The Black’s Law dictionary 9th Edition[1]defines a Bona fide Purchaser as ‘one who buys something for value without notice of another’s claim to faith, paid valuable consideration for property without notice of prior the property and without actual or constructive notice of any defects in or infirmities, claims or equities against the seller’s title; One who has in good adverse claims.
It is worth noting that an Aggrieved Land Owner is one whose interest is directly or indirectly affected by the interest of a bona fide purchaser. In my opinion, I agree with the above statement that the legal framework in Uganda protects the interests of a bona fide purchaser without considering aggrieved land owners.
The Court of Appeal in Hajji Nasser Kitende v. Vithalidas Haridas & Co. Ltd, outlined seven elements that a purchaser must proof before relying on the bona fide purchaser doctrine which includes the following; (a) the person holds a certificate of title, (b) he purchased the property in good faith, (c) he had no knowledge of the fraud, (d) he purchased for valuable consideration, (e) the vendors had apparent valid title, (f) he purchased without notice of any fraud and he was not a party to the fraud.2.
(a) Holds a certificate of title; S.59 of the R.T.A clearly explains this as it provides a certificate of title is conclusive evidence of title implying for one to rely on the bona fide purchaser’s doctrine they must possess a certificate of title and therefore is supposed to be registered by the registry
(b) he purchased the property in good faith, this refers to conduct of taking into account one’s rights existent on the land. In Sempa Mbabali v Kidza, Odoki J held that the defendant’s plea of being a bona fide purchaser failed because they knew all along that part of the land they had purchased was for burial grounds and also the seller had sold them the land before his share was ascertained.
(c) he had no knowledge of the fraud; In the case of Fredrick Zaabwe vs. Orient Bank & O’rs, relying on Black’s Law Dictionary[2],fraud has been defined to mean the intentional perversion of the truth by a person for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or her or to surrender a legal right. It is a false representation of a matter or fact whether by words or by conduct, by false or misleading allegations or concealment of that which deceives and it is intended to deceive another so that he or she shall act upon it to his or her legal injury. Section 77[3] is to the effect that any certificate of title ,entry/removal of an encumbrance /cancelation in the register book procured by fraud shall be void against all parties this was elucidated in the case of Marko Matovu & Others v Mohammed Sseviri were dishonesty and falsity in registration of a certificate of title lead to its cancellation. The elements of Fraud include
1. Intention to cheat,
2. Dishonesty
3 and Participation which can be illustrated by the following cases In William Katiweremu v John Katirakawe, an intention to cheat was manifested through the false representations of the land In Betty Kizito v David Kizito , an intention to cheat was manifested through declaring there were no developments on the land yet they were existent and concealment of the consideration .
In Konde zimula v Moses Byarugaba, participation in fraud
& dishonesty was seen through the forgery of Powers of Attorney
(d) he purchased for valuable consideration The case of Midland Bank Trust v Green defines a bona fide purchaser as a person who for valuable consideration takes any interest in land. The words ‘‘for value’’ are included to show that value must be given. It means any consideration in money’s worth. ‘Money’s worth’’ and extends to all forms of non-monetary consideration in the sense used in the law of contract, but it also includes the satisfaction of an existing debt[4] it also means that the bona fide purchaser must pay for the property rather than simply be the beneficiary of a gift. Value may include money or its worth such as land. Stocks or shares.[5].In Wormald V Maitland, acquiring land in contemplation of entering into a particular marriage, was considered sufficient value.
The marriage however only extends to future as opposed to past marriage. Natural love and affection is not sufficient consideration.
(e) he purchased without notice ;
The Black’s law dictionary 10th edition defines notice as a person has notice of a fact or condition if that person (1) has actual knowledge of it; (2) has received information about it; (3) has reason to know about it; (4) knows about a related fact; or (5) is considered as having been able to ascertain it by checking an official filing or recording.[6] it is actual, constructive and imputed.
1) Actual notice.
‘‘Knowledge and notice are different things’’. A person may be regarded as having notice of a fact not because he knows it, but because for legal purposes he is to be taken to know it. In practice, however, this distinction is not always observed. The term ‘‘actual notice’’ has been used to cover a number of different situations:
(I) A person is commonly said to have ‘‘actual notice’’ of a fact of which he has subjective knowledge, regardless of how that knowledge was acquired.
(ii) A person who is provided with the means to know a fact, but does not avail himself of that means, will have actual notice of that fact. Thus, if a person is supplied with a document in a conveyancing transaction, but does not read it, he will still have actual notice of its contents[7].
(iii) If a person has actual notice of a fact, he will continue to have such notice even if he subsequently forgets that fact because ‘‘it is quite impossible to say that notice lapses with memory[8].
2) Constructive Notice.
