LAND TRANSACTIONS

ESSENTIAL FEATURES OF THE TORRENS SYSTEM

To distinguish it from the other systems of land transfer, the Torrens system
has two main elements as; title by registration, and indefeasibility of title. The
two are interdependent and essential to the system.

1. Title by registration:

Section 54 of the R.T.A provides; No instrument until registered in a manner

herein provided shall be effectual to pass any estate or interest in any land
under the operation of this Act, or to render such land liable to any mortgage.
But upon such registration, the estate or interest comprised shall pass... or be
liable to the ....conditions set forth in the instrument or by this Act...

Section 92 (2) is to the effect that upon registration of the transfer of the estate,
all powers, privileges, thereto shall pass to the transferee and the latter shall
there by become the proprietor.

It follows from the foregoing that in the Torrens system title does not pass by
execution of the documents only but by the execution and registration thereof.

Case Law

LumuVs Lindo Musoke

(Title does not pass until a transfer is affected)

The plaintiff, a registered proprietor of land, sold it to the defendant, who paid
part of the consideration. The plaintiff duly executed the documents of transfer,
but on presentment for registration, it was found that the land was burdened
with a caveat lodged by a third-party, and so it could not be registered. The
defendant nevertheless, proceeded to collect rent from the tenants, contrary to
the agreement that vested such rights in the plaintiff until registration of the

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transfer documents. The plaintiff thus sued for trespass and asked for an
injunction to restrain the defendant.

It was held that according to sec 51 (now Sec 54) R.T.A, there had been no
registration of the transfer documents of title and therefore the land still
belonged to the plaintiff. That the agreement did not transfer any interest to
the defendant. It merely gave him a contractual right entitling him to bring an
action for damages or specific performance. The defendant’s acts therefore
amounted to trespass.

According to Mugambwa (supra), the learned judge erred in finding trespass

since the primary requirement of trespass to land is that the plaintiff should be
in actual possession of the land at the time of the defendant’s action, and as
the plaintiff had simply rented the premises, he was not in possession.
However, a contrary judgment was arrived at inMoya drift farm Vs Theuri
which shall be examined below under indefeasibility of title.

ZimbeVsKimanza

One piece of land was sold to two persons. The later purchaser had his title
registered. The lower court had found for the respondentcontending that
although his title was not registered, it prevailed over that of the appellant.
This respondent had lodged his agreement for registration but had been
unsuccessful because it bore the wrong certificate number. The appellant’s had
the right number and had successfully been registered.

Per AINLEYJ,

“…. The appellant can only be ousted from the land if it be shown that he
obtainedregistration by fraud, his own, not the seller’s. The onus of proving
this fraud lies on the respondent, and it is a heavy one ...In fact the respondent
was not the owner of the land when the appellant registered hisstatutory
transfer. No man can become the owner of land until a statutory transfer of the
land to him has been registered.

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A stringent application of the element of title by registration can be seen
in;

Busulwa Vs Texas

One Ssebugulu deposited title deeds affecting the suit land with the present
respondents, as security for a loan made by the respondent to his company.
The respondents, unaware of any transactions between the appellant and
Ssebugulu had a caveat registered as they had a right to do so. Meanwhile, the
applicant, a native, had just completed a purchase of the suit land from
Ssebugulu and was still seeking a completion of the transfer to him. On
discovery of the caveat he sought to have it removed.
Held: The position in law is very clear. I very much regret that it cannot assist
the applicant. No dealing with Mailo land can pass any interest until such
dealing is registered. The applicant, from circumstances beyond his own
control, has not registered his interest and I therefore cannot assist him.

Considering the rigid requirements of registration, what then isthe effect

ofunregistered instruments?

In Souza figuerido Vs Moorings Hotel

The respondent, a registered proprietor of land, entered a contract to lease the

suit properties to the applicants, for a period in excess of three years. The lease
was not registered contrary to the law. The appellants entered onto the land
and left before the expiry of three years. Whenhe sued for rent arrears, the
appellants maintained that since the lease had notbeen registered. It was void
and they were not bound to pay the arrears.

It was heIdthat there was nothing in the Act, whichrendered such

instrumentsineffectual as contracts betweenparties. There is nothing to show
that an unregistered document purporting to be a lease for more than three
years is void…... It can operate as a contract inter parties and can confer on

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intending lessee a right of specific performance and to the intending lessor
aregistrable lease. On the facts of the case it was therefore held that appellants
were boundunder contract to pay the rent arrears. Reference was made to the
learned authors of KERR on Principles ofAustralians Land Titles.

“… an instrument in statutory form, until registration operates as a contract

interparties… the mere execution of a registrable instrument transfers no
interest in the landbut merely gives a right in personum …”

Can it however be said that the instrument creates an “equitable

interest/lease?”

Sir Kenneth O’Connor denied this fact, on Grounds that the R.T.A, creates no
interest whether legal or equitable through an unregistered instrument.

However, in Katarikawe Vs Katwiremu, it was maintainedthat in

suchcircumstances. The purchaser acquires an equitable interest in the
landenforceable against the vendor.

In the Australian case of Chan Vs CresdonProperties, itwas held that it is not

the instrument which creates such equitable interest, but rather the contract
itself. Reference was made to ISAACS j in Barry Vs Heider;

“…denying effect to an Instrument until registration does not touch whatever

rights arc behind it and parties have a right to have such interest registered.
That right, according to the accepted rules of equity is an estate or interest in
land.”

From the foregoing, it is maintained that antecedent agreement will be effective

in accordance with the principle of equity to bring into existence an equitable
interest or estate in land. It should further be noted that at common law, once
an unintendedlesseeenters into possession under unregistered lease. A tenancy
at will is created and they are bound to pay rent if it falls due.

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 2. Indefeasibility of Title

According to Mugambwa (supra), it means that once a proprietor of an estate or

interest in land, the government guarantees that his/ her title cannot be
divested or attacked by rival claims to the land except as prescribed under the
RTA. According to Professor WALLAN, “The Torrens system in Australia”,
though the term indefeasibility of title is not referred to in the R.T.A, its
meaning and scope can be obtained from mosaic of sections and these include;
sec 59 (Certificate to be conclusive evidence of title, sec 64 Estate of registered
proprietor is paramount) ,sec 181 which protects a bonafide purchaser for
value who obtained the land from one who was registered through fraud or
error, from ejectment or action for damages, and sec 176, which, except for a
few exceptions, protects the registered proprietor against any action for
ejectment or damages. Thus, production of the certificate of titleby one in his or
her name is deemed an absolute bar against any legal action subject to a few
exceptions in the R.T.A.

The whole purpose of the indefeasibility principle was designed to protect title
of the registered proprietor from unregistered interests and to save persons
dealing with registered land the trouble of going behind the register book to
investigate the validity of title and possible rival claims to the land.

Case Law

Karim Vs Chief Registrar of Titles

The applicant sought to restrain the registrar of titles from interfering with her
quiet possession of land, as the registered proprietor thereof, she had received
a letter from the respondent asking her to return the land title as she had been
erroneously registered as proprietor. That following the recovery of the original

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file affecting the suit land, some caveats which forbade any transfers of title
without notice to the caveator had been discovered.

It was held that the applicant had acquired good title and she should be
spared the quiet enjoyment, having got the title bonafide and for good
consideration. Further that the registrar should remove the caveats she had
placed on the applicant’s title unilaterally without giving her the chance to be
heard.

DavidAcarVs Alfred Acar

The respondent applied for a lease of land under the R.T.A. The appellant who
claimed an interest complained to the parish chief but did not lodge a caveat.
The land was surveyed and a certificate granted to the respondent. The
appellant refused to vacate the land.

