Ben Kavuya & Others v Wakanyira David George (Civil Appeal 31 of 2021) [2024] UGSC 13 (18 June 2024)

5 10 15 20 25 30 THE REPUBLIC OF UGANDA, IN THE SUPREME COURT OF UGANDA AT KAMPAI.A (CORAM:OW|NY- D0LL0 CJ, MWONDHA, ruHAlSE, MUSOKE, & MADRAMA, JJSC) CIVIL APPEAL NO 3I OF 2021 BEN KAVUYA} GLoBAL CAPTTAL SAVE 2004 LTD) . RUruNGU PRoPERTTES LTD) APPELI.ANTS VERSUS WAKANYTRA DAV|D GEoRGE) RESPONDENT (Appeal against the Judgment of the Court ofAppeal of Uganda at Kampala by Hon. Justices Buteera, DCJ, Obura and Cheborion, JJA in Civil Appeal No. 36 of 2010 dated l? October 2021, also arising from HCCS No. 36 ot 20tA JUDGMENT OF CHRISTOPHER MADRAMA IZAMA, JSC This is a second appeal originating from the trial decision of the High Court before Kiryabwire J who in the main found that the transaction between the respondent and the second appettant was a sate and not a loan transaction whereupon he dismissed the respondent's suit. The respondent appealed to the Court of AppeaLwhich in turn set aside the High Court decision because they found, in the main that that the transaction was a loan transaction and not a sate transaction on the main basis of which they set aside the Judgment of the High Court. The appetlants'appeat against part of the Court of Appeat decision, to the Supreme Court on the fotlowing grounds: 1. That the learned Justices of appeaI erred in law and fact in finding that there was no meeting of the minds between the appettant and the respondent in retation to the sate agreement. 1. 2 3 1 5 That the learned Justices of appeaI erred in taw in finding that the transaction between the appettants and the respondent was a loan agreement. That the learned Justices of appeaI erred in taw in finding that the signed [and sale agreement, a transfer forms and powers of attorney were meant to act as security of a [oan. That the learned Justices of appeal erred in law when they fail.ed to property reappraise the evidence and engaged in conjecture, speculation and fanciful theories thereby arriving at the wrong conctusion that the transaction was a loan. Representation: At the hearing, the appettants were represented by learned counsel Mr. Joseph Kyazze, learned counseI Mr. Edgar Ayebazibwe, and [earned counseI Mr. George Arinaitwe. The respondent was represented by learned counsel Mr. lnnocent 0keng and learned counsel Mr. Tonny Okweny. CounseI addressed court by way of written submissions and the court reserved judgment on notice. Submissions of counset. For the appeltants, the appel.tants' counseI submitted and gave the backgrounds facts, as found by the learned triat judge. These were that the respondent obtained money from the second appetlant. Upon receipt thereof, he executed a land sate agreement and signed transfer forms for the suit properties. The second appettant transferred portions of the suit land to the third appetlant who then took possession thereof. 0n the other hand, the respondent, atteged that the money advanced to him was a Loan, despite there being no loan agreement on the court record. He signed transfer forms, issued powers of attorney and a land sa[e agreement was executed in pursuit of the loan transaction and not a sate. The [earned trial judge found for the appetlants and dec[ared that the transaction was of a sale agreement, and that the sate agreement was not fraudulentLy made and dismissed the respondent's suit with costs. 2 3 4 10 15 20 25 30 2 35 5 The respondent was dissatisfied with the decision of the High Court and appeated to the Court of Appeat. ln the determination of the appeat, the Court of Appeat made certain findings of fact namety that: the respondent had a loan with the Housing Finance Bank. The properties mortgaged to the bank was the subject of forectosure. The respondent got money from the second appetl.ant to save his properties from being sotd under that forectosure. Secondty, the respondent executed a sate agreement for the suit properties and signed land transfer forms. That the respondent is highl.y studied in accounting and finance. The consideration according to the sate agreement was Uganda shittings 212,A00,000/=. The respondent admitted that he signed the sale agreement, transfer forms and received part of the money at the time of execution of the agreement. That there was no loan agreement adduced in evidence. The appettants' counsel submitted that this court shoutd note that the findings of the Court of Appeat are concurrent with the findings of fact of the triat court. The appettants are aggrieved that notwithstanding these concurrent f indings of fact, the Court of Appeat concluded that the monies paid by the second appe[lant on the basis of the executed documents was for a loan transaction and not a sale transaction. The crux of the appeat is whether the decision of the Court of Appeat and the orders they made are supported in law and by the evidence on record. ln the premises, the appettants' counsel submitted that the appetLants' appeaI is against part of the Judgment and orders of the Court of Appeat. That part of the judgment which the appetlants are not contesting is the question of fact that there was no loan agreement between the parties. That in the absence of a cross appeal by the respondent against such a finding of fact, this was conctusive on the issue that retated to what does not form part of the scope of the appeat. 0n the other hand, the appettants agreed with part of the Judgment and orders of the Court of Appeat and appeated onty on the grounds set out in the memorandum of appeat. The appettants' counsel submitted that it was sufficient for this court to estabLish whether the first appetl.ate court, in approaching its task, apptied or faited to app[y the appticabLe Legat principtes (see Banco Arabe Espanol vs Bank of Uganda; SCCA No. 18 of 10 15 ?0 25 30 35 1998). ln exercising that duty, the court is not barred from making reference to evidence on record that formed the basis of the decision of the lower courts and where retevant in determining a second appeal or even a third appeal (see Byaruhanga vs Ruvuhanga & and another (Civil. Appeat No. 09 ot 2014) [2020] UGCA 2088). Counsel submitted that this court is empowered to depart from the concurrent findings of fact of the lower courts onty if, the circumstances of the case justify it in doing so. As a general rute, the burden of proof [ies on the party who asserts the affirmative on the issue or question in dispute (See sections 101 - 106 of the Evidence Act). The Court of Appeat can oniy interfere when it is satisfied that the finding of fact by the trial court was not supported by evidence. The appettants' counsel argued ground L,1.2 and 3 in that order. Ground 4: That the learned Justices of appeal erred in law when they faited to properly reappraise the evidence and engaged in conjecture, speculation and fanciful theories thereby arriving at a wrong conctusion that the transaction was a [oan. As far as the factuaI basis for the findings of the court are concerned, the appellants'counsel maintained that there are concurrent findings of fact of the High Court and of the Court of Appeat to the effect that there was no loan agreement exhibited on the court record. The onty document about the transaction between the parties that was exhibited was a land sate agreement executed by the parties. Further, the attegation that the transaction was a loan was based on oral extrinsic evidence that is barred by section 92 of the Evidence Act. No exceptional crrcumstances were pteaded to warrant admissibitity of any extrinsic evidence to contradict the written sale agreement. The appel.l.ants' counset contended that in the absence of a loan agreement or disctosing evidence of a loan agreement between the parties, the Court of Appeal., on its own motion and in an attempt to justify its conctusion, invoked the fottowing theories: 10 15 20 30 4 5 35 5 That the exigencies of everyday tife such as the need for money to pay medical bitts, school. fees which causes temporary indisposition makes it most untikety that neither party contemptated that one was tegaLty bound to confer transfer of such security. That the nonexistence of the name of Musinguzi in the second respondent borrowers Ledger book whom they acknowtedged was a borrower in 2008 casts some doubt on the respondent's assertion that there was no part repayment because the produced Ledger was only manufactured with the sote purpose of defeating the appettants' ctaim. The court did not attude to the pteadings or evidence on record to support these assertion inferences. The assertions were premised on specutation of what the court viewed as what cou[d have transpired, but not on the evidence. The appeltants' counsel submitted that the approach taken by the court was tegatty and proceduralty wrong and occasioned a miscarriage of justice. That the law is that the court has the primary duty to futl.y and consciousty consider the totatity of the evidence preferred by atl. parties before it in whatever way, ascribe probative vatue to it and put it on an imaginary scate of justice in order to determine the party in whose favour the baLance titts. (See Civil. Appea[ No. 26 of 2009 Brian Kaggwa vs Peter Muramira.) Counsel submitted that the facts considered by the Court of AppeaL in arriving at the conctusion that the transaction was a [oan, did not form part of the evidence on the record. Secondly, courts of law act on credible evidence adduced before them and do not indutge in conjecture, specutation, attractive reasoning or fanciful theories (See Constitutionat Petition No. l4 of 2011;Advocates' Coatition for Development and Environment and others vs Attomey Genera] and another). ln the first appeat, the Court of Appeal. invoked its own theories unsupported by any pteadings or evidence on record and erroneousty conctuded that the transaction was a loan and not a sate of [and transaction. 