Court name
High Court of Uganda
Case number
Civil Suit 196 of 2014
Judgment date
30 June 2020

Prisma Limited v Nile Agro Industries Limited and anor (Civil Suit 196 of 2014) [2020] UGHC 198 (30 June 2020);

Cite this case
[2020] UGHC 198
Coram
Luswata, J

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT JINJA

CIVIL SUIT NO. 196 OF 2014

PRISMA LIMITED:::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF

VERSES

1. NILE AGRO INDUSTRIES LTD

2. JINJA DISTRICT LAND BOARD: DEFENDANTS

JUDGMENT

BEFORE: HONOURABLE EVA K. LUSWATA.

Introduction and brief background.

            The Plaintiff filed this suit against the defendants for declaratory orders that they are the rightful owner of the land comprised in Plot 59-61 Industrial Estate Road, Jinja, a permanent injunction, eviction orders and general damages for trespass, or in the alternative, that the defendants jointly and severally compensate the plaintiff for their loss, interest and costs of the suit.

            The Plaintiff’s case in brief is that following their application (dated 1/07/2008), for land meant for industrial purposes, the 2nd defendant (hereinafter the Board) offered them a lease on vacant land described as plot 59 - 61 Industrial Estate Road, Jinja (hereinafter the suit land). The plaintiff (hereinafter Prisma Ltd) then proceeded to pay premium, ground rent, survey and other requisite fees. That upon a request by the Jinja Town Clerk and Commissioner for surveys and Mapping, they in addition commissioned a re-survey of the suit land at their cost.

            On 16/09/2009, the Board executed a lease in favor of Prisma Ltd and a certificate of title was issued in their name. That in November 2009, the 1stdefendant (hereinafter Nile Agro Ltd) through either its directors, officers, agents and/or workers, without any right, entered upon the suit land, fenced it off and affixed thereon an insignia with the words, “This property belongs to Nile Agro Industries Ltd’’. Prisma Ltd reacted by obtaining permission from the Jinja Municipal Council Engineer and Town clerk, to re-open and fence the boundaries of the suit land. Even then, without any colour of right, and without following the due process of law, the Board cancelled their title and awarded the same to Nile Agro Ltd, the 1st defendant.

            Prisma Ltd contends that both defendants were involved in all actions leading to the cancellation of their lease and are thus jointly liable for the loss and damages they suffered. That both defendants have so far ignored several demands and reminders that they hand over vacant possession of the suit land, or in the alternative, compensate Prisma Ltd for the loss suffered. Instead, Nile Agro Ltd proceeded to uproot the wooden poles and barbed wire fence owned by Prisma Ltd, and then embarked on massive development of the suit land currently under protection of armed guards, events that Prisma Ltd considers to be acts of trespass.

            In defence to the suit, Nile Agro Ltd contends that when they first sought to acquire land for investment in Jinja from the Jinja Municipal Council and the Board, they were advised that the available land was heavily encumbered by customary tenants/occupants. That an allocation, could be made only after negotiations and compensation of those occupants was completed. That Nile Agro Ltd complied by following through the instructions of compensation of occupants on land measuring 19.225 Ha (approximately 48 acres). The exercise was executed by M/s Wafula & Co. Advocates their duly authorized attorney, and with full knowledge and participation of the area Local Council and the Land Committee, after which, they lodged their formal application for the suit land on 9/06/2009.

            Nile Agro Ltd further contends that no adverse claims or interests were raised during the compensation exercise until when a company known as M/s Crescent Holdings Ltd (hereinafter Crescent Ltd) claimed a lease interest for land measuring 6.6 Ha (approx.14 acres) out of the suit land, allegedly granted to them by the Board. Nile Agro Ltd followed up that claim and compensated Crescent Ltd for their claim in full, after which, the latter then assigned their interests to Nile Agro Ltd.

            It is also contended by Nile Agro Ltd that the Board in its meeting held on 17/09/2009, cancelled allocations of the suit land previously made to three allocatees including Crescent Ltd and Prisma Ltd for the reason that they were issued at a time when the land was under the occupation of customary tenants whose interests had not been compensated for, as by law required. That upon discharge of the above, the Board issued Nile Agro Ltd a formal lease offer over the land following which, they begun its development in accordance with the agreed terms. That they have since continued to pay the respective ground rent and other fees.

            Nile Agro Ltd further pleaded that developments on the suit land were at some point halted to allow investigations by the Inspectorate of Government (IGG) on a complaint that the suit land was the subject of a fraudulent allocation. Investigations by the IGG confirmed that the allocation to Nile Agro Ltd was legitimate, and a recommendation was made to cancel Prisma Ltd’s certificate of title. Thereafter, development of the suit land recommenced in line with the conditions of the lease offer. Nile Agro Ltd considers the allegations of fraud against them baseless, and contend that they are in lawful occupation, use and development of the suit land.

            In the same vein, Nile Agro Ltd raised a counter claim for an order that they be declared the lawful owners/allocates of the suit land and the title issued to Prisma Ltd be cancelled on grounds of fraud. They contend specifically that Prisma Ltd failed to conform to set rules and regulations for acquisition of leasehold land in that they applied for land occupied by customary tenants whose interests had not been catered for. They thus prayed for an injunctive order to restrain Prisma Ltd from further interference with the suit land, general damages and costs of the counter claim.

            That Board likewise denied the main claim. They contended that Prisma Ltd failed to process their application for the suit land through the Area Land Committee to confirm that it was free from encumbrances. That notwithstanding, the Board processed a lease offer in their favour, an offer with the underlying condition (inter alia) that the suit land was free from any disputes. That it later transpired that the suit land was encumbered by customary occupants and therefore, not available for leasing. As a result, the Board cancelled the offer to Prisma Ltd. On the other hand that, Nile Agro Ltd negotiated and compensated the customary occupants for their interests on the suit land, after which, the Board proceeded to allocate the suit land to them.

