EQUITY AND TRUSTS L2108(not retake) 24/09/2021

1900701778
19/U1778/PS
NUMBERS ATTEMPTED; 4,1,5,6

NUMBER 4; According to the high court decision in Singh Bhambra 2003, a bonafide

purchaser also referred to as a bonafide purchaser for value without notice refers to an

innocent party that purchases property without notice of any other party’s claim to the title of

that property and without actual or constructive notice of any defects in, infirmities, claim or

equities against the sellers title. This is one who has in good faith paid valuable consideration

for the property without notice of prior adverse claims. The doctrine of notice on the other is

one whose sole purpose is to prevent a buyer of a superior title from setting it up against prior

or earlier owners of inferior interests which affect the property. The effect of this is that the

buyer of the legal estate with notice of prior equitable interest affecting the estate takes it

subject to those prior equitable interests.

The doctrine of notice is subdivided into three types as explained; actual notice which consists

of personal knowledge of prior equitable interests affecting the property the buyer intended to

buy, constructive notice which is defined in the case of Wiliamsom v Brown as where a

purchaser has knowlege of any fact sufficient to put him on inquiry as to the existance of some

right or title in conflict with that which is about to purchase, imputed notice which is

established through agency law that a notice to an agent is notice to the principal.

In the case of David Sejjaka Nalima v Rebecca Musoke, it was decided the principle that a

bonafide purchaser for value cannot have his transfer defeated by fraud per se and therefore is
legally protected if they are claiming honestly as enshrined in section 181 of the registration of

titles act. I therefore disagree with the statement that the principles that govern the doctrine of

notice have effectively rendered the idea of a bonafide purchaser for value utterly useless and

redundant. In my view the doctrine of notice has actually acted a measure to check on the

efficiency of the use of the idea of a bonafide purchaser in the courts of law as explained in the

cases below.

In the case of Labinjo v Olufunmize , the plaintiff was a beneficiary under trust and the trustee

sold the property. The defendant claimed that he was a bonafide purchaser for value without

notice however he admitted not carrying out inquires to ascertain whether the property was

subject other interests. It was held that the defendant had constructive notice of the plaintiff

and therefore was not a bonafide purchaser. From this case it is right to infer that the idea of

bonafide purchaser is useful so long as one is able to prove under the doctrine of notice that

they in good faith did all it took to ensure that there were no other prior interests in the

property.

The doctrine of notice further from rendering the idea of bonafide purchaser useless ,goes

ahead to prevent parties from unjustly benefitting from the idea of being bonafide . The

doctrine of notice confers on the purchaser a duty to acquire all knowledge of any existing

interest in the property in order to qualify to be bonafide purchaser for value. In the case of

David Sejjaka v Rebecca Musoke where the appellant’s agents had known prior of the alleged

fraud concerning the disputed property,it was held that where a party abstains from making

inquires for the fear of learning the truth about the property he is purchasing, that party may

be found not to be a bonafide purchaser for value and the fraud may be properly ascribed to
him. This depicted the fact that the doctrine of notice ably promotes fairness,good conscious

and natural justice in exercising the idea of bonafide purchaser.

The doctrine of notice also controls fraud acquisition by parties who seek to claim interests in

property as bonafide purchasers under section 181 of the registration of titles act. In the case

of Gladys Beyangire v DFCU leasing, the argument that the fourth defendant was a bonafide

purchaser without notice was untenable since he has notice of a suit challenging ownership of

the property. It was held that section 181 RTA was inapplicable since it only applies to cases

where a bonafide purchaser purchases from another person who acquired the property

fraudulently but where he or she has no notice of the fraud.

Therefore, it is only right to assert that the doctrine of notice carries out the duty to protect and

ensure proper employment of the idea of a bonafide v purchaser whilst maintaining fairness,

good conscious and natural justice in the courts of law.

Number 1;According to the Blacks law dictionary, equity is the system of law or body of

principles originating from the English court of chancery and superseding the common-law

when the two conflict. Equity refers to whatever is just or right in man’s being with fellow man.

Equity in its ordinary meaning refers to right doing, honesty, good faith and ethical dealings in

agreements between individuals. The juristic concept of equity is divided into two categories

namely; the general concept refers to a judicial body’s power to administer the law justly taking

into account the special facts of a particular case while the technical juristic concept refers to

the special department of the English legal system which was created, developed and
administered in the court of chancery. The definition of equity is therefore a proper reflection

of what the entire course units in the following ways.

In the course, we study maxims which clearly reflect the fairness as a definition of equity.

Maxims serve as a set of general rules which are said to govern the way in which equity

operates. They illustrate the qualities of equity as being more flexible as compare to common

law. Some of them include, equity follows the law ,where equities are equal the first in time

prevails used in the case of Ndigejjerawa v Kizito where court held that Kizito’s equitable

interest had priority because it was created before Ndigejjerawa’s. This depicts that maxims

studied are a clear reflection of the employment of fairness, and natural justice in deciding

cases.

