THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISCELLANEOUS APPLICATION NO 538 OF 2013)

(ARISING FROM CIVIL SUIT NO 344 OF 2013)

ANDREW BABIGUMIRA}.....................................................................APPLICANT

VERSUS

JOHN MAGEZI}................................................................................RESPONDENT

BEFORE HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicant commenced this application under Order 41 rules 1 and 2 of the Civil Procedure Rules for a temporary injunction to issue restraining the Respondent or his agents from any interference with or further dealings in the land comprised in Kyadondo block 194 plot 45 at Kungu pending the final disposal of the suit and for costs of the application be provided for.

The grounds of the application are that the Applicant is still in possession of the suit land. Secondly the Respondent and his agents are threatening to dispossess the Applicant of the suit land. Thirdly the Respondent and his agents are threatening to destroy the Applicant’s gardens. Fourthly if the Respondent changes the status quo, the Applicant will suffer irreparable damage. Fifthly that the Applicant filed the main suit from which this application arises for a permanent injunction and this raises bona fide triable issues. Lastly the Applicant avers that it is just and equitable that the status quo is maintained.

The application is supported by the affidavit of the Applicants who deposes that he is still in possession of the suit property and claims interest as the owner thereof. He deposes that the land was improperly registered in the names of the Respondent and the others filed an action against the Respondent in HCCS number 344 of 2013. The rest of the deposition repeats the averments in the chamber summons.

In reply the Respondent strongly opposed the application and filed an affidavit in reply.  In the affidavit in reply, he deposes that the application before the court has no merit, is frivolous, vexatious and an abuse of court process and designed to delay court process. Firstly he deposes that the affidavit in support of the application is not dated and does not comply with the provisions of section 5 of the Commissioner for Oath (Advocates) Act cap 5 for which the Applicant should be penalised in costs. Secondly the Respondent bona fide, legally, honestly and genuinely purchased for value without any fraud and dishonesty the suit property for consideration of 150,000,000/= Uganda shillings from Global Trust Bank Ltd, being the mortgagee in possession of the property with powers of sale without recourse to court. Thereafter the Respondent secured registration of the property into his names on 6 October 2011 under instrument number KLA 519948. Thereafter the Applicant instituted civil suit number 161 of 2012 in this honourable court in which he sued Messieurs Global Trust Bank, the Respondent, David Bashaijja trading as Ultimate Court Bailiffs and Auctioneers and the Chief Registrar of Titles seeking a declaration that the sale of the land by Messieurs Global Trust Bank Ltd was unlawful and illegal.

On 13 June 2013, the Applicant's civil suit number 161 of 2012 was dismissed with costs under order 17 rules 4 of the Civil Procedure Rules and rule 7 of the Constitution (Commercial Court) Directions 1996. The Applicant did not appeal against the judgement/decree in the said High Court (Commercial Division) Civil Suit Number 161 of 2012. In the premises the Respondent deposes that the Applicant’s main suit and the application against the Respondent are without merit, is frivolous, vexatious and the Applicant does not have a prima facie case with a likelihood of success. The Respondent deposes that he is in possession of the suit property and accordingly there is no threat against the Applicant. It is not in the interest of justice to grant the application as the Respondent is likely to suffer great loss and inconvenience as the bona fide registered proprietor of the suit property. Furthermore the Respondent deposes that the balance of convenience favours him as the registered proprietor of this property and a decree holder in civil suit number 161 of 2012. The Applicant would be adequately compensated by an award of damages for the loss he may have sustained as a result of the Respondents possession of the suit property. Consequently the application is brought in bad faith and is a blatant abuse of court process and ought to be dismissed with costs.

At the hearing of the application the Applicant was represented by Counsel Nyote David Innocent while the Respondent appeared in person and represented himself. The Respondent raised preliminary objections which were overruled on the 15^th of November 2013 and the application proceeded on merits.