            In reply to Nile Agro Limited’s defence, Prisma Ltd agreed that their offer was subject to compensation of any squatters, and they were indeed making arrangements to compensate all the squatters on the suit after acquiring title. That therefore, having followed the correct procedure in applying for a lease, cancellation of their lease and granting the same to Nile Agro Limited, was illegal and unlawful. They maintained their assertions of fraud by Nile Agro Limited in connivance with the Board, because the offer to the former company was made to defeat the interests of Prisma Ltd in the suit land. In conclusion that, Nile Agro Industries Ltd is occupying the suit land illegally, as it procured possession of the same fraudulently

            Scheduling of the matter was done inter parties with a joint scheduling memorandum being filed in Court on 13/9/2016. The following were the agreed issues for the Court to determine:

  1. Whether the cancellation of LRV 4013 Folio 20 also known as Plot 59 -61 Industrial Road Jinja was lawful.
  2. Whether the 1st Defendant lawfully acquired the suit land.
  3. What remedies are available to the parties

Preliminary Objection.

            Counsel for Nile Agro Ltd raised a preliminary objection in their written submissions. They contend that the submission by Prisma Ltd that they were denied a right to be heard before cancellation of the lease, was not pleaded and only came up briefly in PW1’s testimony. Counsel submitted that being a constitutional right (under Article 28), it should have been pleaded. That Prisma Ltd could only have raised this point by amendment with leave of court which would then have availed Nile Agro Ltd a chance to specifically respond to it by calling evidence. That raising that fact at the stage of submissions took the defence by surprise, and was an act of departure from their pleadings which is contrary to law. I saw no particular reply to this objection by Prisma Ltd’s lawyers.

            I would agree with the argument that a party is bound by their pleadings. And it follows that any claimant cannot be granted a relief which they have not claimed in the pleadings. This is because under Order 6 rr 1 CPR, a pleading shall contain a brief statement of the material facts on which a party pleading relies for a claim. Under Order 6 rr 3 CPR, a party whose facts may require particulars to be disclosed, must in their pleadings, disclose those facts together with dates. Yet again, under Order 6 rr 6 and 7 CPR, a party is not permitted to depart from their pleadings. Departure entails an attempt to call evidence and make final submissions on facts that were not disclosed in the pleadings.

            It is true that Mr. Galisonga, Prisma Ltd.’s lawyer made extensive submissions on the alleged infringement of their rights to a fair hearing. He drew Court’s attention to the evidence of PW1 that he was never informed that their lease was cancelled and only came to learn of it shortly before filing the suit. That the testimony was not rebutted and infact admitted when DW2 stated that the agents of Prisma Ltd were never invited when the decision to cancel their offer was made. Counsel argued that the omission to hear from Prisma Ltd before cancellation of the lease offer (both by the Board and the IGG in her investigations), contravened a fundamental principle of justice which would make both the decision of the Board and the IGG’s report, invalid and unenforceable against them.

            The Supreme Court in their decision of Interfreight Forwarders (U) Ltd vrs. East African Development Bank SCCA No. 33 of 1992, had an opportunity to discuss in detail the importance of drafting of pleadings in the whole framework of a suit. In that case, the plaintiff omitted to mention in the plaint that the defendant/appellant acted as a common carrier. Plaintiff’s counsel argued that it was not necessary to plead that fact which they believed was a matter of evidence, the facts of which were only in the knowledge of the defendant upon whom the burden of proving them lay. The Court disagreed and held that:

The plaintiff’s contention that it was not necessary to plead in the plaint that the defendant was a common carrier, I think has no merit nor do I think that section 105 of the evidence Act is relevant to this case…..

Order 6 Rule 1 of the Civil Procedure Rules provides that every pleading shall contain only a statement in precise form of the material facts on which the party pleading relies for claim or defence as the case may be, but not evidence by which they are proved.

Rule 2 provides that in all cases in which particulars are necessary, such particulars shall be given.

The system of pleadings is necessary in litigation.  It operates to define and deliver with clarity and precision the real matters in controversy between the parties upon which the court will be called upon to adjudicate between them. It thus serves the double purpose of informing each party what is the case of the opposite party which will govern the interlocutory proceedings before the trial which the court will have to determine at the trial ………

Thus issues are framed in the case of the parties so disclosed in the pleadings and evidence is directed at the trial to the proof of the case so set and covered in the issues framed.

He will not be allowed to succeed on a case not setup by him and be allowed at the trial to change his case or set up a case inconsistent with what he alleged in his pleadings, except by way of amendment of the pleadings.

For the above reasons, if the plaintiff did not plead that the defendant was a common carrier, I think that he cannot be permitted to depart from what he clearly appears to have been his case as stated in the plaint and claim that there was evidence proving that the defendant was a common carrier’’.

            The Supreme Court underscored their decision above in the latter case of Ms. Fang Min vs. Belex Tours & Travel Ltd. SCCA No. 6/2013 consolidated with SCCA No. 1/2014 Crane Bank Ltd. vs. Belex Tours & Travel Ltd. The Supreme Court, emphasized the importance of pleadings giving a precise description of the respective cases by each party and to define the issue in dispute for resolution by the court.

            As pointed out for Nile Agro Ltd, the plaint made reference to flaws in the process of cancellation of the lease in two instances. It was stated in paragraph 4g) as follows:

“That in due course, without any colour of right and without following the due process of the law, the respondent cancelled the appellant’s title and awarded the same to M/S Nile Agro Industries Ltd, the 1st defendant herein.’’

It is also stated in paragraph 7 that:

The plaintiff shall aver and contend that the actions leading to the cancellation of the plaintiff’s title, as well as the cancellation of its title did not follow the due process of the law and marred by illegality and court should set aside the cancellation and/or in the alternative order that the defendants jointly and severally compensate the plaintiff for the loss incurred.’’

 

             I am inclined to believe that Prisma Ltd.’s counsel based his submissions on the pleading that the Board did not follow due process, and I would agree that it would be a fatal flaw, one that would render those proceedings null and void. “Due process” is defined in Black’s Law Dictionary (para. 16C page 610) 10th Edition to be “The conduct of legal proceedings according to established rules and principles for the protection and enforcement of private rights before a tribunal with the power to decide the case”.

            As stated for Nile Agro Ltd, that term is relatively wide and would include a myriad of factors that ought to be respected when legal rights are being considered, enforced or curtailed. What comes to mind for example are issues like, an impartial inquisitor and arbiter, full disclosure, adequate notice, legal representation of choice, time and opportunity to prepare, and of course, the right to be heard before any decision is made, etc. This is by no means an exhaustive list.

