Mutyaba v Semwogerere and 2 Others (HCCS 798 of 2017)

Observed later treatment

No later-treatment classification is recorded for this judgment.

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 High Court held that the mortgage transaction between the 1st Defendant and the 2nd Defendant was entered into through fraud and illegality, as the 1st Defendant impersonated the deceased registered proprietor. The court further held that the 3rd Defendant was not a bona fide purchaser for value without notice, as the sale involved false declarations to evade taxes, concealment of the true transferor, and was conducted by private treaty without court approval or public auction as required by law. The court ordered cancellation of the 3rd Defendant's registration and reinstatement of the deceased's name, followed by registration of the Plaintiff as Administratrix.

Outcome

Suit property ordered to be registered in the name of the Plaintiff as Administratrix of the estate of the late Haji Sewalu Ahamada; Defendants permanently restrained from dealing with the property

Facts

The suit property, originally registered in the name of Haji Sewalu Ahamada, was mortgaged to the 2nd Defendant by the 1st Defendant on August 27, 2007. Haji Sewalu Ahamada had died on April 18, 2003, four years before the mortgage transaction. The 1st Defendant, who was the deceased's son, impersonated his late father and forged his signature to obtain a loan from the 2nd Defendant using the suit property as security. When the loan was not repaid, the 2nd Defendant purportedly foreclosed and sold the property by private treaty to the 3rd Defendant on December 12, 2008 for UGX 80,000,000. The 3rd Defendant was registered as proprietor on April 14, 2009. The Plaintiff, as Administratrix of the deceased's estate, discovered the fraudulent transactions and brought suit for recovery of the property. Evidence showed that the 2nd Defendant lacked a money lending licence, the loan agreement did not separate principal from interest, and the sale to the 3rd Defendant involved false declarations on the transfer documents.

Issues

1. Whether the Mortgage transaction between Mr. Semwogerere and M/s Kasida Ltd (1st and 2nd Defendants), in respect of the suit property, was entered into through fraud?
2. Whether Ms. Ndiwo; 3rd Defendant is a bona fide purchaser for value without notice?
3. Whether there are any remedies available to the parties?

Orders

• Declaration that the loan/mortgage transaction between the 1st Defendant and the 2nd Defendant over the suit property was invalid and void ab initio for fraud and illegality.
• Declaration that the sale and transfer of the suit property by the 2nd Defendant to the 3rd Defendant under purported foreclosure was invalid and void ab initio for fraud and illegality.
• Declaration that the 3rd Defendant is not a bona fide purchaser of the suit property for valuable consideration without notice.
• The invalid transactions and conveyance set aside.
• Commissioner Land Registration directed to cancel the name of the 3rd Defendant as registered proprietor and reinstate the name of Haji Sewalu Ahamada, followed by registration of the Plaintiff as proprietor in her capacity as Administratrix.
• Permanent injunction issued against all Defendants, their assignees, workers, servants and all who claim under them, preventing them from entering upon and dealing with the suit property.
• 1st and 2nd Defendants to pay jointly and/or severally to the Plaintiff general damages of UGX 92,000,000 on account of fraud and illegality resulting in loss of revenue to the estate.
• Interest awarded to the Plaintiff on the damages at 12% per annum from the date of judgment until payment in full.
• Costs of the suit awarded to the Plaintiff against all Defendants jointly and/or severally.

Rules and key headnotes

Legislation cited (12)

• Registration of Titles Act s.115
• Registration of Titles Act s.129
• Registration of Titles Act s.181
• Registration of Titles Act s.177
• Registration of Titles Act s.92(1)
• Money Lenders Act s.2(1)
• Money Lenders Act s.2(4)(b)
• Money Lenders Act s.6(2)
• Mortgage Act Cap 229 s.8
• Mortgage Act Cap 229 s.9
• Mortgage Act Cap 229 s.10
• Tier 4 Microfinance Institutions and Money Lenders Act 2016 s.84

Cases cited (19)

• Kampala Bottlers Ltd v Domanico (U) Ltd (SCCA No. 22 of 1992)
• Frederick Zaabwe v Orient Bank Ltd & 5 Ors (SCCA No. 4 of 2006)
• James Balintuma v Dr. Handle Leslie (HCCS No. 193 of 2013)
• Active Automobile Spares Ltd v Crane Bank Ltd & Anor (SCCA No. 21 of 2001)
• Jenabai Sachoo and Anor v. Shamsa Binti Humud Bin Shamis and Anor, [1957] E.A at page 227
• Kisugu Quarries Ltd v Administrator General, [1999] 1 E.A at page 162-174
• David Sajjaaka Nalima v Rebecca Musoke (SCCA No. 12 of 1985)
• Ipolito Semwanga v Kwizera Buchana Paul & Ors (HCCS No. 61 of 2005)
• Haji Abdu Nasser Katende v Viyjaalidas Haridas & Co. Ltd (CACA No. 84 of 2003)
• Sir John Bageire v Ausi Matovu (CACA No. 7 of 1996)
• Betty Kizito v David Kanonya (SCCA No. 8 of 2018)
• Macdowel Food And Beverages Ltd v Stanbic Bank (U) Ltd and Anor (HCMA No. 568 of 2020)
• Julius Okwi v Moses Kirunda (CACA No. 35 of 2008)
• Uganda Broadcasting Corporation v Sinba (K) Limited & Ors (CA Civil Application No. 12 of 2014)
• Re An Application by G. N. Mallo, [1964] E.A at page 731
• Samuel Kizito Mubiru & Anor v G.W Byensiba & Anor (HCCS No. 513 of 1982)
• Khatijabai Jiwa Hasham v Zenab d/o Chandu Nansi, [1957] E.A page 38 at page 54
• Aziz Kalungi Kasujja v Naune Tebekanya Nakakande (SCCA No. 63 of 1995)
• Edward Rurangaranga v Mbarara Municipal Council & 2 Ors (SCCA No. 10 of 1996)

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