A bona fide purchaser would be able to plead absence of notice only if he had made all usual and proper inquiries, and had still found nothing to indicate the equitable interest. If he fell short of this standard, he could not plead that he had no notice of rights which proper diligence would have discovered[9]12. Of these he was said to have ‘‘constructive notice’’.
A purchaser accordingly has constructive notice of a fact if he:
(I) Had actual notice that there was some encumbrance and a proper inquiry would have revealed what it was.
(ii) Deliberately abstained from inquiry in an attempt to avoid having notice.
(iii) Omitted by carelessness or for any other reason to make an inquiry which a purchaser acting on skilled advice ought to make and which would have revealed the encumbrance.
A purchaser’s ordinary duties fall into two main categories: inspection of the land, and investigation of the vendor’s title subject to S.201 of the R.T.A
INSPECTION OF LAND.
A purchaser is expected to inspect the land and make inquiry as to anything which appears inconsistent with the title offered by the vendor by establishing who possess the land. This is because, it is said that possession is prima facie evidence of title, a purchaser is deemed to have notice of the rights of any person in possession A purchaser should therefore:
(i) ascertain whether there is anybody in possession or occupation of the land apart from the vendor, at least if there are any circumstances from which a reasonable person might infer this; and
(ii) make inquiry of any such person
In Uganda Posts & Telecommunication v Abraham Katumba 13 citing Taylor v. Stilbbert[10] court held that failure to make reasonable inquiries of persons in possession and use of the land or the purchaser’s ignorance or negligence to do so forms particulars of fraud and the purchaser acquires and takes such purchased land subject to its equities let alone a finding that he or she committed fraud.
INVESTIGATION OF TITLE.
A purchaser has constructive notice of all rights which he would have discovered had he investigated the vendor’s title to the land for the period allowed by law Investigation of title means the examination of documents relating to transactions in the land during the period immediately prior to the purchase. (The land title at the register). The purchaser ought to carry out a search at the register to find out whether or not the vendor is the registered owner. Consult LCs before purchase and also asking the neighbors of the owner of the land.
In the case Haji Abdu Nasser Katende v Vithaalidas Haridas & Co. Ltd[11]citing the case of Sir John Bageire v. Ausi Matovu[12]where Kikonyogo DCJ quoted Okello JA (as he was) emphatically states that: “Lands are not vegetables that are bought from unknown sellers. Land is valuable property and buyers are expected to make thorough investigations not only of the land but also the sellers before purchase. This is clearly indicating that due diligence must be conducted before the purchase of land.
3) Imputed notice.
If a purchaser employs an agent, such as a lawyer, any actual or constructive notice which the agent receives is imputed to the purchaser[13]. The basis of this doctrine is that a person who empowers an agent to act for him is not allowed to plead ignorance of his agent’s dealings. David Sejakka Nalima v Rebecca Musoke[14].
In Sir John Bageire v. Ausi Matovu[15],once the defendant proves the above elements on the balance of probabilities then the onus shifts to the plaintiff to strictly prove beyond a mere balance of probabilities that the defendant is guilty of some fraudulent act.
A Bona fide’s interest is protected under the Torrens system of land conveyancing that is an Australian system used to register conveyances in land in Barclays Bank D.C. O v Gullu Millers[16], the system was introduced in Uganda in 1922 by the Registration of titles Act cap 205 enacted virtue of the 1922 Ordinance 22 it is currently reflected under the Registration of Titles act cap 230.it has two essential elements;
(I) Title by registration, which means registration of a conveyance confers one with interest’s.
(ii) Indefeasibility of title which means a certificate of title is conclusive evidence of title. Section 59[17] provides that a certificate of title shall be conclusive proof that the person named therein is the proprietor meaning one registered on title is conclusive owner of land . A bona fide purchaser’s interests are registered on the certificate of title. Section 64[18]also illustrates that the interest of a registered proprietor is regarded as paramount therefore, his interest takes precedent over an aggrieved land owners interest. This is further supported by Section 54[19], which is to the effect that instruments will only confer rights if it is only registered in the register book The law under the R.T.A is insufficient because it confers right of ownership of land to a bona fide occupant over the aggrieved land owner because a bona fide occupantpossess a certificate of title.
Section 181[20]is to the effect that a bona fide purchaser for value is protected against any action of ejectment /damages” implying that they are protected against any other claims on the land. Further to this, Section 176[21] , protects a registered proprietor of land, forbidding any action for ejectment of, or recovery of such land from, or adverse claim against, the registered proprietor of land. The exception to this protective provision is where the purchaser procured the land through fraud, or acquired it otherwise than as a bona fide purchaser for value.The lawunder the R.TA is insufficient in the above section because it protects a bona fide purchaser against any action of ejectment / damages from the aggrieved owner therefore the aggrieved owner cannot claim against a bona fide occupant In Hariprasad Ramabai Patel vs Babubhai
Kalidas Patel[22], Karokora J stated as follows, “A certificate of title is conclusive evidence of ownership of the suit property. No submission or oral evidence can be called to vary the certificate of title unless fraud, lack of consideration or illegality is proved.”.
