Unanswered questions in UBC - Muhanga land scandal

Kampala- Just how many goats and cows did Burahya County MP Margaret Muhanga sell to raise Shs10 billion she used to purchase 23 acres of Uganda Broadcasting Corporation (UBC) land and how much did her relatives contribute?
These and more questions have taken centre stage in the public domain following melodramatic scenes before the parliamentary Committee on Statutory Authorities and State Enterprises (COSASE) on Tuesday. But what lies beyond the drama?

Facts and Issues
On October 29, 2015, the Supreme Court resolved the controversial sale, with all five justices upholding earlier orders by the High Court and the Court of Appeal for cancellation of the sale agreement for the UBC land on plots 8-10, 12-16 and 18-20 on Faraday Road in Kampala, measuring about 23.1 acres.

Ms Muhanga and four others (SINBA (K) Limited, Haba Group (U) Limited, Deo and Sons Properties Ltd, Twino Matsiko Gordon T/A Tropical General Auctioneers) had appealed to the Supreme Court, the highest court, challenging the cancellation of the land transaction and reinstatement of UBC as the rightful owner of the property. However, all the five justices of the court dismissed the appeal.

They held in a lead judgment delivered by Justice Stella Arach Amoko: “The learned High Court judge was right in declaring that the sale of the suit property to the 2nd appellant (Haba Group) was null and void ab initio [from the beginning] for contravening the UBC Act; the orders of the High Court which dismissed the suit by the 3rd appellant (Deo and Sons Ltd) and ordered that the title of the 3rd appellant be cancelled and the name of the Respondent (UBC) should be reinstated thereon were also correct. As a result of their finding, both ordered the cancellation of the 5th appellant’s (Muhanga) title and reinstatement of the respondent (UBC) on the certificate of title.”

The High Court, the Court of Appeal and the Supreme Court all ordered that UBC be reinstated on the certificate of title and called the transaction a scam.

“The transfers to Haba Group (U) Ltd and Deo & Sons Properties Limited of the land are null and void. The Commissioner Land Registration is hereby ordered to cancel the entries in the register book transferring the land to Haba Group (U) Ltd and Deo & Sons Properties Limited,” the judges ordered.

A lawyer close to the case who preferred to speak on condition of anonymity for professional reasons told Daily Monitor in an interview: “Our MPs just need to improve their reading skills and get time to read basic documents because whatever they asked Muhanga is answered in the rulings and they need legal guidance for they cannot purport to debate a matter the Supreme Court concluded.”

What a lawyer says
Commenting on a demand by the MPs that Ms Muhanga return the land title to UBC, the lawyer said: “They are only being ignorant and playing to the gallery because once the Supreme Court cancelled the title, it became useless to her and a mere piece of paper for which she cannot transact. UBC is ably represented and all their lawyers have to do is process a special title from the Land registry.”

UBC lawyer Kiwanuka Kiryowa appeared to agree with the lawyer, telling this newspaper yesterday: “We knew those guys were not going to give us the land title so we have moved to the Land registry to process a special title.”

However, when this newspaper contacted Ms Sarah Kulata, the commissioner for land registration, whom the court ordered to cancel Ms Muhanga’s title and reinstate UBC as the owner, she maintained the MP still owned the land. She argued that the court order had not been served on her.

“I have not seen that Supreme Court order; I don’t work in the Supreme Court. I work in the Lands office. I work on documents after receiving them. The land is registered in the name of Margaret Muhanga, she acquired it in pursuance to a court order issued on January 3, 2014,” Ms Kulata said by telephone.

Lawyers, however, insist, “for all intents and purposes, the land no longer belongs to Muhanga and that title is useless to her in law because it was cancelled.” Critics say Parliament could lose sight of the broader issues the Supreme Court ruled on.

For instance, the court ruled that UBC was not entitled to costs, “due to collusion by its representatives with the appellants in the scam.” Who are these employees and has action been taken against them?

IGG speaks out
When contacted for a response, Inspector General of Government Irene Mulyagonja asked this newspaper for more time to ascertain the facts but had not got back by press time.

The court also found that contrary to section 6(a) of the UBC Act which stipulates that the broadcaster could only sell or otherwise dispose of property subject to ‘prior approval of the Minister’, the land was purportedly sold by UBC to Haba Group on January 14, 2011, but the minister’s consent was obtained on April 8, 2011, by which time the sale of the contested land had already been completed and its implementation carried out.
Parliament, critics said, should, for instance, task the minister at the time to answer for possible abuse of office. The court held that Ms Muhanga “was part and parcel of a well-planned fraud, she participated at each and every phase with the clear intention of defrauding the respondents (UBC) of the property, or at least she was aware of all the illegalities outlined above and took advantage of them. She could not, therefore, claim to be a bona fide purchaser for value without notice.”

By putting up the defence of a bona fide purchaser for value without notice, Ms Muhanga’s lawyer, Mr Joseph Kyazze, moved to persuade the court that her client was ignorant of the encumbrances before she paid for the land, an argument the judges rejected.