            My line of thought is supported by authority. Lord Denning in the case of R Vs Ganning Board Exparte Benalin [1970]2 QB 417 at 430 stated thus:

“It is not possible to lay down rigid rules as to when the principles of natural Justice are to apply nor as to their scope and extent. Everything depends on the subject matter.’’ 

Further in the decision of Mpungu & Sons Transporters Ltd Vs Attorney General & Anor SCCA NO.17/2001 the Supreme Court held that;

“I agree that AUDI ALTERAM PARTEM RULE is a cardinal rule in our administrative law and should be adhered to. Simply put, the rule is that one must hear the other side. ……………… However one would have to prove that one had a right to be heard which had been breached and that the decision arrived at by the Administrative body /Authority had earlier deprived him of his rights or unfairly impinged on those rights thereby causing damage to the individual concerned………But each case has to be looked on its own merits.

Thus in the case of Russel Vs Nofolic [1949] 1 ALLLER 109 TURKER LJ stated that;

“The requirements of natural Justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with and so forth.’’

            The above authorities seem to suggest that although the right to be heard is an important rule, it will not apply in all cases. It is also suggested that the injured party should show by their pleadings that within the context of the facts, they had a right to be heard before a decision was made against them. I am persuaded then that Prisma Ltd should have in their pleadings, given some specificity or particulars of which part of the process was flaunted before their lease was cancelled. This is especially so when in paragraph 7 of the plaint, it is mentioned that the actions leading to the cancellation was in addition marred with illegality.  Doing so would have given the defendants due notice of that fact and allowed them to prepare their pleadings and evidence in such a way as to rebut it.

            PW1 would thus be barred from raising facts in his evidence of non-disclosure of the allegations against Prisma Ltd, or a fair opportunity to be heard for more are matters not specifically mentioned in their plaint. Their counsel would certainly have no audience of this Court to submit on them. Allowing such evidence and submissions would be in contravention of Order 6 rr 3 and 7 CPR.

            I accordingly uphold the objection and will not consider all evidence and submissions centered on the facts that Prisma Ltd was denied a fair hearing before their lease was canceled. I will now turn to the substantive claim

Resolution of issues.

Issue 1: Whether the cancellation of LRV 4013 Folio 20 Plot 59 -61 Industrial Road Jinja was lawful.

            Citing much authority, Mr. Galisonga submitted that cancellation of his client’s title was premised on an unproven presumption of the existence of customary tenants on public land over which the Board holds free hold interests in perpetuity. He argued further that prior to the enactment of the Land Act 1998, customary land rights which have to be proved, could be maintained in an urban area on a freehold titled land. It was also his submission that the Board has powers to allocate land with or without squatters and an allocatee of such land, may then engage the customary tenants/squatters for any compensation after obtaining the lease. Further that the certificate of title issued to Prisma Ltd in respect of the suit land, could only be cancelled by the High Court in accordance with the Registration of Titles Act. He concluded that the Board motivated by ill will and bias, erred and were in breach when they cancelled Prisma Ltd.’s offer and leasehold title upon the baseless presumption that the suit land was encumbered with occupants with customary interests.

            Conversely, it was submitted by Mr. Muziransa for Nile Agro Ltd that the pleadings and evidence hardly raised a case against them with respect to cancellation of the offer and certificate of title. That even then, there was sufficient proof that at the material time the lease offer was made to Prisma Ltd, the suit land was occupied by people whose long standing interests were recognized by the Jinja Municipal Council. He continued that by omitting to seek the intervention of the Land Area Committee, important information regarding the status of the suit land was withheld from the Board. That by flaunting the rules pertaining to acquisition of public land, Prisma Ltd deceived the Board that the suit land was available for leasing which was not the case, and therefore, the entire application was rendered void abnitio and a nullity from the outset. He emphasized that a District Land Board which cannot own freehold or other land did not own the suit land and could allocate it only if it had no existing occupants whose interests are recognizable under the law, because such people are entitled to the choice of first refusal for leasing. Counsel continued that the claims in the counter claim were well substantiated but not contested. In particular that the manner in which Prisma Ltd obtained their lease, was fraudulent.

            Mr. Tuyirigire acting for the Board supported much of those submissions. He contended in addition that due to operation of the Constitution 1995, customary tenants can legally occupy public land. He extensively discussed the different land statutes currently in operation and concluded that the occupants on the suit land before it was offered to Prisma Ltd, derived their titles or interests from the Jinja Municipal Council which as the controlling authority, originally held a statutory lease covering the suit land. He argued that although statutory leases were abolished, the interests of the occupants subsisted by operation of the Constitution, and those interests could be regularized or as was the case here, those occupants could transfer their interests to another party.

            Mr. Tuyiringire argued then that Prisma Ltd was entirely to blame for lodging an application in respect of land that was not available for leasing. That upon discovery that the suit land was encumbered by customary tenants, their offer for a lease was cancelled, a correct decision because the Board had no jurisdiction over the suit land and the application was void abinitio. He contested the submission that the contract between the Board and Prisma Ltd was complete since the offer was made on condition that the land was available for leasing. He continued that the Board did not cancel the lease title, but instead, an instruction was given to the Ag. Senior Land Management Officer to follow up its cancellation but before that happened, the lease expired and no application for its extension was ever lodged. He concluded that the Board was justified to cancel the lease offer to Prisma Ltd, and that their decision was lawful.

My decision

            The submissions made for Prisma Ltd on this issue were mainly premised on how the rules of nature justice were violated and by whom. These were matters I overruled in my decision with regard to the preliminary objection raised by counsel for Nile Agro Ltd. I decline to dwell on them. Be it as it may, other factors were raised to contest the decision to cancel Prisma Ltd.’s offer, in favour of Nile Agro Ltd.

            In resolving this issue, it is pertinent to determine whether the grant of the lease to the plaintiff by 2nd defendant was lawful, and if so, whether its cancellation was lawful. Those two questions will be resolved concurrently.