In Andrea Lwanga vs The Registrar of Titles[23], Odoki J. held at p. 25, as follows: "According to Section 18928. the title of a bona fide purchaser for value could not be impeached since a person who was registered through fraud could pass a good title to a bona fide purchaser for value unless the purchaser was not a bona fide purchaser or was a privy or party to fraud. This was one of the paradoxes of registered conveyancing; that the registration obtained by fraud was void and yet capable of becoming a good root of title to a bona fide purchaser for value. However, the legal framework puts into consideration the interests of the aggrieved landowner however they do not precede that of the bona fide purchaser
The legal framework in Uganda gives an aggrieved owner of land to power to apply for a caveat. S.139 (1)[24] which provides as follows “Any beneficiary or other person claiming any estate or interest in land under the operation of this Act may lodge a caveat with the registrar … forbidding the registration of any person as transferee or proprietor of and of any instrument affecting that estate or interest until after notice of the intended registration or dealing is given to the caveator, or unless the instrument is expressed to be subject to the claim of the caveator as is required in the caveat, or unless the caveator consents in writing to the registration. “In the case of Sentongo Produce & Coffee Farmers Ltd v Rose Nakafuma thijusa[25] it was held that for a caveat to be valid, the caveator must have an interest legal or equitable to be protected. With the caveat, the aggrieved land owner can be protected from transfer of title to the purchaser until when the court determines whether the purchaser is a bona fide purchaser for value without notice or not.
S.178[26] , is a means of protection of the aggrieved land owners interest.it provides that an owner may bring an action of prosecution against a person who acquired title of the land the act through fraud for recovery of damages against this person this is a means of protecting the interest of the aggrieved land owner. However this provision should be read in line with S.187[27], that the action should be brought within a period of 6 years from the date of depriviation of the land this was emphasized in the case of Wasswa & Anor v Kiyimba[28] 24 in the same case they relied on Western Highland Creameries Ltd & Anor v Stanbic Bank & Ors and the opinion of J.T. Mugambwa at pg. 87 that; “an action for damages or compensation based on Section 186 (now 178) RTA whose limitation period is found in S.187 RTA, is a separate action, distinct and different from an action the victim may have at common law”.
In Conclusion the legal framework in Uganda isn’t fair for the bona fide purchaser and the agrieved land owner as the bonafide is more protected under the law more than the aggrieved land owner
[1]The Black’s Law Dictionary 9th Edition by Bryan.A. Garner
Civil Appeal No. 84 of 2003 [2]The Black’s Law Dictionary 6th Edition Pg 660 [3] Section 77 of the Registration of titles Act [4] Thorndike v Hunt (1859) 3 De G. & I. 563 [5]John T. Mugambwa, Land transactions 7 (1866)35 LJ Ch. [6] The black’s law dictionary 10th edition, by Bryan A. Garner 9 Lloyd v Banks (1868) 3 Ch. App. 488. [7] Eagle Trust Plc v SBC Securities Ltd [1993) 1 W.L.R. 484 at 494 [8] MCP Pension Trustees Ltd v Aon Pension Trustees Ltd [2010] EWCA Civ 377 [9] Uganda Posts & Telecommunication V. Abraham KatumbaOliver v Hilton [10] [1803-13] ALLER 432 [11] CACA No. 84 of 2003 [12] CACA No.07 of 1996 [13] Stover v Harrington [1988] Ch. 390 at 409, 410. [14] C.A Civ. Appeal No. 12 of 1985 (unreported), [15] CACA No.07 of 1996 [16] Barclays Bank D.C. O v Gullu Millers [17] Section 59 of the Registration of Titles Act Cap 230 [18] Section 64 of the Registration of titles Act [19] Section 54 of the Registration of Titles Act [20] Section 181 of the Registration of Titles Act [21] Section 176 of the Registration of Titles Act [22] Hariprasad Ramabai Patel vs Babubhai Kalidas Patel HCCS No. 981 of 1990, [1992–93] HCB 137 [23] Misc. Cause No. 7A of 1977 [1980] H.C.B. 24 28 Section 189 of the Registration of Titles Act [24] Section 139 of the Registration of titles Act [25] HCMC 690/99 [26] Section 178 of the Registration of titles Act [27] Section 187 of the Registration of titles Act [28] Wasswa & anor v Kiyimba
Written and Compiled by BYARUHANGA JOSHUA MORRIS
A 3rd year law student at Uganda Christian University - Mukono Main campus
Gmail- joshmorris728@gmail.com
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