Counsel for the applicant and the respondent addressed the court in written submissions. The applicants counsel submitted that the conditions for the grant of a temporary injunction include the pendency of a suit and secondly exceptional circumstances showing that the applicant is likely to suffer irreparable damages which cannot be adequately compensated in damages. Thirdly a temporary injunction cannot be granted ex parte. Before the court can grant a temporary injunction it should be persuaded that there are serious questions to be tried in this suit and on the facts before the court that there was a probability of the applicant being entitled to the reliefs sought. Secondly that the courts interference was necessary to protect the applicant from injustices or injuries which may be termed irreparable before legal rights could be established in the trial. Thirdly the comparative inconvenience likely to issue from withholding the injunction would be greater than that which was likely to arise from granting it. Counsel particularly relied on the case of Cotton International versus African Farmers Trade Association BV and Lango Co-Operative Union (1998 – 2000) HCB 57.

The applicants counsel argued that there was a suit pending between the parties according to the attached plaint to the applicant’s affidavit. Secondly the respondent and his agents are threatening to evict the applicant from the suit property and were threatening to destroy his gardens thereon. The applicant also states that it is hard to get land within the proximity of his other plots in Kampala in case the suit land is alienated. In those circumstances the applicant cannot be compensated by an award of damages because location of land is an important factor to a person's development aspirations. This is especially where he owns other piece of land adjacent to the land in dispute. No amount of money can atone and therefore if the status quo changes, the applicant shall suffer irreparable damage.

The applicant's counsel further submits that there are serious questions to be tried which include whether any notice or proper notice was issued to the plaintiff/applicant before his caveat was vacated to transfer the land into the names of the defendant/respondent. Secondly whether the defendant/respondent was registered as the proprietor of the land in issue at 12.22 AM in the night; and whether the defendant/respondent was fraudulently registered as the owner of the suit property. The applicants counsel contends that if the serious questions are answered in the affirmative as they are likely to be, the applicant has a high chance of being entitled to the reliefs sought to cancel the name of the respondent from the title deeds. Last but not least the applicant's counsel contends that the comparative inconvenience likely to be suffered by other party to the application is higher on the part of the applicant who is in possession. The respondent does not suffer as much as the applicant because land increases in value and if he succeeds, he would find it more valuable than the money expended by him in the purchase of the property.

In reply the respondent relies on Order 41 rule 1 of the Civil Procedure Rules which gives the grounds for the grant of a temporary injunction. The first one being that there has to be proof by affidavit or otherwise that the property in dispute is in danger of being wasted, damaged or alienated by any party to the suit or wrongfully sold in execution of a decree or that the defendant threatens or intends to remove or dispose of his or her property with a view to defraud his or her creditors. The respondent's case is that the purpose of a temporary injunction is to preserve the status quo of the subject matter in dispute under Order 41 rule 1 of the Civil Procedure Rules. The respondent is in possession of the suit land as the duly registered proprietor thereof and there is therefore no threat of eviction and destruction of the applicants gardens on the said land as purported in the applicant's affidavit in support of the application. The suit land is in no danger of being wasted, damaged or alienated by the respondent.

The respondent further submitted that the conditions for grant of a temporary injunction are laid out in the Court of Appeal case of Giella versus Cassman Brown and Company Limited [1973] 1 EA 358 and confirmed in Robert Kavuma versus Hotel International Ltd Supreme Court Civil Appeal Number 8 of 1990 have not been satisfied. The conditions are that the applicant has a prima facie case with a probability of success; that the applicant might otherwise suffer irreparable damage which would not be adequately compensated for in damages; if the court is in doubt on the first two points, it will decide the application on the balance of convenience. The balance of convenience is whether the inconveniences which are likely to issue from withholding the injunction would be greater than those which are likely to arise from granting it.

Whether there was a prima facie case with a probability of success?

On the above premises the respondent submitted that the court must be satisfied that the claim is not frivolous or vexatious and that there are serious questions to be tried. The respondents case is that the applicants are indebted to Global Trust Bank Ltd (the first defendant in the main suit) and having failed to settle the indebtedness, Global Trust Bank Ltd sold this property to the respondent for Uganda shillings 140,000,000/=. The respondent purchased the suit property legally and honestly with the notice of any encumbrance, fraud or dishonesty and registered the property into his names. In those circumstances the application does not disclose serious questions of law to be decided against the respondent who is a bona fide purchaser for value of the suit property.

