THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT MASINDI

CIVIL SUIT NO.35 OF 2021

SIRAJ BYARUHANGA :::::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF

VERSUS

KATUSHABE DIANAH ::::::::::::::::::::::::::::::::::::: DEFENDANT/COUNTER

(Suing through her lawful Attorney CLAIMANT
Mugenyi Nabboth)
AND
1. SIRAJ BYARUHANGA
2. ASIIMWE RASHID
3. COMMISSIONER LAND REGISTRATION ::::COUNTER DEFENDANTS

Before: Hon. Justice Byaruhanga Jesse Rugyema

JUDGMENT

[1] The plaintiff brought this action against the defendant for enforcement
of his right to own property guaranteed under Article 26 of the
Constitution of the Republic of Uganda,1995 (as amended) and seeking
for the following;
a) A declaration that the plaintiff is the registered proprietor of land
comprised in FRV HQT 191 Folio 14,Bugahya (Road) 17, plot 760
land at Busisi measuring approximately O.1600 Hectares.
b) A declaration that the actions and activities of the defendant of
forcefully entering onto the suit land, attempting to take
possession or placing there objects without the prior permission
of the plaintiff and or any claim of right, trying to alienate, deal
in and carry out activities adverse to the plaintiff’s interest and
possession amount to trespass on the suit land.
c) A permanent injunction restraining the defendant, her agents,
servants or anybody deriving interest from her or acting under

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 her authority from trespassing, disposing, alienating or in any
other way interrupting or interfering with the plaintiff’s
ownership, use, enjoyment of and quiet possession of the suit
land.
d) An order for general damages and costs of the suit.

[2] The plaintiff’s case is that he is the registered proprietor of land

comprised in FRV HQT 191 Folio 14, Bugahya Block (Road) 17, plot
760 at Bulisi measuring approximately O.1600 Hectares which on
11/10/2020 he purchased from the then registered proprietor a one
Asiimwe Rashid at a valuable consideration of Ugx 150,000,000/=.
That upon payment obtained of the purchase price, the plaintiff
obtained vacant possession and took actual /physical possession of the
suit land thereof.

[3] That on the 11/11/2020, the plaintiff’s enjoyment of quiet possession

of the suit land was interrupted by the defendant’s lawful Attorney a
one Mugenyi Naboth who without the consent/permission of the
plaintiff entered on the suit land claiming ownership and as such trying
to place materials and objects thereon without any color of right,
illegally lodged a caveat on the suit land claiming that he had purchased
the suit land for his sister Katushabe Dianah, the defendant.

[4] The plaintiff avers and contends that the defendant’s continuous entry
onto the suit land without the plaintiff’s permission is unlawful and
amounts to trespass and therefore in contravention of his exclusive
right to the suit land.

[5] Lastly, the plaintiff avers and contends that as a result of the
defendant’s actions he has been greatly inconvenienced, suffered
embarrassment and harassment at the hands of the defendant and her
agents who deprive him of the quiet enjoyment of the suit land,
psychological torture and mental anguish for which he prays for
general damages.

[6] The defendant on the other hand, denied the plaintiff’s allegations and
contended that she is the rightful owner of the suit property which she
lawfully purchased from Asiimwe Rashid at an agreed upon
consideration of Ugx 100,000,000/= payable in 2 instalments of Ugx
50,000,000/= which she paid cash and the other Ugx 50,000,000/=

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 paid through the bank by the defendant’s takeover of the vendor
Asiimwe Rashid’s loan in Hokofam Ltd where the vendor had
mortgaged the property/suit land.

[7] That on the 27/2/2020, the vendor Asiimwe Rashid executed a sale
agreement for the suit property with the defendant’s brother and lawful
Attorney Mugenyi Naboth stipulating that the defendant had paid Ugx
80,000,000/= comprising of Ugx 50,000,000/=, the vendor’s loan due
to Hokofan Ltd which the defendant had taken over and Ugx
30,000,000/= as cash received by the vendor.

[8] That the defendant later advanced Ugx 10,000,000/= by cheque to the
vendor Asiimwe Rashid and around April 2020, the defendant through
her brother and Attorney Mugenyi Naboth paid the vendor Asiimwe
Rashid the remainder of Ugx 10,000,000/= in two equal instalments of
which the vendor acknowledged receipt of the same.

[9] The defendant as well habitually paid the monthly instalment of UGX
3,700,000/= to Hofokam Ltd in fulfilment of her obligation of
repayment of the vendor’s loan she had taken over. She took over
possession of the suit property which was in a dilapidated state,
renovated it into a tenantable state and subsequently in June 2020,
placed therein a tenant.

