Wakilii

Belex Tours & Travel Ltd v Crane Bank Ltd & Anor (Civil Appeal No. 071 of 2009)

Court of Appeal · [2013] UGCA 13 · 2013 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First appeal from High Court judgment dismissing suit and counter-claim
Decision
Appeal allowed; High Court judgment set aside; appellant reinstated as registered proprietor and awarded substantial damages against both respondents

Observed later treatment

Treatment recorded in citing cases followed in 1 Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Good law Followed in 1 case and applied in 0 cases, with no adverse treatment recorded. Citations fading — 7 citing cases on record, 3 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The Court of Appeal allowed the appeal, holding after re-evaluating the evidence that the sale and transfer of the mortgaged property from Crane Bank to Fang Min was tainted by fraud and collusion, being a private negotiated transfer masquerading as a public auction with no consideration paid before transfer. The court held the mortgage and deed of transfer void for non-compliance with sections 147 and 148 of the Registration of Titles Act, and that the bank had improperly acted as a vendor in its own right contrary to section 37 of the Financial Institutions Act. It ordered cancellation of the 2nd respondent's registration, reinstatement of the appellant, and substantial damages.

Outcome

Appeal allowed; High Court judgment set aside; appellant reinstated as registered proprietor and awarded substantial damages against both respondents

Facts

The appellant obtained credit facilities from Crane Bank secured by a mortgage over leasehold property on Plot 9 Sezibwa Road, Kampala, from which it operated a hotel. Three debentures were also executed. By May 1999 the outstanding debt was about USD 704,829. Following default and negotiations, the property was transferred to the 2nd respondent, Fang Min, for USD 745,000. The bank claimed the sale was by public auction and covered the business as a going concern including movables. The appellant contended only the land was sold and claimed the USD 5,800 balance and the value of movables. The evidence showed transfer forms were lodged at the Land Registry on 14 May 1999 and stamp duty assessed by 17 May, before the sale agreement dated 21 May. The 2nd respondent paid only USD 145,000 of her own money, the remainder being a bank loan secured on the very property. The bank had rejected the appellant's efforts to refinance through Barclays Bank, opening its office on a Sunday to demand full payment.

Issues

  1. Whether the appellant could pursue on appeal a claim for the value of movable property that had been claimed by the second plaintiff at trial.
  2. Whether the consideration of USD 745,000 paid by the 2nd respondent included the price of movable assets or was for the land alone.
  3. Whether the sale and transfer of the mortgaged property from the 1st respondent to the 2nd respondent was tainted by fraud and illegality.
  4. Whether the mortgage and deed of transfer complied with sections 147 and 148 of the Registration of Titles Act.
  5. Whether the plaintiffs were entitled to the reliefs claimed and against whom.

Orders

  • Appeal allowed and judgment of the High Court set aside.
  • Registrar of Titles to cancel registration of the 2nd respondent as proprietor of Leasehold Register Volume 2490 Folio 4 Plot 9 Sezibwa Road, Kampala, and reinstate the appellant as registered proprietor.
  • Registrar of Titles to cancel all encumbrances existing on the title.
  • 2nd respondent to hand over vacant possession of the property, or if transferred to an innocent purchaser for value, to pay the appellant USD 745,000 or its Uganda shilling equivalent with interest at 11% per annum from date of judgment until payment.
  • 1st and 2nd respondents jointly and severally to pay the appellant Shs 194,313,000 with interest at 17% per annum from 15 May 1999 to date of judgment and 8% thereafter until payment.
  • 1st respondent to pay the appellant USD 5,800 with interest at 6% per annum from 15 May 1999 until payment.
  • 1st and 2nd respondents jointly and severally to pay general damages for conversion of movable property of Shs 20,000,000 with interest at court rate from date of judgment until payment.
  • 1st respondent to pay general damages for loss of business and use of property equivalent to USD 704,829 with interest at commercial lending rate from 15 May 1999 to date of judgment, such that they offset the loan.
  • 1st and 2nd respondents jointly and severally to pay costs of this court and the court below.

Rules and key headnotes

Appeals — Duty of First Appellate Court to Re-evaluate Evidence
On a first appeal, the appellate court must re-appraise the evidence as a whole afresh and draw its own inferences and conclusions, and failure to subject the evidence to such fresh and exhaustive scrutiny constitutes an error in law.
Mortgages — Validity of Execution — Registration of Titles Act ss.147 and 148
A mortgage or deed of transfer that does not comply with the mandatory execution requirements of sections 147 and 148 of the Registration of Titles Act — including proper signatures, capacity of signatories and attestation — is invalid.
Fraud — Fraudulent Sale and Transfer of Mortgaged Property
Where a mortgagee and purchaser collude in a series of transactions to disguise a private negotiated sale as a public auction and effect transfer before any consideration is paid, the sale and transfer are tainted by fraud, are null and void, and the purchaser is not a bona fide purchaser for value without notice.
Financial Institutions — Sale of Mortgaged Property — Prohibition on Trading for Own Account
A financial institution exercising its power of sale must do so in the course of satisfaction of the debt due to it and not act as a vendor in its own right, otherwise it risks contravening section 37 of the Financial Institutions Act.
Illegality — Court Will Not Sanction Illegality Discovered on Appeal
An illegality or fraud, once brought to the attention of or discovered by the court even during re-appraisal of evidence on appeal, overrides all questions of pleadings and admissions, and the court cannot sanction that which is illegal.
Power of Attorney — Fiduciary Duty of Mortgagee Acting Under Power in Mortgage Deed
A mortgage deed containing a power of attorney creates a fiduciary relationship, and the grantee may not exercise the power to derive personal benefit or otherwise than in the interest of the grantor.

Legislation cited (10)

Cases cited (17)

  • Coghlan v Cumberland (1898) Ch 704
  • Pandya v R (1957) EA 336
  • Ruwala v R (1957) EA 570
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Bogere Moses and Another v Uganda (Criminal Appeal No. 1 of 1997)
  • Active Automobile Spares Ltd v Crane Bank and Another (Civil Appeal No. 21 of 2001)
  • Makula International v His Eminence Cardinal Nsubuga and Another [1982] HCB 11
  • National Social Security Fund and Sentongo v Alcon International Ltd (Civil Appeal No. 15 of 2009)
  • Stephen Lubega v Barclays Bank (Civil Appeal No. 2 of 1992)
  • Fredrick J.K. Zaabwe v Orient Bank Ltd and 5 Others (Civil Appeal No. 4 of 2006)
  • Kampala Bottlers Ltd v Damanico (U) Ltd (Civil Appeal No. 22 of 1992)
  • General Parts (U) Ltd v NPART (Civil Appeal No. 5 of 1999)
  • Kananura Melvin Consultants Engineers and 7 Others v Conee Kabanda (Civil Appeal No. 31 of 1992)
  • Mattaka v R (1971) EA 499
  • Suleman v Azzam (1958) EA 533
  • Cohen v Syed Ali Abdulla E.P Safi and Brothers (1956) 23 EACA 166
  • Kajubi v Kayanga (1967) EA 301

Cases citing this judgment (7)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Belex Tours & Travel Ltd v Crane Bank Ltd & Anor (Civil Appeal No. 071 of 2009) [2013] UGCA 13 (24 October 2013)
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.