On the question of whether the applicant might otherwise suffer irreparable damage which cannot be atoned for by an award of damages. The respondent relied on the case of American Cynamide company versus Ethicon Ltd [1975] 1 All ER 504 for the proposition that if damages recoverable at common law would be an adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction would normally be granted however strong the plaintiffs case appears to be at this stage. In the case of Kiyimba Kaggwa versus Hajji Nasser Katende [1985] HCB 43, the court observed that irreparable injury does not mean that there must not be physical possibility of repairing the injury but means that the injury must be a substantial or material one that cannot be adequately compensated for in damages.

Furthermore the respondent contends that this suit property has value and a monetary figure can be ascribed to the loss that the applicant may suffer in respect of the suit property and the applicants can be adequately compensated in damages. The respondent together with other defendants have the capacity to compensate the applicants in the unlikely event that this suit is decided against them.

The respondent is currently in possession of the suit property as the lawful registered proprietor whose enjoyment and right to deal with this suit property as it pleases should not be interfered with. In any event if the applicants succeed in the main suit, the value of the suit property would have appreciated. Consequently the respondent contends that the applicant’s application lacks merit and ought to be dismissed with costs.

In rejoinder counsel for the applicant reiterated earlier submissions.

On the prima facie case, the applicant has a good case against the respondent because the manner in which the respondent acquired the property concerning his registration was irregular because there was a subsisting caveat and it was registered at night that this 12 00 AM.

On the question of irreparable damage, the applicants counsel reiterated earlier submissions. The main contention of the applicant is that the respondent is going to destroy his gardens if he takes possession of the land in dispute. Counsel added that it takes a long time for gardens to grow especially gardens with assorted trees of different types and it cannot be compensated by an award of damages. The land is adjacent to the applicant’s property.

On the maintenance of the status quo and balance of convenience the respondent is deliberately misleading the court and does not appreciate the meaning of possession as regards land under the Registration of Titles Act. Possession of the land title is not possession physically. Counsel submits that possession of land has to be physical. The physical possession of the applicant is backed by an interim order of the court maintaining the status quo.

On the question of the respondent referring to other parties on the question of compensation, counsel for the applicant contends that the remedy of injunction is being sought against the respondent and nobody else. Secondly on the suggestion that the value of the land would appreciate, the argument cannot hold because the applicants concern is the destruction of his gardens and alienation of the land.

Ruling

I have duly considered the applicants application and the response of the respondent together with the submissions of counsel and authorities cited. My understanding of this application is that the main controversy for determination revolves around the meaning of status quo as a question of fact and on a point of law.

The applicant asserts that he is in possession of the suit property. On the other hand the respondent asserts that he is in possession because he is the registered proprietor having bought the suit property from Global Trust Bank Ltd to which the applicant is indebted.

It is a question of fact that is admitted by the applicant and which forms the basis of the suit that the respondent is the registered proprietor of the suit property. Annexure "A" to the affidavit of the respondent in opposition to the applicant’s application is a sale agreement between the mortgagee, Messrs Gold Trust Bank (U) Ltd as the vendor and the respondent Mr John Magezi as the purchaser dated 2nd of May 2011. The respondent was registered on 6 October 2011 as the proprietor of the suit property according to annexure "B". The sale agreement includes a statement that the respondent was the highest bidder at an auction of the property held on the 2^nd of May 2011. On the other hand the applicant in annexure "A" of his affidavit deposes that he has filed an action according to the plaint attached challenging the registration of the respondent. In the plaint in paragraph 7 thereof, there is an averment that it is for declaration that the sale of the plot by Global Trust Bank Ltd to the respondent was fraudulent, unlawful and illegal. The applicant further seeks a permanent injunction to restrain the respondent and the Chief Registrar of Titles from any further dealings in the property. He also seeks an order of cancellation of title of the respondent as proprietor of the suit property.