[10] That however, sometime in 2020, the vendor Asiimwe Rashid engaged
the defendant with a proposal that the defendant sells the property to
a certain Hajji but when the defendant declined the proposal, the
vendor Asiimwe Rashid transferred the title to his brother, the plaintiff
in this matter and they ordered Hofokam to reject and stop receiving
the monthly instalments from the defendant to which Hofokam Ltd
complied and duly communicated to the defendant.

[11] The defendant on receiving information about the fraudulent transfer

of title from the vendor Asiimwe Rashid to the plaintiff’s names,
lodged a caveat on the said land upon which the plaintiff instituted the
current suit seeking from court to regain the suit property from the
defendant.

[12] The defendant filed a counter claim against the plaintiff as the 1 st
counter defendant and the vendor Rashid Asiimwe and the

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 Commissioner Land Registration as the 2nd and 3rd counter defendants
respectively for recovery of the suit land, general damages for breach
of contract of sale of land dated 27/2/2020 between the counter
claimant/defendant and the 2nd counter defendant, a declaration that
the transfer and registration of the suit land from the 2 nd counter
defendant’s names into the 1st counter defendant’s names by the 3rd
counter defendant is null and void, an order against the 3 rd counter
defendant for cancellation of the certificate of title for the suit land
registered in the names of the 1st counter defendant and an order that
the counter claimant be registered as the true and lawful proprietor of
the suit land/property.

[13] In his written statement of Defence, the vendor Asiimwe Rashid/2nd

counter defendant admitted that on 27/2/2020 he executed a sale
agreement of the suit property with the counter claimant who was
represented by a one Bob Rukundo and Mugenyi Naboth , her lawful
Attorney at an agreed consideration of Ugx 100,000,000/=.

[14] He also admitted that the duplicate Certificate of title to the suit
land/property was held by and in custody of Hofokam Ltd, a financial
institution over the loan which the counter claimant took over and as a
result, the sale agreement captured the loan figure of Ugx
50,000,000/= and Ugx 30,000,000/= paid and received by the vendor
as part of the suit land price leaving a balance of Ugx 20,000,000/=
payable within a period of 4 months.

[15] The vendor Rashid Asiimwe/the 2nd Counter defendant further

admitted that by the month of April, 2020, the counter claimant had
paid up on the balance of Ugx 20,000,000/= as had been agreed upon
under the suit land agreement as the 2nd instalment payment.

[16] That however, by the end of the month of August 2020, the counter
claimant had defaulted on her loan repayment obligation with Hofokam
Ltd and in the month of July 2020, Hofokam Ltd had issued a demand
notice for a sum of Ugx 11,310,000/=, threatening to recall the loan
and realise the security (suit land), and as a result, as a way of avoiding
to have a bad credit reference status, Rashid Asiimwe/2nd Counter
defendant sold the suit property to Siraji Byaruhanga, the
plaintiff/counter defendant for a sum of Ugx 150,000,000/=.

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[17] Upon the payment of the loan with Hofokam, the 2nd counter defendant
obtained the duplicate certificate of title to the suit land from Hofakam
Ltd and handed over the same to the plaintiff/1st counter defendant
who subsequently got registered on the title of the suit land in 2021.

[18] The 2nd defendant averred that he refunded all the monies paid by the
counter claimant amounting to Ugx 50,0000,000/= through the
counter claimant’s agents Bob Rukundo and Mugenyi Nabboth in
respect of the purchase of the suit land and that the 2 nd defendant is
therefore not in any way indebted to the counter claimant and
therefore, the counter claimant has no interest in the suit land, he has
no caveatable interest on the same, and that the caveat as lodged
should be vacated and or removed.

Counsel Legal representation

[19] The plaintiff/1st counter defendant was represented by Counsel Kinali

upon Mr. Kasangaki opting out as a result of his being found to have
had a conflict of interest in the matter while Counsel Magere Hilary
represented the defendant/counter claimant. Ms. Nabirye Gertrude
represented the 2nd counter defendant.

[20] The parties were directed and given timelines to file final submissions
for consideration by this court. Whereas counsel for the
defendant/counter claimant filed the submissions, neither the
plaintiff/1st counter defendant nor the 2nd counter defendant filed their
respective submissions. This court has therefore proceeded to
determine this suit by writing the judgment without the input of
Counsel Kinali and Nabirye in form of final submissions.

Issues for determination

[21] 1. Who is the rightful owner of the suit property.

