If you under declare the value of land, your title is void - court

Any land transaction which deprived the government of its revenue through taxes is illegal and such a certificate of title acquired in the process would be cancelled, the Supreme Court has ruled.
In a landmark decision of the Supreme Court last week, false declaration of the value of land being dealt with is a breach of a legal duty.

“It follows that stating one acquired land as a gift when the transfer was based on exchange of another piece of land can be equated to inserting a lesser figure in the transfer form than what was actually paid as consideration for the land. Such conduct is tantamount to concealment of the true consideration for the transaction and amounts to fraud,” said Supreme Court Justice Lillian Tibatemwa in a unanimous judgement.

Other judges are Eldard Mwangusya, Faith Mwondha, Paul Mugamba and Augustine Nshimye.
According to the judgement of the highest appellate court, declaring that there were no developments on the land in order to evade payment of taxes constitutes fraud.

The court directive results from a dispute between Ms Betty Kizito against her brother David Kizito Kanonya and his seven children in regard to transfer and exchange of prime plots of land at Muyenga, Katwe and Kisugu in Kampala.
Court records indicate that the two persons made an oral contract to transfer the land at Muyenga they acquired jointly as tenants in common into the names of Mr Kizito as a sole owner in exchange of his properties at Katwe and Kisugu.

The case
Court heard that in 1995 while operating a joint business, Ms Kizito and Mr Kanonya pooled resources to purchase and develop land at Muyenga on which they registered as tenants in common but in 2002 the land was fraudulently transferred into the names of Mr Kanonya and his children.

According to court records, the transfer was done after an oral contract between the two persons, where Ms Kizito was to surrender her interest in the land at Muyenga in exchange for another land at Kisugu and part of Mr Kanonya’s land at Katwe, which obligation he did not honour. Ms Kizito filed a case in 2003 challenging the transfer of Muyenga land into the names of Mr Kanonya and his children and the court ruled that the latter (Kanonya) acted fraudulently and cheated his sister of the property he co-owned when it was transferred allegedly as a gift in favour of the children.
However, the Court of Appeal overturned the lower court decision giving rise to an appeal in the Supreme Court.

Justice Tibatemwa noted that the contents of the transfer form exhibited was that Mr Kanonya filled out the form indicating that the consideration of the transfer was a gift from Ms Kizito to him and his seven children.
“Court found that in the land consent form, the first respondent (Kanonya) indicated that there were no developments on the land at Muyenga, yet there were two houses on it,” reads the Supreme Court judgment.

The court of Appeal had ruled that the misrepresentation of the suit land as being undeveloped in the consent form that accompanied the transfer form was of no legal consequence on the transaction.
According to the court records, the false declaration was made in the land transfer form whose recipient was the Commissioner of Land Registration.
The court heard that the two parties agreed to transfer to sthe disputed Muyenga land in the names of Mr Kanonya as a sole owner in exchange of his properties at Katwe and Kisugu.

“It is, therefore, these properties that would be the consideration for the appellant (Kizito) to give up her interest in the suit land. It follows that the transfer of the suit land was not a gift as was stated in the transfer, forms,” the judges explained.
The highest appellate court held that by refusing to fulfill his obligations, Mr Kanonya breached the oral contract and refusal to perform a contractual promise is prima facie a breach.
Justice Tibatemwa ruled that the registration of Mr Kanonya and his seven children as proprietors of the property at Muyenga is void.

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