10 15 20 25 30 5 The appettants' counsel further submitted that the burden of proof is on the party who asserts the affirmative on the issue or question in dispute in terms of sections 101, 102, 103 and 106 of the Evidence Act (see Yakobo M.N. Senkungu & others vs Cresensio Mukasa; Civit Appeal. No. 17 of 2014). The appetlants' counsel contended that it is the Court of Appeat through adopting convenient theories that attempted to discharge the burden on behatf of the respondent. That the respondent never adduced credibte evidence to support a conctusion that the transaction was a [oan. Further, the Court of Appeat, apart from considering the extrinsic and inadmissibte evidence of the respondent, ignored a duty signed agreement; and transfer forms and further invoked its theories in justification of a rather erroneous conctusion that the transaction was a loan and not a sate of land transaction. Further the appettants' counsel submitted that in att the theories considered by the court, the court did not consider the possibitity of the vendor conscientiousty and votuntarity setting off their land and later ctaiming that what they thought that what they were executing was a loan transaction, especiatly where it comes to educated persons tike the respondent. The court was therefore setective even in the adoption of its theories. The appettants' counse[ contends that in the re-eva[uation of the evidence on record, the Court of Appeal. arrived at a conctusion that is erroneous in law and one that is not supported by any evidence on record. This court is therefore empowered to interfere with the decision of the Court of Appeat. The Court of Appeat appears to have rendered its decision premised on sympathy for the respondent to the extent of assuming that he was a man in need who coutd sign such pertinent documents without understanding their import. CounseI submitted that justice cannot be dispensed on account of sympathy but should be based on the Law and evidence (see Supreme Court Civit Appeal. No. 12 of 2014 Mutindwa vs Kisubika (Civit Appeat No. 12 ot 2014) [2018] UGsc 38). ln repty the respondent's counsel. opposed the appeat and gave a simitar background. ln relation to ground 4 of the appeal, the repty of the 10 15 20 25 30 6 35 5 respondent is that the Court of Appeat found that the transaction between the appettants and the respondent was of a loan and not of a sate. The Court of Appeat, in reaching its conctusion, considered a myriad of circumstances surrounding the transaction. Firstl.y, Cheborion, JA, considered the fact that there was no [oan agreement on record. He however considered the evidence as a whote and found that the appettant signed the land sate agreement, transfer forms and powers of attorney with the sote understanding that the transaction he was entering into with the first and second appettants was a loan transaction. That the suit properties and documents he signed were onty meant to act as security in the event that the respondent fail.ed to repay the toan. ln reaching its conctusion, the court considered the fotl.owing circumstances; that at the time of the transaction, the certificates of trtle were in possession of Housing Finance Bank. The Court of Appeat noted that whil.e the bank retained a copy of the power of attorney, they did not f ind it important to retain a copy of a letter introducing the buyer of the property on the records. He submitted that it is surprising that the bank did not retain a letter introducing the appettant to the bank which was to enable the third appetl.ant cotlect securities kept by the bank. This supported the fact that the respondent never introduced the first appettant to Housing Finance Bank as the new owner. lt ctearty showed whether there was a true intention to transfer the suit property. Secondty, the first appettant was incoherent in his testimony regarding the aLteged sate and transfer. The Court of Appeat noted that atthough the first appe[[ant had testified that he got a power of attorney, it was his wife one Barbara Kavuya who signed the transfer forms. The first appettant was never invotved in the transfer nor was he aware of what happened regarding the vatuation of the suit properties at Uganda shil.tings 10,000,000/= each. Thrs was a major discrepancy and inconsistency. Generalty, the first appetlants' testimony was deemed untruthfuI because he was the main director of the second appetl.ant yet he feigned ignorance of the main detai[s regarding the impugned sa[e transaction he initiated. 10 15 20 25 30 7 35 5 Thirdty, the Court of Appeat noted that though the respondent had transacted with the first and second appettants, the transfer forms and records show that the third appettant was the transferee of titte. This atso lends credence to the fact that the respondent was made to sign btank transfer forms which were to act as security onty and not to confer an interest on anyone etse. Further, the court considered the definition of a contract and ruted that there had to be consensus ad idem which was clearty [acking in the rmpugned sate transaction. Fifthty, there was considerabte undervatuation of the property and this had the effect of cheating the government of revenue. The court noted that this amounted to fraud in the circumstances and had the effect of voiding the impugned sate transaction (see Betty Kizito vs David Kizito Kanonya and others; SCCA No. 08 of 2018.) lt was hel.d that any transaction designed to defraud the government of its revenue is an ittegaI transaction and therefore a titl,e deed acquired under such circumstances wi[[ be void because of fraud. Dectaring that there were no devetopments in the Land in order to evade payment of taxes thereby defrauding the government of revenue constitutes fraud. The court also observed that there was no evidence of the respondent having paid the f ut[ consideration for the Land of Uganda shittings 212,000,0001=. ln the circumstances, the Court of Appeat deemed it necessary to Look at the surroundrng circumstances of the transaction to estabtish whether it was a genuine sa[e. CounseI further submitted that the Supreme Court considered the parote evidence rute under sections 9l and 92 of the Evidence Act in General Parts (U) Ltd and another vs the Non-Performing Assets RecoveryTrust;SCCA No. 09 of 2005). Upon retying on the principtes in precedents cited, Mutenga, JSC hetd that extrinsic evidence was correctty retied upon: Admittedly, it does not appear on the face of the mortgage document, as it did in Turner's case (supra), that the stated consideration was nominaL, nor did it so appear what was agreed upon was not at a[[ set down in the document. However, 8 10 15 20 25 30 35 5 upon introduction of credibte evidence showing that the shil.Lings 700 000,000/= was not lent to the appetlant but was a debt inherited from GeneraL Parts, the position changed. A question simitar to that expressed in the Turner case (supra) was provoked: why did the appellant inherit the debt and enter into the mortgage contract? The answer was not in exhibit P4. By parity of reasoning, I find that the TribunaI was entitled to hear evidence of the true circumstances and the true consideration and that was the extrinsic evidence particutarly in exhibits P2 and P3. Secondty, I think that having regard to ampLe evidence regarding the parties' agreement on the restructuring and rescheduting arrangement, the words used to describe the consideration in the mortgage document were so unreal or meaningless in relation to the factuaI context that the court ought to construe them in a manner that gives effect to the intention of the parties. As noted earlier in this judgment the TribunaL ascribed the misdescription to the fact that in the interactions among the parties prior to the making of the mortgage document, portion of the debt of shiLLings 700,000,000/= had come to be known as a loan to the appeLtant. I may add that the use of the standard form faciIitated the misdescription. Seen in that context, it becomes evident that the way to give effect to the intention of the parties in the instant case is not to discard the mortgage as invatid for lack of consideration, but to take the extrinsic evidence into account to ascertain what the real consideration for the mortgage was. That is what both the Tribunal and the Court of Appeat did. And of course mindful of the important principte of interpretation of documents to the effect that what matters is not what the intention of the parties was but what the words they used mean. ln my opinion however this must be quaLified to the extent that it cannot apply where the words used are, as in the instant case, meaningless in retation to the transaction in question". The respondent's counseI submitted that the clear intention of the parties as adduced in evidence was to treat the transaction as a loan and not the sate of property. ln the triat court, the respondent testif ied that the loan was to be paid within six months at an interest rate of 10% per month and that the sale agreement and the transfer forms were meant to act as security/guarantee shoutd he fail. to repay the [oan. He atso testified that he on[y received Uganda shittings 170,000,000/= from the second appeltant and the consideration of 272,000,000/= atteged to have been consideration for the properties was never recetved by the respondent. He contended that it was incumbent upon the frrst and second appettants to prove that the 10 15 20 30 35 40 25 9 5 shittings 272,000,000/= had been paid in fut[, since in [aw, he who denies a fact can hardl.y produce any proof. The Court of Appeal. noted that it was entirely suspect for the second appettant not to have a record of the futt payment of Uganda shittings 2'12,000,000/= apart from the Uganda shittings 170,000,000/= which the respondent admitted had been disbursed to him as a [oan. ln the premises, the respondent's counsel submitted that ground 4 ought to fait. The Court of Appeal futl.y reappraised the evidence on record and discovered the grave and materia[ nondisclosures and fraudutent acts of the appettants jointl.y or severaLty and nuttif ied the purported sale transaction. ln rejoinder to the reply of the respondent on ground 4, the appettants counsel submitted on the question of whether the transaction was a sa[e or a [oan, the appet[ants' counsel reiterated eartier submissions. The appetlants' counse[ noted that the learned counse[ for the respondent maintained that the transaction was essentialty a loan and not of a sate of [and. Counset hightighted the circumstances that the Court of Appeat considered in arriving at its hotding namely that the bank's faiture to retain a copy of the letter introducing the third appetLant to the bank, lent credence to the assertion that the transaction was not a sa[e. Secondty, the testimony of the first appettant regarding the sal.e and transfer equatty lent credence to the transaction being of a loan agreement and not of a sate agreement. Thirdl.y, the appettants' choice to transfer the Land to the third appettant imputed that the [and sate agreement executed was ittegat. ln rejoinder, the appettants'counsel submitted that the learned Justices of the Court of Appeal. in arriving at those findings, erred in Law when they faited to property reappraise the evidence and engaged in conjecture, specutation and fancifuL theories thereby arriving at a wrong conctusion that the transaction was a [oan, and counseL reiterated eartier submissions on this point. Further the appettants'counsel submitted that contrary to the submissions of the respondent's counseL, the court record actualty reflects that indeed the first and second appetlants and the respondent signed a 10 15 20 25 35 10 30 5 Further, the appetl.ants' counse[ submitted that it is true that for a contract to come into existence on the basis of an agreement, there must be an intention to create [ega[ retations. The execution of the agreement is paramount. The fact that the respondent did not take steps to avoid the agreement immediatety after its execution or within a reasonabte time, is evidence that the subsequent attempt to ctaim that it was a loan and not a sate agreement is an afterthought. Counsel reiterated arguments that sectron 91 of the Evidence Act exctudes oraI evidence to contradict a written contract. 