Uganda Legal Information Institute - Contract Formation https://old.ulii.org/tags/contract-formation en Portland International (PTY) Ltd v Sembule Steel Mills Ltd & 2 Ors (CIVIL SUIT NO. 141 OF 2014) [2017] UGCOMMC 118 (3 October 2017); https://old.ulii.org/ug/judgment/commercial-court-uganda/2017/118 <section class="field field-name-field-flynote field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Flynote:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/tags/cl" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">CL</a></li><li class="field-item odd"><a href="/tags/jurisdiction-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Jurisdiction</a></li><li class="field-item even"><a href="/tags/exclusive-jurisdiction-agreement" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Exclusive Jurisdiction Agreement</a></li><li class="field-item odd"><a href="/tags/contract-formation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Formation</a></li><li class="field-item even"><a href="/tags/breach-contract-0" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Breach of Contract</a></li><li class="field-item odd"><a href="/tags/remedies-breach-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Remedies For Breach of Contract</a></li></ul></section><div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"><h3>THE REPUBLIC OF UGANDA</h3> <p><strong>IN THE HIGH COURT OF UGANDA AT KAMPALA</strong></p> <p><strong>(COMMERCIAL DIVISION)</strong></p> <p><strong>CIVIL SUIT NO. 141 OF 2014</strong></p> <p><strong>PORTLAND INTERNATIONAL (PTY) LTD  …………..…….…………. PLAINTIFF</strong></p> <p><strong>VS</strong></p> <ol> <li><strong>SEMBULE STEEL MILLS LTD</strong></li> <li><strong>FRANCIS SEMBUYA</strong></li> <li><strong>CHRISTOPHER SEMBUYA ……………………….… DEFENDANTS</strong></li> </ol> <p> </p> <p><strong>BEFORE LADY JUSTICE FLAVIA SENOGA ANGLIN</strong></p> <p> </p> <p><strong><u>JUDGMENT</u></strong></p> <p> </p> <p><strong>BACKGROUND:</strong> Sometime in 2010, following negotiations between representatives of the Plaintiffs and the Defendants, the Defendants applied for credit facilities to enable the First Defendant obtain steel products from the Plaintiff.  The parties then entered into a credit agreement in those terms.  – Refer to Exhibit P<sub>1</sub>.</p> <p> </p> <p>The Second and Third Defendant are Directors and Shareholders of the First Defendant.  At the time of the credit agreement, the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants signed the terms and conditions of sale incorporating a deed of suretyship and cessation – Exhibit P<sub>2</sub>, wherein they both agreed to bind themselves personally, jointly and severally to be liable for the debt due from the First Defendant.  The Deed of Suretyship was signed on the 1<sup>st</sup> day of October, 2010.</p> <p> </p> <p> </p> <p>As agreed, the Plaintiff supplied steel products to the Defendants, including: hot dipped galvanized wires, cold rolled galvanized steel wire, prime newly produced hot rolled wire rods and galvanized steel coil.  The products were supplied on credit vide commercial invoices and bills of lading – Exhibits P<sub>10</sub> – P<sub>20</sub>.</p> <p> </p> <p>It is the contention of the Plaintiff that the Defendants received all the said products valued at US Dollars $847,781.04 but refused to pay for them hence this suit.</p> <p> </p> <p>The Plaintiff prayed for judgment against the Defendants jointly and severally for:-</p> <p> </p> <ol style="list-style-type:upper-roman"> <li>Recovery of US Dollars $847,781.04 as special damages.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Interest on the above sum at the rate of 30% per annum from the date of breach until payment in full.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>General damages.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Interest on general damages at the rate of 30% per annum from the date of judgment until payment in full.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Costs of the suit</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Any other relief that court deems fit.</li> </ol> <p> </p> <p>The Defendants deny entering into a contract with the Plaintiff. And the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants deny being personally liable for the Plaintiff’s claim.  That the Plaintiff has no cause of action against them.</p> <p> </p> <p>The Defendants further contended that this court has no jurisdiction to try the suit, and that the suit ought to be tried in South Africa.  And that the claim is therefore frivolous and vexatious and prayed the suit to be dismissed with costs.</p> <p> </p> <p>Both the Plaintiff and the Defendants called one witness each.  The written statements of the witnesses were admitted as their evidence in chief.  And they are essentially in the terms set out in the background to the case; and referred to the exhibits admitted by both parties.</p> <p> </p> <p> </p> <p>The issues framed for determination of the court are the following:-</p> <p> </p> <ol> <li><strong>Whether this court has jurisdiction to entertain the suit.</strong></li> </ol> <p> </p> <ol> <li><strong>Whether there was a contract between the parties.</strong></li> </ol> <p> </p> <ol> <li><strong>Whether the Defendants breached the contract.</strong></li> <li><strong>Whether the Second and Third Defendants are liable.</strong></li> </ol> <p> </p> <ol> <li><strong>Remedies available to the parties.</strong></li> </ol> <p> </p> <p><strong>JURISDICTION:</strong></p> <p> </p> <p>According to the evidence of PW<sub>1</sub>, Robert Mulondo- it was agreed that jurisdiction would be in South Africa- Exhibit P<sub>2</sub>.  That the Defendants also insisted that the Uganda Courts do not have jurisdiction and relied upon Exhibits P<sub>3</sub> – P<sub>9</sub>.</p> <p> </p> <p>In his submissions, Counsel for the Plaintiff asserts that this court has jurisdiction under Article 139 of the Constitution and S.15 of the Civil Procedure Act.</p> <p> </p> <p>The case of <strong>David Kayondo vs. The Cooperative Bank Ltd SCCA 19/91</strong> was cited in support.  Plus the case of <strong>Sebaggala &amp; Sons Electric Centre Ltd. vs. Kenya National Shipping Lines HCCS 431/1999.</strong></p> <p> </p> <p>Counsel then argued that, while under the contract, Exhibit P<sub>3</sub>- the parties consented to the non-exclusive jurisdiction of the Witwatersrand Local Division of the High Court of South Africa, the term <strong>“non-exclusive” </strong>means that the agreement did not oust the jurisdiction of the High Court of Uganda, considering that the delivery of the steel products was in Uganda at Nalukolongo, the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants reside in Uganda and the First Defendant’s registered office is in Kampala, Uganda, where the products were delivered.</p> <p> </p> <p>Counsel for the Defendants insisted that under Exhibit P<sub>2</sub>, there terms on jurisdiction are very clear.  And that any proceedings arising out of the agreement between the parties were to be tried by the Witwatersrand Local Division of the High Court of South Africa.  And that the Plaintiff had not presented any document between the parties setting aside the jurisdiction of the South Africa Court.</p> <p> </p> <p>In rejoinder, Counsel for the Plaintiff submitted that the jurisdiction of court is both constitutional and statutory and there is no need to bring a document setting aside the jurisdiction of the Court of South Africa.</p> <p> </p> <p>Looking at the evidence adduced by the parties in this case, it is apparent that PW<sub>1</sub> did not say anything about the jurisdiction of court in his witness statement.  But in cross-examination, he testified that under Clause 8.2- Exhibit P<sub>2</sub> regarding the applicable law and jurisdiction, it was agreed that the jurisdiction would be in South Africa.</p> <p> </p> <p>This was confirmed by DW<sub>1</sub> Francis Sembuya in paragraph 6 of his witness statement where he refers to the Plaintiff’s exhibits P<sub>3</sub>-P<sub>9</sub> regarding applicable law on jurisdiction in respect of the alleged transaction are the laws of the Republic of South Africa, and as such the Uganda Courts do not have jurisdiction in this case.  The witness was not cross examined by the Plaintiff on this point.</p> <p> </p> <p>Looking at the agreement of the parties in this case Clause 8.1 provided that <strong><em>“the purchaser or sureties consent in terms of S.45 of the Magistrates Courts Act No. 32/144 to the jurisdiction of the Magistrates Court having jurisdiction in respect of any action to be instituted against it/him/them by the seller”.</em></strong></p> <p> </p> <p>While Clause 8.2 provided that <strong><em>“However, and in the event the seller electing to proceed in the High Court, the purchaser and sureties hereby consent to the jurisdiction of the High Court of South Africa (Witwaters rand Local Division)”.</em></strong></p> <p> </p> <p>It is clear from the evidence of the parties and the terms of the agreement that the parties consented to the jurisdiction of the High Court of South Africa.</p> <p> </p> <p>However, Art 139 (1) of the Constitution of Uganda has got to be borne in mind.  The article vests <strong><em>“the High Court with unlimited original jurisdiction in all matters and such appellate and other jurisdiction as may be conferred upon it by this Constitution of other law”.</em></strong></p> <p> </p> <p>And S.14 (1) of the Judicature Act also provides that <strong><em>“the High Court shall subject to the Constitution have unlimited original jurisdiction in all matters and such appellate and other jurisdiction as may be conferred on it by the Constitution, or this Act or any other law”.</em></strong></p> <p> </p> <p>Further guidance on the matter of jurisdiction can also be gathered form the case of <strong>LARCO Concrete Products Ltd vs.  Transair Ltd [1987] HCB 40 [1988-90] HCB 80</strong> – where it was held interalia that <strong><em>“the law governing contract is not a decisive factor in determining whether a particular court has or should exercise jurisdiction to entertain disputes arising out of the contract; what matters is whether the parties have unequivocally submitted to the jurisdiction of a foreign court and whether it is proper and just for the court where the proceedings are brought to entertain the action”.</em></strong></p> <p> </p> <p>The court also noted in that case that <strong><em>“the High Court jealously guards its jurisdiction and therefore any <u>instrument purporting</u> to oust its jurisdiction must do so in clear and in no uncertain terms.  Even where they have conferred exclusive jurisdiction to a foreign court, the High Court <u>has discretion whether or not to order a stay of the action”.</u></em></strong></p> <p> </p> <p>From the provisions of the law referred to above and the authority cited, it is apparent that even where exclusive jurisdiction agreement was entered into by the parties as in the present case, the High Court of Uganda still has jurisdiction to hear and determine the matter brought before it, except where there is justification for it to order a stay of the proceedings.</p> <p> </p> <p>Steps to be taken include to settle the choice of jurisdiction problems, were set down in the case of <strong>Spiliada Maritime Corp vs. Cansulex Ltd [1987] AC 460</strong> judgment of Lord Golf.</p> <p> </p> <p>These are:</p> <p> </p> <ol> <li>The court seized with the case must decide if has jurisdiction by virtue of the legislation which created it. – refer to the case of <strong>Aratra Potato Co. Ltd &amp; Another vs. Egyptian Navigation Co. (The “ELAMRIA”) [1981] 2 LLOyds Rep.119 at P.123.</strong></li> </ol> <p> </p> <p>Only if court has jurisdiction may it proceed, otherwise it must dismiss the suit out of land.</p> <p> </p> <p>It was noted however that, <strong><em>“a court which may not have jurisdiction on the merits may have jurisdiction by statute to decide a question of stay”.</em></strong> – House of Lords in the case of <strong>William Glyns vs. Astro Dinamico [1984] ILLoyds Rep. 453 at P.456</strong> – where it was held that <strong><em>“court had jurisdiction to entertain an application for a stay; but that, in so doing, it was not deciding whether it had jurisdiction to determine the case on its merits”.</em></strong></p> <p> </p> <p>There are two distinct kinds of jurisdiction: 1) <strong><em>“to decide the action on its merits”</em></strong> and 2) <strong><em>“to decide whether the court has jurisdiction of the kind”</em></strong> – Refer to <strong>Wilkinson vs. Barking Corporation [1948] I KB 721 at P. 725 (CA).</strong></p> <p> </p> <ol> <li>The court must look to the law which applies to the case before it, to determine if there is a direction in that law as to jurisdiction.</li> </ol> <p> </p> <ol> <li>The court must decide if the other jurisdiction, to which it is called upon to defer, is appropriate and whether the balance of convenience favours the case being heard there, that is, if it is reasonable.</li> </ol> <p> </p> <ol> <li>If there is a jurisdiction clause in the contract, the terms and specific wording of that clause must be considered carefully.  If the jurisdiction clause if not in the contract, but in some other document, the incorporation by reference and notice of the incorporation must be considered carefully, to verify that such incorporation is complete and valid.</li> </ol> <p> </p> <ol> <li>The courts consideration will also be affected if the suit has been commenced by an action in rem and an arrest of a slip, which arrest normally gives jurisdiction in the place of arrest.</li> </ol> <p> </p> <ol> <li>If the new jurisdiction is deemed to be convenient and proper in the circumstances, the court will stay the suit by an order which will preserve the rights of the parties.  Otherwise the court will restrain the suit in its own jurisdiction and will refuse the motion of stay.</li> </ol> <p> </p> <p>In the present case, both the Constitution and the Judicature Act grant the High Court unlimited original jurisdiction over all matters of a civil and criminal nature subject to any law.  It may therefore proceed with determination of this case.</p> <p> </p> <p>The law that applies is the law of contract and the balance of convenience favours that the case be heard in Uganda where the Defendants are based.  While the jurisdiction clause is clear, this court has already determined that it does not oust the unlimited jurisdiction of this court.</p> <p> </p> <p>No proceedings were commenced in the High Court of South Africa and no stay of the current proceedings was applied for.  No strong reason have been advanced for stay of the action.</p> <p> </p> <p>As already indicated the Defendants are residents of Uganda, carry on their business here, have witness and Advocates here.  It is therefore appropriate and cost effective to maintain the suit in Uganda.</p> <p> </p> <p>In any case, the common law general rule is that <strong><em>“exercise of jurisdiction depends on service of originating court process, as service can only be effected on those actually present in the jurisdiction or those who submitted voluntarily or by contract to the jurisdiction”.</em></strong>  The parties submitted voluntarily to  the jurisdiction of this court.  And since the statutory intervention overrides the contractual choice by the parties, jurisdiction will be exercised here as the ends of justice so require.</p> <p> </p> <p>The High Court of Uganda for all those reasons has jurisdiction to determine the matter on its merits.  The submissions of Counsel for the Defendants to the contrary are accordingly overruled.</p> <p> </p> <p><strong>Validity of Contract between the Parties:</strong>  The next issue to determine is <strong>whether there was a valid commercial contract between the parties.</strong></p> <p> </p> <p>The evidence of the Plaintiff in this respect is set out in the background to this case.  The parties entered into a credit agreement to enable the First Defendant obtain steel products from the Plaintiff. – Exhibit P<sub>1</sub>.</p> <p> </p> <p>The 2<sup>nd</sup> and 3<sup>rd</sup> Defendants, Directors and Shareholders of the First Defendant bound themselves to personally, jointly and severally be liable for the debt of the First Defendant by deed dated 01.10.16.</p> <p> </p> <p>The Plaintiff supplied the steel products to the Defendants on credit – Exhibits P<sub>10</sub> – P<sub>20 </sub>valued at $847,781/04 but the Defendants failed and or refused to pay for them.</p> <p> </p> <p>The Defendants denied ever entering into the contract with the Plaintiff, and the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants deny being personally liable for the Plaintiff ‘s claim.</p> <p> </p> <p>However, according to PW<sub>1</sub> – the Second Defendant requested the Plaintiff to discount the debt of $847.781.04 to $200,000 which the Plaintiff rejected.  This evidence was not challenged by the Defendants.</p> <p> </p> <p>Counsel for the Plaintiff submitted that the Second Defendant’s request for a discount is proof that there was a contract between the parties.  He relied on S.10 of the Contracts Act, 2010 which defines a contract and the case of <strong>K &amp; V Ltd vs. The Registered Trustees of Arya Practinidini Sabha Eastern Africa HCCS 299/2011</strong>.  And the case of <strong>Habre International Co. Ltd vs. Ebrahim Maraki Kassam &amp; Others SCCA 04/1999.</strong></p> <p> </p> <p>Counsel for the Defendants submitted that the Plaintiff’s case is premised on Exhibit P<sub>3</sub> - amended Sales Contract, yet the original contract was not brought to court.  Further that, the document is generated by the Plaintiff and does not show any buyer or seller.</p> <p> </p> <p>Also that Exhibit P<sub>1</sub> purported to be the application for the credit facility and written on the Plaintiff’s headed paper was neither signed nor sealed with the Defendants seal and therefore cannot be a genuine document.  Counsel argued that, the fact that Exhibit P<sub>1</sub> contains the Defendants details is of no consequence as the details can be got by whoever needs them.  He contended that the details are not correct as the Defendant’s correct address is Plot 3 Wankulukuku Road.</p> <p> </p> <p>It was also the assertion of Counsel for the Defendants that S.10 of the Contracts Act and the case of <strong>K &amp; V Ltd (Supra)</strong> and <strong>J.K Patel Vs. Spear Motors Ltd SCCA 04/91</strong> relied upon by Counsel for the Plaintiff are not applicable to the facts of the present case as there is no evidence of offer and acceptance or consideration brought to the court to prove that there was a contract.</p> <p> </p> <p>And that there is no evidence of the orders made by the Defendants or delivery notes to prove that the goods were delivered to the Defendants.  He cited S.101 of the Evidence Act to argue that the burden of proof lay upon the Plaintiff to prove the existence of the orders and deliveries.</p> <p> </p> <p>In determining <strong>whether there was a valid contract between the parties</strong>, I bear in mind S.10 of the Contracts Act which defines contract to mean <strong><em>“an agreement made with the free consent of the parties with the capacity to contract, for a lawful consideration and with a lawful object, with the intention to be bound.  The contract may be written or partly oral and partly written or may be implied by conduct of the parties”</em></strong>.  – See <strong>K &amp; V Ltd vs. Registered Trustees of Arya (Supra).</strong></p> <p> </p> <p>To determine if there was a valid contract made between the parties, the court has to determine “<strong><em>if there was an offer to enter into legal relations on definite terms and that offer is accepted”.</em></strong> – <strong>JK Patel vs. Spear Motors Ltd (Supra).</strong></p> <p> </p> <p>In the present case, there was a credit agreement, alleged to have been signed by the Defendants (2<sup>nd</sup> and 3<sup>rd</sup>) where they also guaranteed to be personally liable for the debt.</p> <p> </p> <p>The Defendants denied executing the Exhibits P<sub>1</sub>-P<sub>8</sub>.  Therefore the law required the Plaintiff to prove that the documents were actually signed by the 2<sup>nd</sup> – 3<sup>rd</sup> Defendants.  That is, that the signatures were in their handwriting – S.66 of the Evidence Act.</p> <p> </p> <p>The Plaintiff could have called an expert witness under S.43 of the Evidence Act to identify the disputed signature as that of the Second Defendant.  But not calling the expert witness is of no consequence as court can resort to S.72 of the Evidence Act, to compare the disputed handwriting with others admitted or provided.</p> <p> </p> <p>The section provides that, (1) <strong><em>“in order to ascertain whether a <u>signature</u>, writing or seal is that of the person by whom it purports to have been written or made, any <u>signature</u>, writing or seal admitted or proved to the satisfaction of the court to have been written or made by that person may be compared with the one which is to be proved….”</em></strong></p> <p> </p> <p>In this case, the witness statement of Second Defendant was admitted in evidence.  It bears his signature which court compared to the signature on the disputed documents Exhibits P<sub>2</sub> - P<sub>8</sub>.  The documents were admitted in evidence with the witness statement PW<sub>1</sub>.</p> <p> </p> <p>The comparison of the signature of DW<sub>2</sub> Francis Sembuya on his witness statement with the signatures appearing on Exhibits P<sub>2</sub> – P<sub>8</sub> shows that the signatures on the exhibits correspond perfectly with the ordinary and habitual signature of the Second Defendant on the witness statement.  The Defendants’ claim that the signatures were written by a third party are therefore not accepted.</p> <p> </p> <p>Secondly, Exhibit P<sub>2</sub> indicates that the Second Defendant, Sembuya was the Executive Director of the First defendant Company at the time the documents were executed.  He still held the same position at the time of signing the witness statement.  This court finds that the signature on the impugned documents are his.</p> <p> </p> <p>By denying ever having signed the agreements, the Defendants were insinuating that the signatures on the documents were forged; although they did not specifically plead that the signatures were forged.</p> <p> </p> <p>Be that as it may, the principle established by decided cases is that <strong><em>“an allegation of forgery is quite serious and the party making the allegation should produce evidence to validate it”.</em></strong> – See the case of <strong>James Sebaggala vs. China Palace (U) Ltd HCCS 1521/15</strong> by Justice Wangutusi.</p> <p> </p> <p>In the present case, the Defendants did not point out the differences between the normal signature of the Second Defendant and that on his written statement.  They accordingly failed to discharge the burden of proving that the signature was forged.</p> <p> </p> <p>For all those reasons, this court finds that the Plaintiff proved that it entered into a valid contract with the Defendants to supply the steel products which were delivered to the Defendants as per the bill of lading and invoices issued, although the First Defendant refused to pay and the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants had agreed to personally indemnify the Plaintiff for the debt incurred by the First Defendant.</p> <p> </p> <p>The mere denial by the Defendants without any evidence to the contrary, could not suffice to override the evidence of the Plaintiff.  The Plaintiff effectively discharged the burden placed upon it.</p> <p> </p> <p>The agreement between the parties had all the valid attributes of a valid contract set down by the United Nations Convention on contracts for international sale of goods, the Contracts Act of Uganda and the Common Law.</p> <p> </p> <p> </p> <p> </p> <p>The next issue to determine is <strong>whether the Defendants breached the said contract.</strong></p> <p> </p> <p>The evidence of the Plaintiff in this respect was that it was agreed between the parties that the Plaintiff provides steel products to the Defendants on credit and the Defendants’ obligations were to pay for the goods as per the credit terms.  The Plaintiff performed its part of the contract by delivering the various items of steel to the Defendants, who breached the agreement by failing to pay for the products.  By email dated 11.01.12 – Exhibit P<sub>22</sub>, the Defendants asked for more time within which to pay but to date have not paid the outstanding sum of US Dollars $847,781.04 which the Plaintiff seeks to recover.</p> <p> </p> <p>The Defendant acknowledged Exhibit P<sub>21</sub> although the signature and stamp could not be seen.  However, the email indicates that it originated from Sembule &amp; Co.</p> <p> </p> <p>The invoices are the source of the claim, and they were delivered as per the bill of lading, although there was no evidence of delivery of the invoices.  The Plaintiff claims that under international trade, when documents are delivered with the bill of lading, the invoices can be posted or emailed as long as the bill of lading shows that the products were availed.</p> <p> </p> <p>It was asserted that the bills of lading Exhibit P<sub>10</sub>, P<sub>12</sub>, P<sub>14</sub>, P<sub>16</sub>, P<sub>18</sub> and P<sub>20</sub> show details of the actual shipment of the products with full address of the recipient, the Defendant.  So they are evidence of delivery since they are given as a form of acknowledgement that the recipient has got the goods.  The bills of lading were sent by courier and that the Second Defendant did not deny receiving Exhibit P<sub>22</sub>, the bills of lading and the invoices.</p> <p> </p> <p>The Defendants denied Exhibit P<sub>22</sub>.  It was the submission of Counsel for the Plaintiff that the goods were shipped to the Defendants as per Exhibits P<sub>10</sub> – P<sub>20</sub> which were received.  Under Exhibit P<sub>2</sub> the account statement, the First Defendant partly paid for the goods as indicated in the credit column and the outstanding sum as at 31.05.12 was $847,781.04.  By email of 10.01.2012, the Defendants wrote to the Plaintiffs seeking for a revised payment schedule, but to date no payment has been made by the Defendants.</p> <p> </p> <p>The case of <strong>United Building Services Ltd vs. Yafesi Muzira t/a Quickest Builders &amp; Co. HCCS 154/2005 </strong>where Justice Lameck Mukasa held <strong><em>that “a breach of contract occurs when one or both parties fail to fulfill the obligations imposed by the terms of the contract”, </em></strong><em>w</em>as relied upon.</p> <p> </p> <p>Counsel then submitted that the First Defendant breached the contract entered into with the Plaintiff and the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants breached the contract of guarantee when they failed to pay the monies due on the contract.</p> <p> </p> <p>Counsel for the Defendants submitted that the Plaintiff did not prove delivery of the goods to the Defendants.  The Bill of Lading indicated Nairobi as the destination of the goods and yet the Defendants do not have office in Nairobi.  Since no goods were delivered, Counsel argued, there was no breach of contract.</p> <p> </p> <p>Further that, the bill of lading is not proof of delivery, as it is a document issued by the carrier or its agent to the shipper as contract of carriage of goods.  And without delivery notes signed by the Defendant acknowledging receipt, there is no proof that the goods were delivered to the First Defendant.</p> <p> </p> <p>Also that the Bills of Lading were consigned to Standard Chartered Bank of South Africa Ltd and not to the Defendants; and they were not endorsed by the Defendant.  And without stamp acknowledging receipt of the goods, there was no delivery and therefore no breach of contract.</p> <p> </p> <p>A Bill of Lading is <strong><em>“a document acknowledging receipt of goods by a carrier or by the shipper’s agent and the contract for transportation of those goods.</em></strong>  <strong><em>It also acts as a document of title to the goods”.</em></strong> -  <strong>Blacks Law Dictionary, 8<sup>th</sup> Edition P.176 and Carver on Bills of Lading (1<sup>st</sup> Edition 2001) P.1.</strong></p> <p> </p> <p>The Bill of Lading acts as a symbol of the goods, so that the right to possession of the goods transfers to the transferee with the Bill of Lading. – <strong>Carvers Carriage by Sea (13<sup>th</sup> Edition 1982) P.1113</strong>.</p> <p> </p> <p>To determine whether the parties intended that a transfer of the Bill of Lading should also transfer the property in the goods to the buyer is a matter to be determined by the Sale Contract. -  See <strong>Sewell vs. Burdick (1884) 10 App. Cas. 74 Lord Bramwell.</strong></p> <p>In the present case, the parties agreed that the Plaintiff (Seller) delivers the goods on board the vessel to Mombasa, Kenya (CRF Mombasa, Kenya – under the INCOTERMS of 2010).  – See incoterms 2010- by the International Chamber of Commerce (ICC).</p> <p> </p> <p>The Bills of Lading, Exhibits P<sub>10</sub>, P<sub>12</sub>, P<sub>14</sub>, P<sub>16</sub>, P<sub>18</sub> and P<sub>20</sub> show that the consignee was Standard Chartered Bank South Africa Ltd.  The person to be notified was, Sembule Steel Mills Ltd, Head Office, Pot 11, Sembule Road, Nalukolongo, Kampala, Uganda.  The Bills of Lading were stamped <strong>“Exchange Provided Standard Chartered Bank”.</strong></p> <p> </p> <p>Following the incoterms 2010 agreed to by the parties, the Consigner/Supplier supplied the goods to the Consignee who acknowledged receipt of the same on behalf of the buyer as its agent.</p> <p> </p> <p>Under clause 5.2- Exhibit P2- a signed delivery constituted proof that the goods had been delivered to and received by the purchaser in good condition, whether signed by the purchaser, an employee, an agent or representative or nominated transporter of the purchaser.</p> <p> </p> <p>The Bill of Lading as a document acknowledging receipt of the goods supplied to the consignee/buyer shows that the buyer exercised its rights of taking delivery of the goods from the carrier.  As per Exhibit P<sub>1</sub>, the seller was prepared to extend credit to the buyer.</p> <p> </p> <p>Failure by the buyer to pay the amounts indicated on Exhibits P<sub>9</sub>, P<sub>11</sub>, P<sub>13</sub>, P<sub>15</sub>, P<sub>17</sub>, P<sub>19</sub> and P<sub>21</sub>, the invoices, amounted to breach of contract which left no option to the seller but to file this action.  S. 48 (I) Sale of Goods Act provides that <strong><em>“where under a contract of sale, the property in the goods passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him or her for the price of the goods”.</em></strong></p> <p> </p> <p>There was no way the Defendant would have sought for a revised payment schedule in their email of 10.01.12 if the goods had not been received as alleged by them and no part payment would have been made in the first place as indicated by Exhibit P<sub>21</sub>.