It was held on appeal that, anyone claiming an interest in land being surveyed
with a view to bring it under the operation of the R.T.A, must lodge a caveat.
The complaint to the village chief did not absolve him from the law, and as he
had done nothing within the Iaw to stop it, the certificate granted to the
responded was conclusive evidence that the person named therein, was the
registered proprietor. ‘ .

LWANGA Vs REGISTRAR OF TITLES

After the deceased’s death, k fraudulently caused the deceased’s land to be

transferred into his name. He later sold the land to S an innocent purchaser for
value, who registered as proprietor. K was convicted of fraud and the suit
property was ordered to be transferred into the applicant’s names which the
registrar refused to do hence this suit. It was held that S was a bonafide
purchaser and as he was registered. His title was indefeasible not withstanding
K’s fraud. It was noted that though a paradox, registration obtained by fraud is
sufficient to pass title to a bonafide purchaser.

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EXCEPTIONS TO THE INDEFEASIBILITY TITLE RULE

1. Fraud

This is by far the most important exception to the indefea1ibility of tile.

Section 64(1) of the RTA is to the effect that the title of the registered proprietor
is paramount except for fraud. Fraud is not defined in the act, but it’s meaning
may be attained by a study of case law.

In Assets Company Ltd VS Mere Roihi, (New Zealand case)

Lindley held that fraud in the Torrens System meant actual fraud as opposed
to constructive fraud. In Waimiha Sawmilling Co VAs Waione Timber
Company (1926) AC IO6 fraud was described as,

“...If the designed object of a transfer be to cheat a man of known existing right
that is fraudulent.

The fraud must be that of the person whose title is sought to be impeached but
not that the persons from whom he obtained title. Thus in Kampala Bottlers
Vs DOMANICO, the trial judges had found fraud on part of the appellant on
grounds that; someone, in the lands office and the chairman of the town clerk
had failed to notice the error in the appellant’s title. WAMBUZI CJ expressed
these sentiments on appeal;

“...With respect, these verges on constructive fraud…... it was not shown that
the appellant was guilty of any fraud or that he knew of it…”

In hotel International VS The Admin general of Robert caveman

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It was found that as there was no caveat by the respondent on the register, the
appellants could not be accused of fraud in respect to the respondent’s
registered interest. Similarly in

Shah VS Modern Sweet Mart (1956-57), the purchaser of land, fully aware of
the defendants’ unregistered 7-year lease on it, proceeded to register as the
proprietor. In a suit for vacant possession, the defendants pleaded notice and
fraud ‘It was held that section 146 RTA strictly forbade the application of
equitable principles and that the plaintiff was not bound by the defendants’
lease……

However, inKatarikawe Vs Katwiremu, Ssenkandi J said that although mere

knowledge of unregistered interests cannot be imputed as fraud coupled with a
wrongful intention to defeat such claims would suffice as fraud. Thus in this
case the plaintiff purchased land from the first defendant but there was no
transfer effected in his favour. The plaintiff never the less took possession and
effected many improvements on the said land. Mean while the first defendant
transferred the land to the second defendant, who was his brother in law. It
was found that as the plaintiff had openly carried out improvements on the
land and the fact that the two defendants were closely related were sufficient
grounds to prove connivance by the defendants to defraud the plaintiff. That
the second defendant’s title had therefore been obtained through fraud.

InLusweswe VS Kasule AND Caulibally

The plaintiff was the original registered proprietor of adjacent piece’s of land, A
and B. On A, he had a house and had constructed a drive way through land B
to the house on land A. In the 1970s, he was arrested. His property including
the certificate of title were looted. When he applied for replacements, he
discovered that title to land B’ had been registered in the second defendant’s
name, who alleged he had bought it from the first defendant. The plaintiff
sought to have the title struck out on grounds of fraud It was found that the
circumstantial evidence pointed strongly to the fact that the second defendant

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was involved in the fraud. first because there were no records of the purported
instruments of transfer from the plaintiff to the first defendant and from the
latter to the second defendant. Secondly, there was evidence of a search by the
defendant of the register book to discover who owned the house on plot A, a
drive way to which passed through plot B. Moreover he had proceeded to
occupy the house on plot A, yet he knew he had no right to do so.

In Jandu VS Kirpal, SINGH j was of the view that the ingredients of fraud
were three fold;

Proved knowledge, the existence of some unregistered interest, and knowingly

and wrongfully defeating that interest. On burden of proof, Oder CJ in Alibhai
VS Kariasaid that although the standard may not be as heavy to require proof
beyond reasonable doubt, something more than a mere balance of probability
is required.

Other Exceptions (within the Act)

2. Encumbrances notified on the folium. The register book is like a

mirror. What you see is there and what you do not see is not there.
3. The title of a registered proprietor is not indefeasible as against that
of another registered proprietor claiming the same land. Sec 64 RTA
is to the effect that the registered proprietor may hold the land subject to
encumbrances notified on the folium but free from all other
encumbrances, except the estate of a person claiming the same land
under a prior registered certificate of title. This may have been
occasioned through a mistake at the registry. In such a case the rules as
to priority of registered interests will apply.
4. Land included in the certificate by mistake. ‘This is included in
section 64(1) RTA. See Black locks Vs JB developments ( under bonafide
purchaser for value below)
5. Sec 64(2) of the R.T.A is to the effect that title of a registered proprietor
may also be subject to public rights of way and casements.

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 6. Adverse possession, under the same section, may affect a registered
proprietors rights. According to the Limitation Act, if an owner does not
eject an intruder for 12 years, he/he loses title to such intruders.
Accordin to the Kenyan case of KiseeMaweu Vs KIU ranching & Co-
operative Society (1982) the period of adverse ownership starts running
from the time the squatters begin to live on the land, and not from the
time the proprietor is registered as the owner. Thus the court found for
the appellants who had lived on the land since 1933.

Per PLATT J, On the proprietor’s title in relation to that of the adverse

posesser.

“ However absolute and indefeasible the title is, it is lost forever”

7. An interest of a tenant on land which is neither adverse nor registered is

also protected thus; in Uganda Post and Telecommunications Vs
Lutaaya, it was held that the respondent’s registered leasehold was
subject to appellant’s title acquired by possession with the consent of the
landlord prior to the leasehold.
8. There are also some overriding statutory exceptions on the indefeasibility
such as the access to Roads Act, which empowers a land owner without
access to a road to apply for a court order for a right of way over the
registered proprietor’s land.

THE LAND ACT protects a tenant by occupancy by providing that such

tenants deemed to be the tenant of the registered proprietor. The Act
further subjects the right of the land owner to environmental laws such
as The Forest Act.

9. Judicial powers can also limit the indefeasibility of title. In Fraser VS

Walker; the Privy Council maintained that the Torrens system in no way
limited the power of court to act on a claim in personum against a
registered proprietor founded in law or in equity. .

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Other exceptions include; leases, licenses, and other authority granted by the
minister, unpaid rates, taxes, and charges. The registrar’s powers under the
land Act to correct errors and supply omissions in register book is yet another
exception to the absolute title.

PROTECTION BY CAVEAT.

Caveats are provided for in PART VII of the R.T.A.

A caveat acts as a statutory injunction to the registrar to prevent registration of

any dealings which might affect the interest or subject of the caveat. In
Kazzora VS Rukuba it was pointed out that in Uganda, a pending suit
affecting land does not bar continuation of dealings with such land. That
therefore the best way to protect one’s interest would best be achieved through
a caveat or an injunction.