0n the rationate behind the exctusion rule, it was hetd that where the parties deliberatety put the agreement into writing, it is conclusive[y presumed that they intended to write a fuLt and final statement of their intentions and one which shoutd be ptaced beyond the reach of future controversy, bad farth or treacherous memory (see Phipson on Evidence lOth Edition page at 720 paragraph 1382). Further, in deal.ing with this issue, the trial. judge found that there is no evidence of a loan agreement at atl.. That there is atso the issue of two instatments said to have been given to the ptaintiff being the difference between the outstanding vatue of the Housrng Finance Bank Loan and the purchase price of the suit properties which the ptaintiff did not sufficientty address. The f irst appetl.ate court made a concurrent f inding. The respondent confirmed that he signed the agreement without any duress. Having signed the documents and taken the benefit therefrom, he is estopped from denying the same. Lastty, counsel submitted in repty that the court considered surrounding circumstances of the transaction necessary ln estabtishing the true intention of the parties. The issue of vatuation was one of the circumstances the court considered in establ.ishing the true intention of the parties. He 10 20 25 30 fE 1,1 15 land sate agreement. This in itsetf demonstrates what the parties agreed to. The conctusion that there was no meeting of the minds is erroneous as the agreement was executed after conctuston of negotiations and not otherwise. 5 contended that this is not true because the court considered the issue when Cheborion, JA stated lhal'. "for the above reasons, I find that the transaction between the appellant and the first and second respondent was a loan transaction and the subsequent conduct of the respondent thereafter was illegal and fraudulenl" There was no evidence to support the finding. ln the premises the appetl.ants counsel reiterated the position of the law that the court does not act on conjecture but evidence properl.y admitted in court. The appel.tants' counsel in rejoinder submitted that the court never made any finding on the issue regarding the valuation of property. No finding was made in the matter and the same was not a ground of appeal,. The respondent atso never cross appeated against the same. ln Banco Arabe Espanol vs bank of Uganda (supra) the Supreme Court hetd that the court witl no doubt consider the facts of the appeat to the extent of considering the retevant point of law or mixed law and fact raised in any appeat. The issue of evatuation of property is not the subject to the appeat. The court simpty uphetd finding that the third appetLant never obtained a good title. Grounds 1 and the 2. That the learned Justices of the Court of Appeat erred in law and fact in finding that there was no meeting of the minds between the appe[ant and respondent in relation to the sate agreement. That the learned Justices of the Court of Appeal. erred in taw in finding that the transaction between the appellant and the respondent was a loan agreement. The appettants'counsel submitted that both the High Court and the Court of AppeaL found as a question of fact that the agreement between the second appetl.ant represented by its director, the first appettant was one for sate of land and devetopments thereon. The tand sate agreement was admitted on the court record as exhibit P1. Secondty no loan agreement or other document disctosing a loan arrangement was adduced in evidence. The consideration according to the land sate agreement was Uganda shiltings 10 15 20 25 30 1,2 5 272,000,0001=. There is nothing in the written sate agreement to suggest that it was a [oan sum. That the respondent is highLy studied in accounting and finance. He conceded that he signed the sate agreement, transfer forms and received part of the money at the time of execution. The terms set out in the impugned sate agreement are ctear. No terms therein were suggestive of or leaned in favour of the disctosure of a loan arrangement. The respondent is taken to have read and understood the terms of that agreement before he votuntarity executed it. As far as the law is concerned, the appel.l.ants' counseI submitted that it is a general rute that a party of futt age and understanding is normatty bound by his signature to a document whether he reads or understands it or not. As submitted, no evidence was adduced to prove that the respondent executed the agreement out of duress or undue inftuence or that he was, at the time, not capabte of understanding the terms of the agreement. Secondty under section 58 of the Evidence Act cap 6, it is provided that atl. facts, except the contents of documents, may be proved by oral evidence. The question of how a court shoutd construe terms in an agreement was considered in Supreme Court Civit Appeat No. 06 of 2013 Ms Fangmin & Crane Bank Ltd v ups Betex Tours & Travel Limited by Odoki Ag JSC. ln the circumstances of the appeaL, the agreement had to disctose the terms of what the parties had agreed. There was no evidence and no f inding by the Court of Appeal. that the terms of the agreement were ambiguous and incapabte of berng understood by the respondent or any reasonabte man of the respondent's stature and understanding. Further, the position of law is set out in section 92(1) of the Evidence Act which exctudes oral evidence to vary the terms of a contract or other disposition of property which has been reduced in writing. ln addition, the appeLl.ants'counsel submitted that in the absence of any loan agreement, the intention of the parties to execute a contract for the sa[e of land or otherwise can only be inferred from the clear terms of the agreement and possibty other documents executed contemporaneously 10 15 20 25 30 35 13 5 with the agreement, such as the transfer instrument. The court cannot breathe into the agreement, terms which are not stipulated therein or create new inferences and theories not forming part of the evidence on record. The appel.l.ants' counseI further submitted that it is true that for a contract to be val.id on the basis of an agreement, there must be an intention to create [ega[ retations (see Vot.l Chitty on Contracts at page 198). The test to ascertain whether there was a meetrng of the mind or not is an objective one. lf a reasonabte person coutd consider that there was an intention to contract, then the promisor woutd be bound. CounseI reiterated submissions that the parties manifest intention is a question of fact to be primarity answered by examining the documents executed by the parties and the total.ity of the circumstances. He submitted that in the instant case, aside from the agreement of sate, the respondent conceded to having executed transfer forms and even surrendered the certificate of titLe to the appel.[ants. ln the premises, the conc[usion of the Court of Appeat that the transaction was a loan, in the face of a property executed agreement of sate of tand, executed transfer instrument and surrender of the certificate of tit[e by the respondent, coupted with the absence of a loan agreement is not LegaLLy and factuatty tenabte or even defendabl.e (see sections 9l and 92 of the Evidence Act which exctudes admissibitity of oral testimony to contract a written contract (see atso General lndustries vs Non-Performing Assets Recovery Trust; SCCA No. 5 of 1998). Further in deating with the issue, the learned triat judge found that there was no evidence of a loan agreement at att. The first appel.tate court equatl.y maintained the same finding. Counsel further submitted that there was no other evidence on record save for the theories adopted by the Court of AppeaL. The Supreme Court in Kasifa Namusisivs Francis. K Ntabaazi;SCCA No. 04 of 2005 deaLt with a simitar matter. L4 10 15 20 30 25 5 Counsel submitted that there was no cross appeal. by the respondent to chaltenge the concurrent findings of the High Court and the Court of Appeat that there was no loan agreement. lt is thus apparent that the onty conctusion to be drawn is that the conctusion of the Court of Appeal. is not supported in law and on the evidence on record and ought not to be attowed to stand. ln repty to grounds I and 2 the respondent's counsel submitted that the Court of Appeal. he[d that it is now settted [aw that one of the essentiats for a vatid contract to exist is that there must be an intention to create [ega[ retations which the parties must manifest. Accordingty, there is a mu[titude of evidence to show that exhibit Pl, the sal.e agreement, was never intended as a true sate agreement as there was never any intention to create tegal retations name[y. PWI testified that he had been given Uganda shittings 170,000,000/= as a loan and he was insistent and concurrent throughout that he even signed the vouchers for the same in as much as the vouchers were never given to him by the first and second appettants. SecondLy, the evidence of payment of Uganda shitLings 170,000,000/= as opposed to Uganda shitLings 272,000,000/= atl.eged to have been paid as consideration was corroborated by the cross examination of DW 2, the first appettant, when he admitted to having paid Uganda shittings 158,000,000/= to the respondent coutd not show proof of payment the further atteged sum of Uganda shittings'112,000,000/= to make up the batance of the consideration for the [and sa[e. The respondent atso testif ied that he coutd not have sotd his devetoped properties at the price of Uganda shittings 272,000,000/= which was a gross undervatuation. That he woutd have left the bank to setl them off at the market vatue and atso the appel.l.ants admittedty and intentionatty undervatued and under dectared the vatue of the suit properties. Ctearty, the respondent testified that he was charged interest of 10% per month on the Uganda shil.tings 170,000,000/= for the six months. lf this was 10 15 25 30 35 20 15 5 to be computed, it would come to the impugned Uganda shil.tings 272,000,000/= which is inctuded in the sale agreement exhibit P1 and atleged to have been the totaI consideration for the properties in question. Further, the signing of the agreement exhibit P1, is atso marred by and shrouded in irregutarities and uncertainty. PW 2 testified that he witnessed the signing of the sate agreement and received signed transfer forms from the vendor. He atso testified that he teft the second appettant company by the beginning of January 2018 and therefore by 18th January 2018 he was not there. 