</p> <p> </p> <p>The First Defendant breached the contract by failing to wholly pay for the goods.</p> <p> </p> <p>Court now proceeds to determine <strong>whether the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants are liable under the guarantee in the terms and conditions of the agreement.</strong></p> <p> </p> <p>The evidence of the Plaintiff in this respect is that the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants signed the terms and conditions of the sale incorporating a deed of suretyship and cessation, where they agreed to bind themselves personally, jointly and severally to be liable to pay the debt of the First Defendant upon default.  The evidence was fortified by the documents attached to the claim.</p> <p> </p> <p>The 2<sup>nd</sup> and 3<sup>rd</sup> Defendants on the other hand denied any liability to the Plaintiff, contending that they never dealt with the company in their personal capacity.  They denied signing the Exhibit P<sub>2</sub> and therefore any liability to meet the Plaintiffs claim, although the First Defendants name appears on the top of the document.</p> <p> </p> <p>However, Counsel for the Plaintiff insisted in his submissions that the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants signed the guarantee Exhibit P<sub>2</sub> Clause 4 thereof provides that <strong><em>“the parties who have appended their signature hereto on behalf of the purchaser hereby interpose and bind themselves jointly and severally the one paying the other to be absolved as sureties and co-principal debtors in solidus unto and in favour of the seller and its holding companies associated companies, for the money and obligations for which the purchaser may in the past or now or from time to time thereafter owe or be indebted or obliged to fulfill to the seller and or the sellers successors and assigns however so and from any cession or from whatever cause arising; and shall extend to the payment of damages whether there be cancellation or not of any relevant agreement”.</em></strong></p> <p> </p> <p>Counsel referred court to S.68 of the Contracts Act, for the definition of a contract of guarantee.  He then contended that, the Plaintiff having proved that the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants signed the guarantee Exhibit P<sub>2</sub>, and the First Defendant Company having defaulted in pay the sum of $847,781.04 owed to the Plaintiff, the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants are liable of the debt as guarantors.</p> <p> </p> <p>Counsel for the Defendants contended that the liability of the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants could not arise since they provided that they did not sign the contract.  Therefore that, the principal debtor is not liable and it follows that the purported guarantors as secondly debtors cannot be liable in their individual capacities.</p> <p>This court has already found as earlier indicated in this judgment, that the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants signed the terms and conditions of sale incorporating the deed of suretyship and cession; whereby they agreed to indemnify the Plaintiff for any moneys owed by the First Defendant to the Plaintiff.  Indeed, the Second Defendant was the Managing Director of the First Defendant Company at that time.</p> <p> </p> <p>By agreeing to indemnify the Plaintiff, the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants gave a guarantee or surety bond.  That is, they promised to perform the contract or pay the debt in the event the obligor/principal (in this case the First Defendant) refused or failed to do so.  -<strong> Refer to Smith vs. Wood 01929) ICH. 14.</strong></p> <p> </p> <p>The term surety and guarantor are synonymous.  According to Wikipedia <strong><em>“Surety bond or guaranty involves a promise by one party to assume responsibility for the debt or obligation of a borrower if that borrower defaults.  The person or company providing this promise is also known as “a surety or as a guarantor”.</em></strong></p> <p> </p> <p>The 2<sup>nd</sup> and 3<sup>rd</sup> Defendants are therefore liable in the terms and conditions of sale incorporating the deed of suretyship and cession to pay the amount due and owing from the principal debtor (First Defendant) to the Plaintiff – Exhibit P<sub>2</sub>.</p> <p> </p> <p> </p> <p><strong>Remedies available to the Plaintiff:</strong>  The plaintiff sought recovery of $847,781.04 as special damages, general damages for breach of contract, interest on the two at the rate of 30% per annum from the date of breach until payment in full and from the date of judgment until payment in full, respectively, costs of the suit and any other remedy court deems fit.</p> <p> </p> <p><strong>Special Damages:</strong> </p> <p> </p> <p>It was submitted for the Plaintiff that it is entitled to the special damages.  The case of <strong>Hadley vs. Baxendale [1854] EWTTC J70</strong> was relied upon for the holding that <strong><em>“where two parties have made a contract which one of them has broken, the damage which the other party ought to receive in respect of such breach of contract should be such as may reasonably be considered wither arising naturally, that is according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they contract, as the probable result of the breach of it”.</em></strong></p> <p> </p> <p> </p> <p>Also that according to the case of <strong>Roko Construction Co. vs. Attorney General HCCS 517/2008</strong> – “<strong><em>where payments were indeed delayed and the figure was pleaded and not challenged by the defendant, the plaintiff has proved the claim to the satisfaction of the court”.</em></strong></p> <p> </p> <p>Further that, since the Defendant breached the contract and did not challenge the amounts in the account statement – Exhibit P21, they are liable to pay the outstanding contract sum of $847,781.04.</p> <p> </p> <p>Counsel for the Defendants asserted that the Plaintiff was not entitled to any of the remedies sought and prayed for dismissal of the suit.</p> <p> </p> <p>Under Article 61 (I) (b) of the United Nations Convention on Contracts for the International Sale of Goods (CISG) 1980, <strong><em>“if a buyer fails to perform any of his/its obligations under the contract of this convention, the seller may …..; (b) claim damages as provided by in articles 74-77.</em></strong></p> <p> </p> <p>Article 74 CISG provides that, <strong><em>“damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach.  Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in light of the facts and matters of which he/she/it knew or ought to have known as a possible consequence of the breach of contract”.</em></strong></p> <p> </p> <p>While under S.48 of the Sale of Goods Act – (1) the seller may maintain an action against the buyer for the price of the goods (as in this case).</p> <p> </p> <p>And under S.53 of the Act – <strong><em>“nothing in the Act shall affect the right of the buyer or <u>seller</u> to recover interest or <u>special</u> damages in any case where by law interest or <u>special damages</u> may be recoverable or to recover money paid where the consideration for the payment of it has failed”.</em></strong></p> <p> </p> <p><strong><em>“The object of the award of damages is to compensate the plaintiff for the damage, loss…suffered.  The law recognized two types of damages, that is, pecuniary and non-pecuniary loss.  The former comprises of all financial and material loss incurred, such as loss of business profit, loss of income or expenses.  The latter comprises all losses which do not represent a persons financial or material assets.  The former is capable of being calculated while the latter is not.</em></strong></p> <p> </p> <p><strong><em>Further that in cases of pecuniary loss the amount can be proved and if proved it will be awarded as special damages.  In this category falls income or earnings lost between the time of injury and the time of trial.  But in cases of future financial loss whether it is future loss of earnings or expenses to be incurred in future, assessment is not easy.  This prospective loss cannot be claimed as special damages because it has not been sustained at the date of trial.  It is awarded as part of general damages”.</em></strong> – Refer to<strong> Robert Coussens vs. Attorney General SCCA 08/1999.</strong></p> <p> </p> <p>Courts have established that <strong><em>“special damages and loss of profit must be specifically pleaded.  They must also be proved exactly, that is to say, on the balance of probability”.</em></strong> – <strong>Haji Asuman Mutekanga vs. Equator Growers (U) Ltd SCCA 07/95.</strong></p> <p> </p> <p> </p> <p>In the present case, the Plaintiff under paragraph 4, (g) (I) – (VI) and 5 (I) of the amended plaint, pleaded the particulars of special damages as follows:-</p> <p> </p> <ol style="list-style-type:upper-roman"> <li>Invoice No HY26035 of 08.03.11 of US $53,700.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Invoice No. Exp./2011-2012/136 of 14.05.11 US $125,906.65.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Invoice No. 25034 of 21.05.11 of US $264,020.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Invoice No HY 23881 of 09.06.11 of US $59,000.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Invoice No. 24115 of 08.08.11 of US $202,119.</li> </ol> <p> </p> <ol style="list-style-type:upper-roman"> <li>Invoice No. Exp/2011-2012/322 of US $127,592.86.</li> </ol> <p> </p> <p>Total US <strong>$847,781.04.</strong></p> <p> </p> <p>In his evidence PW<sub>1</sub>, Robert Mulondo tendered Exhibits P<sub>9</sub>, P<sub>11</sub>, P<sub>13</sub>, P<sub>15</sub>, P<sub>17</sub> and P<sub>19</sub> totaling to US $847,781.04.  The exhibits (invoices) were stated to be the source of the Plaintiff’s claim.</p> <p> </p> <p>As already indicated, the Defendants denied receiving any delivers of commodities from the Plaintiff- claimed in Exhibits P<sub>9</sub>, P<sub>11</sub>, P<sub>13</sub>, P<sub>15</sub>, P<sub>17</sub> and P<sub>19</sub> and that the statement of account Exhibit P<sub>21</sub> is inaccurate and untenable.  However, as earlier indicated in this judgment, court finds that the Defendants received the goods.</p> <p> </p> <p>The Plaintiff’s exhibits P<sub>9</sub>-P<sub>20</sub> tendered in evidence and supported by oral evidence add up to the total sum of US $832,338.51.</p> <p> </p> <p>They are:-</p> <p> </p> <ol style="list-style-type:lower-roman"> <li>Invoice No. 25034 dated 21<sup>st</sup> May, 2011 marked Exhibit P9 of US$ 264,020 in respect of bill of lading No. MSCU11229930 for goods shipped on 25<sup>th</sup> May, 2011;</li> </ol> <p> </p> <ol style="list-style-type:lower-roman"> <li>Invoice No. 25115 dated 8<sup>th</sup> August, 2011 marked Exhibit P11 of US$ 202,119 in respect of bill of lading No. 862254808 for goods shipped on 9<sup>th</sup> August, 2011;</li> </ol> <p> </p> <ol style="list-style-type:lower-roman"> <li>Invoice No. EXP/2011-2012/136 dated 14<sup>th</sup>May, 2011 marked Exhibit P13 of US$ 125,906.65 in respect of bill of lading No. EPIRINDCCU103796 for goods shipped on 20<sup>th</sup>May, 2011;</li> </ol> <p> </p> <ol style="list-style-type:lower-roman"> <li>Invoice No. HY23881 dated 9<sup>th</sup> June, 2011 marked Exhibit P15 of US$ 59,000 in respect of bill of lading No. LTJMBA1101929 for goods shipped on 15<sup>th</sup> June, 2011;</li> </ol> <p> </p> <ol style="list-style-type:lower-roman"> <li>Invoice No. HY26035 dated 8<sup>th</sup> March, 2011 marked Exhibit P17 of US$ 53,700 in respect of bill of lading No. RTJMBA1112015 for goods shipped on 16<sup>th</sup> March, 2011; and</li> </ol> <p> </p> <ol style="list-style-type:lower-roman"> <li>Invoice No. EXP/2011-2012/322 dated 5<sup>th</sup> August, 2011 marked Exhibit P19 of US$ 127,592.86 in respect of bill of lading No. 862234682 for goods shipped on 13<sup>th</sup> August, 2011.</li> </ol> <p> </p> <p>This court therefore finds that the Plaintiff proved that the amount of special damages due and owing from the Defendants is US$832,338.51 and not US $847,781.04.</p> <p> </p> <p>That is the amount that should be paid by the Defendants to the Plaintiff as special damages.</p> <p> </p> <p><strong>General Damages:</strong></p> <p>It was the submission of Counsel for the Plaintiff that general damages are awarded where there is breach of contract and the rule behind san award of general damages is that of restitution integrum, that is, in as much as possible to place an injured party in as good a position in money terms as he/it would have been had the wrong complained of not occurred.  The case of <strong>Uganda Commercial Bank vs. Kisozi [2002] IEA 305 </strong>was cited for the holding that <strong><em>“plaintiff who suffers  damage due to the wrongful act of the defendant must be put in a position he/she would have been in had she/he not suffered the wrong”.</em></strong></p> <p>He pointed out that in the present case; the Plaintiff had incurred loss due to the Defendants breach of contract.  He proposed an award of Sh. 50,000,000/- as being sufficient as general damages.</p> <p>Counsel for the Defendants only stated that the Plaintiff is not entitled to the remedy.</p> <p>Under S.61 of the Contracts Act 2010, provides that (I) <strong><em>“where there is breach of contract, the party who suffers to breach is entitled to receive from the party who breaches the contract, compensation for any loss or damage caused…”.</em></strong></p> <p>This court has already found that the First Defendant was in breach of contract and that the 2<sup>nd</sup> and 3<sup>rd</sup> Defendants guaranteed to pay the Plaintiffs any money found to be due and owing to the Plaintiff.  The Plaintiff who suffered loss as a result of the breach is entitled to receive general damages from the Defendants.</p> <p>Decided cases have stated that <strong><em>“general damages in breach of contract are what court may award when the court cannot point out any measure by which they are to be assessed, except in the opinion and judgment of a reasonable man”.</em></strong></p> <p>The Plaintiff are awarded Shs. 50,000,000/- proposed by Counsel as general damages.  The Defendants did not object to the figure proposed by the Plaintiff.</p> <p> </p> <p><strong>Costs:</strong></p> <p>The general rule is that <strong><em>“costs follow the event and a successful party should not be deprived of costs except for good cause”.</em></strong>  See S.27 (2) of the Civil Procedure Act and <strong>Francis Butagira vs. Deborah Namukasa [1992- 1993] HCB 98.  </strong></p> <p>Under the above section, <strong><em>“costs of and incident to all suits shall be in the discretion of the court, and the court has full power to determine by whom and out of what property and to what extent those costs are to be paid and to give all necessary directions for the purpose aforesaid”</em></strong>.</p> <p>The Plaintiff is the successful party in this case and therefore I find no good reason to deprive it of the costs of the suit.</p> <p>Costs of the suit are, accordingly granted to the Plaintiff.</p> <p> </p> <p><strong>Interest:</strong></p> <p>Under S.78 of CISG where a party fails to pay the price or any sum that is in arrears, the other party is entitled to interest on it without prejudice to any claim for damage and coverable under Article 74.1.</p> <p>And in S.26 (2) of the Civil Procedure Act, court has discretionary powers to award interest on the decretal sum if not agreed upon by the parties.</p> <p><strong><em>“Where no interest rate is proved, the rate is fixed at the discretion of court.  However, it is recognized that in commercial transactions, the award of interest should reflect the current commercial value of money”.</em></strong>  <strong>Crescent Transportation Co. Ltd vs. B.M Technical Services Ltd CACA 25/2000.</strong></p> <p>In that case, because the Respondent had held the Appellants’ money for so long the Court of Appeal enhanced the rate from 4% to 22% which court saw was realistic.</p> <p>And accordingly to the case of <strong>Nipunnorathan Bhatian vs. Crane Bank Ltd CACA 75/2006 <em>“the interest rate applied to the dollar currency is that for borrowing the US dollar and not that of Uganda shillings”.</em></strong></p> <p>Counsel for the Plaintiff in the present case proposed interest at the rate of 30% to apply to the decretal sums. Using its discretion and consideration the interest rate applied to the dollar currency for borrowing US Dollars, the rate of 8% is granted on the special damages from the date of filing the suit until payment in full.</p> <p>As for general damages, court grants interest at the rate of 12% from the date of judgment until payment in full.</p> <p>The rates of interest proposed by Counsel is excessive in the circumstances.</p> <p> </p> <p> </p> <p>Judgment is accordingly entered for the Plaintiff against the Defendants jointly and severally in the following terms:-</p> <p> </p> <ol> <li>The Plaintiff is awarded US $832,338.51 as special damages.</li> <li>The Plaintiff is awarded general damages of Shs. 50,000,000/-</li> <li>Interest is awarded on the special damage at the rate 8% from the date of filing the suit until payment in full.</li> <li>Interest is awarded on the general damages at the rate of 12% per annum from the date of judgment until payment in full.</li> <li>Costs of the suit are awarded to the Plaintiff.</li> </ol> <p> </p> <p> </p> <p> </p> <p><strong>Flavia Senoga Anglin</strong></p> <p><strong>JUDGE</strong></p> <p><strong>03.10.17</strong></p> <p> </p> </div></div></div><div class="view view-download-button view-id-download_button view-display-id-entity_view_1 view-dom-id-b161761bd9bcbe2a8c8b52a0b0f53c5f"> <div class="view-content"> <div class="views-row views-row-1 views-row-odd views-row-first views-row-last"> <div class="views-field views-field-field-download"> <div class="field-content"><a href="https://old.ulii.org/system/files/judgment/commercial-court-uganda/2017/118/commercial-court-uganda-2017-118.doc" target="_blank"><img src="https://africanlii.org/sites/default/files/Download-Button-red.png" width="180"> </a></div> </div> <div class="views-field views-field-field-download-1"> <div class="field-content"></div> </div> </div> </div> </div> Mon, 06 Nov 2017 12:26:43 +0000 Eunice Logose 27982 at https://old.ulii.org Kasifa Namusisi and Ors v Francis M.K. Ntabaazi (Civil Appeal No. 4 of 2005) [2006] UGSC 1 (17 January 2006); https://old.ulii.org/ug/judgment/supreme-court/2006/1 <section class="field field-name-field-flynote field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Flynote:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/tags/contract-law" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Law</a></li><li class="field-item odd"><a href="/tags/formation-and-validity-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Formation and validity of Contract</a></li><li class="field-item even"><a href="/tags/contract-formation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Formation</a></li></ul></section><div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"><p><strong>THE REPUBLIC OF UGANDA</strong></p> <p>&nbsp;</p> <p><strong>IN THE SUPREME COURT OF UGANDA</strong></p> <p><strong>AT MENGO</strong></p> <p>&nbsp;</p> <p><strong>(CORAM: ODOKI, CJ., ODER, TSEKOOKO, KAROKORA AND KANYEIHAMBA, JJ.S.C.)</strong></p> <p>&nbsp;</p> <p><u><strong>CIVIL APPEAL No.04 OF 2005</strong></u></p> <p>&nbsp;</p> <p><strong>BETWEEN</strong></p> <p>&nbsp;</p> <p><strong>KASIFA NAMUSISI }</strong></p> <p><strong>AMINA NABANKEMA } ………………… appellants</strong></p> <p><strong>ABDALLA WAKAALO }</strong></p> <p>&nbsp;</p> <p><strong>AND</strong></p> <p>&nbsp;</p> <p><strong>FRANCIS M.K. NTABAAZI ……………………RESPONDENT</strong></p> <p>&nbsp;</p> <p><strong><em>[Appeal from the decision of the Court of Appeal at Kampala (Engwau, Kitumba and Byamugisha, JJ.A) dated 16<sup>th</sup> September, 2004 in Civil Appeal No.63 of 2001}</em></strong></p> <p>&nbsp;</p> <p>&nbsp;</p> <p><u><strong>THE JUDGMENT OF TSEKOOKO, JSC.</strong></u></p> <p>&nbsp;</p> <p>&nbsp;</p> <p>This is a second appeal. It arises from the decision of the Court of Appeal which reversed the judgment of the High Court given in favour of the present appellants by Ouma, J.</p> <p>The facts of this case are interesting.</p> <p>&nbsp;</p> <p>From the pleadings and the evidence adduced at the trial, it is evident that by 1980 the respondent, Dr. Francis M.K. Ntabaazi, owned three pieces of land at Ndeeba, a suburb of Kampala. These pieces were known as Kibuga Block 16, plots Nos.654, 655 and 692. He had buildings on the plots. The respondent had obtained two loans from two financial institutions on the security of those plots.</p> <p>&nbsp;</p> <p>One of the loans was from the Housing Finance Company of Uganda Ltd (Finance Company). He provided the land in plots 654 and 692 as security for the repayment of that loan. It appears that by November, 1980, the respondent was under pressure to repay a sum of shs 1,150,000/= to the Finance Company on account of that loan. According to the respondent, he asked the late Sulaiti Jaggwe, for a loan of shs 4.500,000/= which the latter allegedly agreed to give. Surprisingly on 13/11/1980, he entered into a Sale Agreement (exh.P1) with the Uganda Hardworking Transport and Trading Company Ltd. (the Transport Company) of which the late Sulaiti Jaggwe (deceased) was the Managing Director. That agreement unequivocally states that the two pieces of land were sold to the transport company for shs 4.5m/=.</p> <p>&nbsp;</p> <p>That agreement was at the trial tendered in evidence with the consent of the respondent's counsel. The agreement states that the two plots were sold for a <strong>"consideration of shs 4,500,000/=."</strong> The respondent acknowledged that Jagwe paid shs 160,000/= as legal services fees and that the same Jagwe paid shs 1,150,000/= to the Finance Company on account of the respondent's loan (Account No.1550).</p> <p>Exhibit.P1 provided in subparagraph(c) <strong>payment consideration</strong>, "that the balance of shs 3,190,000/= to be paid to the vendor (i.e., the respondent) <strong>by the purchaser as soon as the vendor signs the transfer forms, for the transfer of the said buildings</strong> (on the two plots) <strong>together with the land referred to above."</strong></p> <p>Among other terms, the agreement states that <strong><em>" The vendor………… has handed over the said building/house referred to above to the purchaser together with all keys to be the property of the purchaser from the date of signing this Agreement of Sale." </em></strong></p> <p>The deceased signed the agreement on behalf of the Transport Company. There is a certificate at the end of the agreement to the effect that the contents were explained to the signatories before the signing. The Respondent confirmed this on oath in Court.</p> <p>Exhibit P.2 is a second <strong>"Agreement of Sale"</strong> executed on 6<sup>th</sup> May, 1981 between the respondent as vendor and the deceased Sulaiti Jaggwe as the purchaser of <strong>"house/buildings"</strong> on plot 655. <strong>Consideration</strong> is shs 940,000/=. Of that amount, the deceased paid to the respondent shs 560,000/= by a cash cheque No.458355 dated 5<sup>th</sup> May, 1981. The respondent accepted receipt of shs 560,000/=.</p> <p>The balance of shs 380,000/= was to be paid in two installments. The first installment of shs 180,000/= was paid by cheque No.458357 dated 5/6/1981 and the second of shs 200,000/= was paid by cheque No.458358 postdated 5/7/1981. Cashing of these cheques is disputed.</p> <p>&nbsp;</p> <p>Other terms of the second sale included one which stated that the vendor handed to the deceased the houses and the keys. The second other term authorized the deceased to collect the certificate of title from <strong>Barclays Bank</strong> <strong>(U) Ltd.</strong>, Kampala. The same agreement further stated that the transfer of the said land and <strong>"buildings thereof is effected accordingly"</strong>.</p> <p>&nbsp;</p> <p>According to evidence of the first appellant the deceased with his family moved into the building soon after the purchase. Within about three weeks, the deceased disappeared. Strangely soon after the disappearance of the deceased, the respondent advised the family of the deceased "to run away" from the buildings. They heeded and vacated the buildings. The first appellant asked the respondent to get tenants for her. The family returned "after Obote 2 War" (1985). The buildings were not occupied. She carried out repairs. She then requested the respondent to get tenants for her. Later, he got Bank of Uganda employees as tenants. He appears to have advised those tenants to pay the rent to him and not to the appellants. This forced the first appellant to seek legal advice from the late Musaala who had drawn the two sale agreements at time of sale.</p> <p>In 1985 he first appellant and her co-wife obtained management order to manage the estate of the deceased. Apparently some time in 1985, the respondent consulted Advocate Masaala about the possibility of treating the two sale agreements as mortgages rather than sale agreements. Exhibits P8 (infra) shows that in April,1986 the respondent communicated the same ideas to Musaala through his lawyer, Mr. Buyondo. Musaala did not accede to the idea.</p> <p>&nbsp;</p> <p>It would seem that after the first appellant had the buildings repaired and got tenants in the buildings the respondent insisted that rent be paid to him. Musaala called the tenants, discussed and convinced them in the presence of the first appellant by showing them the sale agreements that the buildings belonged to Sulait Jaggwe. After that transaction, Musaala was murdered.</p> <p>&nbsp;</p> <p>Because of the respondent's conduct, the appellants filed a suit against him as administrators of the estate of the deceased. The essentials of the two agreements of sale were pleaded in paragraphs 5 of the further amended plaint including the allegation that the purchase price was paid fully.</p> <p>&nbsp;</p> <p>In his written statement of defence, the respondent did not specifically deny para 5 of the plaint nor did he deny the transfer of the titles in the properties in the names of the deceased. Instead he averred that the transactions were not sales of lands but loans of money to him by the deceased and the transfers of the titles were meant to secure repayment of the loans. He further alleged in para 5 of his defence that after repayment of the money the properties would be retransfered to him. In paragraph 7 of the same defence, the respondent specifically admitted in respect of the second sale that out of shs 940,000/= the deceased paid him shs 560,000/=.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>At the trial six issues were framed for determination.</p> <p>During the trial the appellants testified in support of their claim while the respondent gave evidence which was intended to contradict or vary the contents of the two agreements in so far as the nature of the transaction is concerned. He explicitly admitted that he received payment of Shs 1,319,000/= in respect of plots 654 and 692 and Shs 560,000/= in respect of plot 655.</p> <p>&nbsp;</p> <p><strong>Ouma.J,</strong> as he then was, who tried the suit, answered the issues in favour of the appellants. In summary the learned trial judge found that:</p> <ol> <li> <p><em>The two transactions were sales and not loans.</em></p> </li> <li> <p><em>No fraud about transfers was pleaded nor proved.</em></p> </li> <li> <p><em>The respondent validly transferred the suit lands to the deceased who fully paid for the same.</em></p> </li> <li> <p><em>The respondent was estopped from claiming that the transfers were for something else than a sale. </em></p> </li> </ol> <p>The learned judge correctly held that under the old <strong>56 of the RTA</strong>, the certificates of title are conclusive evidence of <strong>"title or ownership".</strong> So he gave judgment for the appellants. The respondent appealed to the Court of Appeal where four grounds of appeal were formulated. Of these four grounds, only the first ground was argued in that Court. It was framed as follows: -</p> <p><em><strong>"The learned judge erred in law and fact when he failed to properly evaluate the evidence resulting in the finding that the appellant had sold the suit property and was fully paid."</strong></em></p> <p>&nbsp;</p> <p>In the Court of Appeal it was argued for the present respondent that there was no consideration, while the appellants' counsel argued the contrary and supported the decision of the trial judge. The Court of Appeal allowed the appeal on the sole ground that there was no consideration. From that decision the appellants have appealed to this Court. The appeal is founded on four grounds. The respondent filed a notice of one ground for affirming the decision of the Court of Appeal.</p> <p>&nbsp;</p> <p>Mr.Tibaijuka, counsel for the appellants, lodged written arguments to which, in like manner, the respondent's counsel, Messrs. Nyanzi, Kiboneka, Mbabazi &amp; Co, Advocates, replied.</p> <p>&nbsp;</p> <p>Out of the six issues framed for determination by the trial Court, I think that the first and second issues are pertinent in so far this appeal is concerned. They were framed this way -</p> <p><em><strong>"1. Whether the defendant sold the suit premises in question to the late husband of the plaintiffs and whether the full purchase prices were paid. </strong></em></p> <p><em><strong>2. Whether the suit premises were transferred to the deceased Suliati Jaggwe as security for loans.” </strong></em></p> <p>During the trial, the respondent testified as DW4. He was led by Mr. Ayigihugu, his counsel, to give evidence intended to contradict the contents of Exh.P1 and P2 so as to prove that the transactions were loans and not sales. Mr. Mwesigwa Rukutana, appellants' counsel, objected to that evidence. The trial judge expunged that portion of the evidence from the record in his ruling given on 1/4/1997.</p> <p>It is important to point out at this juncture that because of that ruling, when opening the closing address to the trial judge, Mr. Ayigihugu, who was lead counsel for the respondent (as defendant in the trial court) abandoned issue No.2 (supra). I must stress this point because the trial judge was criticized in the Court of Appeal for his alleged failure to evaluate evidence on loan transactions. When summing up, Mr. Ayigihungu stated:</p> <p><strong><em>"I would also point (out) that in view of this Court's ruling dated 1<sup>st</sup> April, 1997, it would be useless and a waste of time to address court on issue No.2."</em></strong></p> <p>&nbsp;</p> <p>Mr. Ayigihugu made these utterances after Mr. Kiapi, who represented the appellants at the trial, had submitted that he had earlier raised objections to the respondent's evidence which objections the judge accepted in his ruling of 1/4/1997. Mr.Kiapi invited the trial judge to answer issue No.2 in favour of the appellants. In the said ruling the learned trial judge had relied, inter alia, on the provisions of <strong>S.90 of the Evidence Act,</strong> and the case of <strong>Fenekasi Semakula Vs. E.