Kiyaga v Segujja & Anor (Civil Appeal No. 37 of 2010)

Observed later treatment

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.

Holding

The Court of Appeal held that a 240% per annum interest rate on a short-term loan was usurious, harsh and unconscionable, and re-opened the transaction under section 26 of the Civil Procedure Act, substituting 20% per annum. Where money is lent on the security of land, an equitable mortgage arises and the mortgagor's equity of redemption cannot be defeated by a clog such as a clause transferring ownership on default. The lender's transfer of the security into her own names, while the borrower was still paying, was fraudulent. The first respondent was not a bona fide purchaser for value as she had notice of the appellant's occupation and of a pending suit. The appeal succeeded on all grounds.

Outcome

Appeal allowed on all grounds; appellant declared lawful proprietor of the suit land, awarded nominal damages of Shs 1,500,000/=, and an eviction order granted against the first respondent

Facts

The appellant borrowed Ug shs 6,000,000/= from the second respondent, secured by depositing his certificate of title to land at Kireka (Block 232 Plot 608). The loan agreement provided for fixed interest of Ug shs 2,400,000/= payable after two months, and stated that on default the lender would become owner of the plot. The repayment period was later extended. The appellant made several payments, which the trial judge found liquidated the principal by March 1998. Nevertheless, the second respondent transferred the land into her own names in December 1997 while payments were still being received, declaring a purchase price of Ug shs 1,500,000/= for property said to be worth about Ug shs 200,000,000/=. She later sold the land to the first respondent during the pendency of the appellant's suit. The first respondent inspected the land, was told the occupant was a relative, and was informed by her lawyer of the pending suit. The High Court dismissed the appellant's claim and, in a separate trespass suit, struck out his defence.

Issues

1. Whether the rate of interest charged on the loan was harsh and unconscionable and ought not to be enforced by legal process.
2. Whether the appellant is entitled to the equity of redemption.
3. Whether the second respondent validly and without fraud transferred the suit land into her names.
4. Whether the first respondent is a bona fide purchaser for value without notice of the suit land.

Orders

• Appeal succeeds on all grounds.
• Judgment in HCCS No. 108 of 1999 set aside; judgment entered for the appellant.
• The appellant is declared the lawful proprietor of the suit land and shall be registered by the Registrar of Titles as proprietor.
• The appellant is awarded nominal damages of Shs 1,500,000/= against the second respondent for fraudulent deprivation of his property, at court interest rate from the date of the High Court judgment until payment in full.
• Costs of the appeal and of the court below awarded to the appellant against the second respondent.
• Judgment in HCCS No. 217 of 2001 set aside; judgment entered for the appellant.
• An eviction order granted against Ms Josephine Segujja.
• Costs of the appeal and of the court below awarded to the appellant against the first respondent.

Rules and key headnotes

Legislation cited (15)

• Civil Procedure Act Cap 71 s.26
• Civil Procedure Act Cap 71 s.26(1)
• Evidence Act Cap 6 s.90
• Evidence Act Cap 6 s.91
• Money Lenders Act Cap 273 s.1(h)
• Registration of Titles Act s.54
• Registration of Titles Act s.116
• Registration of Titles Act s.129(3)
• Registration of Titles Act s.139
• Registration of Titles Act s.176(c)
• Registration of Titles Act s.181
• Registration of Titles Act s.190
• Judicature Act Cap 13 s.14(2)(b)
• Mortgage Act s.8
• Judicature (Court of Appeal Rules) Directions SI 13-10 r.30(1)(a)

Cases cited (21)

• Pandya v R [1957] E.A 336
• Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
• Surgipham Uganda Ltd v Noble Health Ltd and 2 Others (HCCS No. 595 of 2003)
• Juma vs Habib [1975] E.A 103 (T)
• Fang Min v Belex Tours and Travel Limited (Civil Appeal No. 6 of 2013)
• Attorney General v Paul Ssemogerere and Zachary Olum (Constitutional Appeal No. 3 of 2004)
• Kaijuka Mutabaazi v Fang Min (Civil Appeal No. 23 of 2007)
• Erieza Wamala vs Musa Musoke (1920-1929) 111 ULR 120
• Elmandry vs Salam [1956] 23 EACA 313
• Phillips vs Copping [1955] 1 KB 15
• Makula International Ltd v His Eminence Cardinal Emmanuel Nsubuga and Another [1982] HCB 11
• Muhindo Enterprises Ltd v Greenland Bank Ltd (HCCS No. 1287 of 1997)
• Harjit Singh Mangat v Christine Lilian Nakitto (HCCS No. 442 of 2003)
• UCB v Bushuyu (HCCS No. 123 of 1994)
• GOVINDJI POPAT LAL vs PREMCHAND R. LTD [1963] E A
• Commercial Microfinance Ltd v David Edgar Kayondo (HCCS No. 0012 of 2006)
• Fredrick J.K. Zaabwe v Orient Bank Ltd and 5 Others (Civil Appeal No. 4 of 2006)
• Kampala Bottlers v Damaniko (Civil Appeal No. 22 of 1992)
• Uganda Posts and Telecommunications v Abraham Kitumba (Civil Appeal No. 36 of 1997)
• J.W. Kazzora v Rukuba (Civil Appeal No. 13 of 1993)
• David Sekajja Nalima v Rebecca Musoke (Civil Appeal No. 12 of 1985)

Cases citing this judgment (1)

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.

• Abdallah Walusimbi and Another v Wadika Nanayi and Another (Civil Appeal No. 82 of 2017)

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