As far as the registered proprietorship is concerned, the status quo is that it is registered in the names of Mr John Magezi. Order 41 rule 1 (a) of the Civil Procedure Rules is the applicable rule in the circumstances of this case and provides as follows:

"That any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or…"

Following from the rule and as far as the question of registered proprietorship is concerned, the question is whether it has been proved by affidavit or otherwise that the property is in danger of being wasted, damaged or alienated. Specifically the relevant provision applies as far as title is concerned to the issue of whether it is in danger of being alienated. There is no averment in the affidavit that the respondent threatens to sell the suit property. What is averred is that the respondent and his agents are threatening to dispossess the applicant of the suit land and threatening to destroy the applicant’s gardens. Specifically the averments concerning threatened change of the status quo is related to the question of physical possession of the suit property. The affidavit in support only avers that the respondent and his agents are threatening to evict the applicant from the property. Secondly he avers that the respondent and his agents are threatening to destroy the gardens on the land. Thirdly the applicant deposes that he would suffer irreparable damage since it is hard to get such land elsewhere in Kampala within the proximity of his other plots.

On matters of fact it is apparent that the applicant does not have a house or has not indicated that he has a house on the suit property. From the above premises, it is also apparent from the application that the applicant has gardens and not any other kind of property. The applicants counsel submitted without evidence about assorted trees. Furthermore he emphasised physical possession over registered proprietorship as constituting the status quo.

Consequently the question of eviction from the suit land is strictly speaking related to the use of the property. Secondly the question of damage is the alleged threat to destroy the gardens. Finally both the applicant and the respondent claimed to be in possession of the suit property. The question of what the status quo is necessarily engages the question of what is meant by possession. I have duly noted that the applicants counsel relies on physical possession as constituting the status quo. However in the absence of a place of abode averred by the applicant and proved in evidence, the applicant asserts a right of use and ascribes some sentimental value to the suit property. The respondent’s assertion of the status quo on the other hand is grounded on being the registered proprietor.

The meaning of "possession" is not straightforward. According to Words and Phrases Legally Defined volume 3 at page 398 the word "possession" has ambiguous meaning:

"'Possession' is a word of ambiguous meaning, and its legal senses do not coincide with the popular sense. In English law it may be treated not merely as a physical condition protected by ownership, but as a right in itself. The word 'possession' may mean effective, physical or manual control, or occupation, evidenced by some outward act, sometimes called de facto possession or detention as distinct from legal right to possession. This is a question of fact rather than of law.

'Possession' may mean legal possession: that possession which is recognised and protected as such by law. The elements normally characteristic of legal possession are an intention of possessing together with that amount of occupation or control of the entire subject matter of which it is practically capable and which is sufficient for practical purposes to exclude strangers from interfering. Thus, legal possession is ordinarily associated with the de facto possession; but legal possession may exist without de facto possession, and de facto possession is not always regarded as possession in law. A person who, though having no de facto possession, is deemed to have possession in law, is sometimes said to have consecutive possession.… (35 Halsbury's laws (4th edition) paragraphs 1111 – 1114)…

If a man buys an empty house, though he never goes inside it, he is in actual possession of it. Nobody else can be. If there is a tramp sleeping in it without his permission, the new owner is still in possession of it. If there is somebody there whom he allows to be there, not as a tenant, but merely as a licensee, still it may be said that there are facts on which it can reasonably be found that the new owner is in possession of it… (Goudge vs. Broughton [1929] 1 KB 103 at 130 CA Scrutton LJ)… 'Possession' is a word that, perhaps like a great many words, is incapable of an entirely precise and satisfactory definition. Possession of a house is essentially different from possession of a gold watch. One has to look at the property possessed.' (Bank View Mill Ltd versus Nelson Corporation and Fryer And Company (Nelson) Ltd [1942] 2 All ER 477 at 486)

Possession can be distinguished from adverse possession. According to Oxfords Dictionary of Law ‘possession’ means:

“Actual control of property combined with the intention to use it, rightly or wrongly, as one's own. In the case of land, possession may be actual, when the owner has entered into the land, or possession in law, when he has the right to enter but has not yet done so. Possession includes the receipt of rent and profits, or the right to receive them."