</strong> <strong>S.M.S. Mulondo (1985)</strong> HCB 29 for the view that a written instrument should be regarded as the appropriate and only evidence of the terms of agreements between parties thereto and that no other evidence of the transaction could be substituted for a written instrument so long as the written agreement or instrument itself exists. The learned judge therefore expunged from the record the respondent's evidence which sought to contradict and vary the two agreements of sale. Consequently in his judgment, the trial judge found that the 2nd issue was redundant partly because both counsel did not address him on it in their closing address but more so because of his <strong>"ruling dated 1<sup>st</sup> April, 1997."</strong> I take this to mean that parties had in effect accepted that his ruling had disposed of the 2<sup>nd</sup> issue. It would have been more appropriate if the learned trial judge had stated in his judgment that because of the reasons contained in his ruling of 1/4/1997, the answer to the 2<sup>nd</sup> issue was in the negative.</p> <p>&nbsp;</p> <p>Later in this judgment I will consider the views of counsel for the two sides regarding the existence on our record of appeal of the evidence which the trial judge ordered to be expunged. Connected with this is a hand written exhibit (Exh.DI) which Mr. Tibaijuka referred to as a fake agreement. That document relates to a loan agreement between the deceased and his brother-in-law in 1976. Because of what I will say later when considering the import of the old S.22 of the <strong>Money Lender's Act</strong>, I attach no significance to that agreement. In any event the first appellant in her evidence fully explained the existence of Exhibit DI.</p> <p>&nbsp;</p> <p>Be that as it may, on the basis of two important witnesses and exhs.PI and P2 the learned trial judge concluded that the respondent sold the suit lands to the deceased. These two witnesses were the 1<sup>st</sup> appellant, Kasifa Namusisi, who testified as PW3, and of Hajati Fatuma Namusoke (PW2) both of whom the judge found to be truthful witnesses. He rejected the evidence of the respondent. He found that Exh.P1 and Exh.P2, were Sale Agreements and not agreements of loans.</p> <p>The appeal to the Court of Appeal was initially based on fourteen grounds. These were amended and reduced to four. I have already reproduced ground one.</p> <p>The other three were formulated as follows:</p> <ol start="2"> <li> <p><em><strong>The learned trial judge erred in law and in fact when he failed to apply or misinter pretted sections 90 and 91 of the Evidence Act, Cap.43 thereby failing to find that exhibits P1 and P2 were illegal and invalid.</strong></em></p> </li> </ol> <p>&nbsp;</p> <ol start="2"> <li> <p><em><strong>The learned trial judge erred in law and in fact when in the course of proceedings he got prejudiced against the defendant and called him a liar.</strong></em></p> </li> </ol> <p>&nbsp;</p> <p><em><strong>4.The learned trial judge erred in law and in fact when he applied the doctrine of estoppel by election.</strong></em></p> <p>&nbsp;</p> <p>I purposely reproduce these three grounds because Mr. Muhammad Mbabazi, who represented the respondent in the Court of Appeal, surprisingly abandoned these three grounds and only argued the first ground. His criticism of the learned trial judge was that the judge wrongly evaluated the evidence and arrived at wrong conclusions. He argued particularly that the trial judge made no finding as to whether the deceased paid the full price. Mr. Furah, counsel for appellants, (who were respondents in the court below) supported the judgment of the trial judge, contending that the transactions were outright sales and that the transfer of the suit lands was effective. The respondent had signed transfer forms as well as the sale agreements (Exhs. P1 and P2) and had surrendered the certificates of title to the deceased.</p> <p>&nbsp;</p> <p>In my opinion the abandonment of the 2<sup>nd</sup> ground (supra) in the Court of Appeal by the appellant speaks volumes. By abandoning the ground, the respondent, or his counsel for that matter, in effect confirmed the opinion of the trial judge that exh.P1 and Exh.P2 were Agreements of sale.</p> <p>&nbsp;</p> <p>Be that as it may, in her lead judgment, <strong>Byamugisha J.A.,</strong> held erroneously in my opinion, that because the bank had denied (Exh. D2), payments of one of the deceased’s cheques, there was <strong><em>“no other evidence of consideration having been paid by other means”.</em></strong> She held that the trial judge erred when he found and held that the full purchase price was paid. She further opined that there was no consideration and therefore there was no sale.</p> <p>&nbsp;</p> <p>The appeal in this Court is based on four grounds.</p> <p>The first ground of appeal which I consider to be decisive is formulated this way:</p> <p><strong>The learned Justice and Lady Justices of Appeal erred in law and fact in that they:</strong></p> <ol> <li> <p><strong>misdirected themselves on the legal nature of consideration; and</strong></p> </li> <li> <p><strong>failed to subject the evidence adduced at the trial to a fresh and exhaustive scrutiny, thereby coming to a wrong conclusion that the suit agreements were</strong> <strong>not supported by any consideration and wrongly accepted the respondent's version.</strong></p> </li> </ol> <p>&nbsp;</p> <p>Mr. Tibaijuka, Counsel for appellants, criticized the Court of Appeal for reversing the decision of the trial judge on the basis that there was no consideration. Learned counsel argued strongly that the learned Justices of Appeal misdirected themselves both on the applicable law and on the facts of this case as disclosed at the trial. He argued that the Justices failed to re-evaluate the evidence, as it is required of a first appellate court. He relied on several authorities including <strong>Bogere Moses &amp; Another Vs. Uganda</strong> Criminal appeal No.1 of 1997 (S Ct) and <strong>J.Muluta Vs. S.Katama</strong> Civil Appeal No.11 of 1999 (S Ct). In those cases this Court emphasized that it is the duty of the Court of Appeal, when acting as a first appellate court, to re-evaluate material evidence before arriving at its own conclusions on the case. Learned counsel pointed out, and here I agree with him, that in his written statement of defence the respondent admitted payment by the deceased of Shs 1,150,000/= and Shs 160,000/= in respect of the purchase of plots No.654 and No.692. Further in the same written statement of defence the respondent admitted payment by the deceased of 560,000/= in respect of plot 655. Mr. Tibaijuka argued that the combined effect of the Sale Agreements (exhibits P1 and P2) and the admissions of payment at least of Shs 560,000 in his WSD show there was payment. There was evidence from the respondent's mouth that the deceased paid shs 1.150,000/= (plus 160,000 paid to advocates) and latter shs 560,000/= in respect of plots 654 and 692 first and plot 655 later. That shows that there was consideration and payment. Counsel also argued that the omission by the respondent to Counter- claim for any alleged balance confirms the fact that the deceased had fully paid for the suit lands.</p> <p>&nbsp;</p> <p>Learned counsel argued further that the Court of Appeal erred when it equated consideration with performance of the two contractual obligations created by the sale agreements. He relied on such cases as <strong>Qadasi Vs. Qadasi</strong> (1963) EA 142 and <strong>Shiv Construction Co.Ltd.,Vs Endesha Enterprises Ltd</strong> (1999)EA 329(S Ct).</p> <p>&nbsp;</p> <p>For the respondent, Messrs. Nyanzi, Kiboneka and Mbabazi, Advocates, submitted the contrary.</p> <p>They contended that the transactions between the deceased and the respondent were loan transactions and not sale transactions. Counsel lamented the manner and procedure in which the trial was conducted. Counsel lamented that reliance by the trial court on technicalities resulted in the exclusion of relevant evidence such as the <strong>"fake"</strong> exhibits, the transfer instruments, the bank statement and the respondent's evidence to prove that exhibit P1 and P2 were evidence of loan transactions.</p> <p>Let me start by reference to undisputed facts. It is common ground that both the trial judge and the Court of Appeal found that on 13/11/1980 and on 6/5/1981 transactions touching the suit lands between, on the one hand, the respondent as proprietor of the suit lands and, on the other hand, the deceased and his transport company, took place. Counsel for both sides are agreed further that Exh.P1 and P2 state on their face that those two transactions were sales. It is also clear that there is no dispute that the respondent signed some instruments of transfer and that the transfers were effected in the names of the deceased.</p> <p>&nbsp;</p> <p>During the trial, the trial judge rejected the respondent's evidence intended to vary the import of Exhs.P1 and P2. The purpose of the evidence was to show that the two transactions were not sales. As I have already stated, the judge concluded that the two transactions were sales. The Court of Appeal held that <strong><em>"the transactions in this case were not supported by any consideration and therefore the present appellants are not entitled to the suit properties".</em></strong> I shall discuss the question of consideration a little later. For the moment let me consider the exclusion by the trial court of what the respondent's counsel described as relevant <strong>"evidence"</strong> which according to counsel was wrongly rejected by the trial judge.</p> <p>&nbsp;</p> <p>This evidence consists of <strong>"Fake exhibits,"</strong> the <strong>transfer instruments</strong>, the <strong>bank statement, exh.D2</strong>, and that part of the respondent's evidence aimed at contradicting or varying Exh.P1 and Exh.P2. I find it convenient to begin with the expunging of the <strong>"evidence"</strong> of the respondent.</p> <p>&nbsp;</p> <p>I should preface discussion of this point with a reiteration of what I said earlier that the decision by counsel for the respondent in their closing address to acquiesce in the trial judge's ruling of 1/4/1997 weakened the argument that the trial judge erred in his decision to expunge some of the evidence. The purpose of that evidence was to contradict the contents of Exh.P1 and Exh. P2. It is my considered opinion first, that after counsel for the respondent explicitly declined to address court on issued No.2 (supra) the trial judge was entitled to resolve that issue in favour of the appellants. Secondly when, in the Court of Appeal, the respondent abandoned ground two (supra) of his memorandum of appeal the position on the expunged "evidence" remained as it was in the trial Court, namely, that the two transactions were sales. For the sake of clarity I again reproduce ground two.</p> <p>It reads-</p> <p><em><strong>"The learned trial judge erred in law and in fact when he failed to apply or misinterpreted sections 90 and 91 of the Evidence Act…………… thereby failing to find that exhibits P1 and P2 were illegal and invalid."</strong></em></p> <p>&nbsp;</p> <p>I do not want to speculate on what were the intended arguments on this ground. However it should be noted that section 90 is concerned with evidence of terms of a written contract. The section reads:</p> <p><strong><em>"When the terms of a contract or of a grant, or of</em></strong> <strong><em>any other disposition of property, have been reduced to the form of a document, no evidence……………………… shall be given in proof of the terms of such contract………………………… except the document itself"</em></strong></p> <p>&nbsp;</p> <p>In the decision of this Court [in <strong>General Industries</strong> <strong>Vs. Non-Performing</strong> <strong>Assets Recovery Trust</strong>]. Civil Appeal No. 5 of 1998 (unreported), Mulenga, JSC., at page 10 ably explained the import of both S.90 and S.91 of the Evidence Act.</p> <p>&nbsp;</p> <p>S.91 excludes oral evidence to contradict a written contract. This section is clear. It states:</p> <p><strong><em>"When the terms of any such contract,………………… have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to or subtracting from its terms." [See </em>General Industries Case</strong><em> (Supra)]. </em></p> <p>The provisos that follow do not affect this case.</p> <p>&nbsp;</p> <p>Mr. Mwesigwa Rukutana objected to the admissibility of evidence by the respondent that both exh. P1 and P2 were loan agreements and not sale agreements. The objection was in respect of evidence by respondent (as DW4) intended to contradict or vary both exh.P1 and exh.P2. I think that during his reply to the objection Mr. Ayigihugu substantially conceded to the objection when he said-</p> <p><em><strong>"It is true that where there is a document in writing oral evidence is inadmissible for the purpose of varying its written terms."</strong></em></p> <p>&nbsp;</p> <p>This is exactly what the old S.90 (supra) of the E A provides. Yet Mr. Ayigihugu sought to rely on S.91 (Supra) to justify introduction of evidence to contradict the contents of the two agreements of sale.</p> <p>&nbsp;</p> <p>The trial judge was not persuaded by Ayigihugu's arguments. So he rejected the evidence. I think that the trial judge acted properly.</p> <p>&nbsp;</p> <p>The next question is what is the effect of expunging evidence which is on the record? Counsel for the respondent argued that once evidence is on court record it should be taken into account in deciding the case. He did not cite any authority to support this strange view. Counsel for the appellants contend that once evidence is expunged it ceases to be evidence and cannot not be taken into account. He criticized the Court of Appeal for relying on the expunged evidence to reverse the judgment of the trial judge.</p> <p>&nbsp;</p> <p>I understand the meaning of the word <strong>"expunge"</strong> to be "<strong><em>to blot out, delete, erase, efface or obliterate".</em></strong></p> <p>The effect of the ruling of the trial judge dated 1/4/1997 was that as the evidence to vary the written sale agreement was inadmissible by virtue of <strong>S.90</strong> of the <strong>Evidence Act</strong>, that evidence was erased from the record. In theory the evidence ceased to be part of the record. The proper view should be that the trial judge could not take into account the said evidence when deciding the case. Appellants' counsel, argued that the evidence should never have been reproduced as part of the record of the Court of Appeal and of this Court. He did not provide authority to support this. However, a reading of <strong>rule 82</strong> of the <strong>Rules</strong> of this Court does not appear to show that expunged evidence should not be part of the record of appeal. It would seem that except for such documents or some other matters that were not admitted in evidence, any evidence that was adduced at the trial becomes part of the record of appeal even though at the trial it was ruled to be inadmissible. Parties may, where necessary, during presentation of arguments on appeal, draw court's attention to its existence to illustrate, for instance, where a lower court went wrong. It should then be the responsibility of counsel to inform court that the record contains evidence which was expunged from the record. If in an appellate Court a complaint is made that the evidence was wrongly expunged, an appellate Court can rule on the correct status of such evidence. The appellate Court can say whether the trial Court acted properly in expunging it. The cases of <strong>Libyan Arab Uganda Bank for Foreign Trade Vs Vassiliadis</strong> (1987) HCB 32 appears to support this view.</p> <p>&nbsp;</p> <p>I agree with the conclusion of the learned trial judge that the respondent's evidence whose purpose was to contradict the terms of exh.P1 and P2 was inadmissible under Ss.90 and 91 of the <strong>Evidence Act.</strong></p> <p><strong><u>Instruments of Transfer and Bank Statement.</u> </strong>The trial judge clearly ruled that the instruments were inadmissible.</p> <p>Exh.D2 from the Bank is the most interesting of the evidence. It shows that the deceased's cheques for shs 560,000/=, 180,000/= and 200,000/= respectively, were never paid by Grindlays Bank. The Court of Appeal relied on this evidence (Exh.D2) for the view that the deceased did not pay the purchase price (at least for plot 655).</p> <p>&nbsp;</p> <p>In this regard, I think that Mr. Tibaijuka was fully justified in his contentions that the Court of Appeal disregarded important evidence before it held that there was no consideration. In her lead judgment, Byamugisha, JA., said-</p> <p><strong><em>"The sale agreement (exh. P2) set out the mode of paying the purchase price. The payment was by cheques. The appellant denied having been issued those cheques. The information from the bank (exh.D2) stated that the bank has never paid the said cheques. <u>There is no other evidence of the consideration having been paid by other means</u>. I think, with respect, the learned trial judge erred when he found and held that the full purchase price was paid."</em></strong></p> <p>Clearly, information on Exh.D2 led the learned Justices of Appeal to hold erroneously that there was no consideration. In my opinion the information on exh.D2 is misleading. With due respect, the learned Justices did not re-evaluate the whole evidence adequately before making the conclusions nor did they appear to have scrutinized the statement of defence. In paragraph 7 of WDS, the respondent averred that-</p> <p><strong><em>"The defendant states that as regards Block 16 plot 655 only 560,000/= was advanced to him…………………."</em></strong></p> <p>This is an unequivocal admission of the payment of Shs 560,000/=. As argued by Mr. Tibaijuka, payment was most probably made in cash as the respondent did not deny this payment in his oral evidence in Court. Otherwise the Bank holding the certificate of title would not have released the certificate to the deceased. Further the clearest explanation is found in the evidence of the first appellant.</p> <p>&nbsp;</p> <p>The first appellant as PW3 (see page 143) at the end of her evidence in-Chief firmly stated that the "house was sold and not mortgaged…………………. There was no loan to be paid by the defendant."</p> <p>During cross-examination by Mr. Ayigihugu she acknowledged that she and her husband, the late Jaggwe, together with their three young children were shared holders in the Transport Company. She explained (at page 144) that the company paid for the house on plots 654 and 692. As regards the name in the title deed this is what she answered. In the land office the plots are in the names of the late Sulain Jagwe. In the sale agreement it was made in the Company. I and the late Sulait Jaggwe first discussed and resolved that the title should be written in the names of the late Sulait Jaggwe." She explained that she and her husband used to discuss these matters at home. So she gave him all powers.</p> <p>&nbsp;</p> <p><em>PW3 was thereafter cross-examined by Mr. Buyondo (page 160) on behalf of the respondent. She replied. I know that my husband Jaggwe bought two houses from the defendant. He first bought the flat in 1980 early. He paid for the house fully. There were tenants but they were evicted by the late Jaggwe. We made it our residence.</em></p> <p>&nbsp;</p> <p><em>Later on, the later Jaggwe bought a second building in 1981 and quarters. I know that the deceased paid fully for the second building. I know that the purchase price was paid for fully but by installments.</em></p> <p>&nbsp;</p> <p><em>I know that the purchase price was fully paid and that there is a letter written by the defendant authorizing or instructing <strong>Housing Finance</strong> to hand over the 3 title deeds to the late Sulait Jaggwe. The late Jaggwe rented it to tenants. I did not collect rent</em> <em>from second house. We left the place after the death of our late husband. The defendant told us to run away."</em></p> <p>&nbsp;</p> <p>On 1/4/1997, (page 214) the respondent testified in Court about Exh.P2. He only claimed that <strong><em>"the cheques stated in paragraph (b) of exh. P2 were not given to me" </em></strong>He was obviously referring to shs 160,000/= and shs 200,000. He said nothing about the cheque for shs 560,000/= which is mentioned in the earlier paragraph (a) of the same exh. P2.</p> <p>&nbsp;</p> <p>Later on in his evidence in-Chief the respondent stated (page.215 of the record).</p> <p><em><strong>"I had deposited Exh. P1 and P2 as securities for the money he (Sulaint) had loaned to me. I saw his wife Kasifa Namusisi. He (sic) took me to their lawyers Sendege. I explained to them regarding Exhibit.P1 and exh. P2." </strong></em></p> <p>&nbsp;</p> <p>I go to all these lengths to show that there is evidence of payment.</p> <p>In his evidence the respondent obviously admits receipt of the money. His visit to "Sendege" was long after the disappearance of the deceased. There can be no doubt at all in my mind that the respondent had received money from the deceased. Had the learned Justices of Appeal considered this evidence they would have inevitably concluded that the deceased paid money to the respondent in respect of the sales. There was therefore consideration and also performance of the contracts of sales.</p> <p>&nbsp;</p> <p><strong>Instruments of tranfer:</strong></p> <p>Normally under the old S.91 of RTA a registered proprietor of land or of a lease or of any estate may transfer his interest by a transfer in one of the forms set out in the seventh schedule. The respondent testified that he signed transfer forms. As a result, the deceased was registered as proprietor of the suit lands. When the appellants instituted the action in the High Court, they annexed the sale agreements (exhs.P1 and P2) to the plaint. They did not annex the transfer forms or copies thereof signed by the respondent, perhaps because there was no obvious need to do so. In any case there is no obligation for a purchaser of land to retain copies of transfer forms. Moreover in his written statement of defence, the respondent admitted in <strong>paragraphs 4, 5 and 8</strong> that he transferred the suit lands to the deceased. He repeated this explicitly in his counter-claim which was set out in paragraph 10 of his defence and counterclaim. Contrary to what Byamugisha, JA, stated in her judgment, the respondent never annexed copies of the transfer forms to his written defence.</p> <p>The first appellant, Kasifa Namusisi, testified as PW3. During cross-examination, Mr. Ayigihugu, counsel for the respondent, at the trial, apparently showed a "transfer form" dated 7/5/1981 in respect of plot 655. The 1st appellant said it bore signatures of the respondent and of the deceased but said that the ones she had seen previously were different. The purchase price was 940,000/= and not 20,000/=.</p> <p>Mr. Ayigihugu then showed the 1<sup>st</sup> appellant a transfer instrument purporting to relate to plots 654 and 692. She asserted that the signature appearing on it purporting to be that of the deceased was forged and doubted the genuineness of the signature of the advocates. Mr. Ayigihugu successfully got a Court order directing the 1<sup>st</sup> appellant to produce true copies of the genuine transfer forms. The forms which were shown to Kasifa Musisi were not put in evidence at that stage. She reported back subsequently that officials in the registry in the land office were unhelpful. The appellants closed their case. The respondent had not tendered any transfer forms in evidence at that stage of the proceedings.</p> <p>&nbsp;</p> <p>The defence called Robert Opio (DW2). He was a Registrar of Titles in mailo land office. He testified that Block 16 plots 654,692 and 655 were registered in the names of the appellants and one other person on 30.6.1987 under instrument No.K 125447. They were administrators of the estate of Sulaiti Jaggwe. Jaggwe had been himself registered on 27/11/1980 under instrument No.KLA96590 in respect of plots 654 and 692. He had also been registered on 8/5/1981 under instrument No.KLA 96590 in respect of plot 655. Consideration in the former was alleged to be shs 100,000/= and in the latter as shs 20,000/=. The transferor in both cases was Ntabaazi, the respondent. When DW2 was to tender in evidence copies of the instruments of transfer, counsel for the appellants objected to the whole of his (DW2's) evidence on the main ground that since in the written statement of defence, transfer of plots to the deceased was admitted there was no need to adduce DW2's evidence to the same effect. The validity of registration was not challenged. Further, lack of consideration was not pleaded as defence nor in counterclaim. Mr. Ayigihugu resisted the objection contending that the instruments of transfer should be admitted to prove inconsistency between the amounts paid as reflected in exh.P1 <strong>and P2 on the one hand and the instruments on the other. </strong>He did not say the transfers were fraudulent or that none was ever executed.</p> <p>&nbsp;</p> <p>In his ruling dated 21/11/1996, the learned trial judge upheld the appellants' objections because;</p> <ol> <li> <p><em>Initially when the 1<sup>st</sup> appellant went to the land office searching for instruments of transfer, she was told by land office officials that the same could not be traced.</em></p> </li> <li> <p><em>The earlier claim by the 1<sup>st</sup> appellant that signatures of the deceased on the transfer forms were forged</em> <em>had not been disproved.</em></p> </li> <li> <p><em>The issue of variance as to consideration should have been pleaded under 0.6 rule 10 of CP Rules Evidence to prove it cannot be adduced.</em></p> </li> </ol> <p>&nbsp;</p> <p>After that ruling the defence abandoned DW2 as a witness. So the instruments were not tendered in evidence. I do not with respect appreciate how the learned Justices of Appeal could look at and rely on documents not admitted in evidence at the trial to bolster the respondent's case. A situation similar to this arose in <strong>Dhanji Ramiji Vs Malde Timba</strong> (1970) EA 422. An appellant was cross-examined on an affidavit at the trial but the affidavit was not admitted in evidence. On appeal in the E.A. Court of Appeal, appellant's counsel sought to rely on that affidavit to support appellant's case. The E.A.Court of Appeal, held that it could not look at the affidavit as it was not part of the evidence at the trial.</p> <p>&nbsp;</p> <p><strong>CONSIDERATION</strong></p> <p>I turn now to the question of whether or not the Court of Appeal was justified in its conclusions that there was no consideration at all and therefore there were no valid sales of the suit lands.</p> <p>&nbsp;</p> <p>As stated earlier, Lady Justice C.N. Byamugisha, JA., gave the lead judgment with which the other two members of the court agreed. In her lead judgment, the learned justice -</p> <ol> <li> <p><em>Criticized the trial judge for upholding Mr. Mwesigwa Rukutana's objection to the admissibility of the evidence of the land office registrar (DW2). That the rejection was premature.</em></p> </li> <li> <p><em>She stated that the respondent had attached to the written statement of defence two copies of instruments of transfer <strong>(I have studied the WSD but I did not find any indication that the transfer instruments were annexed to it).</strong></em></p> </li> <li> <p><em>Consideration stated in both instruments of transfer is less than what the witnesses say was paid for the properties,</em></p> </li> <li> <p><em>There was no evidence of instrument signed by the (transferor) transferring his interest to the deceased for the consideration paid by the deceased. (Actually in his evidence the respondent admitted signing the forms).</em></p> </li> <li> <p><em>If indeed payment was made fully, there was no evidence of acknowledgement by the seller.</em></p> </li> <li> <p><em>The burden shifted to the (buyers) to prove that the purchase price mentioned in the sale agreements was actually paid and received by the vendor.</em></p> </li> </ol> <p>&nbsp;</p> <p>It is true, as I said earlier, that the old section 91 of the RTA stipulates that a proprietor of land may transfer his interest in that land by a transfer in one of the forms set out in the 7<sup>th</sup> schedule to the Act. It is also true that in the case of payment of money as the purchase price, a sum of money as consideration may be mentioned in the transfer form. But with respect I do not think that the learned Justice of Appeal was justified in ignoring the relevant portions of the respondent's written statement of defence and of his own oral evidence on oath in court acknowledging -</p> <ol> <li> <p>The initial payment of shs 1,310,000/= in respect of the sale of plots 654 and 694.</p> </li> <li> <p>The initial payment of shs 540,000/= in respect of sale of plot 655.</p> </li> </ol> <p>These two are part performance of the contracts and are fulfillment of consideration.</p> <p>The respondent is a medical doctor, an educated man who at the time of the two transactions was aged 56 years, having been in practice apparently for quite some time. According to his own evidence he had borrowed money from banks. He can be credited with knowledge of operations of banks for he had obtained at least two bank loans. It is evident from his own evidence that he had provided the suit land to the Finance Company and to Grindlays Bank to secure the two separate loans which were obviously in arrears of payment. It is difficult to imagine or assume that with that type of the respondent's background, he could ask the deceased to act as a good Samaritan by himself (deceased) borrowing money from his own bankers, on security of the titles of the respondent so as to give that same borrowed money to the respondent for no consideration. The defence did not offer a plausible or any explanation of what benefit the deceased derived from each of the two transactions if the transactions were to be treated as mere loans? Was the respondent expected to pay any interest on the two loans and if so how much? We do not know. What was the period of the repayment of the loans? We do not know. Is it practically plausible that the deceased would have agreed to lend shs 4.5m/= to the respondent, pay in part only shs 1,3100,000/= within a day or two days upon the execution of <strong>"Sale agreement"</strong> but fail later to release the balance of shs 3,650,000/=? Would it be a reasonable inference to make that after the deceased had failed to pay to the respondent that remaining balance of shs 3.650,000/= on the first alleged loan, the two would enter into a fresh loan agreement barely six months later for a further loan of shs 940,000/= out of which only shs 560,000/= is released? It needs a lot of convincing for any reasonable person to accept the respondent's evidence that while the deceased had allegedly failed to complete payment of shs 3.650,000/=, the same respondent would agree to receive another part payment on a fresh loan and go further to sign transfer forms and allow the deceased to be registered as proprietor of the respondent's properties. The respondent would not so easily allow the deceased to redeem title deeds from the two banks, transfer suit lands to deceased before the balances of loan money was given? Like the trial judge I am not convinced by the version of evidence given by the respondent.