THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

LAND DIVISION

MISCELLANEOUS APPLICATION NO. 738 OF 2011

(From Civil Suit No.”OS” 9 of 2005)

BASAJJABALABA HIDES AND SKINS LTD. :::::::::::::::::: APPLICANT

VERSUS
1. BANK OF UGANDA
2. COMMISSIONER FOR ::::::::::::::::::::::::::::::::::::::: RESPONDENTS
LAND REGISTRATION

Before: HON. MR. JUSTICE J. W. KWESIGA

RULING

This application by Notice of Motion filed 25 th October 2011 is stated to be

brought under Order 52 Rules 1 and 3 of the Civil Procedure Rules; Section 98
of the Civil Procedure Act, Section 33 of the Judicature Act and Section 177 of
Registration of Titles Act (RTA) Cap. 230.

The application seeks orders that:

1. A consequential order be issued for the rectification of the Register by the

second Respondent to reflect the Applicant and her transferees in the Title on
the Register on the listed Certificates of Title.

2. Any encumbrances/caveats on the listed land Titles be removed.

3. The 1st Respondent returns the above described original Certificates of Title
to the Applicant.
4. Costs of the application be provided for.

The Certificates of Titles, the subject of this application were listed as being the
following:-

(a) LRV 711 Folio 8 Plot 8 Hunter Avenue, Kampala.

(b) LRV 711 Folio 8 Plot 61 Hunter Avenue, Kampala.
(c) LRV 356 Folio 1 Plot 27 Nkrumah Road.
(d) LRV 918 Folio 1 Plot 226, Kyadondo Block 273 at Masajja.
(e) Kibuga Block 4 Plot 338 at Namirembe.
(f) Kibuga Block 4 Plot 647 at Namirembe.
(g) Kibuga Block 4 Plot 78 at Namirembe.
(h) Kibuga Block 4 Plot 648 at Namirembe.
(i) Kibuga Block 4 Plot 432 at Namirembe.
(j) Kibuga Block 4 Plot 452 at Namirembe.
(k) Kibuga Block 4 Plot 585 at Namirembe.
(l) Kyadondo Block 244 Plot 2283.
(m) Kyadondo Block 257 Plot 126 at Munyonyo.
(n) Kyadondo Block 257 Plot 350 at Munyonyo.
(o) Kyadondo Block 257 Plot 351 at Munyonyo.
(p) Kyadondo Block 257 Plot 352 at Munyonyo.
(q) Kyadondo Block 244 Plot 2285.
(r) Kyadondo Block 22 Plots 83, 84, 85 and 86 Mbogo Road, Kabalagala.

The application is supported by the affidavit of Obed Mwebesa the Applicant’s

Legal Manager dated 24th October, 2011 and a second affidavit of the said Obed
Mwebesa dated 4th October 2013 filed in rebuttal of the first Respondent’s
allegations made in the affidavit of TITUS MULINDWA on 30 th September,
2013. These affidavits have several annextures which shall be evaluated as part
of evidence in this application.

This application had been pending hearing since October 2011. The delay of
the hearing and disposal appears to be the health challenges of the first Judge to
whom the case had been allocated. Secondly, there appears to have been a
serries of the Applicant’s continued additional instructions to different firms of
advocate, who, for the desire of rendering in-puts, caused delays in
adjournments for extra filings. At the close of the pleadings the Applicant was
represented by M/s Nangumya and Company Advocates, M/s Mugisha and
Company Advocates and M/s Alaka and Company Advocates. The first
Respondent has been represented by MMAKS Advocates and Mr. Masembe
Kanyerezi together with Mr. Steven Zimula appeared for the first Respondent
throughout the proceedings.

The matter under consideration has a long and chequered history which I will
not indulge in restating in interest of being as precise as possible in identifying
the fundamental issues in this application. It is appropriate and convenient to
start with the Consent Judgment in Civil Suit No. “O.S” 9 of 2005,
Basajjabalaba Hides and Skins Ltd. vs 1. Standard Chartered Bank (U) Ltd. 2.
Stanbic Bank (U) Ltd. and 3. Bank of Uganda. The Consent Judgment was
entered and sealed by this Court on 3 rd February, 2010. The Consent Judgment,
the basis of this application is reproduced here below to facilitate easy reference
and deduction from it to determine whether this application has any merits or
has been proved. The Judgment provided:-

“BY CONSENT of the parties hereto it is hereby agreed and ordered as follows;
(1) The second Defendant be added to this suit as a holder of securities
mortgaged by the Plaintiff in relation to the debt mentioned below assigned
by the second Defendant to the 3rd Defendant.