            A brief history of the legal foundation of District Land Boards and their functions may be pertinent as an introduction. The Constitution of Uganda 1995 introduced a new legal regime that affected and in some instances, repealed the provisions of both the Land Reform Decree 1975 the Public Land Act 1969, then the main laws for land management. In particular, Article 286 abolished statutory leases originally granted to urban authorities like Jinja Municipal Council. The District Land Boards were then created under Article 240 of the Constitution and Section 56 the Land Act (Cap 227)as corporate entities, independent of the Uganda Land Commission in which, hitherto, all Public Land in Uganda was vested. By operation of the provisions of Section 59 (1) (c) of the Land Act, Jinja District Land Board became a successor in title to Jinja Municipal Council as a controlling authority, by statute.

            I agree with the submissions of both defence counsel that neither the Constitution nor the Land Act entrusted ownership of public land to Land Boards. The Constitution under Article 237(1), vested all land in the citizens of Uganda and therefore, Land Boards cannot issue freehold or other title. Their functions only appear to be managerial and supervisory, and always subject to the fact that land is the property of Ugandans. I would illustrate by referring to Section 59 of the Act which spells out their functions (inter alia) to be as follows:

  1. To hold and allocate land in the district which is not owned by any person or authority
  2. To facilitate the registration and transfer of interests in land; and
  3. To deal with all other matters connected with land in the district in accordance with laws made by the Parliament.

 

            Section 59 (1) of the Land Act has replicated the first two functions assigned to the District Land Board by the Constitution. It is also provided in Section 60(1) of the same Act that in the performance of its functions, a District Land Board shall take into account interalia, the particular circumstances of different systems of customary land tenure within the District. According to Regulation 23 (2) of the Land Regulations 2004, upon receipt of an application for land under its control, the Board may:

a.   Advertise the application by giving notice of at least 21 days in a newspaper with wide circulation in the District and by such other means as are likely to draw the matter to the attention of persons likely to be affected by the application within the District.

  1. Invite any person to comment on or object to the application , giving reasons for any comment or objection.

 

  1. Determine, after taking into account any comments or objections that may be made, in a meeting at which members of the public may be present, whether the applicant should be allocated the land for which application is made.

            The above provision is by no means mandatory but it at lease gives a clear guide of what the uniform practice should be, in order to solicit input of the public before an offer is made.

            In his testimony, Andrew Kasigwa PW1 a manager employed by Prisma Ltd, stated that he was responsible for their application from inception to the point this suit was filed. He testified that after they applied to the Board for industrial land, they sought the necessary permissions and were shown available land. He tendered in EXH. PEX.1 the certificate of title for LRV 4013 Folio 20 Plot 59-61 registered in the names of Prisma Ltd and issued on 21/09/2009, indicating a registration date of 17/9/2009. He in addition tendered PEX.2 the premium and ground rent receipt dated 29/08/2008, PEX.3 the payment for land fees dated 4/09/2008. He also tendered PEX.4 a receipt dated 19/11/2009 being permission to fence off Block 59/61 and PEX 5 payment for land fees dated 16/07/2008. He admitted that by the time he filed this suit, the lease had expired and that fact can be confirmed on PEX.1

            It was the defence and not Kasigwa who tendered Prisma Ltd.’s application and lease offer, the latter being admitted as DEX.44. In cross examination, Kasigwa admitted that condition No. 7 in DEX.44 indicated that the offer was subject to the land being available and free from disputes at the time of survey. He then testified that at the time he tendered his application for the land, he had made a previous visit and confirmed that there was no one in occupation, save for growing crops like maize, shrubs and trees. According to him, that was an indication that someone was using the land but he could not at that time identify them. He continued that he made due diligence as he bothered to find out if the land was free and available for allocation. He turned round to state that the due diligence was actually carried out by the Secretary to the Land Board and agents of the Jinja Municipal Council, in particular its senior land management officer. He also admitted that he did not approach any area LC chairperson.

            Conversely both DW1 and DW2 maintained that at the time the plaintiff applied for the suit land, there were customary tenants in occupation. According to DEX.17 an uncontested document, the Town Clerk of Jinja Municipal Council indicated that a group of about ten people had approached him claiming to own bibanja interests on land whose description and acreage marches that of the suit land. There was also uncontested evidence that following successful negotiations with M/s Wafula & Co., Advocates, Nile Agro Industries paid compensation to 11 people for land at Masese, the latter who then relinquished vacant possession to them. (See DEX3, DEX4 and DEX 5-15). Indeed Kasigwa did admit that the activity observed on the land when he inspected it, was an indication that there was someone in occupation but he did not identify them. I am persuaded then that before the suit land was offered to Prisma Ltd, it had occupants. It would thus be imperative to ascertain, as the defence claims, that the occupants had customary interests thereon. 

            Section 1(1) of the Land Act defines customary tenure to be:

“......... a system of land tenure regulated by customary rules which are limited in their operation to a particular description or class of persons, the incidents of which are described in section 3’’.

            It is now settled law that interests in land held under custom must be proved. Odoki CJ (as he then was) in the Supreme Court decision of Kampala District Land Board & Ors Vs Venansio Babweyaka & Ors SCCA NO. 2 of 2007 held that:

            “I am in agreement with the learned Justice of Appeal that the respondents failed to establish that they were occupying the suit land under customary tenure. There was no evidence to show under what kind of custom or practice they occupied the land and whether that custom had been recognized and regulated by a particular group or class of persons in the area’’

            In that case, the Supreme Court held that the respondents therein were not customary tenants but were in fact bonafide occupants clearly making a distinction between the two kinds of land tenure.

            Again in the case of Ndimwibo & 3 Ors Vs Ampaire (Civil Appeal No. 65/2011) [2014 ]UGCA 46(10  October 2014); the learned Justices of appeal held that;

“No evidence was provided whatsoever by any of the parties in this case at the trial to prove that any one of them held the suit land under customary tenure. Not everyone who says ‘’I am a ’kibanja’ holder or customary tenant ‘’ is in fact and in law one. That fact requires proof”.