</p> <p>These questions must have been uppermost in the mind of the learned trial judge when, during the testimony of the respondent, the judge observed (page 200)that-</p> <p><em><strong>"This witness is a liar. I find it inconceivable that he again went to Sulaiti Jaggwe who refused to lend him the full amount of shs 4.5 million in regard to his certificate of title deeds of houses in Block 16 plot 692 and 654. As if that was not sufficient disappointment to him, again went to Sulaiti Jaggwe to borrow shs 940,000/= in regard to his property in Block 655 in regard to which Sulaiti Jaggwe also refused to lend him the money, in both cases after the witness had transferred the certificate of the title deeds in the names of Sulaiti Jaggwe."</strong></em></p> <p>&nbsp;</p> <p>This passage should be understood in the context of the fact that earlier, on the same day, while the respondent was still testifying before the learned judge in examination in-chief claiming that she 4.5m/= was a loan and not a sale, the learned judge noted that -</p> <p><strong>"Witness avoids questions."</strong></p> <p>The trial judge was in a better position to see and observe the demeanour of the respondent whom the judge found unreliable and that is why he disbelieved the respondent and believed the appellants that the transactions were sales and not loans. It is well settled that an appellate court will always be loath to interfere with a finding of fact arrived at by a trial judge and will only do so when after taking into account that it has not had the advantage of studying the demeanour of a witness it comes to the conclusion that the trial judge is plainly wrong. <strong>See</strong> <strong>Jiwan Vs Gohil</strong> (1948) 15 EACA page 36 and <strong>R.G.Patel Vs Lalji Makaiji</strong> (1957) EA 314.</p> <p>Whilst the trial judge can be criticized for rejecting the evidence of DW 2 before he wrote the judgment, on the facts, it is reasonable to conclude that he would have attached little weight on the amounts stated in the instruments even if he had not excluded them from evidence, in view of the evidence of the 1<sup>st</sup> appellant and in as much as the instruments would have had little effect, if any on the respondent's case.</p> <p>&nbsp;</p> <p>In these circumstances and on the evidence available, I respectfully agree with Mr. Tibaijuka's criticism of the Court of Appeal that the Court erroneously equated <strong>"consideration"</strong> with performance. The two doctrines mean different things in the law of contract, as I understand that law. Consideration in crucial at the time the contract is formed and its sufficiency is really not the business of the Courts.</p> <p>&nbsp;</p> <p>In my opinion even if it were assumed that not all the money for the sale had been paid this would not affect the efficacy of the sale agreements in regard to consideration.</p> <p>&nbsp;</p> <p>The story of the alleged loan transactions is a mystery. It is as mysterious as the fact that the deceased, who together with his company purchased the suit lands, disappeared within weeks after he entered the suit premises. According to the 1<sup>st</sup> appellant, soon after the disappearance of Sulaiti Jaggwe, the respondent advised her to vacate the premises and run away which she did. Later she asked the respondent to get her tenants. The respondent is evasive in his evidence in court on this matter. In his evidence he admits visiting one of the advocates of the appellants to explain exh.P1 and P2. This appears to have been in 1986, long after the death of Jaggwe (page.215).</p> <p>&nbsp;</p> <p>There is evidence (exh.P8) which is a letter, written on 18/4/1986, to Mr. Buyondo, who was the second counsel for the respondent at the trial, indicating that the respondent attempted to have the sale agreements changed into something else. This letter is very revealing. Like the trial judge I consider it imperative to reproduce its contents in full:</p> <p>&nbsp;</p> <p><strong><em>18<sup>th</sup> April,1986</em></strong></p> <p>&nbsp;</p> <p><em><strong>Y.S.Buyondo ESQ.,</strong></em></p> <p><em><strong>Advocate,</strong></em></p> <p><em><strong>P.O Box 4550,</strong></em></p> <p><em><strong>KAMPALA.</strong></em></p> <p>&nbsp;</p> <p><em><strong>Dear Sir,</strong></em></p> <p><strong><em>RE: RESIDENTIAL PREMISES ON KIBUGA BLOCK 16 PLOTS 692 AND 554 SITUATED AT NDEBA TRADING</em> <u><em>CENTRE - SULAIT JJAGWE________________________</em></u></strong></p> <p>&nbsp;</p> <p><strong><em>We refer to your letter dated 9<sup>th</sup> April, 1986, related to the above premises, we have to reply as follows: -</em></strong></p> <p><strong><em>1. Our documentary evidence in our hands from the beginning reveals that the vendor your client, did sell the properties to Mr. Sulaiti Jjagwe, the bona</em></strong> <strong><em>fide purchaser for value and registered Mailo proprietor of the said properties.</em></strong></p> <p>&nbsp;</p> <ol start="2"> <li> <p><em><strong>At the time of the transaction for the said properties, between Mr. Francis M.K. Ntabazi and</strong> <strong>Mr. Sulaiti Jaggwe, our Paul Masaala, Esq., asked your client "Your name is famous in Ndeba; Why are</strong></em><strong> <em>you selling your premises? Mr. F.M.K. Ntabazi replied I am going to the village to settle, I am tired of the city life.</em></strong></p> </li> </ol> <p>&nbsp;</p> <ol start="2"> <li> <p><em><strong>Your client came to our office last year, and requested our Paul Musaala Esq., whether it can be possible to alter the complete executed contract. Our Paul Masaala Esq., did not accept his request.</strong></em></p> </li> </ol> <p>&nbsp;</p> <ol start="2"> <li> <p><strong><em>We may have to remind you perhaps that the Estate of Sulaiti Jaggwe is for the beneficiaries who are minors and no person has right to negotiate or change any complete executed contract or transaction without the consent and approval of the Court of Law.</em></strong></p> </li> </ol> <p><em><strong>Thanking you and with all good wishes.</strong></em></p> <p>&nbsp;</p> <p><em><strong>Yours faithfully,</strong></em></p> <p>&nbsp;</p> <p><em><strong>For MUSAALA &amp; CO.</strong></em></p> <p>&nbsp;</p> <ol start="29"> <li> <p><em><strong>The Applicants of Management Order,</strong></em></p> </li> </ol> <p><em><strong>Sulaiti Jaggwe's Property.</strong></em></p> <p>&nbsp;</p> <p>A copy of this letter was handed to the first appellant by Musaala himself after he had read its contents to her. Since a copy was addressed to her as one of the applicants for the management order, she proved its authenticity: See <strong>Dhanji Ranaji Vs Malde Timber</strong> (1970) E.A.422 at page 425.</p> <p>The learned trial judge relied, justifiably, partly on <strong>S.30(b)</strong> of the <strong>Evidence Act</strong> and admitted the letter. Section 30 (b) of the Evidence Act reads as follows:</p> <p><em><strong>"30: Statements, written or verbal, of relevant facts, made by a person who is dead, or who cannot be found, or who has become incapable of giving evidence, ………………………………… are themselves relevant facts in the following cases -</strong></em></p> <p><strong>(a).</strong></p> <p><strong>(b). When the statement was made by such person in the ordinary course of business, and in particular</strong> <strong>when it consists of any entry or memorandum made by him in books kept in the ordinary course of business or in the discharge of professional duty. or of the date a letter or other document usually dated, written or signed by him."</strong></p> <p>The letter is admissible because:</p> <ul> <li> <p>It is relevant.</p> </li> <li> <p>Musaala, its author is dead.</p> </li> <li> <p>Musaala wrote it in ordinary course of business and in the discharge of professional duty.</p> </li> </ul> <p>These are the requirements stipulated by S.30 (b). See <strong>Commissioner of Customs Vs Panachand</strong> (1961) EA. 303 at P.307 where an identical provision in the Kenya Evidence Act was interpreted.</p> <p>&nbsp;</p> <p>Neither Mr. Ayigihugu nor Mr. Buyondo (to whom Musaala had written the letter) cross-examined the first appellant on it. Mr. Buyondo did not deny that Musaala wrote it to him. When Mr. Buyondo joined Mr. Ayigihugu in objecting to the admissibility of the letter, he stated.</p> <p>&nbsp;</p> <p><em><strong>"We are not challenging the document. All we are saying is that we cannot cross-examine the witness on it." </strong></em></p> <p>&nbsp;</p> <p>Indeed this letter was a reply to a letter written a week earlier by Buyondo. So he could not challenge it. In relation to the letter the 1<sup>st</sup> appellant gave the following pertinent piece of evidence.</p> <p><em><strong>"As I was leaving Musaala's Chambers, I met the defendant going to Mr. Musaala's office. I discovered later when I went back to Musaala's Chambers, he give me a copy of a letter addressed to Mr. Y.K.Buyondo I know the contents of the letter. Mr. Musaala read its contents to me. It informed Mr. Buyondo that the Sale Agreement be changed (sic) into mortgage agreement."</strong></em></p> <p>&nbsp;</p> <p>The first appellant visited Musaala on 24/4/1996. That is nearly a week after 18/4/1996, the date on which the letter was written. The letter shows that the respondent changed his mind nearly 5 years after the execution of the sale agreements and of the transfer of the suit lands. Although in his evidence (page 216) the respondent denied visiting Musaala's Chambers, he nevertheless claimed that he only visited M/S Sendege &amp; Co. Advocates. He did not explain why he visited Sendege. His denial may well be a lie because apparently it was Musaala who was handling the affairs of Jaggwe's family. It is rather a pity that Buyondo's letter itself was not put in evidence. A perusal of the evidence of the first appellant shows that not only was she resilient when testifying in court but she appears to have been consistent throughout her testimony. No wonder the learned trial judge was so impressed that he concluded that the <strong>"evidence of Kasifa Namusisi, PW3, was not dented in cross - examination". </strong>This clearly shows that the trial judge was impressed by the first appellant. But not so impressed by the respondent whom, as I noted earlier, he found to be a liar and for which he has been unjustifiably criticised.</p> <p>&nbsp;</p> <p>Although the trial judge did not repeat this impression of him (about the respondent) in his judgment, a perusal of his rulings especially, those of 6/9/1995 and of 1/4/1997 clearly shows that he was impressed by the 1<sup>st</sup> appellant.</p> <p>&nbsp;</p> <p>Learned counsel for the appellants argued forcefully that the Court of Appeal misdirected itself on the legal nature of consideration. I have already alluded to relevant evidence showing consideration.</p> <p>&nbsp;</p> <p>Under the English Law of contract which is the applicable law in Uganda, consideration is important. <strong>"An Act or forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought and the promise thus given for value is enforceable." </strong>See <strong>Cheshire, the Law of contract, 8<sup>th</sup> Edition, </strong>at page 60. Thus the doctrine of consideration implies or means reciprocity. The notion of reciprocity is crucial to the idea of contract. There is a wealth of case law in this country and in East Africa illustrating the operation of the doctrine of consideration. Some of the cases cited to us include <strong>Qadasi Vs Qadasi</strong> (1963) EA. 142, G.M. <strong>Combine (U) Ltd. Vs. A.K. Detergents &amp; others (1999)</strong> EA 84 and <strong>Shiv construction Co, Ltd Vs Endesha Enterprises</strong> (1999) EA. 329. In paragraph 5 of his statement of defence and in his evidence, the respondent contended that he could not have sold the said properties at such a low price if it was in fact a sale. However, apart from his averments in the WSD and his own opinions in Court, the respondent produced no particular evidence to show what was the actual price of the suit lands at the time material to this case. In regard to low price, Wambuzi CJ, as he then was, observed in the <strong>GM Combine case,</strong> at page 93/94 that:</p> <p><strong><em>"I wish to point out here, if I may, that on the appellants own pleadings it was admitted that there was consideration for the sale of the suit lands but the price was so low as to be fraudulent on the part of the first respondent. It is well established that the Courts will not inquire into the sufficiency or adequacy of the consideration as long as there is some consideration. Lord</em></strong> <strong><em>Somrvel of</em></strong> <strong><em>Harrow in <u>Chapell and Co. Vs Nestle Ltd</u>. (1960) AC 87 said</em></strong></p> <p><em><strong>"A peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn"</strong></em></p> <p>In the <strong>Qadasi case</strong> the Court of Appeal for East Africa discussed the doctrine of consideration and its sufficiency.</p> <p>&nbsp;</p> <p>The appellant and the respondent had for many years prior to 29<sup>th</sup> May, 1949, been running under an agreement known as "Zam" a bakery which they had purchased many years earlier, and on that date they renewed the agreement in writing. A <strong>"Zam"</strong> was the name given in Aden to a type of agreement in use there whereby two persons agree to share a business turn and turn about. The renewed agreement provided, inter alia, that each party would run a bakery for a period of six months, that each was bound to take over his turn on the day it was due and that if he refused to do so the other would have the right to claim damages or compensation.</p> <p>&nbsp;</p> <p>The agreement also provided that in the event of either party refusing to hand over the bakery on completion of his turn, he would be liable to pay the other party a sum of Rs. 20/- per day until the bakery was handed over. On April 13, 1961, the appellant filed a suit in the Supreme Court of Aden claiming that the respondent's <strong>"zam"</strong> had expired on January 4, 1961, and that the respondent had refused delivery to the appellant for his turn and the appellant claimed a declaration that he was entitled to six months' <strong>"zam"</strong> and a decree for specific performance and compensation at the rate provided in the agreement. In his defence the respondent alleged that the appellant was "given" <strong>the zam as being the son-in-law and servant of the respondent</strong> and that he had broken the agreement by failing to run the bakery for about five months, necessitating expenditure on repairs and replacements, and that, therefore, he had informed the appellant that he "would not like to continue the zam". He also denied the claim for specific performance, alleging that there was no <strong>consideration for the zam agreement</strong> and that the appellant was himself in breach of the agreement and was guilty of laches. The Supreme Court held that there was no consideration to support the agreement in question and dismissed the suit on that ground. Thereupon the appellant appealed and the respondent filed a cross-appeal contending that the decision of the Supreme Court should be affirmed on other grounds. The Court of Appeal for Eastern Africa allowed the appeal and held that -</p> <p>(i) the agreement of May 29,1949, contained reciprocal promises in that each party undertook to run the business in turn for periods of six months and thereafter to hand it over to the other.</p> <p>(ii) these promises had value in the eyes of the law for each party had an interest, with financial implications, in having the business continuously operated in order that customers would be retained and the goodwill thereby maintained, consequently.</p> <p>&nbsp;</p> <p>(iii) there was accordingly consideration sufficient to support the agreement.</p> <p>&nbsp;</p> <p><strong>PAYMENTS OF PURCHASE PRICE</strong></p> <p>On the question of payment of the full price the pleadings in this case are instructive, I think. As I stated earlier, the appellants pleaded in para.5 of their original plaint drawn as follows: -</p> <p><em><strong>"5 The cause of action arose as below : -</strong></em></p> <p><em><strong>That on the 13/11/1980, the defendant sold land comprised in Kibuga Block 16 PLOT 654, and 692, Ndeba and on the 6/5/1981 sold land comprised in Kibuga, block 16 plot 655, Ndeba to the late Suilati Jaggwe, as per copies of agreements of sale attached hereto and marked "Annexture A and B". That after the said sale the defendant signed transfers in favour of the said deceased, who became registered proprietor thereof".</strong></em></p> <p>&nbsp;</p> <p>The two sale agreements exh.P1 and P2 show that the first sale was for shs 4.5m/= and the second sale was for shs 940,000/=. The respondent appears to have filed his written statement of defence in court on 3/10/1988. In its paragraphs 5, 6, and 7 the respondent averred as follows: -</p> <p><em><strong>"5 The defendant will contend that he could not have sold the said properties at such a low price if it was in fact a sale. That the agreement between late Sulaiti Jaggwe and defendant was that after the payment of the money lent to the defendant, the late Sulaiti Jaggwe would execute the transfer in favour of the defendant.</strong></em></p> <p>&nbsp;</p> <p><em><strong>6.The defendant will contend that he was repaying the money advanced to him by the late Sulaiti Jaggwe by crediting the late Jaggwe's account with Grindlays Bank A/C No.297-664 copies of available bank slips are attached hereto and marked annexture 'A'.</strong></em></p> <p>&nbsp;</p> <p><strong><em>7. The defendant states that as regards block 16 plot 655 <u>only shs 560,000/= was advanced</u> to him. The sum of shs 380,000/= was not advanced because the bank had not released the funds to the late Sulaiti Jaggwe."</em></strong></p> <p>&nbsp;</p> <p>Here no where does the respondent deny in his written statement that shs 4.5m/= was not paid. If part of it had not been paid, the obvious inference is that the respondent would have stated so as indeed he did in paragraph 7 in regard to the part payment for plot 655. In these circumstances the learned trial judge was entirely justified in rejecting the respondent's evidence which he gave at the trial claiming that the deceased only deposited shs 1,316,000/= in respect of part payment of plots 654 and 692. The evidence of the respondent denying payment of the balance of shs 3,690,000/= is an unexplained departure from his pleadings and this tends to support the trial judge's finding that the respondent was lying. The decision of this Court in <strong>Akisoferi W.Biteremo Vs Damscus Munyanda Situma</strong> (SCC Appeal No.15 of 1991) (unreported) supports the view that a party who departs from his pleadings and gives evidence contrary to his pleadings would be lying.</p> <p>&nbsp;</p> <p>I note that during the trial and before the appellants closed their case, they were allowed to again amend their plaint. On 19/4/1993 the new plaint was served on Messrs. Ayigihugu &amp; Co, Advocates, who were lead counsel for the respondent. In subparagraph (iii) of paragraph 5 of the new plaint, the appellants averred:</p> <p><em><strong>"That on completion of payment of the purchase price, the defendant signed transfer forms in favour of the deceased."</strong></em></p> <p>&nbsp;</p> <p>Apparently, the respondent did not file an amended or any other written defence to deny the above averment. It was only when he was testifying in Court on 5/2/1997 that be cleverly denied payment of the balance. This is what he stated in evidence in chief (page 193).</p> <p><em><strong>"Sulaiti did not pay all the 4.5million. He paid me shs 1,150,000/= plus shs 160,000/= which he paid to M/s. Musaala and Co, Advocate. I signed the agreement between me and the Company Hardworking Sulaiti Jaggwe signed the agreement for the Company Uganda Hardworking."</strong></em></p> <p>(Court, Exh. P1 is given to the witness who identifies it as Company Uganda Hard Working).</p> <p>The witness then continued.</p> <p><strong><em>"Apart from paying shs 1.150,000/= and shs 160,000, I was not given the balance of shs 4.5 million. Exh.P1 shows model of payment. Agreement shows shs 1.150,000/= was paid and shs 160,000/= was paid. Balance of shs 3,190,000/= was not paid. <u>It was to be paid after transfer of the certificate of title in his names.</u></em></strong></p> <p><em><strong>This was a loan. I was going to pay by installment."</strong></em></p> <p>&nbsp;</p> <p>At that point it seems the respondent was avoiding answering certain questions from his own counsel which prompted the trial judge to note that: -</p> <p><strong>"WITNESS AVOIDS QUESTIONS"</strong></p> <p>The respondent continued testifying in chief in the afternoon of the same day. Adjourning the hearing the learned trial judge made the following pertinent note on the record. I have already quoted it but for the sake of emphasis I quote it again.</p> <p><strong>"Court: This witness is liar. I find it inconceivable that he again went to Sulaiti Jaggwe who refused to lend him the full amount of shs 4.5</strong> <strong>million in regard to his certificate of Title Deeds of houses in Block 16 Plots 692 and 654. As if that was not sufficient disappointment to him, he again went to Sulaiti Jaggwe to borrow shs 940,000/= in regard to his property in Block 655 in regard to his which Sulaiti Jaggwe also refused to lend him the money in both cases after the witness had transferred the certificates of the title deeds in the names of Sulaiti Jaggwe."</strong></p> <p>&nbsp;</p> <p>In his written arguments, the respondent's counsel argues that these observations show that the trial judge was prejudiced against the respondent. I would point out that a judge is perfectly entitled and has power under <strong>Order 16 Rule 9</strong> of the CP Rules to the following effect-</p> <p><em><strong>"The Court may record such remarks as it thinks material respecting the demeanour of any witness while under examination"</strong></em></p> <p>Obviously this rule enables a trial judge to record instantaneous impressions he gains about a witness while the impressions are fresh. Such impressions are instructive in evaluating the credibility of witnesses. In deciding a case a trial judge can legitimately use his impressions of the witness to determine whether to believe the witness or not. That is proper.</p> <p>In this case on that day when the note was made, the respondent had been testifying before the learned judge since morning. Earlier in the morning the judge had observed that the respondent <strong>"avoids questions".</strong></p> <p>In these circumstances and taking into account the contents of both the plaint together with contents of Exh. P1 and P2, on the one hand, and the written statement of defence, it is my considered opinion that the learned trial judge was justified in accepting the version of the evidence given by the appellants in preference to the version given by the respondent.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>The learned Justices of the Court of Appeal criticised the trial judge for rejecting the instruments of transfer which the respondent's counsel attempted to introduce in evidence and so the learned justices held that the judge erred in that regard. The court further held that there were no instruments of transfer to support the appellants' claim that the suit lands were properly transferred to them.</p> <p>&nbsp;</p> <p>As I said earlier in this judgment, I think with respect that Lady Justice Byamugisha misdirected herself on the facts when she stated that copies of instruments of transfer were attached to the written statement of defence. Nowhere does the written statement of defence say so nor did any witness for the respondent testify to that effect. The respondent himself did not claim this. The only annextures to WSD were <strong>"available bank slips."</strong> These were not produced as evidence as their authenticity was lacking.</p> <p>&nbsp;</p> <p>Further, it must be noted that the question of lack of the instruments was not an issue for the trial judge to determine. Both in his written statement of defence and in the counterclaim (para 10) the respondent averred that he signed instruments of transfer and that the process of transfer was effected. He confirmed this in his oral evidence in court. The certificates of title which were produced in court show that the suit lands had been duly transferred to the deceased. The written statement of defence did not allege that the transfer was fraudulent. The respondent did not give evidence in Court to challenge the validity of the transfer. In the circumstances, the learned judge was correct in holding that the certificates of title were conclusive evidence of title to the deceased. The old sections 56, and 184 of RTA which are relevant to this case support this holding.</p> <p>The issue of the deceased having made payments by cheque are irrelevant. I have already discussed the payments. It must be noted that exh.P2 [in paragraph (a) thereof] shows shs 560,000/= was paid by cash cheque. Although the letter from the bank states that no cheque for that amount was paid, the respondent himself acknowledged receipt of shs 560,000/= as first payment in respect of plot 655. The irresistible<strong> </strong>inference must be that the deceased paid the money either in cash or by another cheque. Otherwise the respondent could not have acknowledged that the money was paid. Indeed, the certificate of title for plot 655 was redeemed from Barclays Bank after that payment before the deceased was registered as proprietor.</p> <p>The question of the respondent remaining in possession of the buildings as owner is not credible.</p> <p>The 1<sup>st</sup> appellant impressed the trial judge. Therefore her evidence that she and other appellants allowed the respondent to collect rent for them must be accepted as against that of the respondent whom the judge found to be a liar. The respondent never counterclaimed for any balance. His claim that he was repaying the deceased's loan is an afterthought and was justifiably rejected by the learned trial judge. In view of what I have said before, the evidence of the banker is not helpful to the respondent's case.</p> <p>In the circumstances, and with all due respect to the learned Justices of the Court of Appeal, they erred in their conclusions that:</p> <ul> <li> <p>There was no consideration;</p> </li> </ul> <ul> <li> <p>If the deceased was a purchaser, the properties would not have remained in possession of the seller.</p> </li> </ul> <p>In my opinion there was consideration disclosed on the face of the transactions. Even if no full payment had been made as claimed by the respondent the remedy for the respondent is not hard to find. The two agreements provided for the course of action.</p> <p>Ground one of the appeal ought, therefore, to succeed. As it is the foundation of this appeal, this conclusion would dispose of this appeal. I see no need to consider the rest of the grounds. The ground for affirming the appeal is dismissed with costs to the appellants.</p> <p>&nbsp;</p> <p><strong>Money Lenders Licence</strong></p> <p>Counsel for both sides were prompted by Court to address us on a question which was not canvassed in the two Courts below, whether both transactions are enforceable. Counsel for the respondent contended that the transactions are unenforceable because there is no evidence to prove that the deceased, an alleged money lender, had a valid moneylender's licence as required by the provisions of the <strong>Moneylenders Act</strong>. It is also argued that Exh.D1 is evidence that the deceased was a moneylender.</p> <p>&nbsp;</p> <p>I think that exh.DI cannot be a basis for the view that Jaggwe was a money lender. Assuming that it was a loan agreement, between himself and his brother in-law, there is no credible evidence explaining why Exh. P1 and P2 were not couched in similar terms as Exh.D1, which was executed in 1976, namely that the transactions were loans. Anyway the first appellant satisfactorily explained the status of exh.D1 in her evidence.</p> <p>&nbsp;</p> <p>I would have dismissed in a few words this question of contravention of the <strong>Money Lenders Act</strong>. I am forced to discuss it a little more because of its controversial nature and because of the opinion of my learned brother, Kanyeihamba, JSC.</p> <p>&nbsp;</p> <p>In view of the provisions of section, 22 of the <strong>Money Lenders Act</strong> and on the evidence available in this case, it would amount to a travesty of justice to hold that the sales were loans affected by S.3 of the Act. With respect to counsel for the respondent I think that he has misinterpreted S.22 (1) (c) of the Act.</p> <p>&nbsp;</p> <p>There is no evidence at all on the record showing that the deceased had no moneylender’s licence as required by section 3 of the <strong>Moneylenders Act</strong> or at all. Indeed in his own evidence, the respondent was non-committal on this point. At page 216 of the record during cross examination, he stated that</p> <p>&nbsp;</p> <p><em><strong>"I did not know that the late Sulaiti Jaggwe had money lenders licence."</strong></em></p> <p>&nbsp;</p> <p>Besides, as I stated earlier, at the trial no issue was framed for the determination by the trial judge about whether the deceased was or was not a money lender and if he was, whether he had a valid moneylender’s licence. If such licence had been in issue, no doubt it would have been framed and determined on the evidence available. I can assume (wrongly or correctly) that most likely if the deceased was a moneylender, he had a valid moneylender’s licence. That is why no issue in that regard was framed. Indeed even in the Court of Appeal, this point was not raised. The appellant's counsel has argued that the transactions were not loans as claimed by the respondent but that the transactions were sales as found by the trial judge. I have considered this when discussing the first ground of appeal.</p> <p>&nbsp;</p> <p>There is also a suggestion that the Memorandum of Association of the Transport Company did not allow the company to buy land. My Lord the learned Chief Justice has discussed this point. Paragraph 3(b) of that Memorandum of Association of the Transport Company shows that the company could acquire real property.