Wakilii

Ddumba & Another v Bagambe (Civil Appeal 9 of 2022)

Supreme Court · [2024] UGSC 29 · 2024 Appeal Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second civil appeal from the Court of Appeal, which had affirmed a High Court first-instance decision.
Decision
Appeal allowed; the respondent's registration cancelled and the suit land reverted to the estate of the late Charles Makumbi.

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Holding

On a second appeal in a land dispute, the Supreme Court (by majority, Chibita and Madrama JJSC dissenting) allowed the appeal and held that the respondent was not a bona fide purchaser for value without notice. He had notice of the beneficiaries' equitable interest and their lodged caveat before completing payment, yet procured removal of the caveat and his own registration through sharp practice. The Court of Appeal had failed to re-evaluate material evidence and wrongly disregarded the binding decision in Betty Kizito that under-declaration of consideration to evade stamp duty is fraud rendering title void under section 77 of the Registration of Titles Act. The respondent's registration was cancelled and the land reverted to the estate.

Facts

Solome Kaweesa, administrator of the estate of the late Charles Makumbi, sold estate land (Busiro Block 459 Plot 15) to the respondent on 2 June 2004 for UGX 96,000,000, of which UGX 50,000,000 was paid as a deposit and the balance later. The beneficiaries, including the appellants, had not consented to the sale and lodged a caveat shortly after the agreement, before full payment. The respondent, aware of the beneficiaries' claim, approached their lawyer seeking to prevent revocation of the letters of administration and offered to pay the beneficiaries directly, yet proceeded to pay the vendor. He moved the Commissioner Land Registration to remove the caveat, was registered as proprietor, and immediately subdivided the land. The beneficiaries obtained revocation of Kaweesa's letters of administration and a fresh grant in their favour, and were registered as administrators. The application for consent to transfer under-declared the consideration as UGX 40,000,000 against the true UGX 96,000,000. The High Court and Court of Appeal found the respondent a bona fide purchaser; the beneficiaries appealed.

Issues

  1. Whether the Court of Appeal erred in striking out grounds 4, 5, 7, 8, 11, 13, 20 and 21 as mixed up and argumentative contrary to Rule 86(1).
  2. Whether an administrator registered as proprietor under section 134 of the Registration of Titles Act has absolute power to dispose of estate property in disregard of the beneficiaries' interests, and whether the administratrix was within her powers to sell the suit land.
  3. Whether the respondent was a bona fide purchaser of the suit land for value without notice.
  4. Whether the suit land was transferred into the respondent's names through sharp practice, fraud or illegality.
  5. Whether the Court of Appeal erred in ignoring the binding Supreme Court decision in Betty Kizito by holding that under-declaration of the consideration to evade stamp duty did not constitute fraud.

Orders

  • Appeal allowed.
  • The judgment and orders of the High Court and the Court of Appeal are set aside and substituted.
  • An order for cancellation of the names of the respondent from the Register and cancellation of the certificate of title to the suit land and all subdivisions.
  • The suit land be reverted to the estate of the late Charles William Makumbi.
  • The respondent surrenders the subdivided titles to the Registrar of Titles for cancellation.
  • The respondent pays the appellants' costs of this appeal and of the courts below.