In Katarikawe VS Katwiremu; it was said by SSENKANDI J that taking

possession of deeds is insufficient to protect an unregistered interest, unless a
caveat is lodged thereafter. According to Namususi VS Ntabazi (1988), to lodge
a caveat one must have a caveatable interest.

Municipal District of Concord, Vs Coles,acaveatable interest is defined as a

claim of a proprietary or quasi proprietary nature of interest in a particular
piece of land. Examples of caveats include; claims under wills, leases,
mortgages etc.

Boyes VS Gathure; Court rejected a caveat because it did not properly identify
the interest claimed as prescribed by the relevant statutory provisions.

Mutual Benefits Vs Patel a caveat prohibiting all dealings in land was held to
go beyond what was necessary to protect a leasehold interest.

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In Desouza V Talbot, the appellant entered into a sublease agreement with the
respondents, and on entering into possession, he expended some money on
repairing house. He then lodged a caveat purporting to be an equitable
mortgagee in the sublease agreement. It was held however that the agreement
referred only to a sublease and did not refer to the appellant as an equitable
mortgagee hence his caveat as a mortgagee was un founded.

A caveat may be lodged by not only the private party but by the registrar
as well, on behalf of government or a disable person. Section l7O (a)

It must be noted that lodging a caveat does not serve to prove title but rather
maintains the status quo, until the ultimate title ids determined. lt follows from
the foregoing that the duration of a caveat envisaged by the Act is only for a
limited period.

In Olojo V Rajah, where a caveat was for twenty years, court observed that a
caveat was only meant to be a temporary measure and was not intended to give
an everlasting protection in the sense that the caveator should be hulled
sleeping over his caveated interest perpetually.

Unfortunately the Act does not stipulate a time limit within which a caveat
should expire. It merely provides that it shall lapse automatically; when
withdrawn by the caveator, and where the proprietor applies for its removal
and the caveator does not commence legal proceedings or apply for extension of
the caveat within sixty days of notification of such application.

Section140 (1) of the Act empowers courts at any time revoke caveat at the
instance or the caveatee where the caveator fails to show reasonable cause why
the caveat should not be removed.

Wrongful lodgment of a caveat may occasion loss the owner and court may
order compensation to such owner by any person who enters a caveat without
reasonable cause.

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LEASES

Section 3 (5)of the land Act provides for the mode of creation of a lease. It
may be created by contract i.e. parties mutually agree to creation of a lease and
agree to terms of the lease. Lease may be created also by operation of the law.
This is where the law provides for the holding of such form of tenure by a
prescribed class of people.

For example section. 40(3) of the land Act provides that Non citizens can only
be granted leases for 99 years.

The Act further provides that the terms and conditions of the lease may be
regulated by the law to the exclusion of any contractual agreement reached
between the parties.

The RTA presumes a number of conditions and covenants between the Lessee
and Lessor, though not specifically agreed upon between the parties.

For example it is presumed that the Lessee will pay rent reserved by the lease
to the times mentioned in the lease and it is implied that the Lessor may, with
or without surveyors or workers once in every year at a reasonable time of the
day enter upon the leased property and view the state of repair of the property.

See Sec. 101 of RTA to Sec. 105 Provides a number of implied covenants
between Lessor and Lessee. A lease Binds parties to it as well as successors in
title of the parties.

A leasehold tenure is defined as a form of tenure whereby one person called a

Lessor grants to another (Lessee) a right to exclusive possession of land for
usually but not necessarily a period defined directly or indirectly by reference
to a specific date of commencement and a specific date of ending.

The lease is granted, usually but not necessarily in capital sum known as
premium or for both rent and a premium. And it may be in return for services
or may be free for any required services.

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CLASSIFICATION OF LEASES

Leases may be classified into fixed term and periodic leases.

A fixed term lease is one whose duration is fixed by the parties at

commencement of the lease i.e. It may be a lease for 12 years, 49 years, 100
years etc. such that upon the expiry of the agreed period, the lease comes to an
end.

A periodic lease is one which continuously renews from one term to another
e.g. it may run on a weekly basis, monthly basis or a yearly basis depending on
the Agreement between the parties.

A periodical lease terminates by proper notice being served by either party as

was stated in the case of Prudential Assurance company Ltd V London
Residuary (1992) 3 All ER 504.

The further classification of Leases which may not fall under the above
mentioned bracket is: A tenancy At will and a tenancy at Sufferance.

A tenancy at Will was defined in the case of Bweya Steel Works Ltd V
National Insurance Corporation (1985) HCB 58 to mean a person who enters
into possession of the Landlord’s premises as a tenant without specification of
the terms of the tenancy e.g. where x, the owner of Nabukeera Plaza allows Y to
occupy his premises without the specification of the terms upon which Y is
holding the premises. Y becomes a tenant at will and this means that he is in
occupation of the premises at the mercy of x who can terminate the tenancy
without giving Notice to Y.

However should a tenant at will begin payment of rent on a regular basis e.g. if
he pays rent on a monthly or yearly basis the tenancy becomes a periodic
tenancy.

A tenancy at sufferance was defined in the case of Hassan V Mukiibi (1978)

HCB 162 where it was stated that a tenancy at sufferance is implied where a
former tenant remains in possession of the rented premises after the expiry of
the period fixed by the owner.

Just like a tenancy at will, a tenancy at sufferance can be terminated at any

time without Notice.

ESSENTIALS OF A LEASE

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The common law position somehow differs in so far as the essential features of
a lease are concerned as opposed to the statutory position. The common law
position require 2 essential features i.e. Certainty of duration and exclusive
possession whereas the land Act cap 227 provides that the lease may not be for
a defined period and as such the only essential feature under the Land Act is
exclusive possession.

Exclusive possession connotes non interference from anybody including the

land lord. While a lessee enjoys a right to exclusive possession of a land, a
lesser enjoys only a reversionary interest.

A leaseholder cannot deny the landlord a right to obtain a mortgage on the

same piece of land. The leaseholder can be paid off and a mortgage can be
created or a mortgage can be created subject to the expiration of the leasehold
interest. The leaseholder can be paid off if the landlord attaches the property,
on execution, the property can be sold off and the Lessee can be paid off while
the bank becomes the new landlord.

There is no law that obliges a landlord to renew the lease, he can refuse to
renew it and no cause of action can accrue.

RIGHT TO EXCLUSIVE POSSESSION

Section 3(5) of the Land Act defines a Leaseholdtenure as a form of tenure

under which the landlord grants or is deemed to have granted a tenant or
lessee exclusive possession of land.

This is the most essential feature of a lease and this is what distinguishes a
License from a lease.

A grant of exclusive possession is the right to enjoy the rented premises to the
exclusion of anyone else; the landlord inclusive. Where the landlord interferes
either directly or indirectly, with the enjoyment of the land or rented premises,
then no lease can be talked about because of the violation of the right to
exclusive possession which is mandatory under a leasehold tenure.

To establish whether or not an occupier enjoys the right to exclusive

possession depends on the intention of the parties. Hence circumstances of a
particular case come into play.

The intention of the parties can objectively be determined from the terms of the
agreement between the parties and the surrounding circumstances.

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An express statement purporting to grant the right to exclusive possession is
neither necessary nor conclusive of the occupier’s legal state. The extent of
control over land retained by the landlord determines whether the occupier has
exclusive possession or not.

In the case of Desai V Cooper (1950) KLR 32 it was stated that if the landlord
retains general control over the rented premises it is strongly believed that
there is an interference with the right to exclusive possession and to that
extent the occupier is a mere licensee as opposed to being a lessee.