(2) The 1st and 2nd Defendants were owed various sums of money by the Plaintiff
which debt were assigned by the 1 st and 2nd Defendants to the 3rd Defendant,
on account of Government of Uganda (“GOU”) together with the benefit of
the securities held, upon payment by GOU through the 3rd Defendant
US$9,150,000. in respect of the amounts owed to the 1st Defendant and US
$2,425,000. in respect of the amounts owed to the second Defendant, being a
total sum paid by GOU through the 3rd Defendant of US$11,575,000.

(3) It is hereby agreed that the Plaintiff shall pay to the 3 rd Defendant for the
benefit of G.O.U. the sum of US$11,575,000. paid by it for the afore
mentioned assignment within 6 months from the date hereof and in default of
payment the 3rd Defendant shall be at liberty to realise and enforce recovery
pursuant to the assignment against the securities mortgaged to the 1 st and 2nd
Defendants by the Plaintiff.

For the avoidance of doubt the securities held are those listed as regards the
1st Defendant in the schedule to the assignment deed dated 30 th March 2006
annexed hereto as ‘A’ and as regards the 2 nd Defendant in preamble B to the
assignment deed dated 13th June 2008 annexed hereto as ‘B’.

4.The Plaintiff shall pay the 1st, 2nd and 3rd Defendants costs of Miscellaneous
Application 566 of 2008 arising from HCCS 320 of 2007 plus the insurance and
receivership costs incurred by the 3 rd Defendant in the Receivership of the
Plaintiff and in the insuring the said Receiver of the said securities held.”
The consent was signed on 29th January, 2010 and sealed by the Court on 3 rd
February, 2010.

I have given the above background as a foundation of what the parties require
me to resolve for them. This application proceeded without conferencing and
after the pleadings were closed, given that the application’s disposal is on
evidence brought by affidavits, the parties were directed to file written
submissions which they all did.

In my view granting or non-granting this application would depend on the

following:-

(i) Whether the Applicant performed or satisfied its obligation imposed by

the Consent Judgment reproduced above?

(ii) Whether the consequential orders prayed for do flow from the satisfaction
of the Consent Judgment?

(iii) Whether the Applicant’s securities held for satisfaction of the Consent
Judgment obligation can be withheld to satisfy other anticipated decrees
outside the Consent Judgment?

The resolution of the above depends on the evidence in the affidavits of the two
parties and the annextures that go to prove the parties’ rights and liabilities.

In my view it does not matter how voluminous the advocates’ submissions may
be as long as they do not go to the root of the matter. The bottom line is
whether the Applicant satisfied the terms of the Consent Judgment and if it did
is it entitled to return of its securities?
I will now proceed to the points of disputes before I visit the evidence for
purposes of its evaluation. The Applicant’s case in general is that:-

1. That the Applicant’s Judgment debt under ‘O.S’ No. 9 of 2005 was
US$ 11,575,000.

2. That it was ordered to pay costs in Miscellaneous Application 566 of 2008

arising from HCCS 320 of 2007 plus receivership and insurance and
receivership costs.

3. That the Applicant fully paid the decretal sums and costs stated under 1 and
2 above.

4. That the consent order was silent on handing over of the Titles hence this
application.

The proof of payment shall be addressed at a later stage of this ruling.

The Respondent does not contest the Consent Judgment’s contents and
obligation.

The affidavit of TITUS MULINDWA dated 11 th November, 2011 in reply to

this application fully acknowledges the contents of the Consent Judgment which
he paraphrased in paragraphs 2 and 3 of the affidavit.
In paragraph 5 he states;

“5. That the Applicant did not pay the US$ 11,575,000. aforementioned
on the 2nd day of August 2010 as adjudged nor has it paid the said sum or
any part thereof to date.”

However he accepted that the Applicant did fully pay the costs in HCCS No.
“O.S” 9 of 2005, Miscellaneous Application 566 of 2008 of HCCS No. 320 of
2007 plus the 1st Respondent’s insurance and Receivership costs in the sums of
Shs.37,215,000/= and US$ 35,000 respectively. This is supported by
annextures to the affidavits of Obed Mwebesa already referred in proof of these
payments.

