parties with capacity to contract, for lawful consideration and with lawful object, with the intention to be legally bound.
S.13 provides for the free consent of parties to contract as follows;
Consent of parties to a contract is taken to be free where it is not caused by; (a) Coercion; b) undue influence, as defined in section 14; c) fraud, as defined in section 15; d) misrepresentation; or e) mistake; subject to sections 17 and 18.
Exb. P.7 is the agreement in issue. It was executed on the 26th January 2011 between the plaintiff, Mugenyi Prudence Kiconco and the 1st defendant, Tumuramye Bernard. It is titled, ‘Sale Agreement’. The plaintiff is named as, ‘Vendor’, and the 1st defendant is named as ‘Buyer’. The subject matter is the Plot 10 Jackson Road, Kabale Municipality, measuring approximately 0.238 Hectares with developments thereon registered in the name of the plaintiff. Paragraph 1 of the agreement provides for the purchase price as agreed upon the parties- UGX 60,000,000/=. Paragraphs 2 and 3 provide for an agreed down payment of UGX 48,000,000/= cash to the vendor and acknowledgment of receipt of the same. In paragraph 4, the purchaser, gives out his piece of land located at Nyakahita cell, Kyanimira sub county bordering Kanyekiro at the bottom, airstrip at the top, Kakuba Joseph on the left and Mutwakazi on the right, with unfinished permanent house; valued at UGX12,000,000/= (Twelve million shillings) to make the total of UGX 60,000,000/= in paragraph 1 above. The parties affixed their signatures to the agreement on the 26th January 2011.
The plaintiff, PW1, testified that this was a loan agreement disguised as a sale agreement. She went ahead to describe the details of the loan agreement in the pleadings. In her initial plaint filed in 2015, she contended that the loan amount was UGX 7,000,000/= with an interest of 20% for two months. Later, in 2017, the plaint was amended and the sum contended was 30,900,000/= at 20% per month payable in 2 months. The amended further added two pieces of information. On the 26th May 2011, the plaintiff made a payment of UGX 50,000,000/= to the 1st defendant and an additional UGX 40,000,000/= to the 1st defendant’s lawyer, Mr. Wilfred M. Murumba on the 26th October 2011. Mr. Murumba is deceased.
PW1 testified that when she defaulted on the loan repayment, the 1st defendant transferred the suit property into his name. A search in the land registry, Exb. P.5, indicated that the 1st defendant had been registered on the property on the 17th August 2011.
The plaintiff explained that she was desperate and that is why she agreed to enter into the disguised agreement with the 1st defendant, a known money lender in town. She handed over the certificate of title and her passport photos, which the 1st defendant used to fraudulently transfer her property, for the same reason.
It was the 1st defendant, DW1’s testimony that the plaintiff’s claim was untruthful and unfounded. Exb.P.7 was a sale agreement. It was the plaintiff who approached him with an offer for sale and he negotiated the price with her. He added his property in Nyakahita to make up the full value of the consideration comprising the purchase. As soon as the transaction was finalized, he commenced and concluded the transfer process. His witnesses, DW2, DW3, and DW4 corroborated his testimony on the agreement and its implications.
DW5, a surveyor who was given instructions by the 1st defendant to go to the land registry and process the transfer, testified that he presented the plaintiff before the registrar, for identification as the vendor and that is when the transfer was concluded. Court summoned Mr. Nyonzima, Registrar of Titles, Kabale, to testify on the transactions on this property. He testified that there was evidence on the registry copy of the file that indicated that the vendor, the plaintiff had appeared before the Registrar prior to the transfer. A copy of her identity document, a driving permit with three signatures, was tendered in evidence and marked, Court’s exhibit 1.
The plaintiff insisted that she was duped by the 1st defendant and prayed for return of her property which the 1st defendant had fraudulently acquired. She testified that she had successfully dealt with the 1st defendant on similar terms prior to the transaction before Court. This was on the 18th September 2009. Exb. P.1 was the said agreement.
It was the duty of the plaintiff to prove her claims. The defendant denied all her claims on fraud. Fraud was defined comprehensively in the Supreme Court case of Fredrick Zaabwe v Orient Bank & Others. SCCA 04/ 2006 (10/7 2007) as follows;
‘An intentional pervasion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or her or to surrender a legal right. A false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which deceives and is intended to deceive another so that he shall act upon it to his legal injury. Anything calculated to deceive, whether by single act or combination, or by suppression of truth, or suggestion of what is false, whether it is by direct falsehood or innuendo, by speech or silence, word of mouth, or look or gesture…A generic term, embracing all multifarious, means which human ingenuity can get advantage over another by false suggestions or by suppression of truth, and includes all surprise, trick, cunning, dissembling and unfair way by which another is cheated dissembling, and any unfair way by which another is cheated. ‘Bad faith’ and ‘fraud’ are synonymous of dishonesty, infidelity, faithlessness, perfidy, unfairness, etc…
As distinguished from negligence, it is always positive, intentional. It comprises all acts, omissions and concealments involving a breach of a legal or equitable duty and resulting in damage to another. And includes anything calculated to deceive, whether it be a single act or combination of circumstances, whether the suppression of truth or the suggestion of what is false whether it be by direct falsehood or by innuendo, speech or by silence, by word of mouth, or by look or gesture…’
By the definition above, fraud or fraudulent would have no place to hide itself if it was present in the transaction between the plaintiff and the 1st defendant. I found the following pieces of evidence relevant in determining this matter;
a. The plaintiff testified that this was the 2nd time she was engaged in a disguised agreement with the 1st defendant. She borrowed UGX 35,000,000/= from him on the 18th September 2009, using the suit property as security. There was no default on this occasion. The defendant denied this transaction. When the Registrar of Titles testified, he stated that the plaintiff was registered on the property on the 22nd December 2010. Exb D.1, the Certificate of title supports this testimony. It follows that the plaintiff entered into this disguised agreement, when she was not the registered proprietor of the suit property. There was not one, but two layers of deceit in the document; on the capacity to contract, and on the fact that the sale agreement was a loan agreement.