In the case of City Council of Kampala V Mukiibi (1967) EA 368 the plaintiff
leased certain premises to the defendant without a right to Sub let without
their consent. The defendant allowed same hair dressers to use the premises
paying a daily fee. The plaintiff sought to terminate the lease on ground that
the defendant parted with possession and therefore breached the tenancy
agreement.

The court found that although the defendant allowed hair dressers to use the
premises subject to payment of a daily fee, he did not give them exclusive
possession of the premises,

Sir UdoUdoma CJ observed that a point of great importance which supports

the case for the defendant is that he never at any time parted with possession
of the premises, he was always in change of the Key, it was his Practice to
always open the premises and admit or let in the hair dressers. At the end of
the business in the evening after collection of his dues he used to lock the
premises and retain the keys. It is clear from evidence that the hair dressers
could only make use of and occupy the premises with permission of the lessee.
In other words the hairdressers could not use the premises in the absence of
the lessee. Hence there was no right to exclusive possession for the hair
dressers. They were not lessees not sub-lessees.

CERTAINITY OF DURATION

At common law a lease must be for a defined duration i.e. Having a specified
date of commencement and agreed upon date of ending.

However section 3(5)(c) of the land act provides that a lease is usually but not
necessarily for a period defined directly or indirectly by reference to a specific
date of commencement and a specific date of ending. As such per this provision
a lease may be created even if for a non defined duration.

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In the case of Lace V Chantler (1944) 1 All ER 305 the plaintiff, during the
2nd World war Sub-let a house to the defendant for the duration of the War. It
was held that the lease was void for uncertainty of duration because at the
time the purported lease agreement took effect, it was not certain for what
period it will be in effect.

A number of cases have been decided in such a way that they attempt to relax
the rule that a lease must be for certain duration.

In the case of Ansalt v Arnold (1888) 2 ALL ER 147

The respondent grated the appellant a right to occupy his premises rent free for
an indefinite period. The agreement was subject to the provision that the
respondent will terminate the arrangement if they require the land for
redevelopment by giving a 3 Months notice. The notice had to be accompanied
by a certificate from a reputable developer stating that the respondents were
ready to develop the land.

The court of Appeal held that the circumstance under which it was granted
could be clearly determined and ascertained i.e. by giving a 3 Months notice of
the termination and notification of the developer.

This case can be distinguished by the case of PRUDENTIAL COMPANY LTD V

UGANDA RESIDUARY where the classical common law rule of certainty of
duration of a lease was emphasized that a lease must be of a certain or
ascertainable time i.e. the exact time the lease must take effect must be clearly
stated.

N.B The statutory position in Uganda is very clear that a lease may be for a
defined or a non defined time.

As such certainty of duration is not one of the essential requirements for the
validity of a lease.

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LICENSES

A license is a permission given by the occupier of land which allows licensee to

do an act which would otherwise be a trespass e.g. a lodge in a house or
permission to till one’s land. For instance where x has 5 Acres of unutilized
land, he authorizes Y to use the same for the growth of maize, the relationship
between x and Y is that of a licensor and a licensee. No interest is created but a
user right

The major difference between a license and a lease is that whereas a lease
creates a right to exclusive possession, a license does not. The licensee is only
given permission to utilize the premises but may be utilized together with the
landlord. For example the permission to the pleasure boats, one has
permission to take a boat ride in association with others, while not enjoying it
to the exclusion of others.

TYPES OF LICENSES

There are four types of licence: Bare licence; licence coupled with an interest, a
contractual licence and a licence protected by estoppel.

1. Bare licence

A bare licence is a licence granted without valuable consideration. It is the

simplest form of licence. For example, an invitation of a friend to come over to
your house for dinner is a bare licence.

Because a bare licence is without consideration, it may be withdrawn at any

time by the licensor even in the middle of the dinner. An action of trespass
would lie against a licensee if he/she remains on the land after the licence is
revoked.

2. Licence coupled with an interest.

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A licence coupled with an interest is a licence to enter upon a licensor’s land
for the specific purpose of taking something that forms part of the land or is
upon the land.

Such a licence is irrevocable whilst the grant remains in existence and may be
assigned, provided it is disposed of with the interest to which it is annexed.
Where a licence involves a right to enter and take something that forms part of
the land or of the soil for example minerals, gravel, timber or clay, the grant is
a profit prendrei.e. the right to enter another’s land to take something off the
land, such as gravel, sand, things that grow on the land such as timber and
grass.

It also entails the right to catch fish or hunt wild animals on the land. A profit
prendre constitutes an interest in land and it binds subsequent purchasers of
the land to which it applies. This principle was fortified in the case
ofSettlement Fund Trees V Nurani (1970) EA 562

In contrast, a licence to take away goods on the licensor’s land does not
constitute an interest in land. The licensee has a right in the chattel which is
on the land, and a licence to enter the land to take away the chattel.

3. Contractual licence.

A contractual licence is a licence granted for a valuable consideration. At

common law, a contractual licence, like any other contract does not bind third
parties and its burden does not run with the land. A contractual licence may
be revoked, though, if revoked in breach of the contract, the licensor would be
held liable in damages. At common law, a contractual licence does not bind
third parties even if they bought the land with notice of the licence. This
principle was illustrated in the case of King V Devid Allen & Sons billposting
ltd (1916)2 AC 54

4. Licence protected by estoppel

A licensor may be estopped from revoking a licence in certain circumstances.

Where Ouma a land owner, by his conduct leads Teki to believe that he would
obtain an interest in land, and on the basis of this belief Teki alters his position
to his detriment, equity may arise in Teki’s favour.

The court may force Ouma to adhere to his representation by making such
order as is appropriate to satisfy the equity. On the basis of this principle,
court may order that a licence that is revocable at its inception has become
irrevocable because of the parties conduct.

19
In the case of Inwards V Baker (1965)1 All ER 446 the plaintiff wanted to buy
land on which to build his house, but he could not afford to buy land.
Encouraged by his father, the plaintiff constructed a house on father’s land
and for several years, while his father was alive, he lived in that house. The
father in his will bequeathed the subject land to his widow.

The plaintiff instituted these proceedings for possession. It was held that the
plaintiff’s father allowed an expectation to be created in the plaintiff’s mind that
the house he built was to be his home, at least for his life. In light of that
equity, the father could not have revoked the licence nor could his successor in
title.

TERMINATION OF A LEASE

1. EXPIRY

A lease for a fixed period of time can expire upon the lapse of the agreed period
e.g. if it is a lease for 45 years, upon he lapse of the 45 years the lease
automatically extinguishes.

2. NOTICE

For a fixed term lease,there may be a provision for termination of the lease
upon giving notice and such provisions must be complied with. The notice
must be given by the lesser himself or his recognized agent and it must be sent
to the proper address.

In Lenon V Ladoem, the property belonged to the wife and the zealous
husband gave notice of termination to the lessee. The lessee contested and the
Court held that the notice was illegitimate since the husband had no authority
to give notice on behalf of his wife.

In Balhir V Peneser [1972]EA 94, a lawyer gave notice on behalf of his client
to vacate and deliver possession of the front portion of the estate. The tenant
contended that this was not a termination due to uncertainty.

Court held that a liberal interpretation must be given to the notice so that
even if it is inaccurate, effect is given to it as if it were clear to the recipient.

3. FORFEITURE

Forfeiture is a situation where the landlord is entitled to re-enter the ranted

premises and put an end to the lease, where there has been breach by the

20
tenant of conditions of the lease even if the lease does not contain an express
clause for forfeiture.