Mulindwa’s affidavit concedes that Cause (4) four of the Consent Judgment was
fully satisfied by the Applicant.

Paragraph 7, 8 and 9 of the affidavit contest the allegation that the Applicant
fully paid US $ 11,575,000 which was the decretal sum in the Consent
Judgment.

Paragraph 10 of the affidavit of Mulindwa states it clearly:-

“That further and in any event even if the whole decretal sum has been
paid, which it has not, the release of the securities would be to the
Applicant and not to the various persons... whose proprietorship and
Special Certificates of Titles were cancelled by His Lordship Justice
Yorakamu Bamwine, in Miscellaneous Application 566 of 2008.”
To a good extent this paragraph of Mulindwa’s affidavit, despite being
argumentative states one fact; the crucial requirement of this application. The
Respondent is simply stating that the securities are returnable to the Applicant
upon fully paying the decretal sums. The burden of proof fully falls upon the
Applicant to prove that the Applicant has paid the total US$ 11,575,000.

At this stage of this application it is settled that the consequential actions that
can result from the Consent Judgment are the following:-

(a) The first Respondent is entitled to apply for execution of the decree to realise
the securities assigned to it under the Consent Judgment to recover the
outstanding decretal sums if they were never paid by the Applicant.

(b) The Applicant is entitled to recover its securities if the sums in the Consent
Judgment were fully paid.

With due respect the rest of the contents of TITUS Mulindwa’s affidavit are
mere arguments and not statement of facts, however the annextures to the
affidavit have been compared to annextures to the affidavit of Obed Mwebesa
and on balance of probabilities this Court is able to ascertain the liabilities and
rights of each party.

Paragraph 4 of the affidavit of Obed Mwebesa dated 4th October 2013 seeks to
prove that the Applicant discharged all its debt obligation under the Consent
Judgment. He particularised the mode of payment in annexture ‘A’ to the
affidavit.

For depicting the supplied Data that was not rebutted by the first Respondent, it
stands as follows:
Date Proof of payment Source of payment Amount paid
A. (1) Letter of Governor
29/10/2010 B.O.U. to PSST,
18-3-2010.
Deductions from HABA Ug.Shs.21,091,676.=
(2) Letter of PSST to GROUP being
Solicitor General, compensation by OR US$ 11,575,000.
6-4-2010. Ministry of
Finance/Solicitor
(3)Letter of PSST to General.
Solicitor General,
14-5-2010.

(4)Letter of Minister of
Finance to Governor
B.O.U. 7-6-2010.

(5)Letter to Minister of
Finance 14-6-2010 to
etc. US$ 11,575,000.=

B. UDB Receipt No.40647 Direct Transfer to UDB Shs.3,408,506,324/=

17/12/10 of 17/12/2010 AND A/C No.0101350015673 (money owed to
UDB’s CEO letter to in DFCU Bank. UDB).
Accountant/Treasury
Services Department of
3-1-2011.

C. Banking on the Bank slips totalled and Shs.37,215,000.=

Respondents Advocates annexed to Mwebesa’s
Bank A/C No. affidavit in rebuttal. and
0341279410 (Ug.Shs.)
US$ 35,000.
and
Shs.21,000,000.=
0344169195 (US$ A/C)
all paid by Obed Shs.156,215,000.=
Mwebesa.

NB: This payment under category C is acknowledged by the first Respondent’s advocate in
their letter dated 14th October, 2011, Ref. E 327/TMK/726 of 2007. The extract from the
letter addressed to the Applicant’s advocates states in part “We acknowledge receipt of your
letter of 17th October 2011 and payment of the following sums;

(i) Ug.Shs.590,000,000.= as discounted party to party costs.

(ii) Ug.Shs.37,215,000.= as Insurance costs.

(iii) US$ 35,000 as receivership fees.”

MMAKS Advocates, for the Respondent clearly stated that the release of the
Securities would be upon proof of payment of US$ 11,575,000. by the
Applicant and the Ministry of Finance confirming to this effect.