18th January 2018 is the date the impugned sate agreement was executed by the respondent. PW 2 could atso not remember whether there was a [awyer at the time of signing the al.l.eged sates agreement. He submitted that this is pecutiar for someone who was a witness to the agreement. The respondent's counseL submitted that the circumstances Led to the conclusion of the Court of Appeat. He submitted that the Court of Appeat was alive to the fact that the respondent, who was in need of money, approached the first and second appettants for the same. The respondent then executed an oral loan agreement with the first and second appettants on the basis of signing a transfer form in the sale agreement for the lands as security. The respondent never denied having received the monies from the first and second appetlants but when he went to start paying off the same, he discovered that his properties had been transferred to the third appettant. ln the premises counsel prayed that grounds 1 and 2 of the appeat shoutd faiI because the impugned sate agreement lacked the essentiaI aspect of a consensus between the parties to treat it as a true sate agreement. That the learned Justices of the Court of Appeat erred in taw in finding that the signed land sale agreement, transfer forms and powers of attorney were meant to act as security of a [oan. 16 10 15 20 25 30 Ground 3. 5 The appel.tants' counseI reiterated eartier submissions on grounds 2. Additional.ty, the appettants'counsel submitted that the decision of the Court of Appeat sets a dangerous precedent in commerciaI transactions in Uganda. lt creates a leeway for a party to votuntarity and conscientiously enter into a transaction and later turn around and deny the same. That it is inconceivabte that the respondent who is highty skitl.ed in banking and finance coutd execute such a transaction by signing the documents, get money and later deny the purpose of the agreement. For the court to protect such a person woutd open the ftoodgates of fraudsters hence defeating the purpose of the law on land conveyancing. The law on land conveyancing is clearly set out in the Registration of Tittes Act, cap 230. Section 59 thereof stiputates the cardinaI principte that registration of titte is conc[usive evidence of titLe. lt is aLso wetl settl.ed that the certificate of titte is onty defeasibl.e in instances mentioned under section 176 of the RTA the main basis for impeachment of titl,e is fraud. The Court of Appeat erred to hotd that since the payment of the balance was in their view not ctear, then the transaction was a loan. The court in deating with a simitar case with simi[ar facts stated that: "rh my view, if there was no full payment of the agreed price, the remedy is to sue for the balance" (Kasifa Namusisi others vs Francis M. K. Ntabaazi; SCCA No 04 of 2005.) The appel.l.ants' counsel reiterated eartrer submissions that the Court of Appeat retied on fanciful theories to arrive at a finding that there was fraud. The respondent fail.ed to prove fraud to the required standard set out in Frederick JK Zaabwe vs 0rient Bank Ltd and 5 others (Civit Appeat No. 04 of 2006). ln the premises, the appellants'counseI prayed that this court sets aside part of the frndings and judgment of the Court of Appeat and attow the appeat with costs. ln repty, to ground 3 of the submissions, the respondent's counsel submitted that he reiterated submissions in repty on grounds I and 2 as wet[ 10 15 20 25 3s as 4. 77 30 ln repl.y to the submission that the finding of the Court of Appeal set a dangerous precedent in the law of conveyancing, counsel submitted that to the contrary, the hotding is important to deter the activities of unscrupulous moneytenders tike the first and second appe[Lants who take advantage of, unsuspecting desperate borrowers with prime properties tike the respondent. 0n the submission that the respondent is highl.y skitted, the respondent retied on the first and second appettants'good faith to treat the transaction as a [oan agreement. The transfer form and the sale agreement were never meant to take effect. ln the instant case, the Court of Appeat came to the conctusion that the sate transaction is marred by fraud, and this is the fraud which the third appel.tant was privy to, having signed the transfer form which intentional.l.y and grossty undervatued the suit property. ln the premises, the third appetl.ant cannot be heLd to have acquired a good and genuine titte to the suit property according to the provisions of sections 59 and 176 of the Registration of Tittes Act. The premises ground 3 of the appeat ought to fail. as wel.t. The respondents counsel prayed that this court dismisses the appettants appeal. with costs to the respondent. ln rejoinder to the ground 3 submissions, the appetlants' counsel reiterated eartier submissions that the conctusion of the court and the nature of the transaction was premised on conjecture and suspicion but not on evidence adduced on record. Further counsel contended that it is inconceivabte that the respondent who is highty skitted in banking and finance, coutd admit to enter a transaction, sign transfer documents, get money and later feign ignorance of the true purport of the transaction. For court to protect such a person, woutd be opening a f[oodgate of fraudsters and defeating the purpose of the [aw on land conveyancing. ln addition, section 59 of the Registration of Tittes Act, stipuLates the cardinaI principte that registration of titl.e is conclusive evidence of titl.e which can onty be impeached on the grounds stiputated in section 176 of the RTA. Among the exception to this rute is that of for impeachment on the 10 1) 20 30 35 18 5 ground of fraud. The standard of proof of fraud is higher than on the balance of probabitities (see Kampala bottlers vs Damanico Properties (U) Ltd). ln the premises, the appettants' counsel submitted that the Court of Appeat erred to hotd that since evidence of payment of the batance was not there, then the transaction was a [oan. The court in deal.ing with a simitar case with similar facts as stated that " in my vrew, if there was no full payment of the agreed price, the remedy is to sue for the balance. "There is no evidence that the transaction is a loan and not a sate. Finatty, the appettants counsel reiterated eartier submissions and prayed that the appeat is atlowed and the Judgment and orders of the Court of Appeat set aside and the respondents suit dismissed. Further, the respondent should pay the costs of the appeat in this court and in the courts below. Consideration of the appeal. This is a second appeal and the jurisdiction of the Supreme Court is provided for under section 6 (1) of the Judicature Act cap 13 which provides that: 6. Appeal.s to the Supreme Court in civiI matters. (1) An appeat shaLl lie as of right to the Supreme Court where the Court of Appeat confirms, varies or reverses a judgment or order, inctuding an intertocutory order, given by the High Court in the exercise of its origina[ jurisdiction and either confirmed, varied or reversed by the Court of Appeat. The Court of AppeaL reversed the judgment of the triat judge and made a pivotaL f inding that the transaction between the parties was a land sate and not a loan and this Led to the consequential. setting aside of the High Court decree which had dismissed the respondent's suit. The Court of Appeat exercised its jurisdiction under section 11 of the Judicature Act and atlowed the respondent's suit in the High Court on the basis of its finding that the contract between the parties and the foundation of the suit was a loan agreement and not a land sate agreement. There are four grounds of appeal against the decision of the Court of Appeat in this court as I have set out before. I have carefutty considered these 10 15 20 25 30 19 5 grounds of appeal and can onty estabtish two points of law from them. ln the first ground, the issue is whether the Court of Appeat erred to find that there was no consensus ad idem when the parties executed a land sate agreement. The fact that the respondent and the second appettant executed this Land sate agreement is not in dispute and the question before court is of a matter of [aw. Further grounds 2, 3, and 4 are intertwined and deat with the issue of whether the Court of Appeal. erred to reach the conctusion that the transaction between the parties was a loan and not a land sale agreement. ln ground 2 of the appeal, it is asserted that that this is an error of [aw. ln ground 3, the appettants attack the judgment of the Court of Appeal. on the ground that they erred to find that the sate agreement, a power of attorney and a transfer form executed by the respondent operated as a security for a [oan and they were not to be considered as instruments of a land sate under the terms of the tand sate agreement and the executed transfer deeds and power of attorney accompanying it. Finatty, ground 4 of the appeat is about whether there is admissibl.e