However before the landlord re-enters the land, he must make a formal
demand unless if the leasehold agreement provides to the contrary. It has to be
reasonable notice and it will largely depend on circumstances of the case. E.g.
parties may agree on the type and mode of notice.

For example a clause in a leasehold agreement may provide that a lease may
be forfeited if the rent is in arrears for specified period i.e. Default for 6 months
the lesser has a right to re-enter the premises.

The landlord may re-enter the premises either peacefully or by getting a court
order for possession. It is not advisable to re-enter dwelling premises without
proceeding to Court.

Section 25 of the Judicature Act provides for relief from re-entry or forfeiture
for nonpayment of rent. It provides that where a Lessor is proceeding by action
or otherwise to enforce a right of re-entry or forfeiture for nonpayment of rent,
the Lessee may apply to court for relief.

Read Dec. 25 of the Judicature Act.

4. SURRENDER

This is where before the expiration of the lease, the lessee surrenders his lease
to the landlord who, if accepts the surrender, the lease merges with reversion
and it is extinguished. For example if x is the owner of mailo land at Kibuli,
creates a leasehold interest in favour of Y, if Y writes to x showing an intention
to give up the leasehold interest and x accepts, the leasehold interest is merged
with x ‘s reversion.

Surrender may be by express agreement, operation of the law or statutory

provision. A lease is surrendered by operation of the law if a lesser grants and
the lessee accepts a fresh lease commencing before the current lease expires. A
lease is also surrendered by operation of the law where the tenant abandons
the premises and the lessee re-enters.

Read Sec. 108 of RTA.

5. MERGER

21
Merger occurs where the tenant, in addition to holding his leasehold interest
acquire a reversionary interest as well e.g. where x, the registered proprietor of
Mailo land at Kibuli leases his land to Y for a period of 45 years.

Before the Lapse of Y’s Lease, X agrees to sell his reversionary interest to Y. in
this case, Y’s leasehold interest is terminated by the merger.

NB: For a merger to be effective, the lease and the reversion must be vested in
the same person in the same right.

MORTGAGE

A mortgage was described as a conveyance of land or an assignment of chattels

as security for the payment of a debt or a discharge of some other obligation for
which it is given, as was described in the case of SANTTLEY V WILDE (1899)
2 Ch. 479

A mortgage may further be defined as a conveyance of a legal or an equitable

interest in property with a provision for redemption. Redemption means getting
back property given as security

A mortgage in simple terms is a transaction whereby an interest in land is

given as security for the repayment of a loan. The borrower is referred to as
mortgager whereas the lender is referred to as the mortgagee e.g. where x, in a
dire need of money gives the land title to the bank as security for repayment of
the loan, in this case, x is the mortgager and equity bank is the mortgagee.

The deposit of the title deed by x is not a transfer for repayment of the loan it is
just security for repayment of the loan and upon discharge of the loan, x is
entitled to redeem his property.

A MORTGAGE DEED NOT TO CREATE A TRANSFER OF AN INTEREST IN

LAND.

22
Section 116 of RTA Cap. 230 expressly provides that a mortgage created
under the Act takes effect as a security but not as transfer of the mortgaged
property.

It provides that a mortgage created under this Act when registered as herein
before provided, has effect as a security but shall not operate as a transfer of
the land thereby mortgaged and in case default is made in payment of the
principle sum and interest secured or any part thereof or in the performance or
observance of any covenant expressed in the mortgage or implied in the
mortgage and the default is continued for one month or for any such other
period as expressly fixed, the mortgagee or his or her transferees may serve on
the mortgager or his transferees a notice in writing to pay the money owing on
the mortgage or perform and observe the covenant as the case may be.

MORTGAGE IS NOT DEFAULT IN LAND BUT SECURITY FOR REPAYMENT

OF LOAN.

Where there is default in repayment or breach, notice must be given to the

mortgager. Also default must have continued for one month.

In the case of RE FOREST TRUSTEES EXECUTERS AND AGENCY CO. LTD

V ANSON (1953) K.L.R 246

Herring C.J described the effect of a mortgage that a mortgage transfers on the
creditor merely a group of powers to secure the money lent. The debtor or
mortgager remains the owner of the land subject to fulfillment of his or her
obligation under the mortgage agreement. I.e. mortgage does not transfer land
but confers security to guarantee the monies lent.

Although a mortgage created under the RTA does not transfer ownership of the
land to the mortgagee it creates a distinct interest in the mortgaged land and
whoever deals with the land does so subject to the mortgage as an exception to
the principle of indefeasibility of title.

CREATION OF MORTGAGES

Sec. 115 of RTA empowers the proprietor of land registered under it to create
a mortgage by signing a mortgage instrument in the prescribed form in the 11 th
schedule to the Act.

Upon registration of the instrument, the land becomes liable as security in the
manner set forth in the instrument.

23
The mortgage is protected by the RTA and whoever deals with the land does so,
subject to the mortgage. This is an exception to the principle of indefeasibility
of title.

CREATION OF A LEGAL MORTGAGE

A mortgage is defined under section 1 of the Mortgage Act to mean any

mortgage, a charge, a debenture, loan agreement or other encumbrance, legal
or equitable which is registered under the Act.

Creation of a legal mortgage is provide for under s. 115 of the RTA which
provides that the proprietor of any land under the operation of the RTA may
mortgage the land by signing a mortgage deed in the form in the 11 th schedule
to the Act. Upon registration of the instrument, a legal mortgage is created

When the registered proprietor does deposit his certificate of title with intention
to create security, accompanied by a memorandum in writing, if he goes ahead
to register the instrument, it becomes a legal mortgage.

A legal mortgage is protected by the RTA which provides that whoever deals
with the land subject to a mortgage, he takes it subject to that mortgage as an
exception to the principle of indefeasibility of title.

This is provided under Sec. 176 (9) of RTA which provides that the registered
proprietor is protected against ejectment except for a number of cases inter alia
the case of a mortgagee as against the mortgager in default.

In equity it is not only the legal mortgage that is considered but an equitable
mortgage is also protected under equitable intervention

CREATION OF AN EQUITABLE MORTGAGE

In equity a contract to create a mortgage was treated as a promise by the

debtor to execute a legal mortgage when called upon to do so since equity
regards as done that which ought to be done. Such an agreement creates an
equitable mortgage.

For example under the doctrine of equity, a deposit of title deed by way of
security; whether or not accompanied by a memorandum was regarded as an
agreement to execute a legal mortgage and carried as an equitable mortgage.

Sec. 129 of the RTA provides the mode of creation of an equitable mortgage
by providing that an equitable mortgage on the land may be made by deposit
by the registered proprietor of his or her certificate of title with intent to create

24
security thereon, whether accompanied or not by a note or a memorandum of
deposit.

An equitable mortgage just like a legal mortgage creates an interest in land.

An equitable mortgage is registered by causing a caveat to be entered in

accordance with section 139 of RTA.

QN: Can a mortgage be created over land which is owned under customary
tenure?

Section 8 (2) of the land Act provides that a holder of a customary certificate
of ownership of land has a right to mortgage his land.

However section1 (6) of the Mortgage Act in its illustrative definition of a

mortgage talks of a mortgage in land registered under the RTA and the
question to be answered is whether a holder of a mortgage in respect to
customary land goes without any remedies.

The holder of such a mortgage cannot claim remedies provided under the
Mortgage Act and the RTA. He can seek recourse to common law principles
coupled with equitable intervention.

In the case of MatambulireV.Y.Kimera (1975) HCB 150 it involved mortgage

of a Kibanja and the High court held that where the mortgaged land was not
registered under the RTA, the applicable law was common law and doctrines of
equity.