2. Whether the 2nd counter defendant breached the sale agreement with
the counter claimant.
3. Whether the 1st and 2nd counter defendants acted fraudulently in
dealing with the suit land.
4. What remedies are available to the parties.

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Issue No.1: Who is the rightful owner of the suit property.

[22] Counsel for the defendant/counter claimant submitted that the counter
claimant adduced evidence of the copy of the land sale agreement
(D.Exh.3), acknowledgment of receipt of the purchase price (D.Exh.4)
and transfer forms (D.Exh.5) signed by the vendor, the 2nd counter
defendant in favour of the defendant/counter claimant.

[23] Upon perusal of the pleadings of all the parties and their evidence as
adduced in court in court, I find the following as undisputed facts:

(i) Both the plaintiff/1st counter defendant and the Defendant/counter

claimant derive their interest from the vendor Rashid Asiimwe, the 2nd
Counter defendant, the initial registered owner of the suit land that
comprised of a house, the suit property. The vendor Rashid Asiimwe,
the 2nd counter defendant first sold the suit land to the
defendant/counter claimant as per the sale agreement dated 27/2/2020
(D.Exh.3) at an agreed consideration of Ugx 100,000,000/=. The
defendant/counter claimant paid the full consideration as evidenced
below:
a) The suit property had been mortgaged by the vendor Rashid
Asiimwe, the 2nd counter defendant to Hofokam Ltd, a financial
institution that held and had custody of the suit land certificate of title
over a loan that had been advanced to the vendor, the 2 nd counter
defendant. The parties to the sale of the suit property agreed that the
defendant/counter claimant takes over the loan, then worth Ugx
50,000,000/= by way of servicing it via the vendor’s Hofokam Ltd
Account No.103102002518. As a result, the sale agreement (D.Exh.3)
captured the loan figure of the Ugx 50,000,000/= and Ugx
30,000,000/= paid cash and received by the vendor (D.Exh.4) as part
payment of the suit land price leaving a balance of Ugx 20,000,000/=
payable within a period of 4 months.
b) By the month of April 2020, the defendant/counter claimant had paid
up on the balance of Ugx 20,000,000/= as had been agreed upon. By
his pleadings, the vendor, the 2nd counter defendant under paragraph
5(a) of the 2nd defendant’s W.S.D stated as follows;
“That by the month of April 2020, the counter claimant had
paid up on the Ugx 20,000,000/= as had been agreed upon as

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 the 2nd instalment payment under the suit land sale agreement.”
The 2nd counter defendant admitted in the same terms in his witness
statement on record dated 17/12/2021.
c)As per paragraph 13 of the 2nd counter defendant’s witness statement
upon the defendant/counter claimant’s payment of the full purchase
price, the 2nd counter defendant (vendor) was to surrender the duplicate
certificate of title (in custody of Hofokam Ltd) and sign transfer forms
to effect a change in proprietorship into her name. Indeed the transfer
forms were duly signed in favour of the defendant/counter claimant
(D.Exh. 5).
d) A one Mugenyi Naboth (DW1) was the formerly recognized Attorney
of the Defendant/counter claimant who transacted suit property on
behalf of the defendant/counter claimant as evidenced by the power of
Attorney (D.Exh.1) and his endorsement on the sale Agreement
(D.Exh.3) of the suit property for and on behalf of the
defendant/counter claimant.
e)The Plaintiff/1st counter defendant purchased the suit land/property
second in time from the Defendant/counter claimant as per the
purchase agreement on record dated 11/10/2020 between him and the
vendor Rashid Asiimwe/the 2nd counter defendant (P.Exh.2).
Thereafter, he got himself the registered proprietor of the same
(P.Exh.1).

[24] The vendor Rashid Asiimwe/the 2nd counter defendant justified his
sale of the suit property to the Plaintiff/1st counter defendant on the
grounds that the Defendant/counter claimant failed to regularly service
the loan she took over in Hofokam Ltd and retrieve the certificate of
title. Hofokam Ltd had demanded for the loan arrears and threatened
to recall the loan, sell the suit property, a fact he considered
detrimental to his name by having a “bad credit reference status.”

[25] The Plaintiff/1st counter defendant on the other hand claimed to had
done due diligence before purchasing the suit property and that at the
time he purchased it and got registered as proprietor thereof, he was
unware of the previous dealings and undertakings between Asiimwe
Rashid and the Defendant/counter claimant.

