The Supreme Court has overturned decisions in a 20-year land dispute involving former property dealer Patrick Kasulu.The dispute dates back to 2004 when a man called Nelson Ochaya Marie, the registered owner of a house on Martyrs Lane in Ntinda, engaged Kasulu, then a prominent property agent and owner of the now-defunct Property Masters, to help him find a buyer for the property.
According to court records, Kasulu advised Ochaya to vacate the house to allow prospective buyers to inspect it easily. Ochaya also handed over the land title certificate to Kasulu for purposes of marketing the property.
Soon after, a businessman identified as Kamenge Deudonne expressed interest in buying the house. Because the lease on the property had expired, Kamenge reportedly asked Ochaya to apply for an extension of the lease before the transaction could proceed. Ochaya complied and handed over the application documents to Kamenge, who promised to process them. Ochaya later lost contact with both Kasulu and Kamenge and assumed the sale process had stalled.
However, he was later shocked to discover that a fresh land grant had been issued in his name and that several entries had been made on the title without his knowledge. The records showed that the property had first been transferred to Kamenge and later sold to John Kabayo, who subsequently used the property as security for a loan from Housing Finance Bank, which registered a mortgage on the title.
The matter resurfaced in August 2012 when Housing Finance Bank advertised the property for sale through a public auction after the loan reportedly fell into default. It was then that Ochaya went to court, arguing that he had never sold the property to Kasulu or anyone else and had never signed transfer documents authorising the ownership changes.
He sued Kamenge, Kabayo and Housing Finance Bank in the High Court, seeking cancellation of the title transfers and the mortgage. Back then, the High Court dismissed his case, ruling against him. He appealed to the Court of Appeal, but the appellate court also upheld the decision, which forced him to seek redress in the Supreme Court.
Now the Supreme Court has found that the lower courts had failed to address the central issue in the dispute. In a lead judgment written by Justice Christopher Izama Madrama, the court faulted both the High Court and the Court of Appeal for dismissing Nelson Ochaya Marie’s case without first determining how Kasulu, who was never registered on the land title, managed to sell the property.
The judges observed that no sale agreement was produced to prove that Ochaya had sold the property to Kasulu, yet Kasulu went ahead and sold it to Kamenge while presenting himself as the owner. The court further held that once Ochaya denied signing the transfer forms, the burden shifted to those claiming he had signed them to prove their authenticity.
The Supreme Court concluded that the alleged sale between Ochaya and Kasulu had never been proved, making Kasulu’s subsequent sale to Kamenge unlawful because it was not conducted by the registered proprietor. However, the court upheld the later transfer of the property to Kabayo and the mortgage registered in favour of Housing Finance Bank, ruling that Kabayo qualified as a bona fide purchaser for value.
The judges also ruled that although there were shortcomings in the formal execution of the mortgage documents, the mortgage itself remained valid because the essential requirements for creating an equitable mortgage had been met. At the same time, the court found that Kabayo under-declared the value of the property to the Uganda Revenue Authority.
According to the judgment, he declared the property value at 440 million Shillings, instead of the actual purchase price of 525 million Shillings. The court directed him to pay the outstanding taxes arising from the under-declaration.
Kamenge, whom the court found liable for fraud, was ordered to refund 525 million Shillings obtained from the transaction and to pay an additional 150 million Shillings in general damages to Ochaya. The total award of 675 million Shillings will attract interest at six per cent per annum from 2012, when the High Court first handled the matter, pushing the amount payable to more than 1 billion Shillings.
Despite being central to the disputed transaction, Patrick Kasulu was not listed as a respondent in the case. The appeal was heard by a panel comprising Justices Percy Night Tuhaise, Mike Chibita, Elizabeth Musoke and Monica Mugenyi