Adverse possession on the other hand is possession coupled with defective documentary title that may give rise to a good title after a period of 12 years. Registered proprietorship is a right conferred by the Registration of Titles Act Cap 230. A person having adverse title by possession may apply for a vesting order under section 78 of the Registration of Titles Act. In other words a person who does not have registered title can get registered in appropriate circumstances. On the other hand registered proprietorship under the Registration of Titles Act does not merely confer the right of possession but the right to the estate subject to exceptions such as tenancies, licences, bona fide or lawful occupations excepted under the Land Act Cap 227. Other exceptions are provided for under the Registration of Titles Act and I do not need to go into them. They include implied leases. It is sufficient for purposes of defining the legal rights of the registered proprietor to refer to section 59 of the Registration of Titles Act. Section 59 provides as follows:

"No certificate of title issued upon application to bring land under this Act shall be impeached or be defeasible by reason or on account of any informality or irregularity in the application or in the proceedings previous to the registration of the certificate, and every certificate of title issued under this Act shall be received in all courts as evidence of the particulars set forth in the certificate and of the entry of the certificate in the register book, and shall be conclusive evidence that the person named in the certificate as the proprietor of or having any estate or interest in or power to appoint or dispose of the land described in the certificate is seized or possessed of the estate or interest or has that power." (Emphasis added)

I particularly make reference to the latter part of the section which I have italicised. The italicised part means that the person named as the proprietor has in law interest in or power to appoint or dispose of the land described in the certificate or has the estate or interest described therein. The estate described is a right of ownership and power to dispose of the property in the manner deemed fit by the owner. Section 59 has to be read in conjunction with section 176 of the Registration of Titles Act whose head note provides that the registered proprietor is protected against ejectment except in certain cases. The words "ejectment" also means eviction. Specifically the first part of section 176 protects the rights of a registered proprietor to the property against certain actions mentioned therein under the sentence written below namely:

"No action of ejectment or other action for the recovery of any land shall lie or be sustained against the person registered as proprietor under this Act, except in any of the following cases –"

The term "ejectment" or part of the sentence "action for the recovery of any land" implies that the status quo is in favour of the registered proprietor who cannot be 'ejected' or from whom the land cannot be recovered except under the circumstances stipulated in section 176. Such an action would be to change the status quo so as to 'eject' or recover the land from the registered proprietor.

Consequently the status quo concerning the right described in the certificate changed when the property was transferred from the applicant to the respondent by Messieurs Global Trust Bank (U) Ltd and the transfer was noted on the title deed by the registrar. Messieurs Global Trust Bank (U) Ltd purported to exercise the powers of a mortgagee. The question of whether the transfer was lawful or proper is the subject matter of the main suit. Moreover Messieurs Global Trust Bank (U) Ltd is not a party to the application for a temporary injunction and has already transferred the property to the respondent. In other words the rights flowing from having registered proprietorship changed from the applicant to the respondent and the process of that change and the right to that change is being challenged in the main suit. The process of change, is a legal process that is merely reflected by registration on the title deed and the registration is protected by sections 59 and 176 of the Registration of Titles Act. It is not a mere endorsement on paper for someone to be registered proprietor but a reflection of the change in the legal status quo showing that the registered proprietor is seized of the rights recognised under section 59 of the Registration of Titles Act. The conclusion is that the status quo has already changed whether rightly or wrongly the determination of the rights of the parties awaits the trial of the main suit on the merits. Can the court in theory reverse the rights attendant to registered proprietorship in the circumstances of the applicant’s case? In other words can the rights of the registered proprietor recognised by the statutory provisions be reversed by an order of a temporary injunction? Would an injunction not amount to a mandatory order upsetting the status quo?