            In DEX.3, an assumption was made that M/s Wafula & Co., Advocates represented vendors who owned customary rights in the suit land. I also note that Counsel Tuyirigire for the Board attempted to rely on the statements of Ewacu Charles and Katabazi Patrick to prove that those in occupation were customary tenants. This Ewalu and Katabazi could not provide proof since their statements were never tendered in court and those particular witnesses never testified. I would find therefore that the defendants did not adduce sufficient evidence to show under what kind of custom or practice the occupants occupied on the suit land and whether that custom had been recognized and regulated by a particular group of class of persons in the area.

            Besides, customary tenure on public land in urban areas was prohibited. That was the subject of the decision of the Supreme Court in Kampala District Land Board & Ors Vs Venansio Babweyaka & Ors (supra). Justice Odoki CJ advised that:

“The prohibition of customary tenure in urban areas is clear from section 24 (1) (a) of the Public Land Act 1969. The Land Reform Decree 1975 declared all land in Uganda to be Public Land administered by the Uganda Land Commission in accordance with the Act. The question is whether the respondents did acquire customary ownership following the enactment of the Land Reform Decree. The answer to this question appears to be in the negative. Restrictions on acquisition of customary tenure under the Public Lands Act seem to have continued as the law continued to govern all types of public land subject to the provisions of the Land Reform Decree. In order to acquire fresh customary tenure, one had to apply to prescribed authorities and receive approval... there was no evidence that such prescribed authorities existed, ……..…... I would therefore hold that the respondent could not have legally acquired customary tenure in an urban area of Kampala City prior to the enactment of the Land Act in 1998...’’

            In the instant case, Clause 2 (d) of the lease offer restricted use to industrial. The suit land is situated in the urban area of Walukuba Masese and from the above authority, customary tenure in urban areas was prohibited. There could be some merit in counsel Tuyiringire’s arguments that customary holding of land on public land was reintroduced by the Constitution in 1995. This is because in Article 237(3), it is one of the tenure systems given recognition. The Constitution did not differentiate between those interests being held on public or private (mailo) land. However, that would still not remove the principle that such interests have to be proved, which was not done here.

            However, whether those in occupation were customary tenants or not, the agents of Prisma Ltd and the Board ought to have consulted them. The facts in the case of Kampala District Land Board & Anor vs National Housing & Construction Corporation Civil Appeal No.2 of 2004, were similar to the facts here. The Supreme Court decided that in as far as the claimants therein were people who had been in occupation of urban land since 1970, they are deemed to be people who had lived long on the suit land and utilized it and as such, their interests had to be protected by the Land Board.

            It was contended in the defence and counter claim that the actions of the agents of Prisma Ltd to apply for the suit land when aware of unresolved interests of existing occupants, failing to conform to the set rules and regulations for acquisition of leasehold land, and procuring registration with a motive of frustrating interests of existing occupants, amounted to fraud. Those arguments are supported by authority. It was for example held in Taylor Vs Stibert [1803-13] ALLER 432 that “the failure to make reasonable inquiries of the persons in possession and use of land or the purchasers’ ignorance or negligence to do so, formed particulars of fraud’’.  It was similarly the decision of the Court in Marko Matovu Vs Muhammed Sseviri & Anor C.A No.7/1978 that knowledge of other persons rights or claims over land and deliberate acquisition of a registered title in the face of protest amounts to fraud. Justice Odoki went on to hold in Kampala District Land Board & Anor vs. National Housing & Construction Corporation (supra) that such acts of fraud, defeat the act of registration.

            Fraud is defined in Fredrick Zaabwe V. Orient Bank & Others SCCA No. 04/2006 (inter alia) to be

”………..an intentional pervasion of the truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. A false misrepresentation of a matter of fact, whether by words or by conduct….’’

Osborne’s concise Law Dictionary 7th Edn Sweet & Maxwell, London pg 153 defines fraud “as the obtaining of a material advantage by unfair or wrongful means; it involves moral obliquity. Fraud is proved when it is shown that a false representation has been made ……”

            The admissions by Kasigwa that he did not personally make any inquiries on the land or from the area local council authorities indicate that he himself did not do any due diligence but left that duty to agents of the Municipal Council. He states to have inquired from one Ms. Lydia Mwembe, the Secretary of the Land Board and one Ms. Aisha Nahabo the senior Land Management officer, but did not confirm those two people actually visited the land. In fact, his purported inquiries to any agent of the Board would not amount to due diligence because in law, this was land still outside the Board’s jurisdiction and they could only act upon a report from an applicant and other authorities so designated in law.

            Kasigwa admitted that he did not compensate anybody. That his intention was to meet the occupants on the suit land and arrange for their compensation after he had obtained his certificate. However, that before he could do so, he was thrown off the suit land by the agents of Nile Agro Ltd and his complaints were never resolved by the Board.  Kasigwa’s admission is an indication that he obtained title to land where adverse claims existed. His actions would be in violation of Article 26 of the Constitution which provides that no one is to be deprived of property without compensation. His attempts to adduce PEX6 a title registered in his name but in respect of a different plot on Lubogo Lane Jinja, would not change this cardinal constitutional principle. As explained by DW2, PEX6, was a different plot in a developed area, one without squatters or unregistered interests. I note in fact that in clause (b) of PEX6 under the title “covenants and conditions” it is stated that “compensation of tenants to be done if any on the land will be done by the applicant”. I would interpret “applicant” to be an applicant for a lease interest, as is the case here.

            There was other independent evidence to show that there was no due diligence by the statutory entity to confirm whether there were occupants on the suit land, prior to its allocation to Prisma Ltd. When shown DEX.43, (the Land Application Form) in cross examination, Kasigwa conceded that it did not contain the signature of the Area Land Committee. This would be in line with the testimony of DW2 that when he perused Application Form 8, there was no recommendation and signatures of members of the Area Land Committee which meant that the land was not inspected by its members.

            Clause 2 of the plaintiff’s lease offer provides that:

”subject to your obtaining any necessary approval or consent required by law, the Board has approved a lease or sub lease in respect of the above land in a standard form on the following terms and conditions, subject to the Act and the Registration of Titles Act, and to payment of the required fees.’’ Emphasis of this Court.

I would agree with counsel Tuyiringire that a proper interpretation of the above clause is that the Board made an offer with a condition that the lease would be granted only if Prisma Ltd obtained the necessary approval or consent as required by law. I have already discussed in detail that that the consent would be from existing occupants, and the approval from the Land Area Committee.

