Yakobo M.N. Senkungu and Others v Giradesi Katonya and Others (Civil Appeal No. 17 of 2014)

Supreme Court · [2017] UGSC 94 · 2017 Appeal Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second appeal to the Supreme Court from the Court of Appeal in a suit to cancel certificates of title on the ground of fraud.

Decision

Appeal dismissed; the Court of Appeal's decision cancelling the certificate of title on the ground of fraud upheld.

The full judgment

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Holding

The Supreme Court, as a second appellate court, dismissed the appeal and upheld the Court of Appeal's finding of fraud. Land registered to a proprietor who died in 1941 was purportedly transferred from him in 1978, and through successive transfers to the appellants. The Court held that fraud need not involve a false representation and may include fraudulent conveyance schemes. The subsequent transferees (appellants 2-5) were not bona fide purchasers for value without notice: they had actual and constructive notice of the respondent's occupation and of pending litigation against the first appellant. Once fraud in the initial transfer was shown, the burden shifted to the appellants to prove bona fide purchase, which they failed to discharge.

Facts

Gusite Nakaima was the original registered proprietor of two parcels of land at Mawogola (Blocks 30 and 31), registered in his name in 1932. He died on 13 June 1941. The respondent, holder of letters of administration of Nakaima's estate, sought in 1986 to transfer the land into his name but discovered it had already been dealt with by others. The certificate of title showed that in 1978 Peter Ssekasiko became registered proprietor under a transfer purportedly executed by Nakaima; Ssekasiko transferred to Eugene Ssonko, who in 1979 transferred to the first appellant, Yakobo Senkungu. In 1989 the first appellant transferred the land to the second to fifth appellants as tenants in common. The respondent sued to cancel the certificates of title for fraud, the registered proprietor having died 37 years before the purported transfer. The second to fifth appellants had visited the land, found the respondent and his brother in occupation, attempted to negotiate a purchase, and were informed of a pending suit against the first appellant, yet proceeded. The first appellant declined to appear or give evidence in the trial court and the Court of Appeal.

Issues

Whether the Justices of Appeal erred in holding that the appellants acted fraudulently in acquiring the certificate of title to the suit land.
Whether the appellants were bona fide purchasers for value without notice of the fraud.
Whether the Justices of Appeal failed to evaluate the evidence and wrongly shifted the burden of proof to the appellants.

Orders

Appeal dismissed.
Costs of the appeal awarded to the respondent.

Key headnotes

Land & Property — Certificate of Title — Effect of Fraud (Registration of Titles Act s.77)

A certificate of title obtained by fraud is void against all parties to the fraud, including transferees who were guilty of a fraudulent act or who knew of such act and took advantage of it.

Land & Property — Fraud — Meaning of Actual Fraud

Actual fraud is not confined to false representation; it includes fraudulent conveyance schemes such as secret transfers, transfers to a close relative, transfer of title without transfer of possession, or transfer for grossly inadequate consideration.

Land & Property — Indefeasibility — Fraud as Exception (Registration of Titles Act s.64(1))

A registered proprietor holds the land free of all other interests except in the case of fraud; fraud is the paramount exception to the indefeasibility of a registered title.

Land & Property — Bona Fide Purchaser for Value Without Notice (Registration of Titles Act s.181)

A subsequent transferee is protected from a fraudulently rooted title only where he proves he is a bona fide purchaser, that is, one who acts in good faith, gives valuable consideration, and acquires without notice — actual or constructive — of the fraud.

Land & Property — Constructive Notice — Occupation by a Third Party

A purchaser has constructive notice of an encumbrance where he knew of it and abstained, deliberately or carelessly, from the inquiries a prudent purchaser would make; and one who purchases an estate known to be occupied by a person other than the vendor is bound by the equities of that occupier.

Evidence — Burden of Proof — Shifting in Fraud Claims (Evidence Act s.101-s.106)

In a fraud claim the claimant must first adduce evidence that the transaction was tainted with fraud; once that is established, the burden shifts to the transferees to prove they were bona fide purchasers, and a fact especially within a party's knowledge must be proved by that party.

Legislation cited (8)

Registration of Titles Act s.92(2)
Registration of Titles Act s.64(1)
Registration of Titles Act s.77
Registration of Titles Act s.181
Evidence Act s.101
Evidence Act s.102
Evidence Act s.103
Evidence Act s.106

Cases cited (7)

Kampala Bottlers Ltd v Damanico (U) Ltd (Supreme Court Civil Appeal No. 22 of 1992)
Fredrick J.K. Zaabwe vs. Orient Bank Ltd & Others SCCA No. 141 of 2006
Imelda Ndiwawangi Nakedde v Rony Busuulwa Nsereko & Another [1997] HCB 73
Uganda Posts & Telecommunications v A.K.P.M. Lutaaya (Supreme Court Civil Appeal No. 36 of 1995)
Jones v Smith (1841) 1 Hare
Husky International Electronics, Inc. v Ritz, No. 15-145 (U.S. Supreme Court, 2016)
Avet Sam vs Uganda Criminal Appeal No. ... 2015 (SC)

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