5 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

10 1. BEN KAVUYA}
2 GLoBAL CAPTTAL SAVE 2004 LTD)
3 . RUruNGU PRoPERTTES LTD) APPELI.ANTS

VERSUS

WAKANYTRA DAV|D GEoRGE) RESPONDENT

15 (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

20 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
25 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
30 that there was no meeting of the minds between the appettant and
the respondent in retation to the sate agreement.

1
 5 2 That the learned Justices of appeaI erred in taw in finding that the
transaction between the appettants and the respondent was a loan
agreement.
3 That the learned Justices of appeaI erred in taw in finding that the
signed [and sale agreement, a transfer forms and powers of
10 attorney were meant to act as security of a [oan.
4 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.

15 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.
20 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
25 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,
30 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
35 and dismissed the respondent's suit with costs.

2
 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
10 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
15 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
?0 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
25 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
30 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
35 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
 5 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).
10 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).

15 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
20 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
30 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
35 attempt to justify its conctusion, invoked the fottowing theories:
4
 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

10 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
15 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.
20 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
25 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
30 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.

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
10 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;
15 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
20 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

25 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
30 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).
35 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
6
 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
10 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
15 in the event that the respondent fail.ed to repay the toan.

ln reaching itsconctusion, 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
20 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
25 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
30 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
35 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.
7
 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
10 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
15 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
20 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
25 212,000,0001=.

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
30 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
35 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
 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
10 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
15 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
20 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
25 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
30 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
35 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
40 was incumbent upon the frrst and second appettants to prove that the

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
10 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
15 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
20 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
25 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

30 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
35 submissions of the respondent's counseL, the court record actualty reflects
that indeed the first and second appetlants and the respondent signed a
10
 5 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.

Further, the appetl.ants' counse[ submitted that it is true that for a contract
10 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
15 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
20 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
25 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.
30 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
fE the court considered in establ.ishing the true intention of the parties. He

1,1
 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
10 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
15 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
20 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.

25 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
30 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

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 ishighLy 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
10 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

15 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.
20 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
25 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
30 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
35 land or otherwise can only be inferred from the clear terms of the
agreement and possibty other documents executed contemporaneously
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
10 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.

15 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
20 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
25 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
30 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
 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
10 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
15 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
20 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
25 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/= tomake 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
30 272,000,000/= 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
35 month on the Uganda shil.tings 170,000,000/= for the six months. lf this was

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
10 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
15 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
20 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
25 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
30 consensus between the parties to treat it as a true sate agreement.

Ground 3.

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
 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
10 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
15 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
20 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.)

25 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).

30 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[
3s as 4.

77
 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
10 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
1) 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
20 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
30 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
35 RTA. Among the exception to this rute is that of for impeachment on the

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
10 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
15 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:
20 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.

25 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
30 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

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
10 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
15 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
20 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
,q 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.

30 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.
35 The Supreme Court of lndia held that:

20
 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
10 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,
15 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
20 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
25 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
30 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)

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
35 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.

27
 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
10 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
15 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
20 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
25 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
30 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
35 record or that they are so gtaring[y erroneous that the findings by the tria[ court
were perveTSe.

22
 5 I frndthat 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
10 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
15 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
20 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
25 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
30 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.

 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
10 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
15 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:

20 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.
2 That the learned triat judge erred in [aw in hol.ding that the
undervatuation of the suit property and cheating government of
25 stamp duty was not sufficient to invaIidate transfers for the suit
properties.
J That the learned triat judge erred in [aw and in fact in refusing to
award special and general damages when the appeltant was
evicted.
30 4 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.

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
35 was a totaI disregard of the parties' understanding. The Court held that the

24
 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
10 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
15 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.

20 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

25 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,
30 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
1q writing by which he or she is appointed need not be proved.

25
 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.

Explanation2. -Where there are more originals than one, one original on[y need
10 be proved.

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
15 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
20 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
25 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
30 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
35 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
26
 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
10 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.

15 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
20 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[
25 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
30 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
35 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

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
10 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
15 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
20 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-

25 (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
30 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;

(c) the existence of any separate oraL agreement, constituting a condition

precedent to the attaching of any obtigation under any such contract, grant or
35 disposition of property, may be proved;

28
 (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;

10 (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
15 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
20 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
25 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
30 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
35 except on any grounds upon which to discharge a contract between the
parties:

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"

10 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:

15 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
20 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
25 suit or proceeding between himself or herself and that person or his or her
representative, to deny the truth of that thing.

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
30 -
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:

56. ...Where parties express an agreement of that kind in a contractual

35 document neither can subsequentl.y deny the existence of the facts

30
 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.

10 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.

15 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
20 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
25 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
30 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.

35 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
31
 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
10 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
15 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.
20 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
25 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
30 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
35 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

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
10 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
15 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,
20 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
25 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
30 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
35 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

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
10 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
15 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
20 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
25 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
30 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

35 transfer of the property when it was meant as security for a loan. Second[y

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
10 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.
15 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.

20 ...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)

25 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
30 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
35 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
 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
10 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
15 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
20 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.

?q. 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

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
35 the premises attow grounds 2 and 4 of the appeat.

36
 5 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
10 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.

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
15 High Court.
tr1
Dated at Kampata the day of A"^*!- 202L
l)-
Christopher Madrama lzama

Justice of the Supreme Court

20

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(

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37
 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
a

wl b ( 4
 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

wtl
rl >4
 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.
v\
Dated, and signed at Kampala this .{.fl. day of ... \":1i.......... 2024

Alf onse C. O(vfuy - Do llo

Chief Justice

clL-.02 \o
'*^-=&-

(r( ul\
 THE REPUBLIC OF UGANDA
IN THE SUPREME COURT OF UGANDA AT KAMPALA

(CORAM OWINYI-DOLO, CJ, MWONDHA, TUHAISE, MUSOKE, MADRAMA; JJSC)

CIVIL APPEAL NO 31 OF 2O2I

(1)Ben Kavuya
(2) Global Capital Save 2004 Ltd Appellants
(3) Rutunza Propcrties Ltd

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. Iconcur 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... 2024.
\J

ttl.,..r,O-t r-o
Faith Mwondha
JUSTICE OF THE SUPREME COURT

t^,b .-\t-,.-
(J' tu ( %1