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Galina v Kibuuka & Anor (Civil Appeal No. 42 of 2016)

Court of Appeal · [2019] UGCA 145 · 2019 Appeal Partly Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court (Land Division) decision in a suit to remove caveats on land
Decision
Appeal partly allowed; High Court judgment set aside and substituted; appellant's name to be cancelled from titles and first respondent restored as proprietor; appellant entitled to recover UGX 70 million advanced

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Holding

The Court of Appeal held that the transaction between the parties was a money lending agreement secured by land titles, not a sale of land. The appellant advanced UGX 70 million to the first respondent who deposited his land titles as security, creating an equitable mortgage. The appellant's transfer of the titles into his own names and those of third parties was fraudulent, and payment of the purchase price under both agreements was not proved. The court ordered cancellation of the appellant's names and restoration of the first respondent as proprietor, but recognised the appellant's right to recover the UGX 70 million advanced. Interest of 20% per month was found harsh, unconscionable and unenforceable.

Facts

The first respondent and the late Dan Kyobe executed two agreements in November and December 2006 concerning plots of land at Kawuku, Bunga. The appellant (administrator of Kyobe's estate) contended these were sales of land, asserting payment of UGX 84 million under the first agreement and UGX 120 million under the second. The first respondent maintained the agreements were security for money borrowed, denying any sale. Evidence showed the appellant had advanced UGX 70 million, to which UGX 14 million interest (at 20% per month) was added to reach UGX 84 million. No witness confirmed payment of UGX 120 million, and the witnessing advocate was not called. The appellant filled in transfer forms himself, and a handwriting expert found signatures on certain transfer forms were scanned and pasted rather than signed by the first respondent. Kyobe transferred the plots into his own names and those of his children, then sold some to third parties. The first respondent lodged caveats. Kyobe sued to remove the caveats; the trial Judge found for the first respondent, and this appeal followed.

Issues

  1. Whether the transaction between the appellant and the first respondent was a sale of land or a money lending agreement secured by land titles.
  2. Whether the transfer of the suit properties into the appellant's names was fraudulent.
  3. Whether the trial Judge erred in ordering cancellation of all suit titles, including those of a third party not before the court.
  4. Whether the appellant was entitled to recover money advanced to the first respondent and to charge interest.

Orders

  • The Judgment of the High Court is set aside and substituted with this Judgment, allowing the appellant's claim in part and the counterclaim in part.
  • The Commissioner Land Registration is directed to cancel the name of the appellant from all the suit properties and restore the first respondent as registered proprietor.
  • UGX 20 million awarded as general damages to the first respondent on the counterclaim, with interest at court rate from date of the High Court Judgment.
  • The first respondent shall pay the appellant UGX 70 million as money had and received, with interest at 18% per annum from date of filing the suit until payment in full, less the amount in paragraph 3.
  • The appellant shall pay 2/3 of the costs of the appeal and the High Court.

Key headnotes

Land Transactions — Distinction Between Sale of Land and Money Lending Secured by Land Titles
Where money is advanced and land titles are deposited as security with an agreement to repay, the transaction is a money lending agreement secured by an equitable mortgage rather than a sale of land, notwithstanding language of sale in the agreement.
Fraud — Transfer Using Forged or Scanned Transfer Forms
A registered proprietor who transfers land into his own name and the names of third parties using transfer forms bearing scanned and pasted signatures, without proof of consideration, commits fraud justifying cancellation of the resulting titles.
Burden of Proof — Failure to Call Essential Witness
Where a party omits to call a witness who would have been essential to prove payment of the purchase price, a presumption arises that the witness's evidence would have been unfavourable to that party.
Interest — Harsh and Unconscionable Rates Charged Without a Licence
Interest charged at 20 percent per month by a person without a money lending licence is harsh, unconscionable and unenforceable, and the court may decline to grant it while still ordering repayment of the principal advanced.
Equitable Mortgage — Recovery of Principal Before Return of Security
Where land titles are deposited as security for a loan creating an equitable mortgage, the lender is entitled to repayment of the principal advanced before the borrower can recover the deposited titles.

Cases cited (4)

  • Fredrick J.K Zaabwe v Orient Bank Ltd & 5 Others (Civil Appeal No. 4 of 2006)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Bogere Moses v Uganda (Criminal Appeal No. 1 of 1997)
  • Fr. Narcensio Begumisa & Others v Eric Tibebaaga (Civil Appeal No. 17 of 2002)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.