b. On the 20th September 2011, the plaintiff, in another disguised agreement, Exb P.9 ‘resold’ the land in Nyakahita back to the 1st defendant for UGX 12,000,000/=. The real story was that she was attempting to reduce her debt to the 1st defendant by the same amount. The 1st defendant did not deny this document, he admitted to paying buying the land back upon the plaintiff’s request.
c. There was a copy of the plaintiff’s identity document on the registry file relating to the suit property, complete with three signatures, which proved that she participated in the transfer. The plaintiff did not challenge this evidence.
d. It took the plaintiff, four years to bring this claim against the 1st defendant. This was after, he threw her tenant out of the suit property and caused destruction of her household property to the tune of over UGX 20,000,000/= She testified that she was trying to settle the matter amicably in the meantime. During this time, the 1st defendant was in occupation of the suit property.
e. Exb. P.5, the search report, is dated 24th June 2014. This is the first time the plaintiff, made an attempt to check the status of the suit property, when the last payment, she apparently made to settle her debt with the 1st defendant was made on the 26th October 2011.
f. The paper work for the caveat to be lodged on the suit property was only filed by the plaintiff on the 18th March 2019.
It is court’s finding that the plaintiff did not make an honest claimant. If the sale agreement, the subject of this suit, was a disguise for a loan agreement, the plaintiff was a key and active participant in the deceit. Desperation shall never offer legal justification for deceit. However, this court is not convinced that the Sale Agreement, Exb. P.7 was anything less or more than it was, an agreement to sale land between two adults of sound mind with the capacity to contract. The plaintiff’s literacy was not in question. She is a Diploma holder. She needed the money and she entered into the agreement with some reckless haste.
The plaintiff, in her pleadings and in her testimony span a tale of alternative facts which she stated was the reality of what actually transpired between herself and the 1st defendant. These alternative facts were not borne out by the evidence she adduced in court. There was no basis for this court to follow her down that path. Even if, court wanted to believe that there was truth in her payments to the 1st Defendant and his deceased lawyer to the tune of UGX 90,000,000/= (Ninety million shillings), her participation in the transfer prior to 17th August 2011 when the 1st defendant was registered as proprietor, cast a huge shadow of doubt over the truth of these payments which were denied by the 1st defendant. What incentive did the plaintiff have to make a payment of UGX 40,000,000/= (Forty million shillings) to the deceased lawyer, on the 26th October 2011 when she had already effected a transfer in favour of the 1st defendant? To date, there is no police report of the alleged fraud filed by the plaintiff against the 1st defendant.
The evidence demonstrated that the plaintiff sold her property below market value out of desperation and participated in its transfer into the name of the 1st defendant. After coming to her senses, she decided to redeem the property by any means necessary.
There was one last thing. The value of the property as reflected on the transfer document. It read, ‘35M’. This court summoned the Registrar to explain this amount because it was clearly at variance with the amount in the sale agreement. Mr, Nyonzima clarified that the value is filled in by the Chief Government Valuer basing on a set of values for the different regions in the country. The purpose is to assess stamp duty. Mr. Nyonzima added that the officials at the land registry do not require that sale agreement to process a transfer.
Once the issue above was cleared up, this court was satisfied that the plaintiff had placed herself in a quagmire of her own making. She could not expect this court to go back in time and correct the mistakes she had made. Counsel for the 1st defendant invited this court to reject the evidence of the plaintiff since it was littered with falsehoods. I agree.
This court finds that the agreement between the plaintiff and the 1st defendant was for the sale of the suit property and that the property was lawfully transferred into the name of the 1st defendant with the participation of the plaintiff. I agree with Counsel for the 1st defendant that the plaintiff has failed to prove her case against the 1st defendant. The suit is accordingly dismissed.
3.Remedies available to the parties
The Plaintiff’s suit is dismissed and I hereby order as follows:
1. The sale agreement dated 26th January 2011 between the plaintiff Kiconco Prudence Mugyenyi and the 1st defendant, Tumuramye Bernard of the suit property, Leasehold Register Volume 2299 Folio 15, land at Plot 10 Jackson Road Kabale Municipality constituted a lawful sale agreement.
2. The transfer of the suit property Leasehold Register Volume 2299 Folio 15, land at Plot 10 Jackson Road Kabale Municipality into the name of the 1st defendant Tumuramye Bernard was lawful.
3. Costs of the suit are awarded to the 1st defendant.
Olive Kazaarwe Mukwaya
25th June 2020
Defendant: Mr. Godwin Masereka M/S Beitwenda & Co. Advocates
Delivered by Email to the parties on the 25th June 2020.