</p> <p>There is a further suggestion that exh.P1 confirms that shs 4.5m/= was a loan. A proper reading of all the provisions of exh.P1 does not suggest in any way at all that the transaction was a loan to the respondent. It actually states that shs 1,150,000/= was to be used to repay the respondent's loan in the Finance Company so as to redeem the title deeds from there.</p> <p>Because of the erroneous interpretation of the first sale agreement. I am forced to reproduce the contents of it (exh. P1).</p> <p>&nbsp;</p> <p><strong>REPUBLIC OF UGANDA</strong></p> <p><strong>AGREEMENT OF SALE</strong></p> <p>&nbsp;</p> <p><strong>VENDOR:</strong> <strong>Dr.F.M.K.Ntabazi</strong> of P.O Box 1501, Kibuye/Kampala, Uganda.</p> <p>&nbsp;</p> <p><strong>PURCHASER:</strong> UGANDA HARDWORKING TRANSPORT &amp; TRADING COMPANY LIMITED, P.O Box 1151, Kampala, Uganda.</p> <p>&nbsp;</p> <p><strong>SUBJECT MATTER:</strong> Land on Kibuga Block 16 Plots No.692 and 654, together with a House/Building having Up-stairs as under:</p> <ol> <li> <p>Ground Floor consisting of one big shop in front of it, one big garage, 2 big rooms, stores, toilets, 2 small rooms and a passage.</p> </li> <li> <p>Up-Stairs consisting of one dinning room, one sitting room, big kitchen, 4 bed-rooms, bath-rooms, toilets, a passage, a verandah, and three other rooms. Situated at Ndeba Trading Centre on Masaka Road. The said Building/House is the second from Masaka side to that of Dr. F.M.K.Ntabazi's Building (the vendor) and from Kampala side it is the third. The said Building/House, was built of concrete Blocks and thatched with concrete.</p> </li> </ol> <p><strong>PAYMENT</strong></p> <p><strong>CONSIDERATION</strong>: Shs.4.500,000/= (shillings four and half million).</p> <p>&nbsp;</p> <p><strong>PAYMENT:</strong> (a) Shs.160,000/= (shillings one hundred and sixty thousand) paid in cash to the vendor by the Purchaser on the date of signing this agreement of sale.</p> <p>(b) Shs.150,000/= (shillings one million, one hundred fifty thousand only, is paid on cheque No.H/A 433888 of 13/11/80 payable to <strong>Housing Finance Company of Uganda Limited,</strong> P.O Box 1539, Kampala, Uganda, <strong>being loan on account No.U.1550, obtained by the vendor referred to herein, from the said Company.</strong></p> <ol start="3"> <li> <p>That the balance of Shs 3,190,000/= (shillings 3 million nineteen hundred thousand is to be paid to the vendor by the purchaser as soon as the vender signs the Transfer Forms, for the transfer of the said building together with the land referred to above.</p> </li> <li> <p>That the vendor is responsible to pay for all electricity charges in arrears and rates to the City Council of Kampala up to the date hereof.</p> </li> </ol> <p>&nbsp;</p> <p><strong>OTHER TERMS:</strong> (a) The vendor referred to above has handed over the said Building/House referred to above to the Purchaser together with all keys to be the property of the purchaser from the date of signing this agreement of sale.</p> <p>(b) That the Title Certificates of the said land were deposited with the above mentioned Company for loan and shall be handed over to the Purchaser as soon as payment for loan has been made by the Purchaser as per para (b) payment hereof.</p> <p>&nbsp;</p> <p>(c) …………………………………………………………………………………………</p> <p>(d) That in default of either party to comply with the terms and conditions as stated herein above, such default shall be referred to Court of Law.</p> <p><strong>IN WITNESS WHEREOF</strong>, the parties hereunto have set their respective hands at Kampala this 13<sup>th</sup> day of November, one thousand Nine hundred and Eighty.</p> <p>&nbsp;</p> <p><strong>SIGNED</strong> by the said</p> <p>DR.F.M.K. NTABAZI ------------------</p> <p>In the presence of</p> <p>&nbsp;</p> <p>----------------</p> <p>&nbsp;</p> <p><strong>SIGNED</strong> by the said</p> <p><strong>SULAITI JAGWE</strong> -------------------The Managing Director</p> <p>For and on behalf of</p> <p><strong>UGANDA HARDWORKING</strong></p> <p><strong>TRANSPORT &amp; TRADING </strong></p> <p><strong>COMPANY LIMITED</strong></p> <p>In the presence of:</p> <p>&nbsp;</p> <p>------------------</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>I certify that the contents herein were first read over and explained to them when they appeared fully to under-stand the same.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong>Filed by: -</strong></p> <p>M/S. Musaala &amp; Co.</p> <p>Advocates,</p> <p>P.O Box 4804,</p> <p>Kampala.</p> <p>&nbsp;</p> <p>The problem with this agreement is the draftsman's language and style.</p> <p>Whilst the whole document must be read to understand where and for what purpose the certificates of title were deposited, it is the careful reading of (b) under PAYMENT and (b) under OTHER TERMS which brings out where the certificates were deposited and for which loan. Thus (b) under PAYMENT clearly shows that the respondent had to clear with Finance Company a loan of Shs 1,150,000/= whereas (b) under Other Terms indicates that the Finance Company held the Title deeds because of the respondent's loan of shs 1,150,000/=. The title deeds would be released to the purchaser after the purchaser pays shs 1,150,000/= to the Finance Company on behalf of the respondent. The respondent states so in his evidence.</p> <p>&nbsp;</p> <p>From his own mouth this is what the Respondent said during examination in-chief (page 193).</p> <p><em><strong>"I had the security but it was in the Housing Finance of Uganda. I had deposited the security, i.e., the title deed for a loan of shs 1,150,000/= from Housing Finance of Uganda. He redeemed the title deed by paying shs 1,150,000/=. The certificate of title was in respect of Block 16 Plot 692 and 654."</strong></em></p> <p>&nbsp;</p> <p>The respondent claimed that the deceased needed the agreements in order to be able to raise money from his banks so as to lend that borrowed money to the respondent. This sounds ridiculous. The irresistible inference I can draw from the two transactions is that in either case the respondent had probably defaulted to repay the banks loans and that each of the banks might have been poised to dispose off his property. Fearing the worst, the respondent must have opted to pre-empted that by offering his property to the deceased to buy. That is the rational explanation. I find it extremely difficult to accept that out of whatever humanitarian motivation or considerations, the deceased would take all the trouble to obtain loans from banks for purposes of only lending the same money to the respondent to enable the latter to redeem his property. Neither the respondent in his written statement of defence or in his evidence nor the agreements tell us the benefit which the deceased derived or would derive from such arrangement. Secondly both in the Court of Appeal and in this Court, the issue was not raised or pursued as an independent ground of appeal. This is because it was never an issue at the trial.</p> <p>&nbsp;</p> <p>Assuming, for the sake of argument, that the deceased was a moneylender and that in that capacity he, or his Transport Company, lent money to the respondent, there is a provision in the <strong>Moneylenders Act</strong> which excludes the application of the Act to the two transactions. At the request of the court, counsel for the two sides belatedly presented written arguments on this point. The provision is section <strong>22(1)(c)</strong> of the <strong>Moneylenders Act [Cap 264 of 1964</strong> <strong>(Revision of Laws of Uganda)</strong> which is now S.21 of Cap.273]. It reads:</p> <p>“<em><strong>S.22 (1) This Act shall not apply-</strong></em></p> <p><em><strong>(a)</strong></em></p> <p><em><strong>(b)</strong></em></p> <p><em><strong>(c) to any money lending transaction where the security for repayment of a loan and interest on the loan is affected by execution of a legal or equitable mortgage upon immovable property or of any bona fide transaction of money lending upon such mortgage or charge.</strong></em></p> <p><em><strong>(2) The exemptions provided for in this section shall apply whether the transactions referred to are affected by a money lender or not.”</strong></em></p> <p>&nbsp;</p> <p>It would be contrary to known standards of statutory interpretation to hold that this section would not protect the two transactions in this case. The language of the Act is plain and unambiguous.</p> <p>I accept arguments by Mr. Tibaijuka that this provision would clearly exempt the two transactions between the deceased and the respondent from the application of the Act. This is the interpretation which a number of Courts in East Africa have placed on S.22(1) (c) or identical provisions. This view was upheld by the Privy Council in the case of <strong>Coast Brick Tile Vs. P. Raichand</strong> (1966)E.A.154. The other cases are S<strong>.N.Shah Vs. C.M.Patel (1961) E.A 397,Buganda Timber Co.Ltd. Vs. Mulji Kankji Metha (1961) E.A 477 and D.Jakana Vs. C. Senkaali (HCCS No.491 of 1984) (1988-1990) HCB 167.</strong></p> <p>&nbsp;</p> <p>It is not necessary for me to analyse the judgments in these cases because they are plainly clear.</p> <p>On the basis of these decisions with whose reasoning I agree, I think that the <strong>Moneylenders Act</strong> is not applicable in this case and, therefore, the transactions are unaffected.</p> <p>&nbsp;</p> <p>I would allow the appeal with costs here and in the courts below.</p> <p>I would set aside the judgments and order of the Court of Appeal. I would dismiss the notice for affirming the decision of the Court of Appeal. I would restore the orders of the learned trial judge with slight modifications as follows:</p> <p>&nbsp;</p> <ol> <li> <p>I would grant a declaration that the appellants are entitled to the suit properties.</p> </li> </ol> <p>&nbsp;</p> <ol start="2"> <li> <p>I<em> </em>would grant an order directing the Registrar of Titles to retransfer the suit properties into the appellants' names.</p> </li> </ol> <p>&nbsp;</p> <ol start="3"> <li> <p>I would grant a permanent injunction to restrain the respondent and/or his servants/agents from interfering with the suit properties.</p> </li> </ol> <p>&nbsp;</p> <ol start="4"> <li> <p>The respondent is to pay the appellants shs 480,000/= as money had and received by him as rent from the suit properties from October 1997 to October, 1988, with interest at 10% from date of filing the suit till payment in full.</p> </li> </ol> <p>&nbsp;</p> <ol start="5"> <li> <p>I would uphold the award of Shs 1,000,000 as general damages with interest at the rate of 8% p.a from 5/6/1997, being date of judgment in High Court till payment in full.</p> </li> </ol> <p>&nbsp;</p> <ol start="6"> <li> <p>The respondent is to pay the appellants the costs of this appeal and that in the courts below.</p> </li> </ol> <p>&nbsp;</p> <p>&nbsp;</p> <p>Delivered at Mengo this 17<sup>th</sup> day of January 2006</p> <p>&nbsp;</p> <p>_____________</p> <p><strong>J.W.N.Tsekooko</strong></p> <p><strong>JUSTICE OF THE SUPREME COURT</strong></p> <p><strong>THE REPUBLIC OF UGANDA</strong></p> <p>&nbsp;</p> <p><strong>IN THE SUPREME COURT OF UGANDA</strong></p> <p><strong>AT MENGO</strong></p> <p><strong>(CORAM: ODOKI, CJ, ODER, TSEKOOKO, KAROKORA AND KANYEIHAMBA, JJ.SC)</strong></p> <p>&nbsp;</p> <p><strong>CIVIL APPEAL NO. 4 OF 2005</strong></p> <p>&nbsp;</p> <p><strong>BETWEEN</strong></p> <p>&nbsp;</p> <p><strong>1. KASIFA NAMUSISI }</strong></p> <p><strong>2. AMINA NABANKEMA} ::::::::::::::::::::::::::: APPELLANTS</strong></p> <p><strong>3. ABDUL WAKAALO }</strong></p> <p>&nbsp;</p> <p><strong>AND</strong></p> <p>&nbsp;</p> <p><strong>M K NTABAZI :::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT</strong></p> <p>&nbsp;</p> <p><em><strong>(Appeal from the judgment and orders of the Court of Appeal of Uganda at Kampala (Engwau, Kitumba and Byamugisha, JJ.A) dated September 2004 in Civil Appeal No. 63 of 2001).</strong></em></p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong>JUDGMENT OF ODOKI, CJ.</strong></p> <p>&nbsp;</p> <p>&nbsp;</p> <p>I have had the benefit of reading in draft the judgments of my learned brothers, Tsekooko JSC, and Kanyeihamba JSC as result of which it has become necessary for me to spell out the reasons for my conclusion that this appeal should succeed.</p> <p>&nbsp;</p> <p>The background to this appeal has been outlined in the judgment of my learned brothers, and I need not repeat it.</p> <p>&nbsp;</p> <p>The Court of Appeal allowed the appeal filed by the respondent against the appellants who had obtained judgment in the High Court on the sole ground that the appellants failed to prove that consideration was paid by Sulait Jaggwe for the two properties allegedly purchased by him from the respondent. It was the case for the respondent that the transactions between him and Jaggwe were mortgages by deposit of title deeds secure loans from Jaggwe, who disappeared soon after the transactions had been concluded. The appellants are the administrators of his estate.</p> <p>&nbsp;</p> <p>The case for the appellants which the trial judge accepted was that the two parties entered into two separate sale agreements of the two properties, and subsequently, the respondent signed transfers which led to the registration of properties in the names of Jaggwe, and certificate of title were issued. The respondent did not seriously dispute these facts.</p> <p>&nbsp;</p> <p>The respondent’s defence was that the transfers were to enable him obtain loans from Jaggwe who promised to retransfer the properties to the respondent, upon completion of payment of the loan. The respondent claimed he paid off the loans. The trial Judge accepted the appellants evidence and rejected the respondent who he found to be a liar. He gave judgment in favour of the appellants.</p> <p>&nbsp;</p> <p>On appeal, in her lead judgment, Byamugisha JA, with whom other Justices of Appeal agreed, criticized the trial judge for refusing to allow the Registrar of Titles to produce copies of the certificates of title in Court, but allowed the appeal on the ground that consideration had not been proved to make the contract of sale of the suit property valid.</p> <p>&nbsp;</p> <p>She then concluded,</p> <p>&nbsp;</p> <p>“<em><strong>As matters stand now there is no evidence of the instruments signed by the appellant transferring his interest in the suit properties to Sulait Jaggwe for the consideration allegedly paid by the latter. The first respondent testified that she knew that “That purchase price was fully paid by installments.”</strong></em></p> <p>&nbsp;</p> <p><em><strong>Indeed payment was made fully as she testified, there was no evidence of acknowledgement by the seller. The appellant maintained throughout that he signed blank transfer instruments for purposes of obtaining a loan or loans and there was not outright sale. The onus therefore shifted to the respondents as the alleged buyers to prove that the purchase price mentioned in the sale agreements was actually paid and received by the appellant. The second agreement P.2 set out the mode of paying the purchase price. </strong></em></p> <p>&nbsp;</p> <p><em><strong>The payment was made by cheques. The appellant denied having been issued with those cheques. The information from the bank (Exh. D.2) stated that the bank has never paid the said cheques. There is no other evidence of the consideration having been paid by other means. I think with respect, the learned trial judge erred when he found and held that the full purchase price was paid. In my humble opinion the transactions in this case were not supported by any consideration and therefore the respondents are not entitled to the suit properties. I think this is one of those cases in which this Court can go behind the fact of registration.”</strong></em></p> <p>&nbsp;</p> <p>&nbsp;</p> <p>The last sentence of the passage I have quoted from the judgment of the learned Justices of Appeal is the crux of this appeal. When can a Court go behind the fact of registration? This issue forms the third ground of appeal in this Court.</p> <p>&nbsp;</p> <p>The cardinal principle of registration of title is a certificate of title is conclusive evidence of title. Section 59 of the Registration of Titles Act, Cap 230 provides,</p> <p>&nbsp;</p> <p>“<em><strong>No certificate of title issued upon an application to bring land under this Act shall be impeached or defeasible by reason or on account of any information or irregularity in the application or in the proceedings previous to the registration of the certificate, and every certificate issued under this Act shall be received in all Courts as evidence of the particulars set forth in the certificate and of entry of the certificate in the Register Book, and shall be conclusive evidence that the person named in the certificate as the proprietor 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 that estate or interest or has that power.”</strong></em></p> <p>&nbsp;</p> <p>&nbsp;</p> <p>It is also well settled that a certificate of title is only indefeasible in a few instances which are listed in Section 176 of the Registration of Titles Act. The section protects a registered proprietor against ejectment except in cases of fraud, among others.</p> <p>&nbsp;</p> <p>In the present case, the respondent transferred his titles to Sulait Jaggwe allegedly as security for loans. The respondent did not execute a legal mortgage or an equitable mortgage by deposit of title deeds, which are the normal methods of securing loans by real property. Instead he signed sale agreements and blank transfers to Jaggwe who immediately obtained certificates of registration for the two properties.</p> <p>&nbsp;</p> <p>The respondent can only impeach the title of Jaggwe on ground of fraud. Unfortunately the respondent did not plead or prove fraud which must be strictly proved. For the same reason I do not find any merit in the argument that the suit’s property was sold to a company but was transferred and registered in the name of Jaggwe, since it was not proved that the registration was obtain by fraud. The fact that the appellants were the lawful administrators of the estate of the late Jaggwe was not disputed.</p> <p>&nbsp;</p> <p>In these circumstances I do not see how the certificates of title held by the appellants can be impeached. The respondent admitted receiving various amounts of money from Jaggwe in consideration for the transfer of the properties. I do not know what kind of consideration was needed to complete the transfer transaction. In any case this fact was not pleaded in the defence or counter claim. On the contrary the defendant admitted receiving at least Shs.560,000/=, in respect of the transfer of Plot 655.</p> <p>&nbsp;</p> <p>In my view, therefore, the Court of Appeal erred in holding that there was no consideration proved for the transfer of the properties, and that this amounted to a circumstance which could be sufficient to impeach the title of the appellants.</p> <p>&nbsp;</p> <p>The issue of the applicability of the Money Lenders Act to the transaction in this case was not raised in the two lower Courts, but we asked both counsel to address us on it. The respondent alleged that the late Sulaiti Jaggwe was carrying out the business of money lending which was denied by the appellants. There was no evidence to show that Jaggwe had a money lenders licence. The burden was on the respondent to prove this fact. He failed to do so. Secondly, if the transactions between Jaggwe and the respondent were money lending transactions, they were, in my view, exempted from the operation of the Money Lenders Act by Section 21(1) (c) of the Act, on the ground that they involved security of real property and were therefore in the nature of legal or equitable mortgages, which would be governed by the Registration of Titles Act and the Mortgage Act. The respondent would, in that case, have appropriate remedies under those Acts. For these reasons, I do not find the Money Lenders Act applicable to this case, not to affect the result I have reached.</p> <p>&nbsp;</p> <p>I therefore agree with Tsekooko JSC that this appeal should be allowed. I concur in the orders he has proposed.</p> <p>&nbsp;</p> <p>As Karokora JSC also agrees, with the Judgment of Tsekooko JSC, this appeal is allowed with orders as proposed by Tsekooko JSC.</p> <p>&nbsp;</p> <p>Dated at Mengo this 17th day of January 2005</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>B J Odoki</p> <p><strong>CHIEF JUSTICE</strong></p> <p><strong>THE REPUBLIC OF UGANDA</strong></p> <p>&nbsp;</p> <p><strong>IN THE SUPREME COURT OF UGANDA</strong></p> <p><strong>AT MENGO</strong></p> <p><strong>(CORAM: ODOKI, CJ, ODER, TSEKOOKO, KAROKORA AND KANYEIHAMBA, JJ.SC)</strong></p> <p>&nbsp;</p> <p><strong>CIVIL APPEAL NO. 4 OF 2005</strong></p> <p>&nbsp;</p> <p><strong>BETWEEN</strong></p> <p>&nbsp;</p> <p><strong>1. KASIFA NAMUSISI }</strong></p> <p><strong>2. AMINA NABANKEMA} ::::::::::::::::::::::::::: APPELLANTS</strong></p> <p><strong>3. ABDUL WAKAALO }</strong></p> <p>&nbsp;</p> <p><strong>AND</strong></p> <p>&nbsp;</p> <p><strong>M K NTABAZI :::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT</strong></p> <p>&nbsp;</p> <p><em><strong>(Appeal from the judgment and orders of the Court of Appeal of Uganda at Kampala (Engwau, Kitumba and Byamugisha, JJ.A) dated September 2004 in Civil Appeal No. 63 of 2001).</strong></em></p> <p>&nbsp;</p> <p>&nbsp;</p> <h1><u>JUDGMENT OF ODER, J.S.C</u></h1> <p>&nbsp;</p> <p>I have had the benefit of reading in draft the judgment prepared by my learned brother, Kanyeihamba, JSC, I agree with him that the appeal should be dismissed with no order for costs.</p> <p>&nbsp;</p> <p>Dated at Mengo this 17<sup>th</sup> day of January 2006</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>………………………………….</p> <h3>A.H.O. Oder</h3> <h2>JUSTICE OF THE SUPREME COURT.</h2> <h1>THE REPUBLIC OF UGANDA</h1> <p><em><strong>IN THE SUPREME COURT OF UGANDA</strong></em></p> <h2>AT MENGO</h2> <p>&nbsp;</p> <p><em><strong>(CORAM: ODOKI, CJ., ODER, TSEKOOKO, KAROKORA</strong></em></p> <p><em><strong>AND KANYEIHAMBA, JJ.SC.)</strong></em></p> <p>&nbsp;</p> <p><em><strong>CIVIL APPEAL NO. 04 OF 2005</strong></em></p> <h2>B E T W E E N</h2> <p>&nbsp;</p> <ol> <li> <p><em><strong>KASIFA NAMUSISI }</strong></em></p> </li> <li> <p><em><strong>AMINA NABANKEMA } :::::::::: :::::::::: APPELLANTS</strong></em></p> </li> <li> <p><em><strong>ABDALLA WAKAALO }</strong></em></p> </li> </ol> <p>&nbsp;</p> <p><em><strong>A N D</strong></em></p> <p>&nbsp;</p> <p><em><strong>FRANCIS M. K. NTABAAZI: :::::::::: :::::::::: RESPONDENT</strong></em></p> <p>&nbsp;</p> <p><strong><em>{Appeal from the decision of the Court of Appeal at Kampala (Engwau, Kitumba and Byamugisha, JJ, A) dated 16<sup>th</sup> September 2004, in Civil Appeal No. 63 of 2001}</em></strong></p> <p>&nbsp;</p> <p>&nbsp;</p> <p><em><strong>JUDGMENT OF KAROKORA, JSC:</strong></em></p> <p>&nbsp;</p> <p>I have had the benefit of reading in draft the judgment prepared by my learned brother, the Hon. Justice Tsekooko, JSC and I agree with him that the appeal should be allowed with costs here and in the courts below. I, however, wish to briefly add my comments arising from the facts as brought out in paragraph 4 of the amended plaint in which the plaintiffs sought an order directing the defendant/respondent from wrongfully claiming ownership of the premises comprised in Kibuga Block 16 Plots 654, 655 and 692, Ndeeba and for removal of caveats lodged thereon and for refund of Shs. 480,000= as money had and received by the defendant in respect of the premises for the months of October 1987 to October 1988 and mesne profits.</p> <p>The defendant/respondent denied that he could not sell the suit property at such a low price.</p> <p>&nbsp;</p> <p>The facts of the case are set out in the judgment of Tsekooko, JSC and therefore, I do not need to repeat them.</p> <p>&nbsp;</p> <p>There was overwhelming evidence which the learned trial judge considered after a long protracted hearing and concluded that Kibuga, Block 16, Plots 654, 692 and 655, Ndeeba were sold by the respondent and transferred and registered in the names of the late Sulaiti Jjaggwe and thereafter later transferred to the appellants, the administrators of the Estate of Sulaiti Jjaggwe.</p> <p>The learned trial judge after finding that the title deeds in respect of Kibuga Block 16 Plots 692, 654 and 655 had been tendered in evidence without any objection from the defence and in view of the admission in the WSD and in the counterclaim that he had transferred the said plots to Sulaiti Jjaggwe, held that the respondent was estopped from retracting his earlier admission that he had transferred the suit properties to the late Sulaiti Jjaggwe. The learned trial judge concluded that after the respondent had transferred the suit properties in the names of Saluiti Jjaggwe and after the suit land was registered in the names of the late Sulaiti Jjaggwe and the deceased was issued with title deeds of ownership, the certificates were, according to old section 56 of RTA, conclusive evidence of ownership. The learned trial judge made his conclusion after he had rejected the respondent’s evidence to the effect that Exh. P1 and P2 were not loan agreements but sale agreements, the respondent having signed transfer forms and the sale agreements. He held that by the above respondent’s conduct, he had surrendered the certificates of title of the suit land to the deceased.</p> <p>&nbsp;</p> <p>The respondent appealed to the Court of Appeal which reversed the decision of the trial judge mainly on the ground that there was no consideration at all and that therefore, there were no valid sales of the suit properties.</p> <p>&nbsp;</p> <p>It must be noted that in his pleadings the respondent never pleaded in his WSD that there was no consideration paid by the deceased, Sulaiti Jjaggwe nor did he raise absence of consideration in his counterclaim. In fact the respondent admitted in his WSD and in his oral evidence that the deceased paid Shs. 1,150,000= and Shs. 160,000= in respect of the purchase of Plots 654 and 692. He further admitted payment by the deceased of Shs. 560,000= in respect of Plot 655.</p> <p>However, the respondent stated in para 5 of his WSD that he could not have sold his properties at such low price if it was in fact a sale. This was the nearest plea by the respondent on the issue of consideration, which plea goes to sufficiency or adequacy of consideration which the courts are not concerned with. His Lordship Justice Tsekooko, JSC, has ably discussed the law dealing with doctrines of consideration and adequacy or sufficiency of consideration in the law of contract in his lead judgment. I agree with him and would have nothing useful to add to what he stated and the authorities he has cited.</p> <p>&nbsp;</p> <p>On the issue of transfer of the suit properties, the respondent stated in his WSD and in his counterclaim that he signed Instruments of transfer of the suit properties and that thereafter the transfers were effected, registering the properties in the names of Sulaiti Jjaggwe. What is clear is that no fraud was raised in the WSD or in the counterclaim regarding the transfer of the suit properties. In the result, I would agree with the conclusion of the learned trial judge that the certificates of the title in respect of the suit properties were conclusive evidence of the title to the deceased from whom the appellants derived the titles as administrators of the estate of the deceased, Sulaiti Jjaggwe.</p> <p>&nbsp;</p> <p>Clearly, the certificate of titles to the suit properties are under section 59 of the Registration of Titles (RTA) conclusive evidence of the appellants’ ownership of the suit properties.</p> <p>Section 59 of the RTA provides that:</p> <p>&nbsp;</p> <p>“No certificate of title issued upon an application to bring land under this Act shall be impeached or defensible by reason or on account of any informality or irregularity in the application or 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 that estate or interest or has that power.”</p> <p>&nbsp;</p> <p>Consequently once the properties were duly transferred and registered in the names of Sulaiti Jjaggwe through whom the appellants are claiming, as administrators of the estate of Sulaiti Jjaggwe, then the onus was on the respondent to prove that the transfer/registration of the deceased Sulaiti Jjaggwe was through fraud, which fraud was never pleaded in the WSD or in the counterclaim or that there was no consideration. I must reiterate that no fraud was pleaded and proved. In the result, fraud does not arise. Further, as I have already stated in the course of this judgment, the respondent admitted in his WSD and in his oral evidence that the deceased Sulaiti Jjaggwe made some payments in respect of Plots 654, 692 and 655. In my view, if there was no full payment of the agreed purchase price, the remedy was to sue for the balance of the purchase price in accordance with the provisions of the sale agreements Exh. P1 and P2, but not to rescind the sale agreement when the vendor had already transferred the title deeds of the suit properties into the names of the buyer, Sulaiti Jjaggwe. Consequently, Sulaiti Jjaggwe’s titles to suit properties are indefeasible as no fraud was pleaded and proved against Sulaiti Jjaggwe in the manner he got the titles.</p> <p>&nbsp;</p> <p>Lastly, on the issue of whether the transaction between the respondent and the late Sulaiti Jjaggwe was governed by the Money Lenders Act which never featured before the trial court, Court of Appeal or in the Memorandum of Appeal to this Court, I find this issue to be an afterthought; because it never appeared in the Sale Agreements Exh. P1 and P2 and was never raised in the pleadings ie. in the WSD, counterclaim, evidence of the respondent or even in the submission before the learned trial judge or before the Justices of Appeal and as a result, neither the learned trial judge nor the Justices of Appeal made a decision on it. This issue was never part of the grounds in the Memorandum of Appeal before the Supreme Court. It came belatedly in written submission at the request of this Court.</p> <p>&nbsp;</p> <p>Be that as it may, Money Lenders Act would not apply to this transaction as it was never raised in the pleadings before the trial judge and no evidence was led to show that the transaction was a loan governed by the Money Lenders Act. In fact the transaction was governed by sale agreements Exh. P1 and P2 between the respondent and the deceased, Sulaiti Jjaggwe, through whom the appellants are claiming. Clearly the transaction between the parties in this case was not governed by the Money Lenders Act.</p> <p>Consequently, I would agree with the conclusion of Hon. Justice Tsekooko, JSC. That the appeal should be allowed with costs here and in the courts below.</p> <p>&nbsp;</p> <p>Dated this: 17<sup>th</sup> day of: January 2006.