We see the definition of equity in the doctrine of notice. The sole purpose of the doctrine of

notice is to prevent a buyer of a superior title from setting up against the prior or earlier

owners of inferior interest which affect the property. This doctrine reflects and promotes the

principle of fairness and natural justice by ensuring that parties intending to purchase property

first to acquire knowledge on previous smaller interests and compensate them accordingly. In

the case of Sejjaka v Musoke, it was held that where a party abstains from making inquiries

about the property he or she is purchasing, that party is not considered a bonafide purchaser

and will be charged with fraud.

We studied equitable estoppel which clearly relates to fairness. Under estoppel, equity

prevents a land owner who has made an imperfect gift of some estate from asserting his legal

title against the done. Say in the class of Rasmussen v Rasmussen, a farmer promised his son
that when he passed, he would receive a large parcel of land. The son worked for his father in

reliance on the promise for a number of years however the father failed to adhere to the

promise on passing. The son brought a claim under equitable estoppel and acquires the land

hence ensuring natural justice. Therefore the principles of equity which are fairness, good

conscious and natural justice are clearly reflected in the different topics studied under the

course.

NUMBER 5;(c) According to Equity and Trusts by Bakibinga, power of appointment refers

to the right to dispose of an estate or interest in property rather than ownership of an estate or

interest. In Re Weekes settlement, Mrs.Slade gave her husband authority to distribute her

estate in favor of their eight surviving children.

(b)Donatio mortis causa; is gift made intervivos /alive which is conditional upon and which

takes effect upon the death of the donor. It gives rise to a condition subsequent in where by

the gift can divest if the person doesn’t die. The case of Cain v Moon established the essentials

of a valid donotio mortis causa to include, a gift must be made in contemplation though not

necessarily in expectation of death, the donor must part with dominion of the subject matter,

the gift can revert to the donor if he should recover. In the case OF Mukobe v Wambuwu, the

appellant’s father was sick and gave out the pieces of land to his daughter but later regained his

senses and revoked the gift made.

(d)Resulting trusts refer to trusts where property has been transferred to another but the

beneficial interest returns or results to the settlor or transferor. It is an equitable reversion that

arises by operation of the law whenever a person has created an express intentional trust but
the trust fails or doesn’t dispose completely of the trust property hence this undisposed off

property goes back to the settlor in a resulting trust.

(e) According to Unlocking tort by Mohammed Ramjohn, a discretionary trust is one whereby

the trustees are given a duty to exercise their discretion in order to distribute the property in

favor of a selected group of persons. The beneficiaries, individually considered, do not have an

interest in the property but have only a hope of acquiring an interest in the property, prior to

the exercise of the discretion by the trustees.

(a)Completely constituted trusts; these are trusts in which the trust property has been finally

and completely vested in the trustees. The basic principle applicable in determining whether a

trust has been validly constituted was discussed in the case of Milroy v lord where it was stated

that in order to render a voluntary settlement valid and effectual, the settlor must have done

everything which according to the nature of the property compromised in the settlement was

necessary to be done in order to transfer the property and render the settlement binding upon

him.
NUMBER 6;

THE REPUBLIC OF UGANDA

THE TRUSTEES ACT CAP 104

TRUST DEED CREATING A CHARITABLE TRUST

Of

THE TUMUHAIRWE GROUP OF COMPANIES

THIS TRUST DEED is made this 24th day of September 2021

Between

MR. JACKSON TUMUHAIRWE of P.O. box 1515 Kampala Uganda (hereinafter referred to as the

founder as may be applicable)on the one part

And

1.AYEBARE DENISE

2.ARIHO EMMANUEL

3.AHABWE DELIZA

All of P.O box 1515 Kampala, Uganda (hereinafter collectively referred to as the trustees which

expression shall where the context admits include their survivors)

NOW THIS TRUST DEED WITNESSETH as follows;

1.1: Thereafter the trustees may dissolve the charity if they decide that it is necessary or

desirable to do so. In this case two thirds majority of the trustees will make the resolution.

1.2: Any assets of the charity that will be left after the charity’s debts have been paid shall be

given :

1.2.1: to any charity for use for particular purposes which fall within the charity’s objectives.

1.2.2:to the Martyrs way association for their general activities in line with the benefits of the

trustees.

1.3; while the founder/trustee is alive, he shall make all decisions regarding the charity

including when and why to dissolve it.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands the day and year first

before written.

Signed by the said:

TUMUHAIRWE JACKSON tumuhairwe Jackson(founder)

AYEBARE DENISE ayebare denise(trustee)

ARIHO EMMANUEL ariho Emmanuel(trustee)

AHABWE DELIZA ahabwe deliza(trustee)

All in the presence of : agaba daisy t.(witness)