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 Plaintiff/1st counter defendant’s due diligence

[26] It is now trite that the value of land as valuable property calls for
thorough investigations before purchase. Call it due diligence. The
buyer who fails to carry out due diligence and buys from fraudsters
gets no legal title; Naome Auma & Anor Vs Nantume Ruth & Anor,
H.C.C.S No.363 of 2010 [2020] UGHCD1.

[27] Due diligence involves visit to the land, inquiries from the local
authorities and neighbours about the ownership authenticity, history
of the land, boundaries, family consents where they are necessary and
for any other encumbrances, last but not least, conduct a search in the
Ministry of lands registries. In the instant case, the burden lay on the
plaintiff/counter defendant to prove that he did the desired due
diligence before purchase of the suit property; Ss 101 and 102 of the
Evidence Act. See also Hannigton Njuki Vs G.W Musisi [1999] KALR
794. Other than mere claiming that he did due diligence and searched
the land registry, the plaintiff does not explain exactly what kind of due
diligence he conducted on the ground to ascertain and satisfy himself
that the suit property had no encumbrances.

[28] Though the Plaintiff/1st counter defendant claims that upon payment
of the purchase price for the property he obtained vacant possession
and took actual/physical possession of the suit land and enclosed it to
secure it from strangers and intruders, I am unable to agree with him
because his brother Asiimwe Rashid who sold him the property, during
cross examination in court, conceded that Katushabe the
defendant/counter claimant was in possession of the suit property
upon purchase and she had placed therein a one Hon. Natumanya
Florence as a tenant. Baguma John who had renovated the house on
instructions of the defendant/counter claimant had locked the house
and handed over the keys to Hon. Natumanya. The Plaintiff and 2nd
Counter defendant group broke into and placed therein other people,
they evicted the Defendant/counter claimant’s tenant.

[29] The vendor/2nd counter defendant having conceded that the

defendant/counter claimant had placed a tenant in the house, it follows
that the 2nd purchaser in time of the suit property cannot claim to had
purchased the suit property without knowledge of the tenant therein as

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 an encumbrance; Uganda Posts & Tel. Vs Abraham Katumba [1997] IV
KALR 103 it was held that,
“as the law now stands a person who purchases an estate which
he knows to be in occupation and use of another person other
than the vendors without carrying out the due inquiries from
the person in occupation and use commits fraud.”
In the premises, I find the Plaintiff/1st Counter defendant Siraji
Byaruhanga never purchased the suit land as a bonafide purchaser for
value without notice of knowledge of the 3rd party interest/earlier
claimants.

[30] In the instant case, I find that the Plaintiff/1st Counter defendant
conducted what I may call a perfunctory search of the title to land
before the alleged purchase but did not carry out the physical
inspection of the land. The vendor Rashid Asiimwe/the 2nd Counter
defendant on the other hand is a self-claimed/confessed fraudster who
admits that he had wholly sold the suit property to the
Defendant/Counter claimant but later took it upon himself to purport
to retrieve the title or rescue the property from the Hofokam Ltd by
servicing the loan the purchaser had taken over. Rashid Asiimwe did
this to purposely defraud the purchaser. Both Plaintiff/1st Counter
defendant and the 2nd Counter defendant colluded to defraud the
Defendant/Counter claimant.

[31] In Bunny Industries Ltd Vs F.S.W Enterprises Pty Ltd &Anor [1982]
QSCFC 64, (In the Supreme Court of Queenland) Connly J. held that:
a) Where there is a clear and undisputed contract, the court will not
permit the vendor to transfer the legal estate to a third person and
the reason for this as being because in equity the property was
transferred to the purchaser.
b) It must therefore be considered to be established that the vendor
is a constructive trustee for the purchaser of the estate from the
moment the contract is entered into.
See also Lysaght Vs Edwards (1876) 2 Ch.D 499 at 506 and William
Kasozi Vs DFCU H.C.C.S No. 1326 of 2000.

[32] In this suit, the Defendant/Counter claimant is found to had lawfully

purchased the suit land/property at an agreed consideration of Ugx
100,000,000/= and the Plaintiff/Counter defendant is found to have
purchased the suit property in bad faith, in collusion with the 2 nd

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 Counter defendant to defraud the Defendant/counter claimant. The
foregoing resolves both the 1st and 3rd issues in the affirmative, that is,
in favour of the Defendant/counter claimant.

[33] The Defendant/counter claimant is the rightful owner of the suit

property. The 1st and 2nd counter defendants acted fraudulently in
dealing with the suit land and the 1st Counter defendant therefore
cannot be protected by the provisions of Ss.176 & 181 RTA for his title
had lost its indefeasibility; David Sejjaka Nalima Vs Rebecca Musoke,
S.C.C.A No.12/85[1992] V KALR at 22.