</p> <p>&nbsp;</p> <p>&nbsp;</p> <ol> <li> <p>N. KAROKORA</p> </li> </ol> <p>JUSTICE OF THE SUPREME COURT</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><strong>THE REPUBLIC OF UGANDA</strong></p> <p><strong>IN THE SUPREME COURT </strong></p> <p><strong>AT MENGO</strong></p> <p><strong>(CORAM: ODOKI C.J, ODER, TSEKOOKO, KAROKORA, KANYEIHAMBA, J.J.S.C)</strong></p> <p>&nbsp;</p> <p><strong>CIVIL APPEAL NO. 04 OF 2005</strong></p> <p>&nbsp;</p> <p><strong>BETWEEN</strong></p> <p><img src="1.1.gif" /></p> <p><strong>KASIFA NAMUSISI</strong></p> <p><strong>AMINA NABANKEMA ============ APPELLANTS</strong></p> <p><strong>ABDALI WAKAALO</strong></p> <p>&nbsp;</p> <p><strong>AND</strong></p> <p>&nbsp;</p> <p><strong>FRANCIS M. K. NTABAZI ============ RESPONDENT</strong></p> <p>&nbsp;</p> <p><em>[An appeal from the Judgment and decision of the Court of Appeal (Engwau, Kitumba, Byamugisha, J.J.A) dated 16<sup>th</sup> September 2004 in Civil Appeal No. 63 of 2001]</em></p> <p>&nbsp;</p> <p>&nbsp;</p> <p><u><strong>JUDGMENT OF KANYEIHAMBA, J.S.C</strong></u></p> <p>&nbsp;</p> <p>I have had the benefit of reading in draft the lead judgment of my learned brother, Tsekooko, J.S.C, and I find myself in a position where my own findings on some issues differ from his. I will therefore dissent from the majority of my colleagues on this appeal.</p> <p>&nbsp;</p> <p>This case has had a long and chequered history. This is its background. The appellants are the administrators of the estate of the late Sulaiti Jaggwe. Letters of administration were granted to them by the High Court as long ago as in 1997. There is no clear evidence of the date and month in which those letters were granted.</p> <p>&nbsp;</p> <p>Be that as it may, the case for the appellants is that on 13<sup>th</sup> November, 1980, the respondent sold his land, comprised in Kibuga Block 16 Plots 654 and 692 at Ndeeba, to a company called M/s Uganda Hardworking Company. A sale agreement (Exb P1) was allegedly signed between the respondent and the Late Sulaiti Jaggwe who was managing director of the company. The alleged purchase price was Shs. 4,500,000. A deposit of Shs. 160,000 was said to have been paid by Grindlays (now Stanbic) Bank through cheque No. 433880. Apparently, the agreement omitted to provide a date on which the balance of the purchase price was to be paid or when the transfer of the suit property into the names of the purchaser would be effected.</p> <p>&nbsp;</p> <p>On the 8<sup>th</sup>, May, 1981, the respondent is alleged to have entered into another agreement of sale with the same Late Sulait Jagwe. This time the subject matter of the sale was Kibuga Block 16 Plot 655 situated at Ndeeba. It is alleged that M/s Musala &amp; Co. Advocates drew the agreement of sale <strong>(Exb P.2)</strong>. The purchase price for this latest acquisition was Shs. 940,000. A deposit of Shs 560,000/= is stated to have been paid by a cash cheque No. 458355, dated 5<sup>th</sup> May, 1981. This time the sale agreement apparently provided the manner and dates by which the balance was to be paid. It was to be satisfied by payment in two instalments, the first of which was for Shs. 180,000 by cheque No. 458357 dated 5/06/1981 and the second by cheque No. 458358 dated 05/07/1981. The other terms of the agreement were that the vendor had already handed over the house or houses together with the keys to the purchaser on the date of signing the agreement.</p> <p>&nbsp;</p> <p>According to the evidence given by the appellants, the certificates of title to the suit property had been held by Barclays Bank as security for a loan which were later collected by the vendor. According to the land titles that were exhibited in court, the first property, the subject matter of the alleged first sale, was transferred into the names of the late Sulaiti Jaggwe on the 27<sup>th</sup> November, 1980, at 8:50 a.m. by means of Instruments No. Kla 96589 and 96590, respectively.</p> <p>&nbsp;</p> <p>The second property, the subject matter of the alleged second sale was transferred into the names of the late Sulaiti Jaggwe on 8<sup>th</sup>, May, 1981. The latter transfer was apparently witnessed by the Late Musaala whose stamp was embossed on the sale agreement. It is the contention of the appellants that after the completion of the payment of the purchase prices, the three properties were transferred into the names of the late Sulaiti Jaggwe.</p> <p>According to the testimony of one Hajjati Fatuma Namusoke (PW1), one of the widows of the late Sulaiti Jaggwe, she and her late husband moved into one of the purchased houses. However, shortly after they moved into the house, her husband was arrested and, following that arrest, Fatuma Namusoke vacated the same house. It appears that following his arrest, Sulaiti Jaggwe disappeared and has never been seen again. Following the disappearance of Jaggwe, Kasifa Namusisi, the first appellant in this appeal appears to have obtained a management order and later, letters of administration in relation to the estate of Sulaiti Jaggwe. After the grant of the letters of administration, the suit property was transferred into the names of the appellants as joint administrators of the estate of Sulaiti Jaggwe. In 1986, the respondent commenced claims of ownership of the suit property. It was for the purposes of stopping the respondent from making those claims of ownership that the appellants filed a suit in the High Court from which this appeal originates.</p> <p>&nbsp;</p> <p>In his statement of defence in the High Court, the respondent contended that Sulaiti Jaggwe was a money lender who told the respondent that in order for Jagwe to render the respondent financial assistance, he, the respondent had to transfer his property, the suit property, into the names of Sulaiti Jaggwe, presumably by way of security for the moneys he would be receiving from time to time from Jagwe. The respondent stated that the payments on Jaggwe’s account No. 297-664 at Grindlays bank were simply installment repayments to clear the loan and should not be seen in any way as recognition of sale to Sulait Jagwe. The respondent further contended in the statement of defence and counter claim that he continued to collect rent from tenants of the suit property notwithstanding the purported transfer of the same property to Sulaiti Jaggwe.</p> <p>&nbsp;</p> <p>In his counter claim, the respondent averred that the purported transfer to Sulaiti Jaggwe was intended to be a deposit of security to enable Jagwe to give him bank facilities and it was not evidence of an outright sale. He prayed court to order the appellants who were the plaintiffs in the High Court to transfer the suit properties back into his names.</p> <p>&nbsp;</p> <p>At the trial, five issues were framed for determination. They were:</p> <ol> <li> <p><em>Whether the defendant sold the suit property to the plaintiff’s husband and whether the full purchase price was paid.</em></p> </li> <li> <p><em>Whether the land was transferred to the deceased as security for a loan.</em></p> </li> <li> <p><em>Whether the defendant lawfully lodged a caveat on the titles of the suit property.</em></p> </li> <li> <p><em>Whether the defendant lawfully collected rents from tenants after the transfer in 1986, and</em></p> </li> <li> <p><em>Whether the plaintiffs are entitled to rent and mense profits in the plaint.</em></p> </li> </ol> <p>&nbsp;</p> <p>After hearing and evaluating the evidence, the learned trial judge found in favour of the appellants. The present respondent appealed to the Court of Appeal which allowed the appeal. Hence this appeal.</p> <p>&nbsp;</p> <p>The memorandum of appeal to this court contains four grounds framed as follows:-</p> <ol> <li> <p><em>The learned Justice and Lady Justices of Appeal erred in law and fact in that they</em></p> <ol> <li> <p><em>misdirected themselves on the legal nature of consideration; and</em></p> </li> <li> <p><em>failed to subject the evidence adduced at the trial to a fresh and exhaustive scrutiny, thereby coming to a wrong conclusion that the suit agreements were not supported by any consideration and wrongly accepting the respondent’s ‘version’.</em></p> </li> </ol> </li> <li> <p><em>The learned Justice and Lady Justices of Appeal erred in law and fact, in that they wrongly imposed the burden of proof of</em> <em>ownership of the suit property on the appellants. Alternatively, their Lordships wrongly failed to find that the burden of proof of ownership of the suit properties had been duly discharged by the appellants, and wrongly held that the appellants were not entitled to the suit property.</em></p> </li> <li> <p><em>The learned Justice and Lady Justices of Appeal erred in law and fact, in that they wrongly went behind the fact of registration of the appellants’ title, thereby wrongly ordering cancellation of the appellants’ title and consequent restoration of the respondent’s name as proprietor of the suit properties.</em></p> </li> <li> <p><em>The learned Justice and Lady Justices of Appeal erred in law and fact when they altered ground 1 of the appeal before them suo motu after the hearing of the appeal had been closed, thereby denying the appellants a hearing on the altered ground.</em></p> </li> </ol> <p>&nbsp;</p> <p>The appellants prayed for several orders including a declaration that they were entitled to the suit property and consequential orders to such declaration.</p> <p>&nbsp;</p> <p>Messrs Tibaijuka &amp; Co. Advocates, counsel for the appellants filed written submissions under Rule 93 of the Rules of this Court on 10<sup>th</sup>, March, 2005, and in reply, Messrs Nyanzi, Kiboneka and Mbabazi Advocates, did likewise.</p> <p>&nbsp;</p> <p>In their written submissions, counsel for the appellants first dealt with ground 1 of the appeal; counsel contended that the Justices of Appeal misdirected themselves when they held that the onus of proving that the purchase price mentioned in the sale agreement was actually paid and received by the appellant who is the respondent in this appeal. Counsel further contended that the Court of Appeal erred in holding that the sale agreements relating to the suit property were not supported by any consideration. In counsel’s opinion, by their reasoning, the Justices of Appeal were equating consideration with execution of the sale agreement.</p> <p>&nbsp;</p> <p>Counsel for the appellants contended that in this case, consideration was clearly disclosed on the face of the sale agreements. They submitted that it is incredible that the respondent having on the one hand, claimed to have transferred his first property as security for loans totalling Shs. 4,500,000 but having failed to receive the full amount, should subsequently willingly stake more of his land for another Shs. 940,000. Counsel cited a number of authorities including <strong><em>G.M. Combined (U) Ltd Vs A. K. Detergent Ltd and Others; (1999) E.A. 84, The Evidence Act, (Cap. 6), Biteremo Vs Damascus Munyanda, S.C.C.A. No. 15 of 1991, Bogere Moses &amp; Anor Vs Uganda, SC Criminal Appeal No. 1 of 1997, Joseph Mulula Vs Sylvano Katama, S.C.C.A No. 3 of 1999</em></strong>, in support of their written submissions.</p> <p>&nbsp;</p> <p>Messrs Nyanzi, Kiboneka and Mbabazi in their written submissions in support of the respondent’s case, denied that there was ever any land sale agreement between the parties, or any consideration given for the transfer of the suit property.</p> <p>&nbsp;</p> <p>Counsel for the respondent contended that the only relationship that was created and which existed between Sulaiti Jaggwe and the respondent was one of a money lender and borrower. Counsel further contended that the only arrangements made between the parties were such that the late Sulaiti Jaggwe would lend certain sums of money to the respondent provided the latter deposited certain titles of his land with the deceased. Apparently, the arrangements also meant that once the respondent had repaid the loans, presumably with interest thereon, the deceased or his successors in title would return the suit property to the respondent.</p> <p>&nbsp;</p> <p>Counsel further contended that it was incumbent upon the appellants to prove and adduce evidence showing that the purchase price was paid and in counsel’s opinion, they failed to do so in this particular case. Finally on this ground, counsel for the respondent submitted that the reason why the purported sale agreements were not supported by any consideration was because they were, in reality not land sale agreements but instruments for deposit of security to obtain loans from Sulaiti Jaggwe and his company.</p> <p>&nbsp;</p> <p>Counsel contended that the process of transfer of land which the learned trial judge rejected in his judgment was material in reaching a just decision which the Court of Appeal correctly did. Counsel cited the cases of <strong><em>Hajji Musa Sebirumbi Vs Uganda, Criminal Appeal No. 10 of 1989 (S.C.), General Industries Ltd Vs Npart, S.C.C.A No. 5 of 1998, Re Duke of Malborough, Davis Vs Whitehead, (1894) 2 CH 133</em></strong> and the <strong><em>Evidence Act</em></strong> in support of their submissions.</p> <p>I will now consider the issues raised in this appeal. In their detailed and lengthy written submissions, both counsel concentrate on such issues as the intention of parties, general principles of contract, such as consideration and execution, evidence and burden of proof in legal proceedings. In my opinion, there is failure on the part of counsel to appreciate that the suit property became the subject of an entirely different law, namely, the Moneylenders Act, Cap.273 and this appeal succeeds or fails on the basis of whether or not the provisions of that Act were complied with. In my view, both the decisions of the trial court and of the Court of Appeal are decisions <em>per incurium</em>. However, the perusal of the record of proceedings, Counsel’s written submissions and their subsequent arguments requested by this court on the application of the Moneylenders Act, raise other matters which this court must resolve. They may be summarized as follows:</p> <p>&nbsp;</p> <ol> <li> <p><em>The purported sale of the first group of properties were to Uganda Hardworking Transport and Trading Company Ltd, of P.O Box Kibuye, Kampala, yet the purported transfers were to the late Sulaiti Jaggwe. </em></p> </li> </ol> <p>&nbsp;</p> <ol start="2"> <li> <p><em>The objects of the company did not allow it to purchase land but they allowed it to lend and borrow money. </em></p> </li> </ol> <p>&nbsp;</p> <ol start="3"> <li> <p><em>The agreement which was between the company and the respondent indicates that;</em></p> </li> </ol> <p>“<em>(a)the vendor referred to above has handed over the said building/house to the purchaser together with all the keys to be the property of the purchaser from the date of signing this agreement of sale.</em></p> <p>&nbsp;</p> <ol start="2"> <li> <p><em>that the titles certificates of the said land were deposited with the above company for a loan and shall be handed over to the purchaser as soon as payment for the loan has been made by the purchaser”.</em></p> </li> </ol> <p>&nbsp;</p> <p>Both statements cannot be correct. This court must reconcile them. (See Exhib. ‘A’ on P.234 and Exhib ‘D1’ on p.277 in the record of proceedings).</p> <p>&nbsp;</p> <ol start="4"> <li> <p><em>There is clear evidence that the late Sulaiti Jaggwe and the company were actually in the business of money-lending.</em></p> </li> </ol> <p>&nbsp;</p> <ol start="5"> <li> <p><em>The agreement on some other property between the parties shows that the land and concrete blocks and buildings on it consisting of 8 rooms and 2 bathrooms together with the boys’ quarters of 2 rooms, 4 stores and 2 baths were being purchased for less than one million shillings of which shillings 380,000 was still unpaid. <u>Yet</u>, the agreement proceeds to provide that notwithstanding the balance, the vendor was happy to hand over the said property together with all the keys to the purchaser and that such handover (of physical premises) automatically and effectively transfers the land certificate to the purchaser even though those certificates were still at Barclays Bank as security for the loan. This needs to be resolved.</em></p> </li> </ol> <p>&nbsp;</p> <ol start="6"> <li> <p><em>The appellants are the administrators of the estate of the late Sulaiti Jaggwe, their locus to represent the directors of the car-dealer company, which actually purportedly bought the property needs to be established</em>.</p> </li> </ol> <p>&nbsp;</p> <p>On ground 1, I find the evidence of payment of a consideration for the sale of three valuable city properties to be unclearly stated. The amounts shown as consideration are grossly inadequate even by the property evaluations of the 1980<sup>s</sup>. They are however, compatible with moneys lent on the basis of land titles being given in as security for the loans. I agree with Byamugisha, J.A; the learned Justice who gave the lead judgment in the Court of Appeal when she observes that;</p> <p>“<em><strong>Most importantly, the consideration that was stated in both instruments was less than what the witness had claimed was paid for the suit properties.”</strong></em></p> <p>&nbsp;</p> <p>Incidentally, no transfer titles were produced in court. The appellants only produced transfer forms, all of which do not comply with section 92 of the <strong>Registration of Titles Act (Cap. 230).</strong> In my opinion, where it is shown that the purchase price is grossly inadequate as in this case, and it is alleged that the transaction was actually not a sale of land but a moneylending transaction, the court is put on notice and must enquire and resolve the matter. In this case, the appellants on one hand plead that their predecessor, Sulaiti Jaggwe was not in the business of moneylending but was a purchaser of land. The record of proceedings and the respondent on the other, show that in fact both Sulaiti Jaggwe and the company of which he was chairman were actually in the business of moneylending governed by the provisions of the Moneylenders Act <em>(Supra)</em>. The evidence further shows that the land titles of the suit property were actually deposited for the purposes of a loan. I would therefore hold that the purported consideration for the sale of the suit property was grossly inadequate but may easily be explained if the money was a loan. I am persuaded by the respondent’s submissions that the money had been advanced as a loan. For these reasons, I would dismiss ground 1 of the appeal.</p> <p>&nbsp;</p> <p>I now turn to ground 2. The memorandum and articles of association of the Uganda Hardworking Transport and Trading Company Limited under which the appellants claim title contained an omnibus list of objects for which it was formed. Although the company appears to have been founded mainly for motor transport, its (<strong>z)</strong> article provides:</p> <p>“<em><strong>To advance, deposit or lend moneys, securities and property to or with such persons and particularly the customers of the company on such terms as may seem expedient and to draw, make, accept, endorse, discount, execute and issue cheques, promissory notes, bills of exchange, bills of lending, warrants, debentures and other negotiable instruments.”</strong></em></p> <p>There is no evidence that Mr. Jaggwe or the other directors of the company to which the transfers of the suit property titles should have been made or the company itself were licensed Moneylenders. Nor did they obtain a Moneylenders’ licence as required by section 2 of the Act. During the trial, no attempt was made to establish whether or not the deceased or the company had a moneylender’s licence as required by the Moneylenders Act.</p> <p>&nbsp;</p> <p>Nevertheless, on 13<sup>th</sup> November 1980, Mr. Jaggwe as managing director of the Uganda Hardworking Transport and Trading Company Limited and Dr. F.M.K. Ntabazi, the respondent and owner of the suit property signed an agreement purported to be a sale agreement of the suit property but which in reality was a loan agreement with the suit property as security. This fact is borne out by what are described in that agreement as <strong>other terms;</strong> where it was further provided as follows:</p> <ol start="2"> <li> <p><em><strong>That the title certificates of the said land were deposited with the above mentioned company for loan and shall be handed over to the purchaser as soon as payment for loan has been made by the purchaser as per para (b) payment hereof.</strong></em></p> </li> </ol> <ol start="4"> <li> <p><em><strong>That in default of either party to comply with the terms and conditions as stated hereinabove, such default shall be referred to court of law.</strong></em></p> </li> </ol> <p>Evidently, there was no resort to court before the purported transfers of the suit property.</p> <p>&nbsp;</p> <p>In order to show that Sulaiti Jaggwe was a “moneylender”, the respondent produced another document in Luganda and translated in English, marked <strong>exhibit D1</strong>. The document was not successfully challenged in the courts below. That document contained a loan agreement. It showed that on the 17<sup>th</sup> November, 1996, a Mr. Samuel.K. Ntege and Mr. Sulaiti Jaggwe entered into a similar agreement which was witnessed by J.F. Kityo Advocates and provided as follows:</p> <p>“<em><strong>I Samuel K. Ntege has agreed with Mr. Sulaiti Jaggwe to borrow money amount to 100,000/= using his Bank account No. 297-664 (G.R. Bank). He has given me the said sum and he has proceeded ahead to process this loan. I Samuel K. Ntege, has transferred Land Block 11 Plot 349, with a house on it into the names of Sulaiti Jaggwe. Mr. Sulaiti Jaggwe has also agreed to retransfer the Land Block 11 Plot 349 together with the house into the names of Samuel K. Ntege after this money has been paid back to him so that he deposits it into the Bank after one year.”</strong></em></p> <p>It is thus clear that Sulaiti Jaggwe was in the practice of lending money against land titles as security on the basis that if the borrowers repaid the loans their property would be returned. In any event, even if there had been a court action and transfers of the suit property, all would have been in vain because of the apparent failure to comply with the provisions of the Moneylenders Act. Section 2 of that Act provides that;</p> <p>“<em><strong>If any person</strong></em></p> <ol> <li> <p><em><strong>---------</strong></em></p> </li> <li> <p><em><strong>carries on business as a moneylender without having in force a proper moneylenders’ licence authorizing him or her so to do, or being licensed as a moneylender, carries on business as such in any name other than his or her authorised name, or at any place other than his or her authorised address or addresses or</strong></em></p> </li> <li> <p><em><strong>enters into any agreement in the course of his or her business as a Moneylender with respect to the advance or repayment of money, or takes any security for money in the course of his or her business as a Moneylender, otherwise, their in his or her authorised name, he or she contravenes this Act and for each offence, is liable on conviction to a penalty.”</strong></em></p> </li> </ol> <p>&nbsp;</p> <p>Section 18 of the same Act prohibits certain transactions by providing that:</p> <p>“<em><strong>Any agreement between a moneylender and a borrower or intending borrower to the moneylender of any sum on account of costs, charges or expenses incidental to or relating to the negotiations for or the granting of the loan or proposed loan shall be illegal.”</strong></em></p> <p>Thus, the transaction between the parties was illegal and void.</p> <p>&nbsp;</p> <p>Although there appears to have been no evidence adduced to prove one way or the other that Sulaiti Jaggwe was a moneylender, the appellants cannot benefit by that omission because the case is dependent on their claim that the respondent sold the suit property to Sulaiti Jaggwe. Thus in their plaint in the High Court they asserted that <strong><em>“5-the cause of action arose on the 13/11/1980, when the defendant sold land comprised in Kibuga Block 16 Plots 654 and 692 Ndeeba, and on the 6/5/1981, sold land comprised in Kibuga Block 16 Plot 655 Ndeeba, to the late Sulaiti Jaggwe, as per copies of agreements of sale attached hereto and marked Annextures A and B. That after the said sale, the defendant signed transfers in favour of the said deceased, who became registered proprietor thereof, as per attached copies of certificates of title marked Annextures C, D and E.” </em></strong>it should be recalled however that it is the same agreement that contains the <strong>“other terms”</strong> of the agreement <em>(supra). </em>In my opinion therefore, ground 2 of this appeal ought to fail.</p> <p>&nbsp;</p> <p>On ground 3, Counsel for the appellants made submissions on the exemptions permitted by the Moneylenders Act, section 21 of Cap. 273 Law of the Republic of Uganda, Rev. Ed. 2000, which reads as follows:</p> <p><em>(1) This Act shall not apply -</em></p> <p><em>(a) to any moneylending transaction where the security for repayment of the loan and interest on the loan is effected by execution of a chattels transfer in which the interest provided for is not in excess of 9 percent per year;</em></p> <p><em>(b) to any transaction where a bill of exchange is discounted at a rate of interest not exceeding 9 percent per year;</em></p> <p><em>(c) to any moneylending transaction where the security for repayment of the loan and interest on the loan is effected by execution of a legal or equitable mortgage upon immovable property or of a charge upon immovable property or of any bona fide transaction of moneylending upon such mortgage or charge.</em></p> <p>&nbsp;</p> <p><em>(2) The exemption provided for in this section shall apply whether the transactions referred to are effected by a moneylender or not.</em></p> <p>&nbsp;</p> <p><em>(3) Any person who lends money only by means of the type of transactions set out in subsection (1) and by means of no other type of transaction shall be deemed not to be a moneylender for the purpose of this Act.</em></p> <p>&nbsp;</p> <p>Section 21 of the Act is a saving clause. The term saving has diverse meanings but in law it may mean a provision which continues in force the repealed law as to existing rights. In this case, the relevant provision is paragraph (c) of sub-section 1. In my opinion, this paragraph does not save the transaction in this case which the appellants claim were not intended to effect execution of a legal or equitable mortgage upon immovable property or a charge or a <em>bona fide</em> transaction of moneylending upon such mortgage or charge, but a straight forward execution of a land sale agreement. It follows therefore that this case does not fall within the exceptions in the Moneylenders Act.</p> <p>&nbsp;</p> <p>Counsel for the appellants cited a number of authorities including cases of <strong>Coast Brick Tile Vs. P. Raichand (1966) E.A.154, S.N.Shah Vs. C.M.Patel (1961) E.A.397, Buganda Timber Co. Ltd Vs. Mulji Kankji Metha (1961) E.A.477 and D.Jakana Vs. C.Senkaali (HCCS No. 491 of 1984) (1988 – 1990) HCB 167,</strong> which he claimed fall within the exceptions. In my opinion, these authorities are distinguishable from the present case. In the first instance, the appropriate parties in the cases cited were licensed moneylenders who nevertheless breached the statute in areas permitted by the exceptions referred to earlier on. Secondly, they had secured their interests with charges on the land which the present appellants deny was the case with their predecessor in title. Thus, in the case of <strong>Coast Brick Tile</strong> <em>(supra)</em>, the decision recognized that the respondent was a licensed moneylender. Ground 3 therefore fails.</p> <p>&nbsp;</p> <p>In my opinion, the disposal of grounds 1,2 and 3, disposes of the whole appeal.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>It is unfortunate that neither party addressed this court on the exact sums of money paid and repaid by the parties in relation to the loan transactions involving the suit property. It was not disclosed to the courts whether or not the deceased moneylender, Sulaiti Jaggwe or the company had a moneylender’s licence, for the court to be able to order that the respondent should be liable to repay the balance on the loans with interest. There is no evidence on record as to what happened to the rest of the shareholders and directors of Uganda Hardworking Company or their successors in title.</p> <p>&nbsp;</p> <p>I note however, that since the eviction of the respondent from the suit property in 1987 or thereabouts, the appellants should have reoccupied the premises and collected rent. I am inclined to agree with Byamugisha J.A in her lead judgment when she observes that <strong><em>“had Sulaiti Jaggwe been the buyer and owner of the suit property, his successors in title, the appellants would have insisted on remaining or placed in possession.”</em></strong></p> <p>&nbsp;</p> <p>Consequently, I would confirm the orders of the Court of Appeal that the Registrar of Titles be directed to cancel the registration of the appellants as proprietors. In light of the observations I have made, the persons who are entitled to claim the suit property or compensation thereof are yet to be ascertained.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>In light of the facts and circumstances of this case, I would make no orders as to costs.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>Dated at Mengo this 17<sup>th</sup> day of January 2006</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>G. W. KANYEIHAMBA</p> <p><strong>JUSTICE OF THE SUPREME COURT</strong></p> </div></div></div><div class="view view-download-button view-id-download_button view-display-id-entity_view_1 view-dom-id-b629014114ec035f797d5d0b844f47b1"> <div class="view-content"> <div class="views-row views-row-1 views-row-odd views-row-first views-row-last"> <div class="views-field views-field-field-download"> <div class="field-content"><a href="https://old.ulii.org/system/files/judgment/supreme-court/2006/1/supreme-court-2006-1.rtf" target="_blank"><img src="https://africanlii.org/sites/default/files/Download-Button-red.png" width="180"> </a></div> </div> <div class="views-field views-field-field-download-1"> <div class="field-content"></div> </div> </div> </div> </div> Mon, 27 Jul 2015 13:34:07 +0000 Anonymous 15517 at https://old.ulii.org Aziz Kalungi Kasujja v Naune Tebekanya Nakakande ((Civil Appeal No.63 Of 1998)) [1998] UGSC 6 (25 March 1998); https://old.ulii.org/ug/judgment/supreme-court/1998/6 <section class="field field-name-field-flynote field-type-taxonomy-term-reference field-label-above view-mode-rss"><h2 class="field-label">Flynote:&nbsp;</h2><ul class="field-items"><li class="field-item even"><a href="/tags/contract-law" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Law</a></li><li class="field-item odd"><a href="/tags/formation-and-validity-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Formation and validity of Contract</a></li><li class="field-item even"><a href="/tags/contract-formation" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Contract Formation</a></li><li class="field-item odd"><a href="/tags/performance-contract" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Performance of contract</a></li><li class="field-item even"><a href="/tags/specific-performance" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Specific Performance</a></li></ul></section><div class="field field-name-body field-type-text-with-summary field-label-hidden view-mode-rss"><div class="field-items"><div class="field-item even" property="content:encoded"><p>. <strong><u>THE </u></strong><strong><u>REPUBLI</u></strong><strong><u>C OF</u></strong><strong><u> UGANDA</u></strong><strong><u> </u></strong><br /> <strong><u>IN THE</u></strong><strong><u> SUPREME COURT OF UGANDA </u></strong><br /> <strong><u>AT MENGO </u></strong><br /> <strong><u>CIVIL APPEAL 63/95 </u></strong><br /> <strong>(CORAM KAROKORA. </strong><strong>J.S.C.