Justice Arach-Amoko ruling that exposed scam in sale of UBC land

On February 14, 2011, Uganda Broadcasting Corporation (UBC) sold to Haba Group, owned by businessman Hassan Basajjabalaba, a piece of land at Bugolobi in Kampala for Shs11.5 billion.  Three months later, Haba sold the said property to a company known as Deo & Sons, under a sale agreement dated May 16, 2011, for Shs22 billion. Haba was registered on the title on May 31, 2011.

UBC’s reaction came through Paul Kihika, it’s then managing director. He wrote a letter terminating the sale agreement between UBC and Haba and instructed the commissioner for land registration to not only de-register Doe & Sons from the title to the land, but also reinstate the State-owned broadcaster.

Feeling aggrieved, Haba ran to the High Court’s Land Division, accusing UBC and Kihika of wrongfully terminating the sale agreement and interference with its investment. UBC was having none of it through Kiryowa Kiwanuka, now the Attorney General, and raised a counterclaim saying the sale of the land was illegal.
Kiwanuka cited Section 6(a) of the UBC Act that stipulates that UBC could only sell or otherwise dispose of property subject to “prior approval of the minister”.

The issue
The issue was that the land had been purportedly sold by UBC to Haba Group on Jan 14, 2011, yet the minister’s consent was obtained on April 8, 2011, by which time the sale of the suit land had already been completed and its implementation substantially carried out.
Justice Joseph Murangira agreed with UBC and not only dismissed Haba’s case, but also cancelled all entries on the title and ordered the reinstatement of UBC as the owner. Haba and Doe & Sons took the fight to the Court of Appeal in 2012.

On April 16, 2013, before the Court of Appeal could determine the appeal there was a twist on the case when all parties involved in the scandal entered into a consent judgment dated April 16, 2013, in effect settling the appeal amicably by reversing the orders of the High Court.

Subsequently, Haba applied for execution of the consent decree, and a warrant of attachment was issued to one Gordon Twinamatsiko who proceeded to attach and sell the suit property to Margret Muhanga Mugisa, the current State minister for Primary Healthcare, on the December 30, 2013. 
Muhanga was thereafter registered on the certificate of title on January 10, 2014. UBC made it clear that it was aggrieved by the actions of Haba Group, Doe and Sons, Twinamatsiko, and Muhanga and in a bid to recover its land, challenged the execution and sale of the land in the Court of Appeal. 

In a majority decision of 2-1, the Court of Appeal quashed the consent judgment, saying it was at variance with the judgment and decree of the High Court. In the consent judgment, it had been agreed that UBC refunds Shs11.5 billion to Haba Group, something that Justice Murangira at the High Court hadn’t ordered.
“I have already stated earlier that I do not think that a party may withdraw an appeal in this court and in the same transaction consent to other orders, other than an order relating to costs, resulting from the withdrawal,” Justice Kenneth Kakuru, who has since passed on, wrote in his lead judgement.

“I have also already held that decree or order of the High Court did not and could not have contained a clause requiring the defendant [UBC] to pay to the plaintiff in that suit, the money stated therein when the plaintiff’s suit had been dismissed.”

Justice Kakuru also ordered the commissioner of land registration to cancel the title that Muhanga possessed, and this was one of the grounds of appeal she took to the Supreme Court where they faced a panel that included then Chief Justice Bart Katureebe, John Wilson Tsekooko, Galdino Okello, Christine Kitumba, and Stella Arach-Amoko.

On behalf of Muhanga, Caleb Alaka contended that the Court of Appeal’s move to cancel Muhanga’s name from the title was neither sought nor pleaded or proved in the application. 
It was Alaka’s contention that a court cannot grant such an order, according to the law laid down under Order 6 rules 1 and 7; and Order 7 rules 1(g) and 7 of the civil procedure rules.
“It was, therefore, an error on the part of the learned justices of the Court of Appeal to issue this order which occasioned a miscarriage of justice,” Alaka said.

Defending Kakuru’s judgment
Kiwanuka, on behalf of UBC, predictably defended Justice Kakuru’s lead judgment, saying the Court of Appeal, having granted the setting aside of the execution, the cancellation order just followed as a consequential order since the court could not set aside the sale and not order cancellation of the certificate.
The various authorities Alaka had cited to persuade the justices, Kiwanuka said, weren’t inapplicable to this case.