            A similar interpretation was given by the High Court in the case of Folomera Nalongo Vs Luwero Town Council HCCS No. 303/1993 reported in [1995] IV Kalr 24-27. In that case it was held that an offer including a clause that it was “……subject to land being available and free from disputes at the time of the survey’’ meant that it was only a conditional offer and not a binding contract between the applicant and the controlling authority. Likewise, as soon as the Board confirmed that there were adverse claims on the suit land, their offer to Prisma Ltd was automatically withdrawn because it was a condition precedent that any consents required under the law, would first have to be obtained. 

            In the instant case, neither the agents of Prisma Ltd nor those of the Board complied with the legal and procedural requirements leading to an offer for a lease. Kasigwa who professed to be part of the leadership in the Municipal Council is expected to have known the steps to follow when lodging such an application. As it turned out, the suit land was actually occupied by several people some of whom were compensated by Nile Agro Ltd. The compensation agreements (admitted as DEX3 to DEX 15) confirming that evidence were not challenged at all.

            The decision of the Supreme Court in Kampala District Land Board & Anor Vrs. Venansio Babweyaka & 3 others (Supra) would be relevant here. It was observed that

“….in this appeal, clearly the failure to follow the prescribed procedure for registration of the 2nd appellant‘s interest in the land was a trick to deceive the relevant authority that the land was available whereas not. The registration was hence unlawful and cannot be left to stand. The respondent had the first option to the lease. The offer to the 2nd defendant would be considered if the respondent had declined to take it for one reason or another”.

            Interestingly, apart from the occupants represented by M/s Wafula & Co’; Advocates, another company M/s Crescent Holdings Co. Ltd had also previously (in Sept 2006), applied for a lease in respect of the same land offered to Prisma Ltd. A conditional lease was made to Crescent Holdings Ltd for 6.6 hectares vide JDLB Min. NO. 11/20/2006 of 13/7/2006. Ahmed Osman its director, testified that they paid premium on 10/10/06, about three years before Prisma Ltd was offered the same land. It is evident in the deed plan presented by Kasigwa that the suit land covered the exact portion already offered to Crescent Co Ltd. The claims by Kasigwa that Prisma Ltd was in active occupation were contradicted by Ahamad who testified that they had never been known to be in occupation. In fact the admission by Kasigwa that their plan was to pay compensation to occupants on the suit land after obtaining title, would contradict his statement that they were in possession at the same time.

            It appears also that the procedure laid down in Regulation23 of the Land Regulations 2004, was not followed. The result is that the public was not engaged before the offer was made. Thus this important step was also omitted, and the opportunity to solicit any adverse claims to the suit land was ignored. Thus, as pointed out by counsel Muzilansa, it was evident that the agents of Prisma Ltd did not conduct any due diligence before lodging their hurried application for allocation of the land. Had they gone through the statutory process as submitted above, especially involving the public and securing the requisite endorsements, they should have come to learn that the suit land was occupied or that it was not available for leasing due to those claims, or a previous allocation to another applicant.

            I would thus conclude that before Prisma Ltd presented their application, the suit land was not available for allocation and allocating the same by the Board was contrary to Article 241 (1) of the Constitution, Section 59(1) Land Act and Regulation 23 (1)(a). This is so because the District Land Board can only allocate land in a district which is not owned by any person. This was reflected in the Board’s defence that at the time of the allocation, the suit land was not under their jurisdiction.

            Failure to follow the above procedure requirements in granting and obtaining a lease from Jinja District Land Board amounted to an illegality or non-compliance with the law which renders the allocation to Prisma Ltd wrongful and illegal. I am bound by the Court of Appeal decision of Venansio Bamweyaka & 5 Others Vs Kampala District Land Board & Anor Civ. Appeal No. 20/2002 that, where the application for and the alienation of land by a controlling authority has been done without consultation of those in occupation thereof, such grant would not be allowed to stand

            In conclusion, it is my decision that the offer and grant of a lease interest in favour of Prisma Ltd by the Board, was unlawful and therefore its cancellation was correct and lawful.

            I note that there was some emphasis by all counsel on evidence with respect to cancellation of the title issued to Prisma Ltd. It was shown that the Board passed a resolution to revoke the offer on 17/9/2009. Prisma Ltd still managed to obtain a title on 21/09/2009, which was wrong but could be explained by Kasigwa’s insistence that they were never informed of the foregoing resolution. That notwithstanding, DW2’s opinion was correct. It was the mandate of another entity, the Registrar of Titles, to cancel the title. Thus in his letter to the Town Clerk on 2/11/2009, DW2 advised that the District Land Officer to initiate action to cancel any land titles had been issued in respect of the suit land. This was correct advice, but as admitted by Kasigwa himself, the lease expired before it could be cancelled. There was no evidence that Kasigwa applied for its renewal. As it is, there is no running lease in favour of Prisma Ltd and a decision of whether its cancellation was valid, is therefore moot. There was no lawful lease offer granted to the plaintiff, and no leasehold title was ever revoked or cancelled.

 

Issue 2: Whether the 1st defendant lawfully acquired the suit land.

            I have when resolving the first issue decided that there was no valid offer for a lease to Prisma Ltd because of pre-existing occupants and an earlier offer made to another entity. It is correct as pointed out by their lawyer that their application and offer was made first in time (before Nile Agro Ltd). Unfortunately those arguments are moot because the lease offer made to Prisma Ltd has been found to be of no legal consequence and would have virtually no effect on any application that came later in time, including that of Nile Agro Limited. I would in essence consider that by the time Nile Agro Ltd lodged their application, there was no offer made to Prisma Ltd by the Board, and none accepted by them. The question then would be whether the offer made to Nile Agro Ltd and their acceptance of the same, was valid.

            It was a wrong assumption by counsel Galisonga that without first obtaining consent of the Board as land owner, the compensation agreements entered into between Nile Agro Ltd and the occupants were void. It has already been discussed that the Board does not own but only manages public land. Its mandate of allocation extends only to land not owned or claimed by any person or authority in line with the Constitution, Land Act and Land regulations 2004. The Court in Bamuhiga & Ors vs. Mugara & Ors (HCCS No.68/2006) agreed with that assertion of the law. It was for that reason that a procedure was given which any applicant for public land ought to follow before an offer is made by the Board as the controlling authority in charge of allocations. That procedure has been given when resolving the first issue and will not be repeated here.