REMEDIES OF A MORTGAGEE

A mortgagee has a number of remedies where there is breach of the covenants

under the mortgage Agreement.

These remedies are cumulative. This means that the mortgagee is free to
persue of the remedies or all of them. These remedies include;

1. Mortgagee can sue for breach of covenant

2. Mortgagee can take possession of the mortgaged land
3. Mortgagee can sale otherwise than by foreclosure
4. The mortgagee can appoint a receiver

ACTION FOR BREACH OF COVENANT

25
The RTA implies certain covenants against the mortgager in every mortgage
made under the Act (RTA)

These covenants include;

(a) Payment of the mortgage debt

(b) Maintenance of the mortgage property

Where there is breach of those covenants, the mortgagee can bring an action
for breach of contract and this is regulated by the law of contract.

Where an action for breach of personal covenant is successful against the

mortgager, the mortgagee may enforce the judgment against the mortgager’s
assets even though they are not part of the mortgage.

APPOINTMENT OF A RECEIVER

Section 3 of the Mortgage Act provides that a mortgagee can appoint a

receiver to enable him reduce or clear the mortgage debt. This applies where
the mortgaged land has some income that can be obtained from it.

A receiver is appointed to receive income out of the mortgaged land and is

under an obligation to use the proceeds from the land to clear the mortgage
debt.

A receiver may still be under an obligation to manage the land by for example
making the necessary repairs or improving the land where he is directed in
writing by the mortgagee with the consent of the mortgager or with the
approval of court.

The receiver may be appointed upon court order where a mortgagee specifically
applies to court for the appointment. There are instances where the mortgagee
may appoint a receiver without recourse to court if the mortgage agreement
expressly reserves the power to do so to the mortgagee.

In the case of Grindleys bank ltd V Edward Boaz SCCA No. 23 of 1992 it
was stressed that the power to appoint a receiver does not a rise unless the
mortgager is in default for a period of at least one month and fails to pay
following a written demand notice. In Sec. 116 of the Registration of Titles
Act makes it mandatory for the service of a one month notice to the
mortgager and the case ofEpainetoMubiru V Uganda credit and savings
bank (1978) HCB 109 it was clearly stated that the demand notice must be
served personally to the mortgager.

26
NB: Here the mortgage debt is payable on demand, the written demand for
payment is equivalent to the statutory notice.

Primarily a receiver is employed for the security of the mortgagee. He or she

directly receives proceeds from the land instead of the mortgager. After
payment of taxes and other on goings relating to the mortgaged land, the
Receiver would pay the balance to the mortgagee.

From the legal point of view, the main advantage of the mortgagee
appointing a receiver is that although he does the appointment of the
receiver to protect his or her interest, the receiver acts as an agent of the
mortgager, irrespective of any agreement to the contrary.

The effect of this is that the mortgagee is not liable to the mortgager or
secondary mortgagees for the receiver’s negligence or willful misconduct.
This makes the appointment of a receiver mere advantageous as opposed to
entering into possession. The only drawback is that the receiver has to be
paid a commission for his/her work out of the income from the mortgaged
property.

NB. The receiver’s remuneration has priority over any other payment due
from the income collected.

POWER OF SALE

This is the most important and common remedy for realization of security
under the mortgage agreement.

The right to sell may be exercises without recourse to court where such
right is expressly reserved in the mortgage agreement. If the right is not
provided for under the agreement, the sale must be conducted with sanction
of court as provided under sec. 10 of the Mortgage Act.

The Mortgage Act provides that if a mortgage agreement allows the

mortgagee to sell land without reference to court, the sale must be
conducted by Public Auction unless the mortgager and subsequent
mortgagees, if any consent to sell by private treaty.

The power of sale a rises if the mortgager defaults in payment of the

mortgage debt or part of it for a continuous period of one month or such
other period as may be stipulated in the mortgage agreement and the
mortgager fails to pay after a written demand notice being served on him.

27
Where there is a provision in the mortgage agreement that the loan is
payable on demand, the power of sale arises once the demand is made and
the mortgager fails to pay.

In the case of Barclays bank Ltd V KatendaLuttu SC 22 of 1993 the

mortgage agreement provided that the debt is payable on demand and that
in case of default, the mortgagee has the right to sell the land without court
order. He defaulted in payment of the debt. The court further held that if the
mortgagee has the power to sell without court order, the court has no power
to order some other remedy or postpone the sale. The only way the
mortgager could redeem his land is to pay the loan.

The mortgager’s right to redeem his land is confined to repayment of the

loan and if the mortgagee has the power to sell without the court ordering
foreclosure, nothing can stop the sale.

SALE BY FORECLOSURE

Where the mortgage agreement does not power the mortgagee to sell without
recourse to court, the mortgagee must seek a court order before he goes on
with the sale of the mortgage property.

Sec. 8 of the mortgage act provides that a mortgagee may apply to court to
foreclose the mortgager’s right to redeem anytime after breach of the
covenant to pay.

Unless the debt is payable on demand, an application for foreclosure cannot

be entertained UNLESS The mortgager has defaulted to pay for at least one
month and a written demand notice has been served on him (Section 116
RTA)

In the case of SAJJABI V KLAMALA and ANOR (1952) 22 EACA 71 it was

stated that when the application is made, the court will assess the amount
due and fix a date which must not exceed a period of 6 months from the
date of default, within which payment is to be made. If the mortgager fails to
pay within the prescribed time, the court must order the mortgager not to
redeem the mortgaged property and therefore the mortgager’s right to
redeem is foreclosed and the mortgagee granted the right to sell the
property. Upon grant of a foreclosure order the sale must be conducted in
accordance with the provisions of the mortgage Act. Sec. 9 of the
mortgagee Act provides that the sale must be by Public auction unless the

28
mortgage at the date of the foreclosure agree to a sale by a private treaty
and the court approves the terms of the sale.

NB: The sale must not take place until the expiry of at the 30 days from the
date of the foreclosure order as provided under Sec. 9 (2) of the Mortgage
Act.

NB: Where a foreclosure order has been made and the 30 days have lapsed
the mortgager loses the right to redeem their property unless if the
mortgagee voluntarily agrees.

Sec. 9(3) of the Mortgage Act requires the mortgagee to give reasonable
notice not less than 30 days, to the mortgager prior to the sale. The notice
must specify the date and place of sale to the mortgager and all subsequent
mortgagees.

The object of this appears to give interested parties a chance to attend,

observe and participate in the bidding and to seek an injunction against the
sale in case any thing has been done in an improper way.

Failure to notify the mortgager or subsequent mortgagees does not render

the sale void.

DUTIES OF THE SELLER

The mortgagee is given the power of sale to realize his or her security in the
event of default. So once the power of sale has accrued, the mortgagee is
entitled to use it for his or her benefit at the time of his choice.

A number of cases have provided that in the exercise of this power the
mortgagee does not act as a trustee of the mortgager. As such the mortgagee
is entitled to look out for his or her interest and where his interests conflict
with of those of the mortgager, his interests will take priority.

In the case of Cuckmere brick co. ltd v mutual finance co. ltd (1971)Ch.
949 the mortgage property was allegedly sold below the market value at a
badly attended auction. In an action for damages against the mortgagee,
counsel for the mortgager submitted that the sale in the circumstances
undervalued the mortgager’s property. Justice salmon stated that the
mortgagee has no duty to speculate as to the most appropriate time to sell.
That it does not matter that by waiting, a higher price could be obtained.
The mortgagee has the right to realize his security by turning it into money
when he likes.

29
THE REMENDIES OF EQUITABLE MORTGAGEES

The remedies available to an equitable mortgagee may as well be similar to

these available to a legal mortgagee.

