Wakilii

Kyampangi Farm Estates Ltd and Another v Byamukama and Others (Civil Suit No. 244 of 2008)

High Court · [2022] UGHCLD 207 · 2022 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit concerning disputed sale of shares versus land, fraud allegations, and wrongful registration on certificate of title
Decision
Judgment entered for the Plaintiffs. Defendant held to have purchased shares (not land) and to have fraudulently obtained registration on Plot 10. Permanent injunction granted. 4th Counter Defendant's title to Plot 11 upheld. General damages of UGX 100,000,000 awarded to Plaintiffs with 6% interest, subject to offset for sums paid by Defendant under prior agreements.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the Defendant purchased 40% shares in the plaintiff company, not land, based on agreements of 1993 and 2000. The Defendant fraudulently transferred Plot 10 into his name by forging the 2nd Plaintiff's signature. The deregistration of the Defendant from Plot 10 was lawful. The Defendant was found to be a trespasser. The 4th Counter Defendant lawfully acquired Plot 11 as a bona fide purchaser for value without notice.

Outcome

Judgment entered for the Plaintiffs. Defendant held to have purchased shares (not land) and to have fraudulently obtained registration on Plot 10. Permanent injunction granted. 4th Counter Defendant's title to Plot 11 upheld. General damages of UGX 100,000,000 awarded to Plaintiffs with 6% interest, subject to offset for sums paid by Defendant under prior agreements.

Facts

Kyampagi Farm Estates Ltd and its director Mwesigye Sam entered into agreements in 1993 and 2000 with Byamukama Fred for the sale of shares in the company. Plaintiffs alleged the Defendant purchased 40% shares in total but claimed land instead. In 2005, Plaintiffs handed certificates of title for Plot 10 and Plot 11 to the Defendant for valuation purposes to secure a loan. The Defendant subsequently forged the 2nd Plaintiff's signature and fraudulently transferred Plot 10 into his name. The Defendant also claimed to have purchased land (not shares) totaling over 750 acres and occupied both plots from 1993. A forgery case was instituted and later withdrawn. In 2011, the 2nd Plaintiff sold Plot 11 to Mugarura Peter. The Defendant counterclaimed alleging he lawfully purchased land and was wrongfully deregistered from Plot 10.

Issues

  1. Whether there was a sale of land or sale of shares between the Plaintiffs and the Defendant and if so, how much land or shares was bought?
  2. Whether any of the parties is liable for fraud?
  3. Whether the 2nd Plaintiff lawfully caused the cancellation of the Defendant's registration on Plot 10 and if the Defendant is entitled to restoration thereon?
  4. Whether there was trespass by the Defendant on the suit land?
  5. Whether the 4th Counter Defendant Peter Mugarura lawfully acquired land comprised in LRV 2414 Folio 6 Singo Block 771 Plot 11?
  6. What remedies are available to the parties?

Orders

  • The Defendant purchased 40% shares in the plaintiff company, but his registration as a shareholder is subject to the directors agreeing to enter him in the register in accordance with the Articles of Association.
  • The 4th Counter Defendant is the legally recognised owner of land comprised in Singo County Block 771 Plot 11.
  • A permanent injunction is issued restraining the Defendant, his agents, assignees and successors in title from any future trespass on the suit land.
  • Let a Government surveyor open boundaries for both Plot 10 and Plot 11 and cause the necessary subdivision to give effect to the orders above. The Plaintiffs and 4th Counter Defendant will equally foot the surveyor's costs.
  • The Defendant is ordered to pay the Plaintiffs general damages to a tune of UGX 100,000,000 at an interest of 6% per annum.
  • The Defendant is entitled to offset from the general damages in (5) above, the money he paid under the agreements of 1993 and 2000.
  • The Counter Claim fails.
  • The Defendant shall bear the costs to the 1st Plaintiff in both the main suit and the counterclaim and costs to the 3rd and 4th counter defendants in the counterclaim.
  • The 2nd Plaintiff and the Defendant shall meet their own costs in the main suit and the counterclaim.

Rules and key headnotes

Company Law — Share Transfers — Validity in Absence of Board Resolution
A transaction purporting to transfer shares in a company without a valid resolution of the company or consent of other shareholders where pre-emption rights exist is ultra vires and does not confer valid title to the shares.
Company Law — Corporate Separate Legal Personality — Application of Salomon Principle
Upon incorporation, a company has a separate legal entity from its members and officers and can own and deal with property itself. Where shares in a company owning land are sold, the purchaser acquires shares in the company, not direct title to the land, which remains vested in the company.
Contract Law — Interpretation — Contra Proferentem Rule
Where the terms of a contract are uncertain or ambiguous, the term is to be construed against the party attempting to rely on it. A court will not give effect to an interpretation that produces an unintelligible or contradictory result.
Contract Law — Parole Evidence Rule — Variation of Written Agreements
The parole evidence rule prevents oral evidence from being adduced to add to, vary or contradict a written instrument. However, where there is a dispute as to what transpired between the parties, evidence can be adduced to show that a written contract has been varied or modified.
Land & Property — Fraud — Forged Transfer Instruments and Deregistration
Where a party fraudulently transfers land into his name by forging the signature of the registered proprietor on a transfer instrument, the Commissioner Land Registration is empowered under section 91 of the Land Act to correct such error and deregister the fraudulent transferee. The deregistration is lawful and the fraudulent party is not entitled to restoration on the register.
Tort Law — Trespass to Land — Elements and Possession
Trespass to land occurs when a person makes an unauthorized entry upon land and interferes with another person's lawful possession of that land. A person who is in possession of a certificate of title to land has legal possession and can sue in trespass. Possession for purposes of trespass does not require physical occupation; the slightest amount of possession suffices.
Land & Property — Bona Fide Purchaser — Protection Despite Vendor's Caveat
A purchaser who acquires land for value and without notice of defects in the vendor's title is protected as a bona fide purchaser. A caveat lodged by the registered proprietor to protect his own interest does not constitute notice to a purchaser of a defect in the vendor's title and does not prevent a transferee from acquiring good title.

Legislation cited (3)

  • Land Act s.91
  • Companies Acts (general reference to incorporation and transfer provisions)
  • Limitation Act (general reference)

Cases cited (7)

  • Re Discoverers Finance Corporation Ltd, Lindlar's Case
  • Salomon v Salomon & Co Ltd [1896] UKHL
  • Maye v Colonial Mutual Life Assurance Society (1924) 35 CLR 14
  • Lutaaya v Stirling Civil Engineering Company Ltd (Supreme Court Civil Appeal No. 11 of 2002)
  • Prehn v Royal Bank of Liverpool (1870) LR 5 Exch 92
  • Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Okullo v Apiyo (Civil Appeal No. 26 of 2016)

Full judgment

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

Kyampangi_Farm_Estates_Ltd_and_Another_v_Byamukama_and_Others_(Civil_Suit_No._244_of_2008)_[2022]_UGHCLD_207_(26_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.