evidence in support of the finding that the transaction between the parties is a loan. This is attacked on the basis of admissibitity of evidence in that the appetlant contends that the Court of Appeat engaged in conjecture and theories instead of retying on the [aw. There is a further and fundamental assertion that the oral testimonies were admitted erroneousty to reach a finding on the nature of the transaction between the parties. The appettant asserts that the oral testimony retied on to reverse the high court finding on the nature of the transaction was inadmissibte under sections 91 and 92 of the Evidence Act. ln R. Ramachandran Ayryar vs Ramalingam Chettiar 0962) AIR 302, (1962) SCR (3) 604, it was hetd by the Supreme Court of lndia whiLe interpreting a statutory provision rn pari materia with section 72 (1) (c) of the CiviL Procedure Act, that an error in rejection or admissibrl.rty of evidence that affects the merits of the case in a substantra[ manner, is an error of [aw. The Supreme Court of lndia held that: 20 10 15 20 ,q 30 35 5 It rs necessary to remember that a. 100 (1) (c) refers to a substantial error or defect in the procedure. The defect or error must be substantia[ that is one fact to remember, and the substantial error or defect shoutd be such as may possibty have produced error or defect in the decrsion of the case upon the merits-that is another fact to be borne in mind. The error or defect in the procedure to which the ctause refers is, as the clause- ctearty and unambiguously indicates, an error or defect connected with, or reLating to, the procedure; it is not an error or defect in the appreciation of evidence adduce by the parties on the merits. That is why, even if the appreciation of evidence made by the lower appetlate Court is patentty erroneous and the finding of fact recorded in consequence is grossty erroneous, that cannot be said to introduce a substantiaL error or defect in the procedure. 0n the other hand, if in deaLing with a question of fact, the lower appeLtate Court had ptaced the onus on a wrong party and its finding of fact is the resuLt, substantiat[y, of this wrong approach, that may be regarded as a defect in procedure; / rn dealing with questions of fact, the lower appellate Court discards evidence on the ground that it is inadmissrble and the High Court is satisfied that the evidence was admissible, that may introduce an error or defect in procedure. lf the lower appellate Court fa s to consider an issue which had been tried and found upon by the trial Court and proceeds to reverse the tnal Courtb decision without the consideration of such an issue, thdt may be regarded as an error or defect in procedure, if the lower appellate Court attows a new point of fact to be raised for the first time before it, or permits a party to adopt a new'plea of fact, or makes out a new case for a party, that may, in some cases, be mid to amount to a defect or error in procedure. But the High Court cannot interfere with the conclusions of fact recorded by the lower appettate Court, however erroneous the said conctusions may appear to be to the High Court, because, as the Privy CounciI observed, however gross or inexcusabte the error may seem to be there is no jurisdiction under section'100 to correct that error. (ltatics added) 10 15 20 25 30 35 27 Both parties counsel submitted on ground 4 first and then on grounds'l and 2 together and lastty on ground 3. I find that ground 4 of the appeal has the potentiaI of disposing of the appeaI on a point of taw if it can be estabtished that the Court of Appeat retied on inadmissibte evidence in terms of sections 91 and 92 of the Evidence Act to reach the conclusion that the transaction between the parties, the subject matter of the suit, was a loan transaction rather than a land sa[e transaction. 5 ln a second appeat, the court is bound to accept concurrent findings of fact of the triaI court and the first appettate court except rn exceptionaI circumstances. ln Kifamunte Henry vs Uganda; (Criminat Appeal. No. 10 of 1997) [1998] UGSC 20, (15 May 1998). rhe Supreme Court held that it is the Court of Appeat, as a first appettate Court which has a duty to evatuate the evidence under 30 (1) of the Judicature (Court of Appeat Rutes) Directions (as revised, previousty rule 29 (1)). Where the Court of AppeaL re-evaluated the evidence and subjected it to exhaustive scrutiny, the Supreme Court woutd not interfere with any concurrent f indings of fact: 0nce it has been estabLished that there was some competent evidence to support a finding of fact, it is not open, on second appeaI to go into the sufficiency of that evidence or the reasonableness of the finding. Even if a Court of first instance has wrongty directed itself on a point and the court of first appeaL has wrongly held that the trial Court correctty directed itsetf, yet, if the Court of first appeal has correctty directed itself on the point, the second appeLl.ate Court cannot take a different view R. Mohamed At[ Hasham vs R (1941) B E.A.C.A.93. ... 0n second appeaL the Court of Appeal is prectuded from questioning the findings of fact of the trial Court, provided that there was evidence to support those findings, though it may think it possibLe, or even probab[e, that it wouLd not have itseLf come to the same conc[usion; it can onLy interfere where it considers that there was no evidence to support the finding of fact, this being a question of taw: R. vs. Hassan bin Said (19L2) 9 E.A.C.A. 62. ln Natumansi v Kasande & 2 Ors (Civit Appeal. No. 10 of 2015) 12017) UGSC 21 (10 Juty 2017) Prof LiLtian Tibatemwa - Ekirikubinza, JSC on whether the Supreme Court can interfere with concurrent findings of fact of the trial court and the f irst appeLLate court said that: It is a trite principle of law that where factuaI findings have been made by the triaL court and affirmed by the first appettate court, the second appettate court, [ike this one, must be carefuL not to interfere with those findings unLess the court is satisfied that the findings were devoid of support in evidence on record or that they are so gtaring[y erroneous that the findings by the tria[ court were perveTSe. 10 15 20 25 30 35 22 5 I frnd that there is no controversy on the concurrent findings of fact retating to two important matters. The first is that the parties votuntarity signed a land sale agreement exhibit P1. Secondty there was no separate loan agreement exhibited in court. The issue revotves rather on whether the evidence used by the Court of Appeal. to reach the conctusion it did that the transaction between the parties was a loan and not a sate agreement was tawfutty admitted under sections 9l and 92 of the Evidence Act. Any exclusion of the oral evidence relied on by the court as atters the express terms of the admitted sate agreement executed between the parties can resutt in the appeaI being attowed in its entirety on a point of law and it shatt be tried first by considering. This woutd resotve att the grounds of appeal. The background of the dispute between the parties was that the respondent to this appeal fited a suit against the appettants and he ctaimed mesne profits, rent, recovery of movable property fottowing his eviction by the appettant. The case of the ptaintiff in triat court was that on 'l5th January 2007 he obtained a loan from the second defendant/ appetl.ant in this court and what he borrowed was onty Uganda shil,tings 170,000,000/= and was payabl.e in instatments for a period of six months. The loan attracted an interest rate of 10% per month. ln the transaction, the ptaintiff, who is now the respondent, executed an agreement of sa[e of [and, issued a power of attorney and signed a transfer forms as further security for the Loan. The two properties, the subject matter of the sate or security are described as Btock 236 Plol 2062 Kyadondo and P[ot i7 Bunyonyi Lane (hereinafter referred to as the suit property). The respondent to the appeat in this court asserts that the signed transaction was to give security for a loan white the appettants who were defendants in the triat court assert that the property in dispute was the subject matter of a sate agreement. ln High Court the parties agreed to 3 issues fortriaI name[y: 1. Whether the agreement was a straight loan or a sate agreement. 2. Whether or not the transaction was fraudutent. 10 15 20 25 30 5 3. Whether or not the pLaintiff faited to effect loan repayments on time after borrowing from the second defendant. The triaL judge found that the transaction between the ptaintiff and the first defendant raises eyebrows as to its true nature. However, he found that in the circumstances before the court, there was no evidence of a Loan agreement at att thereby distinguishing other eartier decisions where there was a finding of a loan transaction. I need not refer to these authorities. The learned trial. judge found that the onty agreement before the court was an agreement of sate and therefore the learned triat judge answered the first issue in the affirmative and hetd that there was a sate agreement between the parties. 