The only difference is that the equitable mortgagee can only realise his
remedies upon a court order. And the remedies available are discretionary.

In the case ofBaclay’s bank co. ltd v North cote and anorcs 1467 of 1974
(unreported)Senkandi J. observed that while sec. 138 of the RTA provides
for creation of equitable mortgagees by deposit of title deeds as security,
neither the RTA nor the Mortgage Act make provision for the remedies
available to an equitable mortgagee. Accordingly his honor felt compelled to
look elsewhere for such remedies.

The issue has been covered in the case of Barclays bank v Gulu millers ltd
(1959) EA 540 where it was held that it would appear that the difference
between an equitable mortgage and a legal mortgage as regards mortgagees
is that whereas a legal mortgagee may realize his security under the
mortgager by exercising most of the statutory powers conferred upon him
without recourse to the courts, an equitable mortgagee must of necessity
apply to the court for exercise of any of these powers.

Justice Sekandi further stated that the appropriate procedure to follow for
an equitable mortgagee seeking to realize his security was in the first
instance to sue the mortgager and obtain an order for an account of the
outstanding mortgage debt, then he should seek a declaration that he is
entitled to a charge on the land comprised in the certificate of title referred
to in the memorandum of deposit to secure the amount outstanding, the
interests and costs. Thereafter the declaration should be followed by an
application that the mortgagee may realize his security by pursuing any or
all the remedies provided for in the mortgage act.

The law protects a mortgager through providing him with right of

redemption.

EQUITY’S PROTECTION OF THE MOTGAGOR

Equity’s protection of the mortgager is summed up in the maxim, once a

mortgage always a mortgage. The test for a mortgage is substance and not
form. This means that whether a transaction is a mortgage or some other
transaction, it is a question of substance and not form. As such if parties
enter into a contract of sale of land but which is in essence mortgage equity

30
will regard it as a mortgage and all the consequence of a mortgage will
follow.

NO DAYS ON THE EQUITY OF REDEMPTION

This means that the court will not permit any attempt by the mortgagee to
exclude the mortgager’s right to redeem his property.

In the case of Samuel V Jarrah timber and wood paying corporation

(1904) ac 324 it was clearly stated that:

“Once a mortgage always a mortgage means that no contract between a

mortgager and a mortgagee made at the time of creation of a mortgage
prevents the mortgager from getting back his security. Any bargain which
has that effect is invalid and inconsistent with transaction of a mortgage”.

Equity’s intervention is premised on the fact that mortgagers are usually in

a dire need of money who may willingly accept whatever terms creditors
may impact against them e.g. in the case ofMatambulire V YozefuKimera
CA 37 of 1972 (Unreported) the plaintiff, in desperation to go on
pilgrimage to Mecca mortgaged his land to the defendant on condition that if
the plaintiff failed to pay the loan within the specified period, the defendant
would become the absolute owner of the land. After the contractual date of
payment had expired the defendant claimed ownership of the land and
rejected the plaintiff’s subsequent attempt to redeem the same. It was held
that the plaintiff was entitled to redeem his land until his right to do so was
foreclosed by a court order or the land was disposed of in a mortgage sale.

In the case of GA Investments property ltd v Standard insurance Co. ltd

(1964) war 264 it was stated that a clause in a mortgage agreement that
gives a mortgagee an option to purchase the mortgaged property is a clog
because it deprives the mortgager of his right to redeem.

In the case of Samuel v Jarrah timber and wood paying corporation it

was stated that it is not a clog if the option is granted in a separate
agreement.

A clause in a mortgage contract may provide that the mortgager shall not
redeem earlier than the agreed upon date e.g. if the money is to be paid in a
period of ten years, and the mortgager wishes to pay off the loan before the
expiry of the ten years, the question is whether such a clause is a clog on
the equity of redemption.

31
 In the case of Fair clogh v Swans brewery co. ltd (1912) ac 565, the
applicant/mortgager trade hotel for a period of 17 years. He a lease to the
respondent should not redeem earlier than 6 weeks before his lease had
expired and that during the continuance of the mortgage only beer brewed
by the plaintiff should be sold on the premises. The defendants brought an
early redemption so that he could be released from the restriction to sell
only the plaintiff’s beer.

The issue was whether a clause postponing redemption was a clog on the
equity of redemption. Privy Council held that the clause was a clog because
the right to redeem was illusory or valueless.

EXPROPRIATED PROPERTIES

In August 1972, president id Amin announced an economic war which realized

the expulsion Asians from Uganda. A number of properties belonging to these
Asians were expropriated from the government and placed under the
management of the departed Asians property custodian Board.

After idi Amin’s dictatorial regime, a number of legislations were enacted under
which most of the properties belonging to the former Asians were either
returned to the former owners or sold off.

ASIANS ECONOMIC DORMINANCE

The Asians first made serious presence in Uganda in the aftermath of the
construction of the Uganda railway where a number of them worked as
laborers. After the construction of the railway, most of them got devoted to a
life of commerce.

By the mid 1940s, the Asians had established themselves as a dominant force
in the retail trade, cotton ginning, produce buying, transportation, and import
and export trade. All the major towns including trading centers had Asians as
the dominant trading community and real property owners.

The Africans largely dealt in peasant farming and laboring on plantations,

factories, shops owned by the Asians and Europeans. There was no significant
African presence in commerce or industry.

32
Overtime, discontent grew among the African communities and they started
agitating for a more significant share in the economy in terms of cotton
ginning, coffee curing, marketing of their agricultural produce and
participation in commerce. They started organizing strikes and trade boy cots.

The colonial government responded to these agitations by several measures like

the setting up of corporative movements to enable Africans engage in organized
production and marketing their produce e.g. in 1949 the LINT MARKETING
BOARD was set up to handle all cotton exports and to ensure a more descent
return to the farmers.

In 1950, the Uganda credit and savings bank was setup with the object of
facilitating loans to Africans in furtherance of agriculture, commerce, building
and co-operative societies.

Other measures included the setting up of the Uganda development

corporation in 1952 to facilitate the industrial and economic development in
Uganda.

A provision was further made under the Acquisition of Ginneries Ordinance

for the government to compulsorily acquire privately owned ginneries and sell
them to the Africans.

To accelerate urban development, a National Housing Corporation was set up

in 1964 to undertake the development, building and management of housing
estates. Special programmes were initiated especially in Kampala, Ntinda,
Naguru, Kiswa, Nakawa etc

Agreements were entered into for the sale of houses upon deferred terms of
payment for a period not exceeding 20 years or for grant of leases for such
houses.

All the aforegoing measures made tremendous contribution to the integration

of Africans in the economy but the dominance of Asians in commerce and
industry still remained. It remained a contentious political issue in the country
and between Uganda and great Britain since most of the Asians were British
citizens.

In 1969 a Trade Licensing Act was enacted with one of its objectives being to
limit the operational area of the non citizen traders. The minister was
empowered from time to time by statutory order to declare any trading centre
to be an area in which a person who is not a citizen of Uganda is prohibited
from trading.

33
In pursuance of these powers a number of statutory orders were made to
prohibit non citizens from trading in most rural trading centers. The Act
further made it illegal for any person who is not a citizen of Uganda to trade
outside any city, municipality or town or to trade in prohibited goods. This law
put pressure on the Asian Trading community in the city or large urban
trading areas.

By 1969 there were open political calls to Britain to take its citizens. So this
explains the expulsion of the Asians by President Idi Amin in 1972.

