Wakilii

Kaddu v Kaddu (Divorce Cause 2 of 2018)

High Court · [2022] UGHCFD 39 · 2022 Cross-petition Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Divorce petition by husband on grounds of cruelty; cross-petition by wife on grounds of adultery and cruelty; default judgment entered on cross-petition for formal proof hearing on matrimonial property dispute
Decision
Cross-petition granted — suit property declared matrimonial property to be registered in both spouses' names as tenants in common; corporate veil lifted; company's name struck from title; alimony refused

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that property purchased during marriage with financial contributions from both spouses is matrimonial property regardless of whose name appears on title. The husband's transfer of the suit property to a company he controlled four years after joint purchase, using underdeclared consideration and without wife's knowledge, was fraudulent. Court lifted corporate veil where company was incorporated solely to defeat spouse's property rights. Suit property ordered to be registered in both spouses' names as tenants in common. Alimony refused where wife gainfully employed and not economically disadvantaged.

Outcome

Cross-petition granted — suit property declared matrimonial property to be registered in both spouses' names as tenants in common; corporate veil lifted; company's name struck from title; alimony refused

Facts

Husband and wife married in 1996. During marriage they jointly acquired two properties: one in Muyenga (registered in joint names) and the suit property at Bukasa purchased from wife's sister for UGX 32,000,000 in 2007-2008. Wife contributed financially to both properties. Husband held certificate of title and blank signed transfer. In 2012 husband incorporated Johka Print Machinery Ltd in which he held 98% shares. In 2014 he transferred suit property to the company, underdeclaring consideration as UGX 25,000,000. Wife was unaware. In December 2017 husband transferred 93% company shares to third party for UGX 980,000. One month later, January 2018, husband filed divorce petition. Wife cross-petitioned seeking declaration that suit property is matrimonial and that transfer to company was fraudulent. Parties entered partial consent on divorce and Muyenga property but suit property remained in dispute.

Issues

  1. Whether the suit property comprised in Kyadondo Block 246 Plot 1635 land at Bukasa Kyeitabya, Makindye is matrimonial property.
  2. Whether the petitioner fraudulently transferred the suit property to Johka Print Machinery Ltd.
  3. What remedies are available to the cross petitioner.

Orders

  • The suit property comprised in Kyadondo Block 246 Plot 1635 land at Bukasa, Kyeitabya is declared matrimonial property to which Mr. John Kaddu Bwabye and Mrs. Teddy Kyeyune Kaddu shall have an equal share.
  • The cross respondent Mr. John Kaddu Bwabye used Johka Print-Machinery Limited as a device, sham, cloak, mask to fraudulently transfer the suit property and the veil of incorporation is lifted.
  • The Commissioner Land Registration is ordered to strike out the entry of Johka Print Machinery Limited as registered proprietor of the suit property.
  • The Commissioner Land Registration is ordered to register the suit property in the names of John Kaddu Bwabye and Teddy Kyeyune Kaddu as tenants in common.
  • No order made for mesne profits because no evidence was adduced that any income has accrued from the suit property.
  • No order for alimony made because the cross petitioner is not economically disadvantaged and is capable of meeting her reasonable needs.
  • The cross respondent Mr. John Kaddu Bwabye shall bear the costs of the cross petition.

Rules and key headnotes

Matrimonial Property — Definition — Joint Contribution
Matrimonial property to which each spouse is entitled is that property which the parties choose to call home and to which they jointly contribute, whether the contribution is direct and monetary or indirect and non-monetary.
Matrimonial Property — Proof of Contribution — Absence of Documentary Evidence
Where spouses jointly purchase property during marriage and one spouse retains the sale agreement and title documents, it is not uncommon in the marriage setting for either spouse to keep joint documents, and the absence of documentary evidence in the other spouse's possession does not defeat their claim to the property where credible testimony establishes joint contribution.
Fraud — Transfer of Matrimonial Property — Under-declaration of Consideration
A transfer of matrimonial property obtained by a spouse who underdeclares the consideration on transfer documents in order to defraud the government of tax is null and void and the whole transaction cannot be sustained.
Lifting Corporate Veil — Fraud — Matrimonial Property
Where a spouse incorporates a company and transfers jointly-owned matrimonial property into the company's name with the sole intention of concealing identity and defrauding the other spouse of their interest, the court will lift the corporate veil and attribute the acts of the company to the individual spouse.
Lifting Corporate Veil — Proof of Fraud — Standard of Proof
For a court to lift the corporate veil on grounds of fraud, the applicant must prove fraud to the satisfaction of the court. Fraud must be attributable to the transferee either directly or by necessary implication and must be proved strictly, the burden being heavier than the balance of probabilities generally applied in civil matters.
Alimony — Economic Disadvantage — Refusal
Alimony is designed to afford economic justice between parties and ensure that the reasonable needs of a spouse unable to support herself through appropriate employment are met. Where a spouse is gainfully employed and capable of meeting her reasonable needs, alimony will be refused as its purpose is not to reward one party and punish the other.
Registration of Titles Act — True Consideration — Requirement
Section 92(1) of the Registration of Titles Act requires that where consideration for a transfer does not consist of money, the true consideration must be concisely stated. Under-declaration of monetary consideration to defraud government of revenue renders the buyer not bona fide and the transaction illegal and fraudulent.

Legislation cited (7)

Cases cited (15)

  • Julius Rwabinumi v Hope Bahimbisomwe (Supreme Court Civil Appeal No. 10 of 2009)
  • Muwanga v Kintu (High Court Divorce Appeal No. 135 of 1997)
  • Fredrick Zaabwe v Orient Bank & 5 Others (Supreme Court Civil Appeal No. 4 of 2006)
  • Janet Diana Cope & 4 Others v Janet Namuli & Allan Katusiime (High Court Civil Suit No. 33 of 2005)
  • Samuel Kizito Mubiru Versus G.W Byansiba & Anor (1985) HCB 106
  • Salomon v. Salomon and Co. Ltd. (1897) A.C 22
  • Littlewoods Mail Order Stores Ltd V. Inland Revenue Commissioners (1969) 1WLR 1241
  • Gilford Motor Company Ltd v. Horne.(1933)Ch. 935
  • Jones v. Lipman (1962) 1WRL 832
  • Stanbic Bank Uganda Ltd v Ducat Lubricants (U) Ltd & 3 Others (Miscellaneous Application No. 845 of 2013)
  • Fredrick J.K. Zaabwe v Orient Bank Ltd & Others (Civil Appeal No. 4 of 2006)
  • Kampala Bottlers Ltd v Damanico (U) Ltd (Supreme Court Civil Appeal No. 22 of 1992)
  • HL Bolton Co Vs TJ Graham and Sons [1956] 3 All ER 624
  • Lennard's Carrying Co Ltd Vs Asiatic Petroleum Co Ltd ([1915) AC 705
  • Ayiko Mawa Solomon v Lekuru Annet Ayiko (High Court Divorce Cause No. 1 of 2015)

Full judgment

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

Kaddu v Kaddu (Divorce Cause 2 of 2018) [2022] UGHCFD 39 (23 August 2022)
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.