0n the question of whether the transaction was fraudutent, the Learned trial judge having found for the defendant on the first issue atso found that there was no fraud. He dismissed the suit with costs. The ptaintiff was aggrieved and appeated to the Court of AppeaI on the fottowing grounds: 10 15 25 30 2 4 1 That the learned triat judge erred in law and fact when he heLd that the transactions between the appettant and the respondent were a sale and not a loan agreement. That the learned triat judge erred in [aw in hol.ding that the undervatuation of the suit property and cheating government of stamp duty was not sufficient to invaIidate transfers for the suit properties. That the learned triat judge erred in [aw and in fact in refusing to award special and general damages when the appeltant was evicted. That the [earned triaL judge erred in law and fact when he faited to evatuate the whote of the evidence on record, thereby reaching a wrong decision. J 0n ground 1 of the appeat, the learned Justices of the Court of Appeal inter aliafound that there was no consensus ad idem and the saLe transaction was a totaI disregard of the parties' understanding. The Court held that the 24 20 35 5 transaction between the appettant and the first and second respondents was a toan transaction and the subsequent conduct of the respondent in registering a transfer of the suit property to the 3'd respondent was ittegal and fraudutent. ln retation to grounds 2 and 4, that Justices of the Appeal. found that the transaction between the parties was a loan transaction and the first and second respondents' subsequent transfer of the suit properties into the name of the third respondent was ittegal and fraudutent. That none of the respondents obtained a good titte and on the premises that the transfer was untawfu[. The learned Justice of the f irst appel.tate court, who wrote the lead judgment and with the concurrence of the other Justices attowed ground 2 of the appeat. ln relation to ground 3, the learned Justices of the Court of Appeat awarded the appettant speciaI damages of Uganda shittings 71,860,Ll6/=. Further, the learned Justices of the Court of Appeat awarded Uganda shittings 50,000,000/= as generaI damages. The appeaI was attowed with costs. As far as exctusion of oral evidence to prove the contents of documents is concerned, I have considered sections 91 and 92 of the Evidence Act. Section 91 of the Evidence Act provides that: 91. Evidence of terms of contracts, grants and other dispositions of property reduced to form of document. When the terms of a contract or of a grant, or of any other disposition of property. have been reduced to the form of a document, and in at[ cases in which any matter is required by law to be reduced to the form of a document, no evidence, except as mentioned rn section 79, shal.t be given in proof of the terms of that contract, grant or other disposition of property, or of such matter except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissibte under the provisions hereinbefore contained. Exceptionl -When a publ.ic officer is required by Law to be appointed in writing, and when it is shown that any particular person has acted as such officer, the writing by which he or she is appointed need not be proved. 10 15 20 25 1q 25 30 Exception2 -Witls admitted to probate in Uganda may be proved by the probate Explanation 1. -This section applies equa[Ly to cases in whrch the contracts, grants or dispositions of property referred to are contained in one document, and to cases in which they are contained in more documents than one. Explanation 3. -The statement, in any document whatever, of a fact other than the facts referred to in this section shall not prectude the admission of oral evidence as to the same fact. Section 91 of the Evidence Act inter atia is about the proof of the contents of an agreement which has been reduced in writing. ln this case the terms of the agreement between the parties had been reduced into writing and the learned triat judge found that there was no evidence of a loan transaction and the only evidence was exhibit Pl. The learned triat judge found that the ptaintiff testif ied as having signed two agreements. 0ne was a straight Land sate agreement and the other was a loan agreement. The loan agreement was not adduced in evidence and the ptaintiff said that he was not given a copy. The defendants' case was that they bought the suit property and adduced exhibit P1 together with duty signed transfer forms transferring the property. ln terms of section 9l of the Evidence Act, the terms of the contract or the contents of the contract or agreement can only be proved by the document exhibit Pl. The AppeLLants'counsel harped on the point that both the High Court and the Court of AppeaL found no evidence of a [oan agreement on record. The Court of Appeat reviewed the evidence on record and indeed found that: "0n record, no loan agreement exists." They found as a fact that there was a sate agreement exhibit Pl. The appettant proved that it paid shiLlings 158,000,000/- to Housing Finance Bank Ltd. The appettant testified that he received onty170,000,000/- which is the sum he borrowed and he executed the various documents such as the sate agreement, transfer forms and power of attorney as security for the Loan. The Court of Appeal. did not f ind evidence of payment of the baLance of 1'12,000,000/- which the second 10 15 20 25 30 35 26 Explanation2. -Where there are more originals than one, one original on[y need be proved. 5 appetLant ctaimed it paid to make the totaI of 272,000,000/- stiputated in the land sate agreement. Cheborion, JA rnter alia stated that: It's surprising that the 2"d respondent company coutd not have in its possession and custody pertinent documents in business such as payment receipts and vouchers more so for payment of such large sums of money. One wonders how their accounts woutd be audited in the absence of such pertinent documents. Be that as it may, the 1't respondent's assertion that he paid the batance of 112,000,000/= in 2 instalments was not backed by any evidence. Had the respondent adduced evidence of the same, this woutd have been of great hetp to the court. PW4 testified that for any money paid out, a payment voucher was signed by the recipient. The vouchers for the period in issue that were brought forth. tacked important entries. What can be discerned from the 1d and 2'd respondent's conduct as that if these payment vouchers actuatly existed and showed shiLl.ings 10,000,000/= had been partty repaid, then this woutd have weakened the respondent's case. The respondent had to keep away the vouchers from the Court because this woutd be evidence of a loan repayment. The absence of vouchers to show payment to the appettant of the atteged 112.000,000/= said to have been made in 2 instalments wou[d onty lead one to conctude that the same was not issued because no monies were actuaLty paid out by the 2"d respondent in fut[ payment of the 272,000,000/= being the al|eged purchase price of the suit properties. I find that the conctusion of the court is tricky because there was evidence that the 2"d appeltant company paid out shittings 158,000,000/=. However, the ptaintiff who is now the respondent in this court admitted on record that he received onty 170,000,000/- as a [oan. 0n what instrument did he receive the additionat shitl.ings 12,000,000r admitted or how was it paid to him? The Court of Appeat retied on the testimony of the ptaintiff who stated that he received shil.tings 10,000,000/= cash and shil.tings 2,000,000/= was the transaction fee for the loan amount of shittings 170,000,000/= hence the total. [oan amount of shittings 170,000,000/=. The court atso deduced that fact that the loan was for 6 months attracting an interest rate of 10% per month. The total. interest for six months amounted to'102,000,000/- giving a total of shitLings 2'72,000,000/= and that was amount stated in the Land sa[e 10 15 20 25 30 35 27 5 agreement. The Court of Appeal. accepted that pLaintiffs testimony that he never received the shittings 102,000,000/=. From the above facts the Court of Appeat made an inference that the transaction was a [oan agreement under the terms testified to by the ptaintiff. Section 91 of the Evidence Act exctudes the oral testimony of the contents of the loan agreement of which the ptaintiff testified that he signed two agreements and these were the sate agreement and the loan agreement. 0bviousl.y the loan agreement, whose terms were accepted by the Court of Appeat contradicts the contents of exhibit Pl which was admitted in evidence and confirmed as true by the ptaintiff himsetf. The questron is therefore whether the terms of exhibit Pl coul.d be exctuded or varied. the way it was, by oral testimony. This depends on the construction of section 92 of the Evidence Act which provides that: 92. Exctusion of evidence of oral agreement When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to section 91, no evidence of any oraI agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to or subtracting from its terms; but- (a) any fact may be proved which wou[d invatidate any document, or which wou[d entitte any person to any decree or order relating thereto, such as fraud, intimidation, itl.egatity, want of due execution, want of capacity rn any contracting party, want or faiture of consideration or mistake in fact or [aw; (b) the existence of any separate oral agreement as to any matter on which a document is si[ent, and which is not inconsistent with its terms, may be proved. ln considering whether or not this paragraph appLies, the court sha[L have regard to the degree of formality of the document; 15 20 25 30 condition grant or (c) the existence of any separate oraL agreement, constituting a precedent to the attaching of any obtigation under any such contract, disposition of property, may be proved; 28 10 35 (d) the existence of any distinct subsequent oraL agreement to rescind or modify any such contract, grant or disposition of property may be proved, except in cases in which that contract, grant or disposition of property is by Law required to be in writing or has been registered according to the Law in force for the time being as to the registration of documents; (e) any usage or custom by which incidents not expressty mentioned in any contract are usuatty annexed to contracts of that description may be proved if the annexing of the incident wouLd not be repugnant to, or inconsistent with, the express terms of the contract; (f) any fact may be proved which shows in what manner the language of a document is retated to existing facts. I have carefutty considered section 92 and the exceptions to the general rule where oral testimony woutd not be admitted. The general rute is that as far as exhibit Pl which is the Land sate agreement is concerned, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradrcting, varying, adding to or subtracting from tts terms. However, to be permitted by law to admit any evidence for the purposes of contradrcting, varying, adding to or subtracting from its terms of exhibit Pl (the land sate agreement) one much prove any of the exceptions under section 92 (a) - (f) of The Evidence Act. Under section 92 (a) oral testimony may be admitted of a fact which woul.d inval.idate the agreement on the basis of fraud, intimidation, il.l.egaLity, want of due execution, want of capacity to contract, want or farture of consideration, mistake of fact or [aw. These are the general grounds, when proved, upon which a contract can be vitiated. The courts have used these grounds to aside consent judgments which are considered as contracts of the parties on any of the grounds tisted above. ln Hirani vs. Kassam 19 (EACA) l3'l