Thousand of properties belonging to the Asians were expropriated by

government after the expulsion. However after Amin’s fall a number of
legislations were enacted under which most of the properties were either
returned to the former owners or sold off.

According to section 2 (1) of the Assets of departed Asians decree of 1973

which provided that every departing Asian leaving Uganda had to declare his
assets in forms PRO1 and PRO 2 specified in the schedule to the decree.

The departing party had to state all his assets and liabilities including these
relations to any business interest and give the minister such other particulars
and information relating to such assets and liabilities as the minister would
require.

According to sec. 4(1), any assets declared by the departing Asian who failed to
prove his citizenship at the time and in a specified manner, it automatically
vested in the government without any further authority. In other words sec, 4
automatically transferred land to the government. This means that there was
no need for government being entered on the certificate of title before claiming
ownership of such property.

All such assets vested in the government and the decree transferred them to
the Departed Asians Property Custodian Board.

The Board in this case had the power to take over and manage assets
transferred to it by virtue of sec. 13 of the decree. The Board was further
obliged to discharge liabilities on the property and it could sell or otherwise
deal with such assets in the same way as a departed Asian could.

However the Expropriated Properties Act of 1982, following agitation

internationally and nationally was enacted to provide for the transfer of
properties and businesses acquired or otherwise expropriated during the
military regime to the ministry of finance and to make provision for the return

34
to former owners or disposal of the same by government or to provide for other
matters connected to that property like claims for interest.

Section 19(a) of the Expropriated Properties Act 1982 defined expropriated

property to include any property or business which had vested in the
government and transferred to the departed Asians custodian board. In the
same Act, the property shall from the commencement of the Act remain vested
in the government and managed by the ministry of finance.

To note further, by virtue of section 19(2) of the Act any purchase, grant of or
dealing of whatever kind in such property or business were nullified.

In the case of Victoria tea estates Ltd V James Bbemba Civil Appeal 49 of
1996 it was held that once it is proved that property was expropriated it
becomes the statutory property of government and any dealings in it are
nullified.

Under this law the minister was empowered to manage any property or
business vested in government.

Section 3 of the Act provided that any former owner of property or business
vested in the government could within 90 days of commencement of the Act
apply to the minister in writing for the repossession of the property or
business.

Under Section 7 of the Act the property could not be sold or otherwise dealt
with without the written consent of the minister or after 5 years from the date
of the transfer.

EXPROPRIATION UNDER THE EXPROPRIATED PROPERTIEES ACT CAP

87

The Expropriated Properties Act (EPA) Cap 87 makes provision for the following
properties to remain vested in government and to be managed by the ministry
of finance. Section 2 of the EPA gives a list of these properties and they
include.

a) Properties acquired by the government under the properties and

Business acquisition decree of 1975.
b) Properties which were in any other way appropriated or taken by the
military regime, save property which had been affect by the previsions of
the repealed National Trust Decree of 1971.

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REVESTING OF PROPERTY IN THE GOVERNMENT AND NULLIFICATION
OF DEALINGS

The departed Asians decree vested property of the departed Asians under the
control of the departed Asians custodian Board. However the expropriated
properties Act vested the property in the ministry of finance which was to
manage it on behalf of the government.

As such sec. 2 (2) of EPA Cap 87 provided that all purchases, transfers, grants
or other dealings of whatever kind of such properties were nullified.

The rationale for this nullification was to ensure that all the expropriated
properties remained vested in government and to ensure that they could be
dealt with under the Expropriated Properties Act.

Such expired or terminated leases were deemed to have continued in force and
to continue until the property had been dealt with under the expropriated
properties Act.

The regulations provided that leases were deemed to continue after the
property was dealt with under the Act for a further period of 2 years or to a
period equivalent to the unexpired period or lease at the time of expropriation,
whichever was the greater period.

This nullification interfered with a number of transactions which had been

concluded by the departed Asians property custodian Board in respect of these
properties. As such any purchases, leases on such property were nullified.

Re-entries by lessers on expropriated leasers were also nullified and such

forfeited leases reinstated to be dealt with under the act.

The nullification was intended to be retrospective i.e. It affected these dealings

that had taken place before the Expropriated Properties Act 1982. This
principle was expounded in the case of Victoria Tea estates Ltd V James
Bbemba and Amor civil Appeal No. 49 of 1996. The court of appeal
reconsidered the true import of sec 1(1) and 9(2) of the EPA in view of the
purported re-entry by a lesser registered on 29 th may 1991 and a certificate of
repossession issued in respect of the same property on 28 th November 1981.
The court held that since the government in 1973 expropriated the suit
property, it followed that the Act of 1982 applied to it and the suit property
became the statutory property of the government until the minister of finance
dealt with the property as provided for by Act No. 19 of 1982.

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Any other purported dealing with such property were null and void. The
minister would deal with the expropriated property in a number of ways e.g. he
would return it to the former owners or government if interested, would sell or
dispose of the property in any other manner.

RE-POSSESSION BY FORMER OWNERS

Section 4 of the EPA Cap. 87 authorizedformer owners of expropriated

property to apply to the minister in a prescribed form to repossess their
property within 90 days of the commencement of the Act.

The minister could issue a certificate of repossession if satisfied with the merits
of the application and the property is one in which government did not wish to
participate (sec 6 EPA)

Section 7 further provides that a certificate of repossession is sufficient

authority for the chief registration of Titles to transfer title to the former
owners.

A certificate authorizing repossession is in accordance with the 2 nd schedule of

thee expropriated properties (repossession and disposal) regulations of 1983.

JOINT VENTURE BETWEEN THE GOVERNMENT AND THE FORMER

OWNER

Section 5 (1) of the EPA provides that where government is interested in

property which a former owner has applied to repossess the minister notifies
the applicant of the government’s interest, the government invites the former
owner to enter into a joint venture company. It is incorporated and the minister
issues a certificate transferring the property or business to the company in
accordance with sec. 5(2) of EPA.

SALE BY THE MINISTER

The minister, under section 6 may make an order that the property be sold in
the following circumstances.

1. Where the former owner fails to apply for repossession within the prescribed
time.

2. Where the minister is not satisfied with the merits of an application

3. Where negotiations for a joint venture fail.

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4. Where a former owner fails to physically return and reside in Uganda within
a period of 120 day from the date of repossession.

DISPOSAL IN ANY OTHER MANNER

Section 9 (1) of EPA provides that the minister may order any other form of
disposal of the expropriated property depending on the circumstances of the
property at hand e.g. he may order that the property be subdivided into
separate titles; each to be leased to a particular person. He may revert the
property to the planning authority for re-planning and order the authority to
compensate the former owner.

In other instances the minister may order the resale of the property to
purchasers whose purchases had been nullified.

The Expropriated Properties Act provides for compensation under certain

circumstances.

Section 10(2) provides that where the property is returned to a former owner or
transferred to a joint venture company or retained by the government, the
former owner of the company or the government is obliged to pay for the value
of any improvements of such property to the person who effected such
improvements.

Section 10 (3) further provides that where the property has been transferred to
any person for value and it is subsequently returned to a former owner or
otherwise dealt with under the Act, the government is liable to pay
compensation to such person.

The compensation payable to such a person is the purchase price paid for the
property less the income derived or which ought to have been derived from the
property on the date of the transfer.

APPEALS

Section 11 of the EPA provides that persons aggrieved by any decisions made
by the minister under the Act have a right to appeal to the high court against
the minister’s decision from the date of communication of the decision.

NB

Sec. 14 of the EPA provides that a person has no right to sue the government
for damages arising from any loss, damage, waste or the deterioration of any
property or business which occurred before the coming into force of the Act.

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