In her lead judgment, Justice Arach-Amoko agreed with Muhanga’s lawyers that indeed UBC hadn’t initially prayed for the cancellation of the minister’s name from the title, she said there was no way the Court of Appeal would have left that issue hanging.
“It follows, therefore, that notwithstanding the finding that there was no pleading or prayer for the cancellation of the 5th appellant’s [Muhanga] certificate of title, since the evidence before the court had disclosed that the whole transaction leading to the sale of the property to the 5th appellant was based on an illegal consent judgment and thus null and void, the court was obliged to make that order, after establishing that fact,” she ruled.
Justice Arach-Amoko said Alaka had insisted that the procedure under which Muhanga’s title was challenged and ultimately cancelled was wrong.
 
The Supreme Court, Alaka submitted, had previously held that once the property has been transferred in the name of the auction purchaser, it becomes an exception to Section 34 of the Civil Procedure Act.
The correct procedure, he said, should have been by way of an ordinary suit in which contentious issues would have been resolved after adducing evidence and cross-examination and not by a notice of motion.
Kiwanuka, in a rebuttal, submitted that there was absolutely nothing wrong with the procedure adopted. Section 2(x) of the Civil Procedure Act, Kiwanuka said, defines a suit to include a notice of motion. That it is not necessarily true, he said, that oral evidence is required in order to be heard.

“Even in a suit commenced by notice of motion, a party is free to bring evidence if he feels that he needs more evidence,” he said, adding that according to Section 34 of the Civil Procedure Act, the correct procedure for challenging execution is, in fact, within the same suit and not a separate suit.
Justice Arach-Amoko agreed with Kiwanuka. “In my judgment, counsel [Kiwanuka] for the respondent [UBC] is right. Section 34 is the correct procedure for determining issues arising out of the execution of decrees between parties to a suit. Section 34(2) actually empowers the court to treat proceedings under the section as a suit,” Justice Arach-Amoko said.

With such technicalities out of the way, Arach-Amoko turned to the gist of Muhanga’s appeal.  The crux of the appeal was that the Court of Appeal had wrongly decided that Muhanga was the rightful purchaser of the land.

Regarding the question of bona fide purchaser, Alaka insisted that Muhanga was a bona fide purchaser for value without notice in that she saw an advertisement in the newspaper, bid and emerged the highest bidder; and the property was sold to her.
He further contended that this was not an ordinary sale; it was a sale by auction by order of the second highest court in Uganda, therefore, when the valuation report was attached by the bailiff and at the same time sanctioned by the court, there was no need for a valuation by the Government Valuer. 
Kiwanuka responded by saying that it was Muhanga who had pleaded that she was a bona fide purchaser for value without notice. That Muhanga had adduced evidence and her lawyer had also submitted it.
The UBC case, on the other hand, Kiwanuka said was that the sale was illegally and irregularly concluded. Therefore, the court had no option but to pronounce itself on the issue.   
Still, Justice Arach-Amoko decided that Muhanga had no case.
“… therefore, agree with the findings of the justices of Appeal that the property could not be a subject of lawful execution. It was still in the name of the judgment creditor and the title deeds were in possession of the assignor. The certificate of title should have been deposited in court. The execution was, therefore, contrary to Section 48 of the Civil Procedure Act...” Arach-Amoko rule.

In her analysis, Justice Arach-Amoko said it was clear that the law sets out an elaborate procedure for the sale of immovable property. 
It would appear to me, she said, that the basic procedure where the property has been ordered for sale would be for the Registrar of Court to order the duplicate certificate to be delivered up to court. 

This order, Arach-Amoko said, would have to be put in writing where such a certificate is lost or destroyed the registrar of court can order the Registrar of Titles to issue a special certificate. 

“In conclusion, I find that the learned justices of Appeal had ample evidence before them from the record of appeal on which they based their findings. They could not ignore or condone illegality that was glaring from the record before them,” Arach-Amoko ruled before dismissing Muhanga’s appeal and upholding the orders of the Court of Appeal.  
Having won the case, UBC lawyers had asked for costs. However, Arach-Amoko told them that they are not entitled to costs because UBC’s representatives, she didn’t name, had colluded with Basajjabalaba, Muhanga, Deo & Sons, and Twinamatsiko in the scam.