crted in Brooke Bond CI) Ltd vs. Martya n9751 E.A. 266 at pase 269 it was hel.d that a consent judgment cannot be varied or discharged except on any grounds upon which to discharge a contract between the parties: 10 15 25 30 35 20 29 5 ...cannot be varied or discharged unLess obtained by fraud or cotlusion, or by an agreement contrary to the poticy of court... or if consent was given without sufficient materiaI facts, or in misapprehension or ignorance of materiaI facts, or in general for any reason which would enable court to set aside an agreement between the parties" 0ne undertying principte for this is another rute of evidence which is of estoppel.s by agreement. A party rs estopped from adducing evidence to contradict his or her own wntten agreement as stated by Lindtey L.J. in Huddersfietd Banking Co. Ltd -Vs- Henry Lister & Son Ltd (1895) 2 Ch. D page 273 at page 280 that: A consent order I agree is an order and so [ong as it stands it must be treated as such, and so long as it stands it is as good an estoppel as any other order. The doctrine of estoppets is a shiel.d and bars any party to the contract from asserting a contrary position from that stipulated in the contract. This doctrine is imported under section 1'14 of the Evidence Act cap 6 Laws of Uganda. Section 114 of the Evidence cap 6 provides that: 1'14. EstoppeL When one person has, by his or her dectaration, act or omission, intentionatly caused or permitted another person to betieve a thing to be true and to act upon that betief, neither he or she nor his or her representative sha[t be a[[owed. in any suit or proceeding between himself or herself and that person or his or her representative, to deny the truth of that thing. 56. ...Where parties express an agreement of that kind in a contractual document neither can subsequentl.y deny the existence of the facts 10 15 20 25 30 35 30 The current situation invokes the doctrine of estoppets by contract. Estoppet by contract was considered in Peekay lntermark Ltd and Harish Pawani vs Austratia and New Zeatand Banking Group Ltd [2006] EWCA Civ 386 where Lord Justice Moore - Bick stated in paragraph 56 that the terms of the contract give rise to an estoppe[ and a party cannot be attowed to deny the facts and matters upon which they agreed (circumstances on which the contract was based. He stated that: 5 and matters upon which they have agreed, at least so far as concerns those aspects of their relationship to which the agreement was directed. The contract itsel.f gives rise to an estoppet: see Colchester Borough Council v Smith [1991] Ch. 448, affirmed on appeal [1992] Ch. 421. The contract has terms and the words in them speak for themsetves. By the act of the Ptaintiff, he endorsed a land sate agreement and executed a transfer deed. Being an adutt of sound mind and signing a document whose terms expressty indicate the intention of the parties, he cannot be altowed to depart from the terms except on grounds that woutd invalidate a contract. The case of the ptaintiff was not that the sale agreement was obtained by fraud, or that he Lacked capacity or was intimidated or acted under duress. There was no case of misapprehension of facts. The pl.aintiff asserted that he signed two agreements. One a loan agreement and another a sate agreement. There is no evidence of a written loan agreement and its existence was not proved. The agreements, if the loan agreement is proved to exist, woutd be contradictory. The sate agreement whose terms I wit[ reproduce betow is an outright sate though it leaves an escape clause for the vendor to rescind the agreement and refund what the appettant had paid for the Land with interest. The agreement further disctoses, in its terms, that the ful.t consideration was paid because the respondent by appending his signature thereto agreed that the ful.[ price was paid. The ptaintiff did not sue for the batance of the consideration. ln short section 92 (a) does not hetp the respondent's assertion of a loan agreement to contradict or vary the sale agreement. There is no loan agreement on record and what can be inferred is based on the express wording of the contract that merety has a power of rescission of the agreement and refund of shittings 212,000,000/= with interest in the event the pl.aintiff (now the respondent in this appeal.) rescinded the sate agreement. The learned trial. Judge reached the correct conclusion on this. 10 15 20 25 30 31 ln terms of section 92 (b) of the Evidence Act, rt cannot be said that there existed a separate oraI agreement on any matter on which exhibit Pl is 35 5 sitent. The Pl.aintiffs testimony was that he signed two agreements or there were two written agreements. Section 92 (b) of the Evidence Act does not permit the oral testimony to vary or contradict the terms of the land sate agreement in the circumstances of this appeat. The sate agreement coutd be interpreted to aLl.ow for rescission and refund with interest and this coutd be interpreted as the atteged [oan. The wording of the contract shows that it was an agreement to setl [and. ln terms of section 92 (c) of the Evidence Act, there was no separate ora[ agreement discLosing a condition precedent and exhibit Pl wou[d stand. ln terms of section 92 (d)of the Evidence Act, the case of the respondent was not that he had a distinct subsequent oraI agreement to rescind or modify exhibit Pl and the section does not permit departure from exhibit Pl, ln terms of sections 92 (e) and (f) of the Evidence Act, the sections deat with the existence of any usage or customs not expressly mentioned or any fact to show the manner of the language of the exhibits relating to existrng facts. The subsections do not appty to the circumstances of the appeat. Before taking leave of the matter, I have read through the sate agreement admitted as exhibit Pl. Exhibit Pl is a document that is capabte of disctosing an intention to refund the purchase money or the consideration for the sale of the land with interest under the terms of the sate agreement. lt provides as f ottows: ".... 1. ln considerataon of Shs. 272,000,000/= (shil.tings two hundred and seventy - two mitlion onl.y) the Vendor has sotd and the Purchaser has purchased the properties described above. 2. The Purchaser has paid to the Vendor Shs. 272,000,000/- (Shitl.ings Two hundred seventy - two mi[[ion onl.y) in settLement of totaL purchase price. The Vendor by signing this agreement acknowledges receipt of the said consideration. 3. The Vendor has executed Transfer forms in favour of the Purchaser. 4. The Vendor covenants that he has a good and unimpeachable titte to the properties forming, the subject matter of this agreement and further covenants that on the date of closing, the property shall be free and clear of 15 20 25 30 35 10 32 5 mortgage, [iens, encumbrances, charges and ground rents payabte, KCC rates and utitity charges, other outstanding biLts, and ctaims and shatl provide such documents and evidence in support thereof as may be ... by the purchaser, The Vendor covenants that he has atl the necessary consents to conclude this agreement and undertakes to indemnify the Purchaser against any adverse claims to the titte to the property and further indemnify the Purchaser against any cost he may incur owing to the Vendor's defect in titte. lf the contract is rescinded the vendor shatt within one week after receipt of such notice given by the purchaser repay to the purchaser a[L the amount of his purchase price but with interest and the purchaser shatl return forthwith aL[ abstracts beLonging to the vendor. The parties wit[ execute such deeds and documents and do aL[ such further acts and things as may be necessary to implement the intent of this agreement. The certificate of title sha[L be handed over to the purchaser after fu[[ payment of the purchase price. The purchaser shatl take possession of the land and enjoy futl use thereof with effect from 17'h January, 2007. ..." The agreement was executed by the parties on the l7th of January, 2007 and the purchaser was free to take futl possession with effect from 17th January 2007, the date of the agreement. lt was envisaged by the parties that the contract coutd be rescinded whereupon and within one week of notice to rescind, the Purchaser woutd be refunded its money with interest and would return "at[ abstracts". The term abstracts in context seems to impty any instruments affecting titte to the suit property. The learned triat judge found that the agreement raises some questions (raises eyebrows) but found it to be val.id. I can see that the questions inctude whether the futt purchase price indicated in the sate of [and agreement had been paid. To me, the question is whether this woutd lead to an action to invatidate or avoid the agreement. To do this, one woutd have to admit oral testimony to contradict the acknowtedgement of the ptarntiff that he received the purchase price. The ptaintiff actuatl.y denied receiving the futt purchase price but had not exercised the option to rescind. However, no attempt was made by the ptaintiff in the amended pLaint to impeach the land sate agreement. ln Paragraph 6 (d) of the Ptaint, the pl.aintiff averred inter alia that as security for a loan transaction, he 10 15 20 25 30 35 33 5 executed powers of attorney in the first defendant's favour and a sale agreement which purported to indicate Shs. 272,000,000/= as consideration but the plaintiff never received this consideration. That [ess than three months, into the agreed srx month's period within which he was to repay the loan, the defendant transferred the property to the 3'd Defendant without the ptaintiff's consent or any default in the payment of monthty interest. What was chattenged was the transfer of the property to the 3'd Defendant. Further the period of six months coutd not be admitted as the sate agreement does not disctose such information. The agreement shows that the respondent had a right, with notice to the second appettant, to rescind the agreement and refund the money he had received with interest. The fact that he had signed an agreement indicating that he had received shil.tings 272,000,A001= yet at the same trme the agreement provides for repayment of the purchase price after rescinding the agreement lends credence to the notion that the respondent, if he so wished, cou[d have the property back by rescinding the agreement provided he paid back 272,000,000/= with