Issue No.2 Whether the 2nd defendant breached the sale agreement
with the counter claimant.

[34] In this case, I find that the land Sale Agreement (D.Exh.3) was between
the Counter claimant as purchaser and the 2nd Counter defendant as
vendor. Under the terms of that agreement, the vendor (2nd Counter
defendant) agreed to sell and transfer ownership of the suit property
with the house thereon to the purchaser (Counter claimant) for a
consideration of Ugx 100,000,000/=. Upon completion of the payment
of the consideration, the vendor (2nd Counter defendant) lost and
therefore had no interest at all in the suit property to transact or pass
to any other party. The terms of the agreement had nothing to do with
the burden the purchaser (Counter claimant) had regarding the securing
of the loan in Hofokam. It was in her best interests to service the loan
she had taken over and retrieve the security i.e, certificate of title and
the suit property itself. It was never the responsibility of the vendor
Asiimwe Rashid/2nd Counter defendant to retrieve the title. The vendor
had surrendered all his rights and obligations as regards the Hofokam
loan from the time he accepted that the Defendant/Counter claimant
take over the Hofokam loan.

[35] The 2nd counter defendant washed off his hands upon receipt of the full
consideration of the suit property and therefore could not be seen to
interfere in the counter claimant’s management of the Hofokam loan
by purporting to redeem the property for his own benefit. Having
redeemed it, he would still in law be required to hold the security as a
trustee and for the eventual benefit of the purchaser by virtue of the
doctrine “fiduciary relationship” and “the right to trace”-Snell (27th

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 edition) quoted in Bunny Industries Ltd Vs F.S.W Enterprises pty Ltd
and Anor (supra) at p.289 states;
“The right to trace is founded upon the existence of a beneficial
owner with an equitable proprietary interest in property in the
hands of a trustee or other fiduciary agent.”

[36] The sale agreement (D.Exh.3) entered between by the 2nd Counter
defendant and the Counter claimant was valid as between the parties.
It had no reference whatsoever as to the loan obligations in the
Hofokam Ltd. It therefore follows that the 2 nd Counter defendant sale
of the suit property to the Plaintiff/1st counter defendant already sold
to the Defendant/counter claimant amounted to a breach of contract on
the part of the 2nd Counter defendant. The 2nd Counter defendant vendor
had parted with the suit property and therefore had no interest at all in
the suit property to sell to the Plaintiff/1st counter defendant. If sold,
the Defendant/counter claimant would in law trace it from the
plaintiff/1st counter defendant. The 2nd issue is in the premises found
in the affirmative.

Issue No. 4: What remedies are available to the parties.

[37] The Defendant/counter claimant is found to be the rightful owner of

the suit property and therefore, as against the Counter defendants is
entitled to the following declarations;
a) Recovery of the suit land comprised in FRV HQT 191 Folio 14,
Bugahya Block (Road) 17, plot 760 at Busisi registered in the
names of the Plaintiff/1st counter defendant, its transfer and
registration from the 2nd Counter defendant’s names into the 1st
Counter defendant’s names by the 3rd Counter defendant being
null and void.
b) An order against the 3rd Counter defendant for cancellation of the
certificate of title of land comprised in FRV HQT 191 Folio 14,
Bugahya Block (Road) 17, plot 760 at Busisi registered in the
names of Siraji Byaruhanga, the 1st Counter defendant and the
Counter claimant Katushabe Dianah be registered as the true and
lawful proprietor.
c) General damages of Ugx 45,000,000/= arising from breach of
contract of sale of land by the 2nd Counter defendant with the
Counter claimant considering also the economic inconvenience
the Counter claimant has been put through for she had purchased

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 the property using hard earned money while in the United
Kingdom, embarrassment with the authorities while pursuing the
Plaintiff/1st counter defendant and 2nd Counter defendant, mental
distress and loss of use of property by way of rental.
d) The general damages to attract interest at court rate p.a from the
date of the judgment until full payment.
e) Costs as against the Plaintiff/1st counter defendant and 2nd
Counter defendant in favour of the Defendant/counter claimant.
In conclusion, the plaintiff/1st counter defendant’s suit is dismissed
and judgment is given in favour of the Defendant/Counter claimant
with the above referred to terms.

Signed, dated and delivered at Masindi this 16th day of September,

2022.

Byaruhanga Jesse Rugyema

JUDGE.

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