            Mr. Muziransa submitted and I agree that the allocation to Prisma Ltd being unlawful, the occupants on the suit land who were not compensated, retained their interests in it, the voidable allocations notwithstanding. It is also evident (in DEX29 and DEX30) that the Board cancelled both the offer and allocation made to Prisma Ltd  before allocating the suit land to Nile Agro Ltd. Indeed this was only a formality because from my decision above, there was never a valid contract between Prisma Ltd and the Board. What needs to be ascertained then is whether the correct legal procedures were followed before an offer and allocation was made to Nile Agro Ltd

            Being public land, a valid application for the suit land could only be made to Jinja District Land Board. It is provided in Section 59(8) Land Act that;

“The board shall hold in trust for the citizens the reversion on any lease to which subsection (1) (c) relates and may exercise in relation to the lease and the reversion the powers of the controlling authority  under the Public Land Act  1969 , as if that Act had not been repealed, but subject to the foregoing, that Act shall in respect of any such lease or reversion, have effect with such modifications as may be necessary to give effect to this Act and subject to the provisions of the Constitution.’’

            According to DWI Magan M. Patel, the Managing Director of Nile Agro Ltd, they applied to the Board through the Jinja Municipal Council for industrial land. The suit land was located for them but the Board advised that it was heavily encumbered by occupants and an allocation could be made only after they were compensated. That with the assistance of their lawyers, they negotiated with the occupants, compensated them for their interests and then allowed them time to remove their crops. He emphasized that Nile Agro Ltd was the first entity to pay any compensation and the occupants who occupied the entire 20 hectares (the land of interest) were unaware of any previous allocations made by the Board in respect of that land. Patel’s evidence was supported by DW2 Ahamed who stated that although they too had been allocated the suit land, they had not yet paid compensation to any occupant. Proof that the occupants were compensated was present in the compensation/purchase agreements that the listed occupants signed with Nile Agro Limited. See DEX.5-DEX16.

            Patel was specific that all their interactions and dealings with the occupants were done with the recommendations and knowledge of the local council officials and Area Land Committee. That was the correct procedure to follow in line with Section 64 of the Land Act as amended by section 27 of the Land (Amendment) Act 2004 which empowers a District Council to establish a Land Committee at any sub county. Under Section 64 (7) that Committee has the primary duty to assist the Board in an advisory capacity on matters relating to land including ascertaining rights in land. Patel submitted that it only after they had compensated the occupants and a verification made by the Committee, that they lodged their application for a leasehold.

            DEX 21 was admitted without contest. It is the application by Nile Agro Ltd for a leasehold with respect to industrial land in Walukuba Masese in Jinja Municipality. It is evident in Part II of that application that there was input of the Walukuba-Masese Division Land Committee. Three committee members who signed the document on 25/05/09 stated that:

“the area is vacant and has settled with the customary owners amicably”

            The above recommendation was confirmation that the requirement to settle existing claims in the land being applied for was fulfilled. It then paved way for the Board to positively consider the application by Nile Agro Limited. There was no requirement for Nile Agro Ltd to first obtain consent from the Board before commencing negotiations and compensating the occupants. As argued for the defendants, the suit land being public land, did not belong to the Board as claimed by Mr. Galisonga. The occupants found on it owned certain unregistered claims to it and the powers reserved in the Board were strictly that of holding and allocating it in accordance with the Constitution and Land Act.

            It is correct as pointed out by Mr. Tuyiringiye that the Board cannot be the registered owner contemplated under section 34 (3) of the Land Act. The occupants on the suit land were neither under an obligation to give the Board a first refusal, nor to apply to it for the surrender of their interests in the suit land. Likewise, Nile Agro Ltd had no obligation to first seek consent of the Board before engaging the occupants. Thus, the uncontested agreements between them and those former occupants were valid and sufficient proof that existing claims to the suit land were compensated before an allocation was made to the former.    

            It is not clear whether the procedure in the Land Regulations was followed before the application of Nile Agro Ltd was considered. As I have said, it is not mandatory for every case and the Brand reserves the discretion to engage the public through print media. In this case, the unregistered interests on the land were known, and Nile Agro Ltd, as applicant duly informed. They responded by following the correct steps in the law. The only other previous claimant to the suit land was Crescent Holding Company Ltd. Osman Muhamad their Managing Director, confirmed that with the intervention of the Board, they agreed to negotiate with Nile Agro Ltd. The latter having agreed that they held a former offer in respect to the same land, offered, and they agreed to be compensated for their interests and to receive refunds for any moneys paid to the Board. Their consideration in that transaction was their agreement to relinquish all claims to the suit land and handing over their lease offer and vacant possession to Nile Agro Ltd.  Ahamed as Managing Director of Crescent Co Ltd was aware of and did not contest the cancellation of their offer by the Board. Only then was the suit land lawfully allocated to Nile Agro Ltd.

            Therefore, in resolving this issue, I find that the 1st defendant in the process of applying for the suit land, engaged the occupants on the suit land and then sought approval and recommendation of the Area Land Committee. They then fulfilled all the other procedural and legal requirements before obtaining and accepting a lease offer in respect of the suit land. They therefore lawfully acquired the suit land and the second issue is resolved in the affirmative.

Issue 3:  What remedies are available to the parties?

            Prisma Ltd the plaintiff company has failed to prove their claim on a balance of probabilities. They are denied any remedy and their case is accordingly dismissed.

            l have agreed with Nile Agro Ltd on much of their claims in the counterclaim. Their application for a leasehold interest in the suit land was lawful. The offer for the lease by the Board was made after confirming that the offer to Prisma Ltd was irregular and unlawful and after its cancellation. Nile Agro Ltd fully compensated the original occupants on the suit land and there was no adverse claim to the suit land at the time it was offered to them for leasing. The actions of Prisma Ltd amounted to fraud and their title which was procured through fraud is liable to be cancelled. However, as I have already held, at the time the suit was filed, the lease had expired. The prayer for its cancellation would thus be moot. I decline to grant it as for now it only Nile Agro Ltd that holds a valid leasehold title to the suit land.

