Wakilii

Kyobe v Kibuuka & Anor (Civil Appeal No. 42 of 2016)

Court of Appeal · [2019] UGCA 143 · 2019 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from High Court (Land Division) judgment in a suit for cancellation of caveats
Decision
Appeal partly allowed; High Court judgment set aside and substituted; appellant's name cancelled from titles and first respondent restored as proprietor subject to repayment of UGX 70 million to the appellant; first respondent awarded UGX 20 million general damages on the counterclaim

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court of Appeal held that the transactions between the parties were a money lending agreement secured by deposit of the respondent's land titles, creating an equitable mortgage, rather than a genuine sale of land. The appellant failed to prove payment of the purchase price and the transfers into his and third parties' names were fraudulent, effected using scanned transfer forms. The Court set aside the High Court judgment but substituted its own, allowing both the claim and counterclaim in part: the appellant's name was to be cancelled and the first respondent restored as proprietor, subject to repayment of the UGX 70 million advanced. Interest of 20% per month was found harsh, unconscionable and unenforceable.

Outcome

Appeal partly allowed; High Court judgment set aside and substituted; appellant's name cancelled from titles and first respondent restored as proprietor subject to repayment of UGX 70 million to the appellant; first respondent awarded UGX 20 million general damages on the counterclaim

Facts

The first respondent and the late Dan Kyobe executed two written agreements in 2006 concerning land at Kawuku, Bunga. The first agreement recited that the respondent was indebted to Kyobe in shs. 84 million, to be repaid by sale of the land; the second described a sale for shs. 120 million. Kyobe transferred the plots into his names and sold some to third parties, including his children. When he sought cancellation of caveats lodged by the respondent, the respondent contended the titles had been deposited as security for a loan, not sold. Evidence showed the appellant had advanced only shs. 70 million, with shs. 14 million added as interest at 20% per month to make up the shs. 84 million. No witness confirmed payment of the shs. 120 million. A handwriting expert testified that transfer forms bore scanned, pasted signatures rather than genuine ones.

Issues

  1. Whether the transactions between the deceased and the first respondent constituted a sale of land or a money lending agreement secured by the land titles.
  2. Whether the appellant lawfully and validly acquired an interest in the suit properties.
  3. Whether the transfer of the suit properties into the names of the appellant and third parties was fraudulent.
  4. Whether the trial Judge properly ordered cancellation of all the suit titles including those held by a third party.

Orders

  • The Judgment of the High Court is set aside and substituted with this Judgment, allowing the appellant's claim in part and the counterclaim in part.
  • An order is issued directing the Commissioner Land Registration to cancel the name of the appellant from all the suit properties and restore the first respondent as registered proprietor.
  • Ug.shs. 20 million is awarded as general damages to the first respondent on the counterclaim, with interest at court rate from the date of the High Court Judgment.
  • The first respondent shall pay to the appellant Ug.shs. 70 million as money had and received, with interest at 18% per annum from date of filing the suit until payment in full, less payments set out in order 3.
  • The appellant shall pay 2/3 of the costs of the appeal and of the High Court.

Rules and key headnotes

Land & Property — Deposit of Title Deeds as Security — Equitable Mortgage Distinguished from Sale
Where a landowner deposits duplicate certificates of title with a lender as security for money advanced, the transaction constitutes an equitable mortgage rather than a sale of land, notwithstanding that the parties framed it as a sale agreement, and the lender must be repaid before the titles are returned.
Banking & Finance — Money Lending — Harsh and Unconscionable Interest — Unenforceability
Interest of 20 percent per month charged on a loan is harsh and unconscionable and unenforceable, particularly where the lender has no money lending licence, and a court will decline to grant such interest.
Evidence — Burden of Proof of Payment — Failure to Call Essential Witness
A party alleging payment of a purchase price bears the evidential burden of proving it, and failure to call an essential witness who would have proved the payment gives rise to a presumption that the witness would have given evidence unfavourable to that party.
Land & Property — Fraud — Transfer Using Forged or Scanned Transfer Forms
Effecting a transfer of registered land using forged or scanned and pasted signatures on transfer forms, without genuine execution by the registered proprietor and without payment of consideration, constitutes fraud attributable to the transferee and justifies cancellation of the resulting registration.

Cases cited (4)

  • Zaabwe v Orient Bank Ltd and Others (Civil Appeal No. 4 of 2006)
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Bogere Moses v Uganda (Criminal Appeal No. 1 of 1997)
  • Begumisa and Others v Tibebaaga (Civil Appeal No. 17 of 2002)

Full judgment

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

Kyobe Vs Kibuuka & Anor (Civil Appeal No. 42 of 2016) [2019] UGCA 143 (11 June 2019)
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.