interest. The rate of interest was not expressty provided for and oral evidence coutd be admitted for that purpose. There coutd be a dispute as to whether this was an unconscionabte agreement amounting to unjust enrichment of the appettants and a court of [aw coutd consider the issue in tight of the evidence on the merits. The transfer of the property to a third party coutd not extinguish the right of the respondent to seek to recover the property or the monies worth from the parties privy to the sate agreement. The issue of the third party receiving a transfer retates to whether they are bona fide purchasers for vatue. Having transferred att his rights, and granted immediate possession to the appettants, this was impossibte for the respondent to argue. The intention of the parties under the express terms of the contract of sate attowed the respondent power to get the property back but under unconscionabte terms. The particulars of fraud averred in the ptaint by the ptaintiff inctuded transfer of the property when it was meant as security for a loan. Second[y 10 15 20 25 30 35 34 5 the transfer was made to a third party which was not privy to the agreement and without consent. (See page 17 of record) ln the premises, the agreement speaks for itsetf and the Court of Appeal. erred to admit oral testimony about a written loan agreement when exhibit Pl was sufficient materiaI from which to determine the intention of the parties. ln General Parts (U) Ltd vs Non - Performing Assets Recovery Trust; Supreme Court Civit Appeat No. 5 of 1998, Mutenga JSC apptied sectron 90 of the Evidence Act and hetd that a contract which is reduced in the form of a document has to be proved by production of the document itsel.f. ln this case no written loan agreement was produced or proved. Further, in General Parts (U) Ltd vs Non - Performing Assets Recovery Trust (supra) the Supreme Court atso considered section 9'l of the Evidence Act. Mutenga JSC, on the issue of estabtishing the intention of the parties to a written contract, hetd that the rute of exctusion of oraI evidence in such cases. ...is founded on a presumption that what is written in the contract reftects fuLty what the parties agreed to be bound by. lt se ...(shieLds) those agreed terms from unwarranted aLteration and unnecessary disputes. The presumption, however, is not absotute. Thus the presumption can be rebutted in circumstances set out in paragraphs (a) - (f) ln other words, for the presumption to be rebutted and another evidence admitted one has to prove any of the grounds under section 92 (a) - (f) which I have set out above. As I eartier heLd, those exceptional grounds have not been proved. Even if the agreement raises eye brows or is even vague under a certain ctause, the vagueness cannot be resotved by catl.ing orat evidence. ln Keshavlal Lal.tubhai Patel vs Lal.bhai Trikumtat Mil.ts Ltd fl958] AIR 512, the Supreme Court of lndia when considering a section of the Evidence Act which is in pari materia wilh the Ugandan section hetd that: lf, on a fair construction, the condition mentioned in the document is hetd to be vague or uncertain, no evidence can be admitted to remove the said vagueness or uncertainty. The provisions of s. 93 of the lndian Evidence Act are clear on this point. lt is the language of the document atone that wi[[ decide the question. lt would not be open to the parties or to the court to attempt to remove the defect 35 10 15 25 30 35 20 5 of vagueness or uncertainty by retying upon any extrinsic evidence. Such an attempt wou[d reatty mean the making of a new contract between the parties. That is why we do not think that the appettants can now effectivety raise the point that the plea of vagueness shouLd not have been entertained in the High Court. The resutt is we confirm the finding of the High Court on the question of vagueness or uncertainty of the agreement to extend time and that must inevitabty lead to the dismissaL of the present appeat. Further in Jahuri Sah & 0thers vs Dwarka Prasad Jhunjhunwata and Others (1968) (1) SCJ 315, the Supreme Court of lndia hetd that oraL testimony or other extrinsic evidence can onty be admitted if it does not have the effect of modifying or affecting the written contract. It is true that he admits the existence of a deed of adoption and of its non- production in the court. This admission, however, would not render oraL evidence inadmissibLe because it is not by virtue of a deed of adoption that a change of status of a person can be effected. A deed of adoption merety records the fact that an adoption had taken pLace and nothing more. Such a deed cannot be [ikened to a document which by its sheer force brings a transaction into existence. lt is no more than a piece of evidence and the failure of a party to produce such a document in a suit does not render oral evidence in proof of adoption inadmissibLe. ln this case the loan agreement that the ptaintiff attempted to introduce in evidence has the effect of modifying and in fact fundamentatty changing the nature of the transaction between the parties contrary to the barring of such evrdence under section 91 and 92 of the Evidence Act, The oral testimony of an atleged written loan agreement was inadmissibte for this 30 reason 10 20 ?q. 35 The above finding resotves grounds 2 and 4 of the appeat. The Court of Appeat woutd not have reached the conclusion they did that the transaction between the parties was a loan and not a sale of Land had they not admitted oraI testimony contrary to sections 91 and 92 of the Evidence Act. I woutd in the premises attow grounds 2 and 4 of the appeat. 36 15 10 15 20 The question of security for a loan does not arise in tight of my f indings on grounds 2 and L and I woutd resotve ground 3 of the appeat in the af f irmat ive. The respondent having signed the sa[e agreement and having not sought to impeach it was bound by its terms. Ground 1 of the appea[ therefore succeeds as the Court of Appeat erred to find that there was no consensus ad idem in the parties' execution of the sa[e agreement exhibit Pl. tr1 A"^*!- 202L Dated at Kampata the day of -s ( rq \o \,,. 37 5 ln the premises I woutd attow the appeat in its entirety with costs in this court and the courts betow. I woutd make an order setting aside the judgment and order of the Court of Appeal. and restore the judgment of the High Court. l)- Christopher Madrama lzama Justice of the Supreme Court &-, % -dl-a-, THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA (CORAM: OWINY-DOLLO, CJ; MWONDHA; TUHAISE; MUSOKE; MADRAMA;J}SC) CIVIL APPEAL NO. 31 OF 2021 1. BEN KAVUYA 2. GLOBAL CAPITAL SAVE (2004)LTD 3. RUTUNGU PROPERTIES LTD... .....APPELLANTS VERSUS WAKANYIRA GEORGE DAVID.... .......RESPONDENT (Appeal nrising from tle judyrrcnt and orders of the Court of Appenl before Hon. Justices Richnrd Buteern, DCl, Cheborion Barislnki nnd Hellen Oburn, llA, in Cit,il Appenl No. 36 of 2010, dnted 12th October, 2021) I UDGMENT OF PERCY NIGHT TUHAISE, TSC. I have had the benefit of reading in draft the Judgment prepared by *y learned brother Hon. ]ustice Christopher Madrama, lSC. I agree with his decision and conclusions that this appeal be allowed with the orders made therein. ^\t-\ Dated at Kampala, this ...l.d.... day of .... !r:\x--.... ...2024. Percy Night Tuhaise justice of the Supreme Court ( wl b 4 a THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA CIVIL APPEAL NO. 31 OF 2O2L 1. BEN KAVUYA 2. GLOBAL CAPITAL SAVE 2OO4 LTD 3. RUTUNGU PROPERTIES LTD: : : : : : : : : : : : : : : : : : : : : : : : : : : : :APPELLANTS VERSUS WAKANYIRA GEORGE DAVID: : : : : : : : : : : : : : : : : : : : : : : : : : : RESPONDENT (Appeal from the decision of the Court of Appeal (Buteera, DC); Cheborion and Obura, tlA) in Civil Appeal No. 36 of2010 dated lZh October, 2021) CORAM: THE HON. THE CHIEF JUSTICE ALFONSE OWINY.DOLLO HON. LADY JUSTTCE FArTH MWONDHA, JSC HON. LADY JUSTICE PERCY NIGHT TUHAISE, JSC HON. LADY JUSTICE ELIZABETH MUSOKE, JSC HON. MR. JUSTICE CHRISTOPHER MADRAMA IZAMA, JSC JUDGMENT OF ELIZABETH MUSOKE, JSC I have had the advantage of reading the judgment prepared by my learned brother Madrama, JSC. For the reasons which he gives, I, too, would allow the appeal and make the orde rs that h e proposes. Dated at Kampala this r% ( day of. ........2024. Elizabeth Musoke lustice of the Supreme Court rl tl >4 w THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA CORAM: OWINY-DOLLO CJ; MWONDHA, TUHAISE, MUSOKE AND MADRAMA JJSC CIVIL APPEAL NO. 3T OF 2021 1. BEN KAVUYA 2. GLOBAL CAPITAL SAVE 2OO4 LTD 3. RUTUNGU PROPERTIES APPELLANTS VERSUS WAKANYIRA DAVID GEORGE RESPONDENT (Arisinq from the decision of the Court of Appeal in Civil Appeal No. j6 of 2010 before Buteera DCJ; Cheborion and Obura, JJA dated 12'h October 2021) JUDGMENT OF OWINY-DOLLO; CJ I have had the benefit of reading in draft the judgment of my learned brother Madrama, JSC, and I concur with the reasoning, conclusions, and orders proposed therein. Since Mwondha, Tuhaise, Musoke, JJSC, also agree, orders are hereby issued in the terms proposed by Madrama JSC in his judgment. Alf onse C. O(vfuy - Do \":1i.......... 2024 \o llo '*^-=&- v\ Dated, and signed at Kampala this .{.fl. day of ... Chief Justice clL-.02 (r( ul\ (CORAM OWINYI-DOLO, CJ, MWONDHA, TUHAISE, MUSOKE, MADRAMA; JJSC) CIVIL APPEAL NO 31 OF 2O2I (1)Ben Kavuya (2) Global Capital Save 2004 Ltd (3) Rutunza Propcrties Ltd Appellants Versus Wakanyira George David Respondent (Appeal aising from the judgnent and decision of Court of Appeal Ciminal Appeal No. 36 of 2O10 before Butera, DCJ, Chebron and Obura JJA dated 12rh October,2021) JUDGEMENT OF FAITH MWONDHA JSC I have had the benefit of reading in draft the judgment of my learned brother Madrama Izama, JSC. I concur with the analysis and decision that the appeal would be allowed with the orders proposed. I hasten to add that the record of appeal liled in Court and received in the registry on 17th December, 2O2l was very clear. If the Court of Appeal properly reappraised and re- evaluated the evidence in accordance with its role as a first appellant Court, it would not have come to thc decision it came up with. The Court ofAppeal would be set aside accordingly. Dated at Kampala u.'lis .......[fi ]]ay ot ..... n-Qp-a4;a*7... \J 2024. Faith Mwondha JUSTICE OF THE SUPREME COURT ( t^,b .-\t-,.- (J' tu %1 THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT KAMPALA ttl.,..r,O-t r-o