The affidavit of Obed Mwebesa has attachment/annextures of protracted

correspondences which included a letter of the Governor of Bank of Uganda
Ref. GOV 908 dated 18th March 2010 addressed PS/The Secretary to the
Treasury. The position in that letter was, at the time “That M/S Bassajjabakaba
Hides and Skins is indebted to Bank of Uganda in the sum of US$
11,575,500. ... is also indebted to UBD Limited in the sum of
Ug.Shs.2,826,577,816/=. On 6th April 2010 the Secretary to Treasury agreed to
set off the US$ 11,575,500. from the money that government owed HABA
GROUP OF COMPANIES”, to which the Applicant belongs. The Minister of
Finance, Planning and Economic Development confirmed the Government
indebtedness to HABA Group (U) Limited in the letter of 24 th September, 2010.
The relevant part of the letter to the Governor Bank of Uganda states:

“... this is to confirm the amount of Shs.54,690,517,149/= owing to HABA

GROUP (U) LIMITED as compensation less Shs.24,500,000,000/= owed
to Government will be channelled directly through Bank of Uganda with
the payment schedule earlier agreed upon.”

The receipt of UDB to the Applicant confirms payment of 3,408,506,324/=,

CEO of UDB wrote on 3rd January 2011 acknowledging this payment.

Bank of Uganda Statement of Account for Account for Account

No.003300148000028 shows that Accountant General’s office paid in a total
21,091,401,676 as at 29th October, 2010.
Evaluation of the evidence brought in the affidavit of Obed Mwebesa depict that
the Applicant’s decretal debt was settled by
(a) Payment to UDB = 3,408,506,324
(b) Payment to bank of Uganda = 21,091,491,676
TOTAL PAYMENT = 24,499,998,000

This proof of payment has not been rebutted or challenged by the 1 st

Respondent. The Respondent’s advocates in their final submissions dated 31 st
October 2013, on issue of whether the Applicant paid the decretal sum stated as
follows;

“We shall not deal with the extensive matters submitted on by the
Applicant with regard to the alleged payment of decretal sum in the
Consent Judgment as they are irrelevant to the question in this application
as the Consent Judgment does not provide for the release by the 1 st
Respondent to the Applicant of the Certificates of Title in question as
earlier stated this Court cannot add to the terms of the said Consent
Judgment which is an agreement of the parties.”

In my view by failing or refusing to address the issue of whether the Applicant

made full payment in compliance with the decretal requirement of the Consent
Judgment the Respondent is either conceding to the fact that payment was done
or is missing the point that proof of payment is a pillar of this application and
that it is a necessary expectation of the Consent Judgment.

The Respondent had the opportunity throughout the proceedings in this

application to contradict or rebut the Applicant’s evidence of payment adduced
by way of the affidavit of OBED MWEBESA with all the annextures which
show that payment was made by set-off from the money that the Government of
Uganda owed the Applicant. It was settled by his Lordship NTABGOBA (Ag.
J) as he then was, and his holding has been widely followed, he held in
SAMWIRI MASSA VS ROSE ACHEN [1978] HCB 297 that where certain
facts are sworn to in an affidavit, the burden to deny them is on the other party
and if he does not they are presumed to have been accepted.

There are other authorities on the same principle of law such as:

(1) Makerere University vs St. Mark Education Institute Ltd. & Others. [1994]
KALR 26.

(2) Eridadi Ahimbisibwe vs World Food Programme & Others [1998] KALR
32.

(3) Kalyesubula Fenekansi vs Luwero District Land board & Others,

Miscellaneous Application No. 367 of 2011 (unreported).

In the case of Kalyesubula Fenekansi (supra) Hon. Lady Justice P. N. Tuhaise

held that “the facts as adduced in the affidavit evidence of Kalyesubula
Fenekansi the Applicant is neither denied or rebutted are presumed to be
admitted.”

I have no doubt that this is a correct principle of law and I am of the same view.

In the instant case there is no evidence presented to the contrary and by

submission the Respondent expressly opts to leave the evidence of payment
intact. After considering all the available evidence as examined in details above
I am satisfied that the Applicant has proved that it fully discharged its obligation
of paying to the 1st Respondent the equivalent of US$ 11,575,000. plus the
decreed costs. I am live to the fact introduced that there are pending suits
between the same parties before the Commercial Division. These suits are
different from the suits settled by the Consent Judgment and they do not seek to
review the terms of the Consent Judgment. I will not indulge in any arguments
in the pending suits or regarding their contents and likely outcomes for these
would depend on evidence and pleadings which are both pending and not before
me. There is no application before me seeking stay of disposal of this
application pending disposal of the suits. There is no evidence presented in this
application that the securities that were offered in assurance of performance
under the Consent Judgment were extendable to all other suits filed subsequent
to the Consent Judgment. I have taken notice of the existence of these
subsequent suits as a fact but I have not been influenced by their existence in
relation to this application.