</strong><strong> </strong><strong>MULENGA</strong>. <strong>J.S.C. </strong><strong>AND KANYEIHAMBA. J.S.C</strong><strong> </strong><br /> <strong>BETWEEN</strong><br /> <strong>AZIZ KALUNGI KASUJJA…………………………………..APPELLANT<br /> AND<br /> NAUNE TEBEKANYA </strong><strong>NAKAKANDE </strong>………………………<strong>RESPONDENT<br /> (</strong>Appeal from Judgment<strong> </strong>of the High Court of Uganda<br /> <strong>(Hon. Justice G.M. Okello</strong><strong> in</strong> <strong>Civil Suit No. 625 of</strong><strong> 1984.) </strong><br /> <strong><u>JUDGMENT OF KANYEIHAMBA </u></strong><strong><u>.J.</u></strong><strong><u>S.</u></strong><strong><u>C.</u></strong><strong><em><u> </u></em></strong><br /> This is an appeal from a<strong> </strong>Judgment of the High Court<strong> </strong>in Civil Suit No. 625 of I 984 against the findings, ruling and orders of Mr.<strong> </strong>Justice Okello. By consent of the parties,<strong> </strong>the appeal was to be determined by way of written submissions under r.97 of the Rules of SC.<strong> </strong>Counsel for<strong> </strong>the respondent was served<strong> </strong>with a<strong> </strong>Record of<strong> </strong>Appeal on<br /> 29/12/95.<br /> On the 10<sup>th</sup> January 1996.<strong> </strong>Counsel for the appellant filed a written<strong> </strong>statement of argument in support of the Appeal in accordance with rule 97.On 22<sup>nd</sup> May 1997, the Registrar of the Supreme Court received a letter<strong> </strong>from the same Counsel, informing Court that his clerk had failed to serve a<strong> </strong>copy of the written submission to Counsel or respondent. Consequently, he requested (that<strong> </strong>under the circumstances he had no alternative but to<strong> </strong>abandon and withdraw the written submission, and intimated that instead he<strong> </strong>would argue the appeal orally.<br /> The appeal was fixed<strong> </strong>to he heard on 2/1O/97<em>.</em><em> </em>When court convened on that day both, parties where represented by counsel. Mr. Zaabwe.and Mr.kawenja respectively.<br /> Mr. Zaabwe addressed and informed<strong> </strong>us that following his last communication<br /> <strong>1 </strong><br /> to court, the appellant,Mr.Juma Kasule had since died and Counsel wished to make the application by way of notice of motion to court to substitute the names of the<br /> deceased with that<strong> </strong>of Aziz Kasujja who is<strong> </strong>one of the personal representatives permitting Mr. Aziz Kasujja to be substituted for the plaintiff was produced to the satisfaction of the court. Counsel for the respondent addressed court and indicated that he had no objection to the application for substitution of the appellant being granted. The court granted the order as applied for.<br /> After an adjournment of thirty minutes to enable counsel prepare themselves, the hearing<br /> After an adjournment of<strong> </strong>thirty minutes to enable Counsel prepare themselves, the hearing of the appeal resumed. Counsel for the appellant addressed Court and said that he had decided in withdraw his letter of 22<sup>nd</sup> May 1997<strong><em>,</em></strong><em> </em>in which he had withdrawn written submission with the intention of arguing orally in Court. He now sought leave of Court to reinstate his written statement of argument for the appeal and to ask Court to allow Counsel for the respondent enough tine in which to prepare and file a written statement of defence for the respondent. The application for leave was made under rule 1 (3<em>). </em>Counsel for the respondent informed Court that he had no objection to the application. Counsel having assured Court that he could serve his written statement of arguments to respondent on 2/10/97, the Court granted the application and ordered counsel for the appellant to serve the written statement of argument on that day. Counsel for the respondent was ordered to submit the written statement of defence by the 16/10/97. This written statement was received by the Registrar of the Court on 14<sup>th</sup> <strong> </strong>October 1997 and, this Judgement is based on the<strong><em> </em></strong>written statements of both Counsel; the record of the proceedings and judgment in the Court be low.<br /> The background to this appeal is<strong><em> </em></strong>briefly as follows For all intents and purposes the appellant and respondent grew up together as brother arid sister with the latter, a much younger person than the former. Until differences of opinion occurred between them is apparent from the evidence and pleadings that both had lived together amicably and shared most things including some of the parcels of land they acquired together from time to time. The facts show that over a period of years parcels of land were<strong><em> </em></strong>acquired by the two persons and registered or recognised as owned either jointly or individually. Tue cordial relationship between the appellant and defendant stretched back to the late 1930’s, and it is only in tire 1970’s and later that differences of opinion developed.<br /> In 1984 the respondent as plaintiff, through her<strong> </strong>Counsel, filed Suit No. 625 of 1984 in the High Court seeking a declaration that certain lands registered or acquired while she lived with appellant, then as defendant, either belonged to her as a beneficiary and should vest in her as sole owner or were jointly owned and she sought an order of Court to sever her interest in each of those parcels of land so that it may invest in her solely as owner, She also asked for mesne profits from appellant for some of the properties he had been<strong> </strong>renting for cash at Shs: 5,000 p. a. as from the year 1978. The appellant resisted these claims with counter claiming ire that as a result of a purported letter by the respondent, he was entitled to the whole of the land registered in their joint names by virtue of that letter which offered an exchange of that the land if he permitted the respondent to own, wholly and beneficially one valuable parcel of land situated at Makindye. After hearing the parties and witnesses and having examined all the relevant titles arid documents and lead Counsel’s submissions, the learned Judge delivered judgment which resolved the issues between the parties as follows: -<br /> <br /> a) That the land mentioned in<strong> </strong>paragraph 4 of the plaint shall be partitioned in equal shares between the plaintiff and the defendant.<br /> b) That the defendant would be entitled as sole owner and beneficiary to all the parcels of land mentioned in paragraph 6 of the plaint.<br /> c) That the plaintiff would be entitled to retain the valuable Makindye holdings as sole owner arid beneficiary, and<br /> d) The parties were to bear their own respective costs.<br /> <br /> It is against this ruling and orders that the appellant who was the defendant in the high court suit appeals to this court. The grounds of the appeal are set out in the memorandum of appeal and appear on page 3 of the record of proceedings. There are six grounds of appeal. However an analysis of the six grounds reduces to two.<br /> the issues to be considered by<strong> </strong>this Honourable Court. These are whether the learned Judge erred in law and fact in holding that the plaintiff was entitled to a half share in the lands comprised in paragraph 4 of the plaint and, whether her the learned Judge erred in law in refusing, to hold that the defendant was entitled to an order of specific<strong> </strong><br /> performance on the evidence alone of the letter of plaintiff represented as exhibit D.<strong> </strong>15<strong> </strong>which issue must be joined<strong> </strong>with ground 4 of the appeal. Once ground one of the<strong> </strong>appeal is resolved then grounds<strong>. </strong>2, 3 and <em>5 </em>follow the decisions reached<strong> </strong>on that ground.<br /> <br /> In attempt to prove ground one of the appeal, Counsel for the appellant argued at great length and cited several authorities to show that since the plaintiff was a liar in her testimony to the Court, she should be held to have written the letter which purports to offer an exchange of land between the parties, Counsel’s arguments and citation of what he deems to be relevant authorities covers some sixteen pages of typed wordage. I can find no relevancy whatsoever for the proposition that the letter written by the plaintiff created a binding contract between her and the defendant as argued in the High Court. It may be true that the plaintiff did write the letter in question. Counsel for appellant cities<strong> </strong>a<strong> </strong>number of cases<strong> </strong>including<strong>, </strong><strong><u>R.G</u></strong><strong><u>. Patel V.</u></strong><strong><u>Lalji Makanji (1957)</u></strong><u> </u><br /> <strong><u>E A. </u></strong><strong><u>317</u></strong><strong><u> Khatijabhai Jiwa Hasham V Zenab (1957) E.A 38 and Pope vs R (1960) E.A 132</u></strong><strong>_</strong><strong><u> </u></strong>All along Counsel argued that these cases<strong> </strong>support the appellant’s case.<strong> </strong>Unfortunately, I can find<strong> </strong>none, either on the facts or on the principles they established as propositions for allowing this appeal. They were all<strong> </strong>decided on different facts<strong> </strong>and criteria and, while some of<strong> </strong>them do indicate that a<strong> </strong>Judge should take into<strong> </strong>account contradictory statements or be cautious of witnesses<strong> </strong>lying in Court, they do not<strong> </strong>support the appellant.<strong> </strong>In the words of Connell, J.<strong> </strong>in Khatijiabhai_Jiwa <u>Hasham</u><u> V.</u><strong><u> </u></strong><u>Zenab </u><strong>_</strong><u>2 E A.</u><strong><u> </u></strong><u>38 </u><u>at P.54</u> “The falsehood shall he considered in weighing the evidence, it<strong> </strong>may be so glaring as utterly to<strong> </strong>destroy confidence in their witness altogether.<strong> </strong>But when there is reason to believe that the main part of the deposition is true, it should not be arbitrary rejected because of want of veracity on perhaps some minor point.Infact in this particular case, no minor point arises for which it could be said there is support for appellant.<br /> <br /> Even<em> </em>if we were to believe Counsel that the plaintiff wrote the letter, this does not prove in any way that there was a contract between the parties to exchange the land in question. The appellant did not show in the High court nor does he do so now that he accepted the offer allegedly made by lire respondent. The letter was dated 5<sup>th</sup> August 1972. The only reference available to suggest hint the appellant accepted the offer is the written statement of defence filed in the High court on 30/08/84 .It cannot be seriously contemplated that an offer made in 1972 for the transfer of land was eventually accepted more than ten years later and Court<em> </em>should sanction such a fiction The submission of Counsel for the respondent that the burden of proof lies upon the person who wants Court to believe the existence<strong> </strong>of certain facts is correct. They cannot be inferred from any alleged falsehood by a witness who is testifying on an entirely different matter.<br /> In any event<strong>, </strong>once it is shown that there was no agreement or contract to exchange the parcels of land in dispute, the question of whether or not the respondent wrote the letter becomes irrelevant. Therefore, the appeal fails on the first ground.<br /> As already indicated, once the first ground fails, grounds 2, 3 and 5 of the Memorandum of Appeal also fail. The arguments and authorities contained in pages 17-34 of the written submissions for the appellant are superfluous. The cases cited in these pages suggest that the parties therein attempted to avoid valid and legally competent transactions whereas there was none between the appellant and the respondent in this case. Counsel for the appellant on pages 26 of his written statement in support of the appeal draws an analogy from the principle that circumstances in the conduct of the parties may establish a binding contract between the parties. He cites such authorities as <u>National and Grindlays Bank v Kentiles (1966) E.A 17, Credit Finance corp. Ltd v Ali Mwakasanga (1957) E.A 79 Brogden v Metropolitan Railway Co.(1972) 2 Ac,66 and Figueriredo v Moorings Hotel (1960) E.A 926</u> in support I am grateful to Mr.Zaabwe for having cited all these cases almost in full fact by fact with long extracts from their Lordships Judgements.However it will be noted that each of these cases is clearly distinguishable from the facts and circumstances of this appeal. Page 17 of the written statement in support of the counsel.<br /> <br /> <br /> Counsel is at<strong> </strong>pains to show that the series of letters v. written by the respondent. requesting for money to<strong> </strong>be paid for land or acknowledging receipt<strong> </strong>of such <strong>;, </strong>constitutes a<strong> </strong>pattern of behaviour that proves that a contractual relationship<strong> </strong>in<strong> </strong>the parties exists.<strong> </strong>However,<strong> </strong>it<strong> </strong>will be recalled<strong> </strong>that for all the land owned or otherwise by the parties, it was<strong> </strong>always the appellant who<strong> </strong>handled or used the money<strong> </strong>to purchase<strong> </strong>the same<strong> </strong>and the evidence alluded to from page 17 reply confirms<strong> </strong>this admitted relationship. Consequently, the authorities cited do 1<sup>st</sup> the appellant in any way. I therefore agree with Counsel for the respondent c written statement of arguments in support of’ the appeal does not disclose any to be admitted for the purposes of allowing the appeal. Indeed. Mr.<em> </em>Kawenja for respondent is right when he states on page 5 of his written statement arguments respondent that the appellant fails to show why he believes the learned Judge in ordering the demarcation and division of land which was registered in the names of tire appellant and respondent.<br /> <br /> The sixth ground of appeal, the argument that the Judge erred in law it refusing to specific performance of the contract is not convincing. It is borne out neither by facts of this case nor the arguments of the counsel nor is it supported by any law concluded that there was no contract between the parties for the transfer of it follows that the learned was correct in refusing to order an act of specific performance. To do so would be enforcing a non-existent contract for the transfer of land.<br /> <br /> Passing. it may be said that tire whole thrust of this appeal is nothing more than an expedition. Counsel for the appellant ought to have advised appellant that there<strong> </strong>was need than to<strong> </strong>impute a contract through the alleged or actual falsehoods of respondent Counsel might<strong> </strong>have assisted the court better by<strong> </strong>being selective of authorities and only extracting the relevant and applicable dicta. By throwing in every thing<strong> </strong>that seemed plausible without carefully asssessing its relevancy arid applicability, and by leaving it court more or less to choose and select<strong> </strong>whatever might be authoritative. Counsel for the appellant was inviting court to accompany him on this expedition. Court will not and cannot do so. I have carefully read the<strong> </strong>judgment of the learned Judge in the High Court and I find no fault with it. This appeal cannot succeed. It is dismissed with costs to the respondent.<br /> <br /> Dated at Mengo this 26<sup>th</sup><strong> </strong><strong> </strong>day of March 1997.<br /> <strong>G. W. KANYEIHA</strong><strong>MB</strong><strong>A</strong><br /> <strong><u>JUSTTCE OF </u></strong><strong><u>THE SUPREME COURT</u></strong><u>. </u><br /> <strong>I CERTIFY THAT THIS IS A<br /> TRUE COPY OF THE ORIGU’AL.<br /> W. </strong><strong>MASALU - MUSENE</strong><br /> <strong><u>REGISTRAR. THE SUPREME COURT. </u></strong>–<br /> <br /> <strong><u>JUDGMENT OF KAROKORA, J.S.C. </u></strong><br /> I have had the benefit of reading in draft the judgment of Kanyeihamba J S. <strong>C </strong>, and do agree that the appeal must be dismissed with costs to respondent.<br /> The facts are clearly set out at page 3 of the draft judgment of Kanyeihamha J. S. C. I therefore, do not have to repeat them here. Suffice, however, to say that Plots referred to<strong> </strong>paragraph 4 of the plaint were alleged to have been jointly purchased and registered in the names of both the appellant and respondent as joint tenants. The respondent claimed that these Plots add up to 43 acres. The Plots which appear in paragraph 6 of the plaint are registered in the names of the appellant. However, the respondent claimed that she had jointly purchased those Plots with the appellant but claimed that the appellant had fraudulently registered them in his own names as the owner. She prayed for an order that the plaintiff gets half share of Plots in paragraphs 4 &amp; 6.<br /> <br /> The appellant denied having purchased Plots of land comprised in paragraph 6 of the plaint jointly with the respondent.<br /> At the trial, the learned trial Judge ordered that the Plots enumerated in paragraph 4 of the plaint be partitioned in equal shares between the respondent and appellant whilst the Plots enumerated in paragraph 6 of the plaint belonged solely to appellant.<br /> The appellant was not satisfied with the order of the Court and hence this appeal.<br /> There were six grounds of appeal which shall be considered in the manner I am going to handle them.<br /> The first ground complained that the trial Judge had erred in law and fact in that he accepted that the plaintiff’s evidence that she did not write and sign Exh.D15 and that by doing so, he failed to appreciate the fact that the weight and bearing of the plaintiff’s falsehood and other evidence indicated that she wrote and signed it.<br /> The learned Counsel for appellant dwelt o-n this ground in his written statement of arguments, citing several authorities which I (lid not find useful or relevant. It must be noted that Exh.D15 was put in by appellant. The respondent had denied having written and signed it. The onus in such case was on the appellant to adduce evidence to prove that it had been written and signed by respondent. It is the principle of law in our law of evidence Act, Section 100, that: -<br /> <em>“Whoever desires any Court to</em><strong><em> </em></strong><em>give</em> <em>judgment as to any legal right or liability dependent on</em><em> the existence of facts which he asserts must </em><em>prove</em><em> that those facts exist.</em><br /> In this case there was no evidence adduced to pin down the respondent that she had written and signed the Exh. D15. The onus was the appellant to adduce expert evidence (handwriting expert) to state that the handwriting and signature, appearing on Exh. D15 was of respondent. The submission by Mr. Zaabwe, Counsel for the appellant was that had the Judge carefully compared the plaintiff’s signature, he would have come to a different conclusion.<br /> With due respect, the trial Judge, not being a witness and moreover an expert witness on handwriting, his comparison of the handwriting and signature on Exh.D 15 with respondent’s samples would not help appellant’s case. In any case, the onus was on the appellant to request for handwriting. samples of respondent to be compared with the signature on Exh.D15, which, with respect, he never did.<br /> Further, Mr. Zaabwe, Counsel for appellant dwelt on the issue of falsehood in the paternity of the parties, which respondent had never denied, and as such, the Court ought not to have believed the respondent. n my considered view, considering the evidence which emerged during the course of the trial, respondent had grown up together with the appellant in the same home more or less as sister and brother. In our African cultural setting, it would not be out of the ordinary for appellant to call respondent loosely as brother.<br /> <br /> In any ease, even if that was false on the part of respondent and had never been denied by respondent, that was falsehood which did not touch on the land transaction which is-subject matter of this appeal as the dispute of land has-no relevance to the paternity of respondent and the appellant.<br /> It must be observed that the land covered by paragraph 4 of the plaint is registered in the names of the appellant and respondent as joint tenants. The title deed of the Plots specifically state that both the appellant and respondent are joint tenants. I do think that there is any- amount of oral evidence that would change the status quo, unless there was evidence, which was not adduced, that the appellant was holding the other half on behalf and for the benefit of the respondent in which case the respondent would be entitled to trace the other halves of each of the Plots from the trustee. In my view, the theory of appellant having been a trustee, holding the land for respondent would not be correct, because if the respondent was then a minor, how come that she was registered for the other halves. Why were these Plots in paragraph 4 of the plaint not registered in the names of the appellant as a trustee for the benefit of the minor?<br /> In my view, in the absence of evidence that the appellant was a trustee for the benefit of the respondent, I think Section <em>56 </em>of the Registration of Titles Act would leave the land in the names of the persons appearing on the title deed. No amount of oral evidence or other evidence according to Section 90 of the Evidence Act would change proprietorship of the Plots referred to in paragraph 4 of the plaint.<br /> Section 56 of Registration of Titles Act (RTA) provides as follows: -<br /> <em>“No Certificate of</em><em> </em><em>title</em><strong><em> </em></strong><em>issued upon an applicati</em><em>on </em><em>to bring </em><em>land under this Act</em><strong><em> </em></strong><em>shall </em><em>be</em><strong><em> </em></strong><em>im</em><em>peached</em><em> or</em><em> </em><em>defea</em><em>sible</em><strong><em> </em></strong><em>by reason </em><em>or </em><strong><em> </em></strong><em>account</em><em> </em><em>of any </em><em>informality</em><em> or irregularity</em><em> in </em><em>the </em><em>application</em><strong><em> </em></strong><em>or </em><em>in th</em><em>e </em><em>proceed</em><em>i</em><em>ngs</em><em> pre</em><em>vious</em><strong><em> </em></strong><em>registration of the</em><em> certificate and certificate of title issued under any of the previous</em><em> here in contained shall be received in all courts as evidence…………….and shall be conclusive evidence that the person named in such certificate as the proprietor of or…………………………….is seized or possessed of </em><em>such </em><em> estate</em><strong> </strong><em>or interes</em><em>t.”</em><br /> However, notwithstanding the above provision, any Certificate of title will be null and void if there is evidence that it was obtained by fraud. Section 76 of RTA is an authority for the above proposition. It provides as follows: -<br /> <em>“Any Certificate of title</em><em> </em><em>…………………………processed or</em><em> </em><em>made by fraud shall be made by fraud shall be void as against all parties or privies to such fraud.” </em><br /> Furthermore, Section 90 of the Evidence Act provides as follows: -<br /> <em>“When the term</em><em>s of a contract or of grant or of any other </em><em>disposition or property, have been</em><em> reduced to the form of a document and in all cases in which any </em><em>matter</em><em>, is required by law to be reduced to </em><em>the form of a</em><em> </em><em>document</em><em> no evidence save as </em><em>mention</em><em>ed in </em><em>Section</em><em> 78 (of </em><em>the Evidence Act</em><em>,) shall be </em><em>given</em><em> </em><em>in proof of the terms of such a contract</em><em>, grant or </em><em>other </em><em> </em><em>disposition of </em><em>property</em><em>……….. except th</em><em>e document itself</em><em>.”</em><br /> It<em> </em>must state that since there was no evidence of fraud on the part of respondent regarding the acquisition of Plots referred to in paragraph 4 of the plaint, each of the ties must get half of each of the Plots enumerated in that paragraph. Therefore, und one of appeal must fail.<br /> On the 2 ground of appeal where <em>it </em>is alleged that the trial Judge erred in law when he held that there was no evidence to prove that the evidence on record established clearly that the respondent wrote and signed Exh.D 15<em>, </em>1 must state that I have already covered this ground during the process of discussing the first ground.<br /> It is, however, necessary that I comment on the counter-claim and failure by the respondent to reply to it and the effect of that failure to do so.<br /> 1 do agree that under Order 8 r 18(5) of the Civil Procedure Rules (CPR) where facts raised in the counterclaim are not denied by the plaintiff they would be presumed “to have been admitted.”<br /> <br /> However, in the instant case, there were no facts pleaded in the counterclaim as was required of him under Order 8r.8, which would require the appellant to reply to the counterclaim. In any case, it is clear from the record of Appeal on page 13, that the reply to the counterclaim was filed in Court on 5/9/84, but this does not appear in the record of appeal. The record of appeal was prepared by the appellant who ought to have ensured that all relevant documents were included in the record of appeal. It cannot therefore be said that the counterclaim was not denied.<br /> I would in view of the above say that there is no merit in the second ground of appeal.<br /> <br /> On 3<sup>rd</sup><strong> </strong><strong> </strong>ground of appeal, where the learned trial Judge was criticized as having erred in law in rejecting Exh.D15 as forming a basis of contract of exchange between the respondent and appellant when the evidence on record indicated that there was such a contract, I must state that there was no evidence on record to support any finding o there having been a contract of exchange of land between appellant and respondent. I have already adequately dealt with Exh.D15. The onus was on the appellant to prove that Exh.D15 had been written and signed by plaintiff/ respondent. This is especially so when the respondent denied ever writing and signing it. In my view the learned trial Judge was correct in his finding when he rejected Exh, D I 5 as forming a contract of exchange of 37 1/2<strong> </strong>acres of land.<br /> It was not clear whether not the 37 1/2 acres of land were the land forming land in paragraph 4 of the plaint or those which were falling in paragraph 6 of the plaint.<br /> In my view, Exh.D15 was so vague that it could not form a basis of a legal binding contract so as to vary the proprietary rights in the Land either referred to in paragraph 4 of the plaint or paragraph 6 of the plaint.<br /> In the circumstances, I think this is a case where status quo in the suit land must be maintained. Accordingly, this ground would fail.<br /> Turning to 5<sup>th</sup> and 6<sup>th</sup> ground, which I shall discuss together, I must point out that I have already discussed these two issues while dealing with the 1 ground. I do not find it necessary to repeat what I have stated therein. The Certificate of title is conclusive evidence of ownership of the Plots referred to in paragraph 4 of the plaint, unless fraud was proved on the part of the registered proprietor, which was iot proved. On the issue of specific performance, the issue would not arise, when there was no evidence on the balance of probabilities that the respondent had written and - signed the agreement of exchange of land between the appellant and respondent. Exh.D15. Accordingly therefore these two grounds would fail.<br /> In the circumstances, this appeal has no merit and must be dismissed. As Kanyeihamba, J. S. C., and Mulenga, J. S. C., also agree the appeal is dismissed with costs to respondent here and in the Court below. The orders of the High Court are confirmed.<br /> Dated at Mengo this 26<sup>th</sup> day of March 1998.<br /> <strong>A. N. KAROKORA</strong>,<br /> <strong><u>JUSTICE OF THE SUPREME COURT </u></strong><br /> <br /> <strong><u>JUDGMENT OF MULENGA. J. .S.C.</u></strong><br /> This appeal was brought to this Court by .JUMA MUNYWANI KASULE, who subsequently died. By order of this Court made in Civil Application No. 27/97, on 2/10/97, AZIZ KALUNGI KASUJJA, one of the personal representatives of the late Juma Munywani K<!-- char 0xe4 --> sule with written consent of the other personal representatives, was made a party, in place of the deceased, as the Appellant. In this judgment I shall refer to the late Juma Munywani Kasule as “Kasule” and the Respondent Nauni Tebekanya Nakakande as “Nakakande”.<br /> By a plaint dated 17<sup>th</sup><strong> </strong>July 1984, Nakakande sued Kasule in respect of 15 Plots of land, situate at diverse places in Kyaggwe County. Nakakande and Kasule were registered proprietors as joint tenants of nine of the plots totaling 43 acres. Kasule was registered sole proprietor of the other six Plots totaling to 39 acres. I shall refer to the former as the “9 Plots” and the latter as the “6 Plot”. All the land was held in Mailo tenure. In the plaint it was claimed that Nakakande and Kasule being sister and brother had in their young days acquired all the land together, but while the 6 Plots were registered in their joint names, Kasule who had handled the transactions had fraudulently caused himself to be registered as sole proprietor of the 6 Plots. Nakakande claimed that the 6 plots, having been purchased with money from a common fund, were held by Kasule as trustee and that she was joint beneficial owner thereof. It was also claimed that Kasule had been collecting rent and rates from tenants without accounting. Nakakande therefore prayed for:<br /> (a) An order that she was entitled to half share in all the land<br /> (b) Alternatively a declaration that the 9 plots be her own property and Kasule takes the 6 plots as his share<br /> (c) The Court to divide the land between the parties equitably.