Key headnotes

Land & Property — Bona Fide Purchaser for Value — Burden of Proof and Notice
A person relying on the defence of bona fide purchaser for value bears the burden of proving both that he purchased for value and that he had no actual or constructive notice of fraud at the time of purchase.
Land & Property — Bona Fide Purchaser — Notice of Beneficiaries' Equitable Interest
A purchaser who, before completing payment, acquires notice of beneficiaries' equitable interest in estate land and nevertheless procures the removal of their caveat and his own registration is disqualified from the protection of a bona fide purchaser for value without notice.
Land & Property — Competing Equities — First in Time Prevails
Where two equitable interests in land compete, the interest first in time prevails; a purchaser with notice of an earlier equity cannot equitably insist on completing a transfer that would defeat it.
Land & Property — Sharp Practice — Effect on Title
Sharp practice — conduct that may be technically within the law but is unethical, including wilful blindness and dealings designed to deprive another of an unregistered interest in land — disqualifies a purchaser from claiming bona fide purchaser status.
Land & Property — Under-Declaration of Consideration — Fraud Voiding Title
Under-declaration of the true consideration in a land transfer form, in breach of section 92(1) of the Registration of Titles Act and designed to defraud government of revenue, constitutes fraud, and a title acquired in such circumstances is void under section 77 of the Registration of Titles Act.
Constitutional Law — Doctrine of Precedent — Article 132(4)
Under Article 132(4) of the Constitution the Court of Appeal is bound to follow decisions of the Supreme Court on questions of law; a decision that departs from a binding Supreme Court decision on the interpretation of the law cannot stand.
Succession & Estates — Administrator's Powers under s.134 RTA — Trust for Beneficiaries
Sections 25 and 180 of the Succession Act vest estate property in the administrator upon trust for the beneficiaries; section 134 of the Registration of Titles Act must be read together with the Constitution and the Succession Act so as to protect beneficiaries' interests rather than confer absolute personal ownership on the administrator.

Legislation cited (22)

  • Registration of Titles Act s.134
  • Registration of Titles Act s.77
  • Registration of Titles Act s.92(1)
  • Registration of Titles Act s.140
  • Registration of Titles Act s.139(1)
  • Registration of Titles Act s.176(c)
  • Registration of Titles Act s.181
  • Succession Act s.2(a)
  • Succession Act s.25
  • Succession Act s.180
  • Succession Act s.192
  • Succession Act s.270
  • Judicature Act s.7
  • Land Act s.91
  • Stamp Duty Act s.24(3)
  • Constitution of Uganda Article 126(2)(e)
  • Constitution of Uganda Article 132(4)
  • Constitution of Uganda Article 247
  • Court of Appeal Rules r.30(1)
  • Court of Appeal Rules r.86(1)
  • Supreme Court Rules r.30(1)
  • Civil Procedure Rules Order 6 r.3

Cases cited (21)

  • Betty Kizito v David Kizito Kanonya & 7 Others (Civil Appeal No. 8 of 2018)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Tito Buhingiro v Uganda (Criminal Appeal No. 8 of 2014)
  • David Sajjaaka Nalima v Rebecca Musoke (Civil Appeal No. 12 of 1985)
  • Kampala Bottlers Ltd v Damanico (U) Ltd (Civil Appeal No. 22 of 1992)
  • Fredrick Zaabwe v Orient Bank & Others (Civil Appeal No. 4 of 2006)
  • Yakobo M.N. Ssenkungu & Others v Cresensio Mukasa (Civil Appeal No. 17 of 2014)
  • Nanteza & 3 Others v Nasani & Another (Civil Appeal No. 28 of 2013)
  • Silvester Byaruhanga v Ruvugwaho (Civil Appeal No. 9 of 2014)
  • Lutalo Moses v Ojede Abdallah (Civil Appeal No. 15 of 2019)
  • Milly Masembe v Sugar Corporation & Another (Civil Appeal No. 1 of 2000)
  • Mpungu & Sons Transporters Ltd v Attorney General & Another (Civil Appeal No. 17 of 2001)
  • Ismail Jaffer Allibhai & Others v Nandala Harjivan Karia & Another (Civil Appeal No. 53 of 1995)
  • John Katarikawe v William Katwiremu [1977] HCB 187
  • Barugahare v Attorney General (Civil Appeal No. 18 of 1994)
  • Lukyamuzi v Attorney General & Electoral Commission (Constitutional Appeal No. 2 of 2002)
  • Oriental Insurance Brokers Ltd v Transocean (U) Ltd (Civil Appeal No. 55 of 1995)
  • R v Hassan bin Said (1942) 9 EACA 62
  • Husky International Electronics Inc. v Ritz No. 15-145 of 2016 (Supreme Court of the United States)
  • Attorney General v Salvatori Abuki (Constitutional Appeal No. 1 of 1998)
  • Attorney General v Tinyefuza (Constitutional Appeal No. 1 of 1997)
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