It is appropriate at this stage to consider whether the reliefs sought by the

Applicant are available. At the commencement of the Applicant’s submissions,
after stating the background, the grounds and evidence, the Applicant states that
it applies for consequential order to give effect to the terms of the Consent
Judgment and sought orders to implement it under Section 177 of Registration
of Titles Act Cap 230.

The Notice of Motions first sought order was:-

“1. A consequential order does issue for the rectification of the Register by
the 2nd Respondent to reflect the Applicant and her transferees in Title on the
register of the following Certificates of Title.” The Applicant at the time of
addressing Court abandoned this prayer. In my view this amounted to a
withdraw of any pleading for this remedy and does not deserve any discussion
or submission as to whether it would be available to the Applicant if she/it had
not abandoned it. To indulge in original arguments of applicability of Section
177 of the Registration of Titles Act was rendered an academic moot which I
have found unnecessary to be involved.

The Applicant settled for a prayer for A consequential order for the release to
the Applicant the listed Certificates of Title.

The list of the Certificates of Title is reproduced in the earlier part of this ruling
and are numbered (a) to (r) and need not be reproduced at this stage because
they are already known. Whether the Applicant is entitled to this remedy calls
for understanding the spirit and intended parties’ benefits embedded in the
Consent Judgment from which this application arises. In my view if the
Applicant had failed to pay the decretal sums the first Respondent would have,
as a matter of law, applied for execution of the decree through selling the
securities that were comprised of the listed properties whose Certificates of
Title were placed in custody of the first Respondent by virtue of the Consent
Judgment. There is no specific provision that after full and final payment in
compliance with the Consent Judgment the Certificates of Title would be
released to the Applicant. It is just and equitable that an order of the release of
the securities to the Applicant be considered without necessarily amending the
terms of the Consent Judgment. This would be giving the Consent Judgment
effect as would have been the case if the Applicant had breached the Consent
Judgment and the consequence would have been execution by sale of the
securities.

Section 33 of the Judicature Act (Cap 13) gives this Court powers to grant
absolutely or on such terms and conditions as it deems just all such remedies as
any of the parties to a matter is entitled to in respect of any legal or equitable
claim properly brought before it. After considering this application as a whole
it is my finding that the first Respondent held the listed Certificates of Title on
account of the Consent Judgment that obliged the Applicant to pay the decretal
sums which the Applicant has proved to have paid in full and satisfaction of the
Consent judgment.

Consequently it is hereby ordered as follows:-

1. That the first Respondent returns to the Applicant all the listed Certificates of
Title that it held as security for the decretal sums now already paid.

2. That the first Respondent shall release all the encumbrances on the returned
securities whether as caveats or mortgages to ensure payments under the
Consent Judgment.

3. The 1st Respondent shall pay the Applicant costs of this application and I
decline to issue a certificate of three advocates as prayed for because I have
not found any justification for it.

Dated at Kampala this 12th day of November, 2013.

J. W. KWESIGA
JUDGE
12/11/2013
In the presence of:-
Mr. J. M. M. Mugisha, Mr. Caleb Alaka and Mr. Nangumya for Applicant.
Representative of Applicant Mr. Obed Mwebesa.
Mr. Masembe-Kanyerezi and Mr. Steven Zimula for the 1st Respondent.
Mr. Magala Sylvester – Court Clerk

12/11/2013

Mr. Masembe Kanyerezi: We seek leave pursuant Order 44 Rule (2) of the
Civil Procedure Rules to Appeal the orders of this Court.

Mr. Mugisha: We object.

(1) There is no proof that there is an arguable appeal.

(2) There should be a noval point of jurisprudence to be attended to Appeal.

Court: The issue of whether leave to appeal should be granted will be best and
fairly addressed on a formal application. The Respondent is at liberty to file a
formal application which this Court will consider.

J. W. KWESIGA
JUDGE
12/11/2013