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Vivo Energy Ug. Ltd v Lydia Kisitu (Civil Appeal 7 of 2015)

Supreme Court · [2017] UGSC 75 · 2017 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second appeal to the Supreme Court from a Court of Appeal decision upholding a High Court judgment in a civil suit to recover land alleged to have been registered through fraud.
Decision
Appeal dismissed; the High Court orders upheld (with the shs 273m award treated as rent rather than mesne profits); appellant to vacate the property and pay rent, general damages and 80% of costs.

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Holding

The Supreme Court dismissed the appeal, holding that the appellant's registered title to the mailo land was tainted with fraud and that the appellant was not a bona fide purchaser for value without notice. Circumstantial evidence — its landlord-tenant relationship with the original owner and its knowledge of the heavily indebted transferor — ought to have put it on inquiry; its wilful blindness amounted to notice of fraud. On mesne profits, the court held they are not special damages but a category of damages requiring proof of profits actually received; though mislabelled, the shs 273m award stood as rent for unlawful occupation. The general damages award of shs 80m was upheld as within the trial court's discretion.

Facts

Semu Kiwanuka, the respondent's grandfather, was the registered proprietor of the suit mailo land at Kibuga Block 38 Plot 63, Kampala. In 1956 he granted a 49-year lease to Gulam Hussein Alibhai, whose leasehold interest the appellant acquired in 1964, operating a fuel station managed by Bob Kasule. On the grandfather's death the respondent's father, Christopher Mukasa, became the mailo proprietor. In 1988 Mukasa told the appellant he would not renew the lease after it refused a rent increase. In 1991, when Mukasa had become of unsound mind, Bob Kasule was registered as proprietor using only a mutation form, with no transfer instrument and no stamp duty paid. The appellant had terminated Kasule's dealership over substantial unpaid debts. In 1995 Kasule sold the mailo interest to the appellant, the debt being set off against the price, and the appellant merged it with its leasehold. The respondent, managing her father's estate, sued to recover the property alleging fraudulent registration. The High Court cancelled the registrations and awarded mesne profits and general damages; the Court of Appeal upheld that decision.

Issues

  1. Whether the registration of the appellant as proprietor of the suit land was tainted with fraud such that the appellant was not a bona fide purchaser for value without notice.
  2. Whether mesne profits are special damages requiring specific pleading and strict proof, and whether the award of shs 273,000,000 was properly upheld.
  3. Whether the award of general damages of shs 80,000,000 was properly made and ought to be interfered with on appeal.

Orders

  • Appeal dismissed with costs.
  • The appellant's and the respondent's names to be cancelled from the register and the respondent's father's names reinstated thereon.
  • The appellant to vacate possession of the property forthwith.
  • The appellant to pay the respondent monthly rent of shs 3,000,000/= from October 2004 till the date of judgment, with interest at 8% per annum.
  • The appellant to pay the respondent monthly rent of shs 4,450,000/= for the period 1981 to September 2004.
  • The appellant to pay the respondent shs 80,000,000/= general damages.
  • The appellant to pay 80% of the costs of the appeal to the respondent.

Key headnotes

Land & Property — Registration of Titles — Bona Fide Purchaser for Value Without Notice — Wilful Blindness
A registered proprietor is not protected as a bona fide purchaser for value without notice where circumstantial evidence ought to have put him on inquiry beyond the certificate of title; wilful blindness to fraud in the transferor's acquisition of the title amounts to notice that defeats the proprietor's claim.
Land & Property — Fraud — Attribution to Transferee
Fraud sufficient to defeat a transferee's registered title must be attributable to the transferee directly or by necessary implication; the transferee must be guilty of a fraudulent act or have known of such an act by another and taken advantage of it, and such knowledge may be inferred from circumstantial evidence.
Evidence — Standard of Proof — Fraud
Fraud must be specifically pleaded and strictly proved to a standard higher than the balance of probabilities ordinarily applied in civil cases.
Land & Property — Purchaser's Duty of Inquiry — Investigation of Land and Seller
A purchaser of land is expected to make thorough investigations of both the land and the seller before purchase; failure to make reasonable inquiries, particularly of persons in occupation or of suspicious circumstances surrounding the seller, constitutes particulars of fraud.
Damages & Quantum — Mesne Profits — Nature and Distinction from Special Damages
Mesne profits are not special damages requiring specific pleading and strict proof, but a special category of damages accruing from wrongful possession of land; they are the net profits the wrongful occupier actually received or might with ordinary diligence have received, after deduction of necessary expenditure and improvements.
Damages & Quantum — Mesne Profits — Burden of Proof
A plaintiff claiming mesne profits must adduce evidence of the profits the person in wrongful occupation actually earned during the period of occupation; absent such evidence a court cannot speculate on the amount of mesne profits.
Damages & Quantum — General Damages — Appellate Interference with Quantum
The quantification of general damages is a matter for the discretion of the trial court, and an appellate court may interfere only where the trial court acted on a wrong principle or where the award is so manifestly high or low as to occasion a miscarriage of justice.

Legislation cited (3)

  • Registration of Titles Act s.59
  • Registration of Titles Act s.176(c)
  • Civil Procedure Act s.2(m)

Cases cited (14)

  • Kampala Bottlers Ltd v Damanico (U) Ltd (Civil Appeal No. 22 of 1992)
  • Uganda Posts & Telecommunications v Abraham Kitumba (Civil Appeal No. 36 of 1995)
  • Sir John Bageire v Ausi Matovu (Civil Appeal No. 7 of 1996)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Fredrick J.K. Zaabwe v Orient Bank (Civil Appeal No. 4 of 2006)
  • Pyramid building Society (in liquidation) V. Scorpion Hotels, (1997) VIC, CA
  • Taylor vs. Stibbert [1803-13] All ER 432
  • Siree vs. Lake Turkana Lodges Ltd (2000) 2EA521
  • Haruna Serunjogi v George William Kijjambu (Civil Appeal No. 33 of 2002)
  • Elliot vs. Boynton [1924] I Ch. 236
  • Uganda Commercial Bank v. Kigozi (2002) I EA 305
  • Dr. J.K. Bhaktharasala Rao v. Industrial Engineers, Nellore, AIR 2005 AP 438
  • Umayun Dhaurajgir vs. Ezra Aboody 2008 (6) Bom. CR 862
  • Robert Coussens v Attorney General (Civil Appeal No. 8 of 1999)
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