Concerning de facto possession, there is no evidence that the applicant resides at the premises. If it comes to the destruction of gardens, the same question arises as to whether the court can reverse the status quo. This point is further supported by the applicants own submissions and concession that the property is likely to appreciate if it is in the hands of any of the parties. Last but not least the applicant seeks to stop the respondent from any further dealings in this suit property i.e. by transferring it to third parties. No evidence has been adduced to support the contention in the words of order 41 rule 1 of the Civil Procedure Rules that there is a threatened sale or transfer (or alienation) of the suit property. Stopping a registered proprietor from further dealing in the land by transacting a sale agreement or any other kind of transaction affecting the interest of the person interested in stopping it, such as a mortgage transaction, does not have to be done through the courts. Sufficient statutory provisions have been enacted to protect interested persons in the land and the registered proprietor as well.

Every person interested in property has the right to lodge a caveat forbidding further dealing in the property. The issue as to whether a Caveator has interest that can be protected would be established subsequently under the relevant statutory provisions and where necessary by a court of law. Sometimes notice to caveator may be sufficient to have the interest of the caveator determined. Section 139 of the Registration of Titles Act is very explicit that any beneficiary or other person claiming any estate or interest in land under the operation of the Act may lodge a caveat forbidding the registration of any person as transferee or proprietor or forbidding registration of any instrument affecting that estate or interest until after notice of the intended registration or dealing is given to the caveator.

Further provisions give the procedure to be followed if the registered proprietor would like to have the caveat removed. Because the status quo has changed and the right of proprietorship has been removed from the applicant, the circumstances of the case warrant that the status quo remains as it is. The respondent has registered proprietorship and the right to exercise those rights conferred by the law and recognised by the courts under section 59 of the RTA until and unless the title of the proprietor is impeached under the provisions of section 176 of the Registration of Titles Act. Any further dealing in the property can be forbidden by a caveat. The title deed annexure "B" attached to the affidavit of Mr John Magezi shows that there was a caveat by Global Trust Bank (U) Ltd which was registered on 16 October 2009 as a mortgagee and the mortgage was released upon sale by the Mortgagee on 6 October 2011 at 12.22 PM. Counsel for the applicant dwelt on the registration of the respondent on 6 October 2011 at 12.22 AM as evidence of possible fraud or irregularity in the registration. That allegation is however a matter on the merits of the applicants suit which should await the trial of the action.

I am satisfied that the trial of the action will resolve the question of proprietorship and the alleged illegal sale to the respondent by Messieurs Global Trust Bank (U) Ltd. In the meantime there are competing interests between the former registered proprietor who is the applicant and the current registered proprietor namely Mr John Magezi. Both of them cannot exercise the right of possession which goes with registered proprietorship. All the estate and interest of the applicant has been transferred to the respondent and the Applicant had on the face of the title given that right to Messieurs Global Trust Bank Uganda Limited as mortgagee. Messieurs Global Trust Bank (U) Ltd having exercised its registered interest as a mortgagee, on the face of it acted on behalf of the applicant until and unless that action is impeached in the main suit. That being the state of affairs, the status quo has changed and the temporary injunction would reverse the status quo. Possibly the situation would have been different if the applicant had a house on the suit premises and was unaware of the mortgage. I cannot however comment on or determine that in this application or suit.

The applicant purports to be exercising a right of proprietorship by having trees or gardens on the property which right has been transferred to the respondent by the acts of Messieurs Global Trust Bank (U) Ltd. I therefore agree with the respondent that it is the respondent who is in possession of the suit property and the status quo changed and there is nothing to restrain concerning the alleged threat to destroy gardens. As far as the registered proprietorship or other interests such as mortgaging the property is concerned, any further dealings on the basis of registered proprietorship can be taken care of by a caveat. In the premises, the applicant's application lacks merit and is accordingly dismissed with costs.

Ruling delivered this 20th of January 2014 in open court

Christopher Madrama Izama

Judge

Ruling/Judgment delivered in the presence of:

Natukunda Julie on holding brief for the respondent John Magezi

Andrew Babigumira, the Applicant present

Charles Okuni: Court Clerk

Christopher Madrama Izama

Judge

20/Jan/2014