“She had a duty and obligation to ascertain the proprietor of the property even before attempting to bid for it. Had she done so, she would have found out that the property she was bidding for did not belong to the respondents and that the advert was false and misleading.”

The courts also pointed out fraud at the Lands registry, which Parliament could look into with deeper examination.
The court held: “The speed with which the transaction was effected particularly at the Lands registry definitely raises suspicion of collusion. This is compounded by the fact that the land had a checkered history right from the sale to the 2nd appellant.

It is indeed inconceivable that she could part with such a huge sum of money without ‘ carrying out a search in the Lands registry to verify the ownership of the said land. Besides, this was a sale by a court appointed bailiff; it is even more incredible that the 5th appellant (Muhanga) had no opportunity of establishing the background suit that had led to the attachment of the said property,” the judges ruled.

Highlights of the court ruling by Justice Amoko

“Indeed, the 5th appellant did not aver anywhere in her affidavit that she made any effort to establish the ownership of the land. Further, the speed with which the transaction was effected particularly at the Land Registry definitely raises suspicion of collusion. This is compounded by the fact that the land had a checkered history right from the sale to the 2nd Appellant.

It is indeed inconceivable that she could part with such a huge sum of money without’ carrying out a search in the Lands Registry to verify the ownership of the said land. Besides, this was a sale by a court appointed bailiff; it is even more incredible that the 5th appellant had no opportunity of establishing the background suit that had led to the attachment of the said property.

This was not an ordinary sale, as rightly submitted by the appellants’ own counsel. It was the sale of very prime land in the heart of Kampala. The suit property belonged to a government body. Therefore, there was a need in my view for a valuation from the Chief Government Valuer.

It was a sale arising out of a court case. The 5th appellant had to verify the history of the court case and scrutinise all the relevant documents before parting with the huge sum of money, to avoid being sucked into litigation like she has been. In the premises, I find that the learned justices were absolutely right to reject the plea of bona fide purchaser for value without notice.

Muhanga pinned
The justice stated that she had a duty and obligation to ascertain the proprietor of the property even before attempting to bid for it. Had she done so, she would have found out that the property she was bidding for did not belong to the respondents and that the advert was false and misleading.

According to the court, it appeared that Ms Muhanga actually was well aware of the fact that the respondent was not the registered proprietor but she went ahead to buy the property anyway. She cannot turn around and contend that she is an innocent purchaser for value without notice.

“Innocent she is not. The ownership of the property was changed from the names of the 2nd respondent to the names of Uganda Broadcasting Corporation the 1st applicant on January 14, 2014, long after she had purportedly bought it. Uganda Broadcasting Corporation, the first respondent, was reinstated as owner on January 10, 2014 at 2.42pm. At 2.44pm on the same day, a special certificate of title was issued. At 2.46pm, Ms Muhanga, the 4th respondent, was registered as proprietor of the said property.

Questions
Clearly in my view, all the transaction in respect of the suit property carried out at the Land registry on January 10, 2014, was made at the same time. It is inconvincible that transfer forms could have been prepared, signed and lodged within two minutes by the 4th respondent.

It is not possible that the 4th respondent who had the duty to effect transfer of the title into her names could have had the property valued by the government valuers, given a value, had the stamp duty assessed, paid stamp duty, lodged the receipts at the Land registry, had the transfer forms endorsed, filed them for registration and had the registration completed, all in a period of two minutes. This may not be a finding of fact but it certainly raises a red flag.”

The court found further that it was inconceivable that Ms Muhanga could have carried Shs10.2 billion in cash and paid it to the bailiff at the fall of the hammer as indicated in the 3rd respondent’s affidavit. The 3rd respondent’s office is on the 6th floor, Room 12, Plot 15 Luwum Street, Kampala. And thereafter, the 3rd respondent could have paid that huge amount to SINBA at the same place as annexure “C” to the affidavit of the 4th respondent a cash receipt issued to SINBA (K) Ltd indicates.

Indeed the 5th Appellant did not aver anywhere in her affidavit that she made any effort to establish the ownership of the land. Further, the speed with which the transaction was effected particularly at the Land registry definitely raises suspicion of collusion. This is compounded by the fact that the land had a checkered history right from the sale to the 2nd appellant.

The learned justice stated that she had a duty and obligation to ascertain the proprietor of the property even before attempting to bid for it. Had she done so, she would have found out that the property she was bidding for did not belong to the respondents and that the advert was false and misleading.

According to her Lordship, it appeared that she actually was well aware of the fact that the respondent was not the registered proprietor but she went ahead to buy the property anyway. She cannot turn around and contend that she is an innocent purchaser for value without notice. The learned justice observed;

In the result, this appeal is dismissed and the orders of the Court of Appeal are upheld. The respondent is not entitled to costs due to collusion by its representatives with the appellants in the scam.”

Compiled by Ivan Okuda

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