            Nile Agro Ltd in addition prayed for general damages as vindication for the inconveniences that they suffered. General damages are those that the law presumes to arise from the direct, natural or probable consequences of the act complained of by the victim; they follow the ordinary course and relate to all other terms of damages. Whether pecuniary or non-pecuniary, general damages should have the effect of reinstating the injured party to their original position and would in addition, include future loss as well as damages for paid loss and suffering. See for example, Storms Vs. Hutchinson [1905] AC 515.

            It is trite law that measurement of quantum of damages is a matter for the discretion of the individual judge which of course has to be exercised judicially with the general conditions prevailing in the country and prior decisions that are relevant to the case in question. See Moses Ssali a.k.a Bebe Cool & Others Vs. A.G and Others HCCS 86 2010. That said, Courts (See for example M/s Pago (U) Ltd Vrs Fort Portal Municipality Council CACA No. 28/2006) have preferred that the party seeking general damages guides the court on the nature of their damage or loss by the erring party which will assist in assessing an appropriate award. There being none specifically disclosed in the counterclaim or Mr. Patel’s evidence, I stand guided by the value of the subject matter, the economic inconvenience the party may have been put through and the nature and extent of the breach or injury suffered. See for example, Uganda Commercial Bank Vs Deo Kigozi 2002 EA 293.

            It was Mr. Patel’s evidence that for the entire period that Nile Agro Ltd engaged and paid the occupants on the suit land, obtained the lease offer and then commenced its development, Prisma Ltd was unknown to them, was not “in the picture” and never came out to make any adverse claim for the suit land. It is safe to conclude then that there was minimal interference with their plans and developments on the suit land by Prisma Ltd’s claims, and Nile Agro Ltd has been in continuous occupation of the suit land from when they signed the formal lease and to date.

            However, there was evidence that during April 2015, Nile Agro Ltd was directed to halt any developments on the suit land to pave way for an investigation by the IGG with respect alleged to its fraudulent allocation. It is not clear who instigated the investigation, and I hasten to add that any aggrieved person would have a constitutional right to engage the IGG. None the less, according to Patel, Nile Agro Ltd adhered to the directive, and that being so, they must have suffered some inconvinence and delay in their plans for the duration of the investigation, which incidentally cleared their allocation and discredited that of Prisma Ltd. I am persuaded that the owners of Nile Agro Ltd must have during that period suffered much anxiety and physical inconvenience since their investment was considerable as related by Patel and illustrated in the photographs admitted as DEX.2(a)-(d).

            I am persuaded that Prisma Ltd cannot be blamed or penalized for the IGG’s intervention. However, their persistent adverse claims to the suit land especially before their offer was cancelled must have caused the owners of Nile Agro Ltd much anxiety. I am only prepared to make a nominal award of shs.15,000,000/= as general damages in that regard. Nile Agro Ltd is in addition awarded their portion of the costs of the suit.

            The 2nd defendant who were successful in defending this suit, are likewise entitled to costs. However, I find their conduct in the transactions resulting into these two suits wanting and even irresponsible. It was raised as a ground of fraud (in clause iv of the counterclaim) for the Board to have allocated land over which they had no legal authority. Mr. Tuyiringire labored in his submissions to convince the court to exonerate the Board which in his view “redeemed” itself by cancelling the offer when it realized it had no jurisdiction over the suit land. That may be so, but the facts indicate that the Board ought to have been aware that this was encumbered land, or at least their interactions with Prisma Limited, were suspicious and even bordering on corruption by their officials. The following are my reasons

            Uncontested evidence was admitted that the Board had made an offer to Crescent Co Ltd over the same piece of land long before Prisma Ltd ever lodged their application. DW2 testified that he was in charge of compiling and then placing before the Board applications for land. I wish to believe that the Board, a public body maintain as register for processed claims, both for record purposes, and to prevent double allocations. The interests of Crescent Co Ltd should have at least been known. In fact, there was uncontested evidence in the IGG’s report that the Board maintained a register for customary tenants which included those on the suit land. That was sufficient notice to the Board not to have gone forward with an allocation to either Crescent or Prisma Ltd.

            Secondly, as pointed out by Mr. Muziransa, the date of Prisma Ltd’s application form and receipt of its purchase indicate that it was presented a day before the form was purchased. Further, it is suspicious that the application filed on 15/7/2008, was quickly processed and then approved by the Board on 17/7/2008 a period of two days only. That application which blatantly lacked the recommendation of the Area Land Committee (a vital pre requisite to an offer) was still processed and approved in an expedited manner.  The Board must have been wary of possible costly litigation when they urged both Crescent Co Ltd and Prisma Ltd to settle the matter with Nile Agro Ltd, the eventual legitimate applicant and allocatee of the suit land.

            The Board was entitled to defend the claim but they did so, with their hands too soiled for this Court to ignore. Such conduct by the agents of the Board and possibly those of the Town Council are some of the factors fueling fraudulent land transactions in public land in Jinja. The agents of Prisma Ltd must have been aided by agents of those two entities. It is for that reason that I deny the Board costs of the suit.    

            In summary, judgment is entered in favour of Nile Agro Limited the 1st defendant on their counter claim and I specifically order as follows:-

  1. The suit by Prisma Limited is dismissed
  2. A declaration that Prisma Limited obtained their lease in respect of LRV 4013 Folio 20 Plot 59 -61 Industrial Road Jinja fraudulently.
  3. A declaration that Nile Agro Limited is the lawful owner of land measuring approx. 1.5 Ha known as Plots 59 -61 Industrial Road Jinja, the suit land.
  4. A permanent injunction restraining Prisma Limited by its directors/agents/servants from interference in the suit land and all developments thereon.
  5. Nile Agro Limited is awarded general damages of Shs. 15,000,000/=.
  6. Nile Agro Limited is awarded their costs of the suit.
  7. No order of costs is made in favour of the Jinja District Land Board, the 2nd defendant

 

………………………

EVA K. LUSWATA

JUDGE

30/06/2020