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Kizito v Kizito & 7 Others (Civil Appeal 8 of 2018)

Supreme Court · [2019] UGSC 75 · 2019 Appeal Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second appeal to the Supreme Court from the Court of Appeal's reversal of a High Court land-fraud decision.
Decision
Appeal allowed; Court of Appeal decision set aside; appellant reinstated as tenant in common on the Muyenga title and awarded UGX 100,000,000 general damages.

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Holding

The Supreme Court allowed the appeal. It agreed that the 1st respondent's mere refusal to perform his obligation under the oral land-exchange contract was breach of contract, not fraud, absent a preconceived intention not to perform. However, his concealment of the true consideration in the transfer form — declaring an exchange of land as a gift and falsely declaring developed land undeveloped to evade tax — amounted to fraud, rendering the transfer void. The registration of the 1st respondent and his children was set aside and the title reverted to the appellant and 1st respondent as tenants in common. Mesne profits were refused for want of evidence, but UGX 100,000,000 general damages and costs were awarded.

Facts

Betty Kizito and her brother David Kizito Kanonya pooled funds from a joint business to buy and develop land at Kyadondo Block 244 Plot 5091, Muyenga, registering it in 1995 as tenants in common. The siblings entered an oral contract under which the appellant would surrender her interest in the Muyenga land to her brother in exchange for parts of his land at Kisugu (Block 244 Plot 1768) and Katwe. The appellant signed a blank transfer form and handed it to the 1st respondent. He completed the form declaring the transfer a gift, and in the accompanying consent form declared the land undeveloped although two houses stood on it, in order to avoid tax. In 2002 he transferred the Muyenga land into the names of himself and his seven children (the other respondents). He never subdivided or transferred the Katwe and Kisugu properties to the appellant, stopped a tenant from paying her rent on the Kisugu property, and the Katwe and Kisugu properties were later sold to third parties.

Issues

  1. Whether the 1st respondent's failure to perform his obligation under the oral land-exchange contract amounted to fraud or merely breach of contract.
  2. Whether the concealment of the true consideration in the transfer form — declaring the transfer a gift and declaring the developed land undeveloped — amounted to fraud rendering the transfer void.
  3. Whether the Court of Appeal erred in ordering subdivision of the Katwe and Kisugu properties without first ascertaining their status.
  4. Whether the appellant was entitled to mesne profits and general damages.

Orders

  • Appeal allowed and the decision of the Court of Appeal set aside.
  • Since the Kisugu and Katwe properties have long been sold to third parties, the appellant is to be reinstated onto the property at Muyenga.
  • The Commissioner Land Registration is ordered to reinstate the appellant onto the certificate of title of the suit land as a tenant in common with the 1st respondent.
  • General damages of UGX 100,000,000 awarded to the appellant.
  • Costs of this appeal and in the courts below awarded to the appellant.

Key headnotes

Contract Law — Breach of Contract — Distinction from Fraud
A party's refusal or failure to perform a contractual obligation, absent a preconceived intention not to perform formed at or before the contract, constitutes a breach of contract and not fraud.
Land & Property — Registration of Titles — Statement of True Consideration (RTA s.92(1))
Where the consideration for a transfer of land does not consist of money, the true consideration must be concisely stated; declaring an exchange of land as a gift contravenes section 92(1) of the Registration of Titles Act and is a breach of legal duty.
Land & Property — Fraud — Concealment of True Consideration and Evasion of Revenue
Concealing the true consideration of a land transaction, or falsely declaring developed land to be undeveloped to evade tax, defrauds the government of revenue and renders the resulting transfer and registration void for fraud.
Evidence — Proof of Fraud — Standard
Fraud is a question of fact that must be strictly proved; mere suspicion or inference of fraud is insufficient and the facts constituting fraud must be clearly and conclusively established.
Land & Property — Trusts — Evidence of Trusteeship on the Register
A person registered on the title as a joint proprietor and tenant in common cannot be treated as a mere trustee where the title and record contain no indication of trusteeship, and counsel's unsupported explanation from the bar carries no evidential weight.
Damages & Quantum — Mesne Profits — Nature and Proof
Mesne profits are profits actually received, or which might with ordinary diligence have been received, by a person in wrongful possession; being in the nature of special damages they must be specifically pleaded and proved by evidence of profits, rent value and the period of dispossession, and cannot be awarded on speculation.
Damages & Quantum — General Damages — Breach of Contract — Assessment
The difficulty of assessing general damages is no reason to refuse them; where assessment is difficult the court must nonetheless attempt to ascertain damages, the award being a matter of judicial discretion that places the innocent party so far as money can in the position it would have occupied had the contract been performed.

Legislation cited (2)

  • Registration of Titles Act s.92(1)
  • Civil Procedure Act s.2(m)

Cases cited (19)

  • Yakobo M N Ssenkungu & 4 Others v Cerensio Mukasa (Civil Appeal No. 17 of 2014)
  • Senkungu vs. Yakobo, Supreme Court Civil Appeal No.35 of 2006
  • Kampala Bottlers Ltd v Damanico (U) Ltd (Civil Appeal No. 22 of 1992)
  • Fredrick J K Zaabwe v Orient Bank & 5 Others (Civil Appeal No. 4 of 2006)
  • Gwolo Jackson vs. Uganda, High Court criminal appeal no. 0014 of 201 (Arua)
  • Samuel Kizito Mubiru & Anor v G.W. Byensiba & Anor (Civil Suit No. 513 of 1982)
  • Tradimpex (U) Ltd v Chris Serunkuma & Christine Okot (HCCS No. 1519 of 1999)
  • Janet Diana Cope & 4 Others v Janet Namuli & Allan Katusiime (HCCS No. 33 of 2005)
  • Mudiima Issa & 5 Others v Elly Kayanja & 2 Others (HCCS No. 232 of 2009)
  • Vivo Energy (U) Ltd v Lydia Kisitu (Civil Appeal No. 7 of 2015)
  • Chaplin v Hicks [1911] 2 KB 786
  • Obongo v Kisumu Municipal Council [1971] EA 91
  • Crown Beverages Ltd v Sendi Edward (Civil Appeal No. 1 of 2005)
  • Haji Asuman Mutekanga v Equator Growers Ltd (Civil Appeal No. 7 of 1995)
  • Prehn v Royal Bank of Liverpool (1870) LR 5 Ex 92
  • Crane Bank Ltd v Nipun Narottam Bhatia (Civil Appeal No. 2 of 2014)
  • Kyambadde v Mpigi District Administration [1983] HCB 44
  • Bovet V Waletr (1917) 62 Sol Jo 104
  • Hall vs. Ross (1831) 3 All ER, 672
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.