<br /> (d) Mesne profits at the rate of Shs. 5,000 per year from 1978 till judgment.<br /> In his Written Statement of Defence and.Counter Claim, dated 28/8/84 and filed in Court on 30/8/84, Kasule generally denied Nakakande’s claims and in particular contended (a) that the 6 Plots belonged to him alone and (b) that there had been a settlement between the two whereby it was mutually agreed that Nakakande would “take the valuable holding at Makindye”, and Kasule would take 37’/2 acres of tie land under joint ownership. He counter-claimed for an Order that Nakakande transfers to him the land under joint ownership.<br /> The learned trial Judge did not grant any of the prayers by either part’. He virtually maintained the status quo ante save that he made an Order (more or less applied for as an afterthought) “severing the joint tenancy” by partitioning the 9 Plots between Nakakande and Kasule in equal shares. He held that the 6 Plots were owned by Kasule alone and that there had been no agreement between the two for Nakakande to exchange her share in the 9 Plots for the customary holding at Makindye. The learned Judge ordered each party to bear his/her costs. Kasule appealed on the following six ground.<br /> <em>“1. That the learned Judge erred in law and fact i</em><em>n that he accepted the plaintiff’s evi</em><em>dence that sh</em><em>e did not write and sign Exh. D15 and that</em><em> by doing so he failed to app</em><em>reciate the fact that the weight</em><em> and bearing of the plainlff’s falsehoods and o</em><em>ther evidence indicated that she</em><em> wrote and signed it.<br /> 2. That the learne</em><em>d .Judge erred in law in that he held </em><em>there was no evi</em><em>dence to prove that the plaintiff wrote and</em><em> signed Exh. D15 when </em><em>the evidence </em><em>on record established clearly that the </em><em>plaintiff</em><em> </em><em>w</em><em>rote and signed it.<br /> 3. That the learned Judge erred in law in that he rejected Eh. D15 as a contract of exchange between the plaintiff and defendant when the evidence on record indicated that there was such a contract.<br /> 4. That the learned Judge erred in law in that he held that a contract of exchange did not exist becaus</em><em>e of failure to execute a trans</em><em>fer </em><em>in</em><em> </em><em>favour of the defendant and yet this was not accord with the law of Uganda.<br /> 5. </em>‘ <em>That the learned .Judge erred in law and fact in that he held that the<br /> plain</em><em>ti</em><em>ff was entitled to a half share in the land comprised in paragraph 4 of the plaint and that by so doing he failed to correctly evaluate the evidence on record which indicated the </em><em>contrary.</em><strong><em> </em></strong><br /> <em>6. That the learned Judge erred in law in that he held that the defendant was not </em><em>entitled to specifi</em><em>c</em><em> performance of Exh. D15 when evidence on record clearly established that he was so entitled</em><em>.”</em><br /> “Land comprised in paragraph 4 of the plaint” mentioned in fifth<em> </em>ground is the 9 Plots. The first ground of appeal attacks credibility of Nakakande and together with the following three grounds is concerned with the alleged contract of exchange and the evidence (Exh. D15) adduced to prove it. Although the fifth ground on surface appears to be an attack on the trial Court finding that Nakakande was entitled to half share in the 9 Plots, its main thrust, is also the complaint that the Court ought to have found that her half share in the 9 Plots had been exchanged for the land at Makindye. The sixth ground is on the remedy but also in respect of the counter-claim. There is no cross-appeal by Nakakande on any holding.<br /> Mr. Zaabwe, Counsel for the Appellant submitted to this Court written submissions in which he argued the six grounds of appeal seriatim. Mr. Kawenja, Counsel for the Respondent, did likewise in his reply. I shall not follow their order of dealing with the grounds because in my view it entails a lot of unnecessary repetition. 1 shall consider the appeal on the issue of credibility first. Next I will consider the appeal in regard to the alleged contract of exchange.<br /> <br /> Mr. Zaabwe opened his lengthy argument on the first ground of appeal ith the following assertions:<br /> <em>“The plaint</em><em>iff</em><em> (Nakakande,) told court </em><em>a lot of lies. Had </em><em>the learn</em><em>ed</em><em> Judge appreciated the </em><em>weight</em><em> and bearing </em><em>of those li</em><em>es on falsehood</em><em>s and other evidence on the record, he would </em><em>certainly</em><em> </em><em>have</em><strong> </strong><em>come</em><em> to the conclusion that </em><em>the plaintiff wrote and signed Exh. D15”.</em><br /> He went on to list several falsehoods Nakakande allegedly told the Court and in conclusion invited this Court to re-evaluate her evidence on the ground that though the learned trial Judge appreciated that she told lies to Court, he did not appreciate that that fact showed that she also lied when she said she did not sign Exh. Dl 5. It appears to me that the underlying complaint in this ground of appeal is that the learned trial Judge accepted part of Nakakande’s evidence when he should have discarded all of her evidence because of the falsehoods in it.<br /> <br /> In his judgment the learned trial Judge expressly disbelieved Nakakande on three assertions she made in her evidence in Court. On her assertion that Kasule was not her brother the learned Judge held: “ I am inclined to believe that the plaintiff and the defendant are brother and sister. They were the children of Asuman Lukwalira”. On her denial in evidence that she had not instructed her lawyers that her father was Asuman Lukwalira the learned Judge held:<br /> <em>“there is no way these lawyers could have got that fact other than from her </em>“.<br /> The more material assertion expressly disbelieved is in regard to the source of funds for the acquisition of the land in issue. Nakakande claimed in evidence that she provided the funds, having got some from a Muzungu and the rest from trade. The learned Judge’s finding is in the following passage from the judgment.<br /> <br /> <em>“That is a matter o</em><em>f credibility. But the plaintiff</em><em>’s (Nakakande ‘s) own evidence regarding her source of income t</em><em>hen is not convincing. She testifi</em><em>ed that a Muzungu had left Shs. 1</em><em>5,000 in her name in a Post Offi</em><em>ce</em><em> Savings Account. </em><em>Apa</em><em>rt from that assertion, there wa</em><em>s no evidence to </em><em>verify</em><em> that</em><em> claim.</em><br /> <br /> <em>The </em><em>plain</em><em>tiff further testif</em><em>ied</em><em> that her second source of income then was her export business. She used to export </em><em>Mangoes</em><em> to Kenya. 7his was between 1939 and 1940 when</em><em> she was about </em><em>6 years old. This stat</em><em>ement sounds more of a joke than real. It</em><em> is</em> <em>incredible that a child of 6 years can engage </em><em>in</em><strong><em> </em></strong><em>an international trade. It</em><em>’s</em><em> the money from these sources that plaintiff </em><em>claimed she gave to the defendant,</em><strong><em> </em></strong><em>as her agent to</em><strong><em> </em></strong><em>buy </em><em>for her</em><strong><em> </em></strong><em>land. I find </em><em>the plaint</em><em>i</em><em>ff</em><em>’s</em><strong><em> </em></strong><em>story incredible……………there is no credible evidence that the plaintiff (Nakakande) gave money to the defendant (Kasule) to buy lands for her.</em><em> </em><br /> <br /> There is other material evidence of Nakakande which the learned Judge, without saying so expressly, disbelieved or at the very least ignored. I will only mention two examples. Although in her plaint Nakakande averred that -Kasule had acquired and was joint tenant<strong> </strong>with her of the 9 Plots, in her evidence she categorically asserted that she was sole owner of those Plots having bought the land with only her own money and that Kasule had caused himself to be registered as joint tenant with her through fraud. The learned trial Judge made no specific finding on this assertion. However, he must have disbelieved it because he held that her entitlement of the 9 Plots was in accordance with the certificates of title, namely as joint tenant with Kasule. Secondly Nakakande averred in her plaint that the 6 Plots registered in the names of Kasule alone were bought with money from the common fund and that she was entitled to half share thereof In her evidence however she also categorically asserted that the Plots Were also bought with her own money and that Kasule had made no contribution: She had given him money to purchase the land for her but he had fraudulently caused himself to be registered as sole proprietor of that land. The learned Judge held, as already noted above that there was no credible evidence that Nakakande had given money to Kasule to buy land for her and then continued:<br /> <em>“H</em><em>ence the </em><em>land mentioned</em><em> in</em><strong><em> </em></strong><em>paragraph 6 of the plaint</em><em> is</em><em> not held by th</em><em>e defendant in trust for plaintiff as the beneficiary</em><em> The lands in question are </em><em>registered</em><em> in (‘his,,) sole name. Without evidence of the existence of trust, the certificate</em><em>s of title are conclusive eviden</em><em>ce</em><em> of (his</em><em>) sole ownersh</em><em>ip of’ those lands. The plaintiff is </em><em>therefore</em><em> not entitled to those lands……..”</em><br /> <br /> “Land mentioned in paragraph 6 of the plaint” are the Plots. In her evidence in Court Nakakande also made substantial departures from the prayers she had made in the plaint produced above. In respect of the 9 Plots she had this to say: -<br /> <em>“I pray that the court orders the removal of the defendant’s name wrongly p</em><em>ut </em><em>on the title of my land</em><em>.</em><em> I </em><em>will </em><em>not be satisfied</em><em> </em><em>i</em><em>f the land was divided equally between me and the defendant• because the defendant never contributed to the purchase money of these lands.” </em><br /> And in respect of the 6 Plots, she said: -<br /> <em>“As for the lands which are wrongly registered in the </em><em>defendant‘s</em><em> name, I pray that the titles be cancelled and the lands be registered in my name. I would not be satisfied </em><em>with</em><strong><em> </em></strong><em>the Court ordering equal division thereof because these are </em><em>my</em><strong><em> </em></strong><em>land alone”.</em><br /> In the judgment the learned trial Judge did not have much to say on the falsehoods and/or departure from pleadings. In regard to the parentage of Nakakande he said: -<br /> <em>“The plaintiff might have lied on the issue of</em><em> </em><em>paternity. But</em><em> that</em><strong><em> </em></strong><em>did not mean that </em><em>she had parted with her interest</em><em> in the </em><em>lands </em>mentioned<em> in paragraph 4 (Exh. P1).” </em><br /> As noted earlier the learned Judge also commented on the evidence regarding Nakakande’s source of finds. He described that evidence as incredible, being more like a joke than real. On basis of that he held as a fact that Nakakande, contrary to what she said in her testimony, did not give money to Kasule for purchase of land for her. That holding notwithstanding the Court upheld her interest in the 9 Plots without question as to how she funded the purchase thereof. I would not pursue that point further however since it has no-t been appealed. Suffice to say that this tends to support the criticism that the evidence was not subjected to such evaluation as it was supposed to be. Indeed, on analysis of the judgment, it becomes apparent that what was considered and determined upon was almost solely the evidence on the counterclaim as if the main suit itself was not before Court for determination. It may well be that the learned Judge was swayed by the way Counsel presented their respective clients’ cases, and in particular by the way Nakakande’s Counsel, in his final address to Court, appeared rightly or wrongly to steer away from her case as presented in her evidence. Presumably upon recognition that he had no other “cogent” evidence to support Nakakande’s evidence that all the land had been bought with her money alone and therefore belonged to her and that Kasule had fraudulently got himself registered is<strong><em> </em></strong>joint tenant in respect of the <em>9 </em>Plots and sole proprietor in respect of the 6 Plots,<br /> Counsel left the plaint un-amended and in the final address said he would “leave this to Court.” In my view where Counsel throws in the towel, as in the instant case, it still remains incumbent on the Court to pronounce itself on the evidence adduced (or absence of it) on material issues in controversy. In this case no specific holding was made on Nakakande’s claim as pleaded on the 6 Plots or as presented in her evidence on both the 9 Plots and 6 Plots. In that regard I have considered whether the omission constituted a mistrial warranting an order for retrial, notwithstanding the fact that Nakakande did not appeal. However, after taking into account the contradictions in, and general weakness of Nakakande’s evidence as well as her fundamental departures from pleadings, I am satisfied that her contention that Kasule was registered on any of the titles fraudulently and her claim of sole beneficial ownership of all the land in issue would have to fail. An order for retrial is therefore unnecessary.<br /> On the first ground of appeal, I would agree with Mr. Zaabwe only to the extent of the criticism that the learned trial Judge did not sufficiently evaluate the evidence of Nakakande to give due weight to its falsehoods. The main thrust of the ground however relates to the alleged contract of exchange to which I shall turn presently. In conclusion on the question of creditability, I am inclined to the view that Nakakande as a witness, in view of the foregoing observations was not one a reasonable Court would place reliance on. I am satisfied however that the learned trial Judge did not base any finding on her testimony. He relied on the certificates of title. I do not find it necessary to review the very many precedents elaborately cited and summarized by Mr. Zaabwe in his written submission. This is, in my view, a clear case where, without saying that everything Nakakande testified was false, her testimony was not relied upon, and therefore the question of whether her testimony was severable (which is what the precedents are about) does not arise. I now turn to the question of the alleged contract of exchange.<br /> <br /> The principal contention in this appeal is that the learned trial Judge ought to have upheld Kasule’s counter-claim that it was he, who was beneficial owner of the whole land in question by virtue of an exchange contract evidenced by Exh. D15.<br /> <br /> According to Counsel for the appellant the learned trial Judge made the following errors in that regard:<br /> (a) He wrongly held that there was no evidence to prove that Nakakande wrote and signed Exh. D15.<br /> (b) He held on wrong grounds that there was no exchange contract between Nakakande and Kasule.<br /> The submissions of’ learned Counsel for the appellant raise two principal questions to be answered in this appeal: - -<br /> (a) Was there adequate evidence on which the trial Court could have held that Exh. D15 was made and signed by Nakakande?<br /> (b) Was there sufficient evidence on which the trial Court could have held that there was a valid contract of exchange binding the parties?<br /> <br /> In his submissions Mr. Zaabwe strongly attacked the learned trial Judge [‘or relying n<br /> Nakakande’s<em> </em>denial of writing and/or signing Lx h. D 15 holding that it was not proved to be her document.<br /> First, with due respect to Counsel, I think he took the matter out of context. Although in discussing the issues, the learned trial Judge entered to Nakakande s denial a<strong> </strong>couple of times, he did<strong> </strong>not use the denial per se, a evidence or basis for holding that<strong> </strong>Exh. DI<strong> </strong>5 was not made or signed by Nakakande.<strong> </strong>The context in which the denial was viewed was in regard, to the burden of proof. Time burden was on Kasule to prove that Exh. D15 was made and signed by Nakakande. Since she denied the document, other evidence had to be adduced by Kasule to provide the proof’ his context is evident in the judgment. The learned Judge, while discussing issue No. I said: -<br /> <br /> Later when discussing issue No 4 he reiterated:<br /> “<em>I</em><strong><em> </em></strong><em>hav</em><em>e already discussed that letter Exh. D15 earlier in his </em><em>Judgement</em><em> rejected it as it as it did not constitute</em><em> a contract which binds the plaintiff because there was no satisfactory evidence to pin the plaintiff as the author thereof.”</em><br /> I am satisfied that the learned trial Judge refused to uphold Exh. D I 5 as document binding on Nakakande not so much because she denied it but essentially because there was no evidence proving that she wrote and/or signed it.<br /> <br /> Secondly, in my view, Mr. Zaabwe virtually conceded, in his written submissions, that there was no direct proof that Exh. Dl <em>5 </em>was Nakakande’s document. This was in the course of his argument that Exh. Dl 5 was admitted by default. The following passage from his written submissions is self explanatory.<br /> <em>In</em><em> the first place, t</em><em>h</em><em>e defendant</em><strong><em> </em></strong><em>pleaded Ex</em><em>h.D</em><em>15 in </em><em>hi</em><em>s written statement of defence </em><em>and counter</em><em>-</em><em>c/a</em><em>im.</em><em> </em><em>T</em><em>he plaint</em><em>if</em><em>f did not deny </em><em>his </em><em>letter or s</em><em>t</em><em>ate </em><em>that</em><em> s</em><em>he did not write or sign</em><em> i</em><em>t</em><em>, </em><em>because she did</em><strong><em> </em></strong><em>no</em><em>t </em><em>repl</em><em>y </em><em>to</em><strong><em> </em></strong><em>the counter</em><em>-</em><em>c</em><em>l</em><em>a</em><em>im</em><strong><em>. </em></strong><em>I invite</em><strong><em> </em></strong><em>thi</em><em>s Court </em><em>to find as</em><strong><em> </em></strong><em>a </em><em>fact that the </em><em>plaintiff’s failure to file a reply</em><em> </em><em>to the</em><strong><em> </em></strong><em>counter-claim</em><strong><em> </em></strong><em>an</em><em>d</em><em> </em><em>specifically denied writing and signing Exh.D15 the defendant would have sought expert opinion on the handwriting and signature of the plaintiff on Exh. D15. (emphasis added).</em><strong><em> </em></strong><br /> I shall return to that argument presently. I have first to emphasize here that learned<br /> Counsel resorted to the argument because lie recognized that there was no or<br /> any evidence adduced to prove that Nakakande authored the letter Exh. D5 Neither<br /> Kasule nor any of his witness saw her write it.<br /> Learned Counsel contended, in his written submissions that Kasule as a brother to Nakakande “knew very well (her) handwriting and signature.’’ This however, was not founded on any evidence at all. Kasule did not testify that he knew or was familiar with, the handwriting and signature of Nakakande and nobody else did iii evidence. Counsel’s said contention therefore was sheer conjecture.<br /> I now turn to the argument as produced above. In my view it is not sustainable on two accounts. First, I am not persuaded that there was no reply to the counter-claim. Counsel himself acknowledged in his submission that there is an official endorsement on the Court file duly signed by the Deputy Registrar to the effect that a reply to<br /> <br /> Counter-claim was filed on 5/9/94. He however contended that he was never served with a copy of the reply. IC indeed no copy was served on Counsel for the defendant, I am inclined to assume that this was through error. And if, as Counsel Further contended in the submission, the original was not found on the Court file when he was compiling the record of appeal I would be more prepared to assume that it was misplaced or otherwise lost rather than assume the official endorsement on the Court file is false. Secondly the argument was not canvassed at the trial; aor did Counsel seek leave to this Court to raise the point on appeal. The Court have consistently held that ordinarily, a party will not be allowed to raise a point on appeal which could have been raised but was not raised in the Court below. (see: T<u>an</u><u>gan</u><u>yika Farmers Vs. Unyamwezi </u>(1960) EA 620; <u>United Marketing Co. Vs. Hashan Kara </u>(1963) BA 276 <u>Warehousing Forwarding Co. Vs. Jaferali &amp; Sons Ltd. </u>(1963) <u>BA 385 and Visran &amp; Karsan Vs. Bhatt, </u>(1965) BA 789). Needless to say that if the argument had been canvassed at the trial, the trial Court would have been in a better position than this court, to determine whether or not there was a Reply to the Counter-Claim and whether or not Exh. Dl <em>5 </em>was expressly denied or implicitly admitted. In the circumstances I would not entertain the argument that Exh. D I 5 should be deemed o maybe been admitted. Accordingly I would hold that the learned trial Judge did not err n holding that there was no proof that Nakakande wrote or signed Exh. Dl 5. In my view therefore the first and second grounds of the appeal ought to fail.<br /> Although in his submissions on the third, fourth, fifth and sixth grounds of appeal Mr. Zaabwe attempted to argue that there was sufficient evidence, independent of Exh. D 15, proving that a contract of exchange binding on both parties was constituted, the arguments kept revolving around the contents of Exh. DI 5. In a nutshell Exh. D I5 is letter, in which allegedly Nakakande undertook to leave her interest in the 0 Plots to Kasule in exchange to the Kibanja at Makindye which Kasule was asked to pay for. the English translation of the letter reads as follows: -<br /> <em>108/72<br /> Dear brother Juma .M.Kasule<br /> I have written in a hurry. I do not want you to worry about the matter of our land and the property thereon. As you decided to which I have been complaining, I have decided to leave you with 371/2 acres with all that is there. Come and pay the bal</em><em>a</em><em>nce of shs.950/= </em><br /> <em>Signed Nakakande Tebekenya Nauni</em><br /> <br /> Mr. Zaabwe contended in the submission that the letter amounted to an offer by Nakakande to exchange her interest in the Plots owned jointly for the Kibanja at Makindye, which offer Kasule accepted by payment of the amount requested for. 1-le concluded that constituted the contract of exchange and that payment by Kasule amounted to part-performance of the contract. He criticized the trial Court for holding that the contract of exchange was not proved because no transfer of Nakakande’s interest had been executed.<br /> With due respect to Counsel, I think that once again he took the learned Judge’s remarks on absence of transfer out of context. The point was discussed twice in the judgment. First when the learned Judge was considering issue No I he observed that the alleged contract of exchange was made in 1972 without any transfer being executed and added:<br /> <em>‘</em>if<em> </em>there <em>was such agreement, </em><em>either of the parties would have taken steps to ensure that the transfer was executed. This was not done. As the certificates are still in the joint names………………………..it is conclusive proof of their joint ownership of those lands</em><em>(s.56 RTA)</em><br /> Later when considering issue No. 3 the learned Judge had this to say:<br /> <em>“</em><em>1 h</em><em>ave already discussed the above issue earlier in this judgment. I had rejected that issue of the contract. I still do not agree with the argument. The plaintiff denied the letter Exh. D15 which is the basis of the alleged contract to exchange.</em><br /> <em>She denied that she signed the letter. There was no evidence to satisfactorily pin that the handwriting on the letter Exh. D15 was by the plaintiff. Further no transfer was executed by the plaintiff in favour of the defendant. </em><em><u>This casts doubt on the alleged agreement to why no step was taken during all this time to have the transfer executed in favour of the defendant”</u></em><em><u>(emphasis added</u></em><br /> The learned trial<em> </em>Judge gave two reasons for not accepting that a contract of’ exchange had been made. The first in that Exh.D I5 was not proved to have been authored by Nakakande. The second was that Failure to execute a transfer by Nakakande in Favour of Kasule “cast doubt’’ on existence of such contract of exchange. It was therefore, incorrect to say, as alleged by Zaabwe that the reason why the learned Judge held there was no contract of exchange was “<u>because of the f</u><u>act </u><u>that</u> <u>no </u><u>transfer was</u><u> executed’’</u>. That fact only cast a doubt in the learned Judge mind (as it does in mine) on the existence of the alleged contract no doubt the learned Judge had in mind the evidence on record that Kasule had long experience of registration of transfer of land title and must have known that in order for him to become the sole proprietor of the Plots which were jointly owned, he would have to obtain from Nakakande a executed in his favour. It was therefore legitimate for the learned Judge to wonder as he must have, why, if there had been such contract of exchange, Kasule had not insisted on getting the transfer from Nakakande for over 1 2 years and had got<strong> </strong>round to make the claim<strong> </strong>Court only after he was sued. This consideration however was not the basis of the court conclusion. It was<strong> </strong>in addition to the<strong> </strong>finding that the alleged was not proved through<strong> </strong>Exh. D 15 or otherwise<strong>. </strong>The burden of proof was on Kasule to prove the contract of exchange. Nakakande added to the burden in her testimony in cross-examination<strong> </strong>when she explained why Kasule was to pay for the Kibanja at Makindye. She said<br /> “<em>I did not jointly with the defendant buy a Kibanja at Makindye. I bought it alone. I told the defendant to pay for the kibanja on my behalf. The money was from the rents from my houses which the defendant was collecting. Those houses were at Kitigoma, Jinja Road.”</em><br /> In view of this, it cannot be said without more that payment for the Kibanja at Makindye was in part performance of the alleged contract of exchange. I agree with the learned trial judge that there was no adequate proof that the parties entered into the alleged contract of exchange. I am therefore unable to hold that the learned trial judge erred in law or fact in this regard. In my view the third, fourth, fifth and sixth also ought to fail. Before concluding I am constrained to refer to a legal that was overlooked at the trial and in toe submissions or appeal, namely determination of action. In his submission Mr. Zaabwe obliquely referred to it, but not surprisingly he did not pursue it, as it obviously destroys his clients case. In the admission on he fourth ground he wrote:<br /> <em>“1 </em><em>submit </em><em>that execution of a transfer is not an element in the formation of the contract</em><em>. An agreement for the</em><em> exchange</em><strong><em> </em></strong><em>of land is</em><em> valid </em><em>despite the </em><em>fact that</em><strong><em> </em></strong><em>no transfer is executed. I </em><em><u>further</u></em><em><u> </u></em><em><u>submit</u></em><strong><em><u> </u></em></strong><em><u>apart</u></em><em><u> fro</u></em><em><u>m </u></em><em><u>limitation</u></em><strong><em><u> </u></em></strong><em><u>of action</u></em><em><u> failure to </u></em><em><u>take further </u></em><strong><em><u> </u></em></strong><em><u>steps to</u></em><strong><em><u> </u></em></strong><em><u>have </u></em><em><u>the transfer</u></em><strong><em><u> </u></em></strong><em><u>executed does not make th</u></em><em><u>e</u></em><em><u> transfer </u></em><em><u>v</u></em><em><u>oid. </u></em><br /> I counter claim Kasule sought to enforce a contract The alleged contract is said to have been entered into on or about l0/8/72. The counter-claim was filed in court on 30/8/84. That was more than 12 years after the agreement is supposed to be reached. There is scanty evidence as to what transpired after the alleged agreement. In examination-in-chief, Kasule did not indicate why there was no implementation of the alleged contract alter he made the payment. In cross examination he said that Nakakande refused without indicating when. This is what he said<br /> “We have agreed as brother and sister that the plaintiff takes the kibanja at Makindye when I remained with the lands. We agreed on this in 1970’s. She refused to come to me to have the lands transferred to my sole ownership and instituted this suit.”<br /> <br /> This to me that Kasule’s cause of action, if<strong> </strong>any, arose in the 1970’s when Nakakande refused to transfer her interest in the 9<strong> </strong>Plots which she had allegedly to exchange for the “holding” at Makindye. It follows therefore that when the claim was bought to Court on 30/8/84, the action was time-barred under a) of the Limitation Act. On that ground I would also have held as a matter of law that Kasule had no subsisting cause of action and his appeal on the counterclaim could not be sustained.<br /> In the result I find no merit in this appeal and would dismiss it with costs of the appeal to the Respondent. In my view the costs payable should include the expenses of partitioning the 9 Plots as ordered by the High Court.<br /> Date at Mengo this 26th day of March 1998.<br /> <strong>J. N.MU</strong><strong>LENGA </strong><br /> <strong><u>JUSTICE OF TH</u></strong><strong><u>E </u></strong><strong><u>SUPRE</u></strong><strong><u>ME COURT.</u></strong><strong> </strong><br /> <br /> &nbsp;</p> </div></div></div><div class="view view-download-button view-id-download_button view-display-id-entity_view_1 view-dom-id-33b0700dbcbf81a6c1cf85254693eb5f"> <div class="view-content"> <div class="views-row views-row-1 views-row-odd views-row-first views-row-last"> <div class="views-field views-field-field-download"> <div class="field-content"><a href="https://old.ulii.org/system/files/judgment/supreme-court/1998/6/supreme-court-1998-6.rtf" target="_blank"><img src="https://africanlii.org/sites/default/files/Download-Button-red.png" width="180"> </a></div> </div> <div class="views-field views-field-field-download-1"> <div class="field-content"></div> </div> </div> </div> </div> Mon, 27 Jul 2015 13:32:22 +0000 Anonymous 15319 at https://old.ulii.org