Rutungu Properties Limited v Carrington & Another (Civil Appeal No. 61 of 2010) [2019] UGCA 2026 (21 November 2019)

s ‘THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT KAMPALA (CORAM: Egonda-Ntende, Musoke & Obura, JJA) CIVIL APPEAL NO. 61 OF 2010 (Atising from the decision ofthe High Court of Uganda at Kampala in High Court 10 Miscellaneous Cause No. 74 of 2009 before His Lordship Joseph Murangira, delivered cn 06.02.2010) RUTUNGU PROPERTIES LIMITEDs::::::ssnsitneerrreeeet: APPELLANT VERSUS

4. LINDA HARRIET CARRINGTON:

152. HARRIET KABAGENYE::::::urstnrnnetert RESPONDENT JUDGMENT OF HELLEN OBURA, JA This is an appeal against a ruling of the High Court (J Murangira, J.) by which the appellant's application was dismissed. The background facts to this appeal are that on 19" February 2007 the appellant bought from 20 the previous registered owner, Rwost Contractors Ltd, land at Sekiunga comprised in Mailo Register Block 395 Plot 1391 and was on 9" May 2008 registered as proprietor of the land under instrument No. 374738, ‘On 10® March 2008 the respondents also purchased the same land from Rwost Contractors Ltd, paid @ deposit and subsequently lodged a caveat to protect their interest which was 2s registered by the Commissioner Land Registration on 20% November 2008 vide Instrument No. KLA 397363.

5 The appellant then fled in the High Court of Uganda at Kampala an application against the respondents seeking for orders that the respondents be jointly and severally summoned to ‘show cause why that caveat should not be removed. The appellant also sought for an order that the Caveat be unconditionally removed.

(On 5" February 2010 the High Court heard the application and dismissed it on grounds that

10 _ the respondents raised triable issues in their affidavit in reply which, in the court's view, could Not be resolved in the application but required an ordinary plaint. The trial Court also found that the respondents had properly lodged the caveat having had a caveatable interest and as such the tial court could not revoke that caveat.

‘The appellant being dissatisfied with the decision of the trial Judge lodged the instant appeal

15 _ on the following three grounds;

1. The Learned trial Judge erred in law when he failed to apply the correct principles in determining whether the respondents’ caveat ought to be removed from the Register Book in respect of the land comprised in Mailo Register Block 395 Plot 1391 at Sekiunga,

2. The Learned trial Judge erred in law when he failed to property evaluate the evidence ‘on record upon which he based the exercise of his discretion in a manifestly wrong ‘manner to maintain the Caveat on the Register Book.

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3. The leamed trial Judge erred in both law and fact when he held that there are triable ‘ssues when there was no evidence on record to show that the appellants tle as registered proprietor of the land was being impeached for fraud by the previous proprietor or the respondent.

5 At the hearing of this appeal Mr. Nkurunziza Peter appeared for the appellant while Mr. Magezi John appeared forthe respondents. Both counsel, with the leave of court, filed written

Submissions

The appellant's counsel argued ground 1 separately then grounds 2 and 3 together. In support ofthe first ground of appeal, counsel for the appellant submitted that the learned 10 trial Judge did not consider whether or not the respondents had commenced proceedings for Cancellation ofthe appellants tite or which ofthe parties had aoquired equitable interests in the suit land first. He faulted the learned trial Judge for failing to follow and apply the correct Principles concerning removal of caveats. He prayed that ground one be upheld by this Court. ‘On grounds 2 and 3 counsel for the appeliant submitted that the respondents’ caveat which 15 _fettered the appellant's right as registered proprietor to deal with the land ought to have been removed by the leamed tial Judge upon proper evaluation of the facts availed to him, with due regard to the balance of interest of the parties particularly as the respondents had ‘repudiated the sale and are seeking refund of the deposit yet no action had been commenced for recovery of the land in any court. The ‘appellant's counsel contended that the learned trial 20 Judge erred in law and infact by not properly evaluating the evidence before him. Further, that the leamed trial Judge exercised his discretion in a manifestly wrong manner. He prayed that the court finds in the appellants favour on grounds 2 and 3, In reply to ground tof appeal, the respondents’ counsel supported the decision ofthe trial Judge and contended that the leamed trial Judge was correct in his application of the 25 principles of removal of caveats. He submitted that the respondents having confirmed the Particulars ofthe suit land, its ownership and unencumbered nature, paid Rwost Contractors Utd a deposit of Ug. Shs. 45,000,000/= and to secure that interest they lodged a caveat on 20" November 2008 which was justified. Further, that the respondents in their afidavitin reply to the application had also claimed thatthe appellant had acquired the suit land by fraud. The

5 respondents’ counsel agreed with the leamed trial Judge that such an allegation required a fully-fledged trial to disprove or establish fraud for which reason the trial Judge was correct in holding that there are triable issues that could only be dealt with in a civil suit. It was further submitted for the respondent that the trial Judge was correct in holding that the caveat on the suit land should be maintained because the respondents carried out due diligence, a

10 prerequisite forall intending purchasers of real estate to exercise during such transactions, confirmed the unencumbered nature of the suit land and paid a deposi for it In reply to ground 2 it was submitted for the respondents that the trial Judge correctly evaluated the evidence on record inthe form of a sale agreement and receipts forthe deposit cof Ug. Shs. 45,000,000/= which cteated an equitable interest that ought to be protected by a 15 caveat. Counsel argued that the respondents having lodged their caveat under section 139 (1) of the Registration of Tiles Act, the court would not order the removal of a caveat under summary proceedings corresponding with section 140 ofthe RTA. It was also his contention that the delay cannot be visited upon the respondents who exercised patience as they gave the vendor time to secure the certificate of ttle and surrender it tothe respondents for further 20 action. Counsel explained that from the time of the purchase to revocation of sale by the respondents, the duration exhibited good will from the respondents towards the vendor to perform its obligation under the sale agreement (On ground 3 the respondents’ counsel submitted that issues of fraud can only be addressed by conducting @ proper hearing. The respondents’ counsel also submitted that the 25 respondents’ repudiated the sale agreement and evoked termination provisions accordingly and demanded a refund because there is no evidence that the respondents received the certificate of tle or refund at all. Counsel prayed that this appeal be dismissed with costs and the caveat be maintained

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