• Sun. Jan 29th, 2023

Court Orders Govt to Pay USh50 Billion After Revoking Land Title

UGANDA, Mukono Real Muloodi News | Government of Uganda has lost an appeal to reverse a High Court ruling requiring it compensate a real estate company USh50 billion after revoking its land title.

In a majority decision written by Justice Christopher Gasharibake, the Court of Appeal supported High Court Judge Boniface Wamala’s ruling that the government was required to make up for the loss Henley Property Developers Ltd. suffered following the cancellation of its land title by the land registrar.

The disputed land, located at East Buganda Block 171 Plot 6 at Namasaga, measures 123.83 hectares.

Background

According to court documents, the land registrar cancelled the company’s title upon discovering Henley Property Developers bought the land from Nantume Filomero Nakalema and Nabunjo Manjeri Kiwanuka, whereas the land actually belonged to Sugar Corporation of Uganda Limited (SCOUL).

During the land purchase in October 2011, Nantume Filomero Kiwanuka assured Henley Property Developers that she was the owner of that land, as an administrator of the estate of the late Kiwanuka Samuel Kaliginya, who owned the land prior to his death.

As part of due diligence, Henley Property Developers carried out several searches at the Mukono District Land Office, and was given search reports which confirmed that Nantume was the owner of the land.

On the basis of the search reports availed by the Mukono District Land Office, Henley Property completed the purchase by paying Nakalema USh6.1 billion in November 2011. The land was subsequently transferred to the company’s name.

Five years later, the Commissioner of Land Registration informed Henley Property Developers that she intended to revoke their certificate of title because it had been granted in error.

According to the commissioner, it was discovered that the land was part of a bigger piece of land measuring 882.39 acres for which a certificate of title had been issued prior. That title, known as Kasenso Estate, Freehold Register Volume 64 Folio 1B, belonged to SCOUL.

Subsequently, the Commissioner canceled Henley’s title in September 2016, which forced the company to seek redress in court.

The High Court Ruling

The High Court ruled that the Commissioner of Land Registration failed to do her job of ensuring the land have only one title of registration, which resulted in financial loss to Henley Property Developers.

Therefore, the judge ordered the government to compensate the company USh50 Billion Shillings, being the market value of the land at that time.

In addition, the judge mandated that the government pay 15% interest on the said money from the time of the judgment until full payment.

The Attorney General asserted that Henley Property Developers should have sought a return of the money from the sellers Nantume and Nabunjo.

However, the court unanimously ruled that it is the responsibility of the Land Registrar to keep a clean record. It was the Land Registrar’s record that was the basis upon which the company purchased the land, therefore responsibility falls to the lands registrar.

“I also agree that the lands registrar guarantees the accuracy of the particulars contained on the register. The register is conclusive evidence of ownership and thus, there is no need to search behind or beyond the certificate of Title to ensure proven ownership of the land…Accordingly, once a person is given such assurance by the custodian of the Land Register, as was the case herein, should such information turn out to be false, a party who has relied upon such information to their detriment has a cause of action against the defendant irrespective of whether the action or omission of the Registrar was negligent or simply erroneous,” the court observed.

The judge added that, under the Registration of Titles Act, a certificate of title bearing the name of the registered owner was adequate evidence of ownership of the land in question unless fraud was involved.

“There was nothing warranting the respondent to sue the vendors in the circumstances. The vendors committed no wrong since the relevant title was issued by the land registrar. I agree with the findings of the lower Court to the effect that the Respondent was convinced that the vendors had neither committed fraud nor were aware of any defect in the title; the Respondent had carried out due diligence and was satisfied the vendors had a clean title; even land office was convinced the vendors were the registered proprietor of the suit land; the vendors and Respondent had nothing to do with the existence of an earlier Freehold Title,” Gasharibake’s ruling reads in part.

The court ruled that it was fair and proper to uphold the judgement awarding USh50 billion for lost business and a 15% interest.

“I have considered the evidence of valuation of the suit land conducted at various periods… In my view, considering the other valuation exercises that gave a higher value of the suit land, the award of 50 Billion Shillings was reasonable… It is also clear that the suit land was in a lucrative industrial belt which led to its appreciating in value. Therefore, the Respondent deserved adequate compensation to reflect this fact and I find that the sum awarded by the trial Court was justified,” Gasharibake’s ruling joined by Justices Eva Luswata and Elizabeth Musoke reads.

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