The concept of fraud in Land Transactions (perspective Uganda).

An act of dishonesty, breach of trust, misrepresentation which is not innocent

 The Supreme Court decision of Frederick J. K. Zaabwe versus Orient Bank & 5 Others; SCCA NO. 4/2006; for the defined fraud;

“Fraud, according to Black’s Law Dictionary means an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him/her or to surrender a legal right and fraudulent means acting willfully and with specific intent to deceive or cheat, ordinarily for purposes of either causing some financial loss to another or bringing about some financial gain to oneself”.

This case further defined fraud to mean;

“Anything calculated to deceive, whether by a single act culmination, or by suppression of truth, or suggestion of what is false, whether it is by a single, direct falsehood or the  innuendo by speech or silence, word of mouth, or look or gesture …….. a generic term embracing all multifarious means which human ingenuity can devise and which are resorted to by one individual to get advantage over another by false suggestions or by suppression of truth and includes all surprise, trick, cunning, dissembling an any unfair way by which another is cheated…..”

Examples

• Forgery

• Uttering a false document

• Obtaining registration to defeat an unregistered interest

• Deliberately refusing to find out the truth

• Under declaration of value to deny government revenue

Section 190 of the Registration of Titles Act provides and describes

 Fraudulent acts that amount to offences in Land Transactions.

 If any person willfully makes any false statement or declaration in any application to bring land under the operation of this Act

 or in any application under Part V of this Act ( Person claiming title by possession. A person who claims that he or she has acquired a title by possession to land registered under this Act may apply to the registrar for an order vesting the land in him or her for an estate in fee simple or the other estate claimed)

 or in any other application to be registered under this Act as proprietor of any land, lease or mortgage, or suppresses or conceals or assists or joins in or is privy to the suppressing, withholding or concealing from the registrar of any material document, fact or matter of information, or willfully makes any false affidavit or signs any false certificate required under the authority or made or signed in pursuance of this Act,

 or if any person in the course of his or her examination before the registrar willfully and corruptly gives false evidence, or if any person fraudulently procures, assists in fraudulently procuring or is privy to the fraudulent procurement of any certificate of title or instrument

 or of any entry in the Register Book or of any erasure or alteration in any entry in the Register Book, or knowingly misleads or deceives any person herein before authorised to require explanation or information in respect to any land or the title to any land under the operation of this Act in respect to which any dealing is proposed to be registered,

 that person commits an offence and is liable on conviction to imprisonment for a period not exceeding three years or to a fine or to both such imprisonment and fine; and any certificate of title, entry, erasure or alteration so procured or made by fraud shall be void as against all parties or privies to the fraud.

The Supreme Court of Uganda, on 19th September 2019, ruled that under declaration of consideration and failure to disclose developments on land during the process of valuation for purposes of transfer amounts to fraud that renders a land transfer void.

Delivering the lead judgment of the Court in SCCA No.8 of 2018 Betty Kizito vs David Kizito Kanonya & 7 Others, Lady Justice Prof. Lillian Tibatemwa-Ekirikubinza, with whom all the other 4 Justices agreed ruled that the law requires that true consideration in land transfers must be declared in view of Section 92(1) of the Registration of Titles Act.

Her Lordship approved as good law the 1982 High Court decision of Samuel Kizito Mubiru & Another vs G.W.Byensiba & Another which held that  a buyer is not a bona fide purchaser where he inserts a lesser figure on a transfer form as consideration than he actually paid. She unequivocally held that concealment of true consideration amounts to fraud.

Section 136 of the Registration of Titles Act states that;

Except in the case of fraud, no person contracting or dealing with or taking or proposing to take a transfer from the proprietor of any registered land, lease or mortgage shall be required or in any manner concerned to inquire or ascertain the circumstances in or the consideration for which that proprietor or any previous proprietor thereof was registered, or to see to the application of any purchase or consideration money, or shall be affected by notice actual or constructive of any trust or unregistered interest, any rule of law or equity to the contrary notwithstanding, and the knowledge that any such trust or unregistered interest is in existence shall not of itself be imputed as fraud.

Section 59 of the Registration of Titles Act provides that a Certificate of title by a registered person is conclusive evidence of ownership of land described therein and once a person is registered as proprietor of land, his title is indefeasible except for fraud.

Section 176 (c) of the Registration of Titles Act states that a registered proprietor of land is protected, save for fraud ‘fraud’.

Section 77 of the Registration of Titles Act is also pertinent.  It provides as follows:-

“Any Certificate of title, entry …. in the Register Book, procured or made by fraud shall be void as against all parties or privies to the fraud.”

Yes it can be cancelled if strictly proved before a court of law.

The burden to prove the alleged fraud however falls on he who alleged it (Per Section 103 of the Evidence Act).

It is trite law that fraud must be strictly proved.  The standard of proof in fraud is higher than in ordinary Civil Suits but not beyond reasonable doubt.

The Plaintiff alleged that the suit property was fraudulently transferred.  The law as stated in Section 101 of the Evidence Act provides that:

“Whoever desires Court to give judgment as to any legal right or liability dependent on the existence of facts which he or she asserts must prove that those facts exist.”

The burden of proving fraud therefore lies on the Plaintiff:  See Miller v Minister of Pensions {1947} 2 ALLERL 372, 373.

Since the allegation is about fraud, the law requires that proof must be almost to the criminal standard of beyond reasonable doubt:  See Kampala Bottlers Ltd. vs Domanico (U) Limited, Supreme Court Civil Appeal No. 22 of 1992.

In a judgment delivered on the 25th day of April 2019 in the case of Hilda Wilson Namusoke & 3 Ors v Owalla’s Home Investment Trust (E.A) Limited Supreme Court Civil Appeal No. 15 of 2017, the Supreme Court held that the commissioner of land registration does not have powers to cancel a certificate of title on the ground of fraud. Prior to this judgement, the powers of the Commissioner of Land Registration with specific regard to cancelling certificates of title due to fraud were unclear.

Under the Registration of Titles Act Cap 205 (1964 edition) the Registrar of Titles (now Commissioner of Land Registration) had powers to cancel a certificate of title on the ground that it was acquired through fraud. This position was confirmed in the case of Edward Rurangaranga v Mbarara Municipal Council Supreme Court Civil Appeal No. 10 of 1996.

However, under the 1998 Land Act as amended by the 2004 Land (Amendment) Act, these powers to cancel a certificate of title acquired through fraud were removed from the Registrar. Courts did not uniformly apply the new position of law. While in some cases such as Sulait Ssemakula v Commisioner Land Registration & Ors; C.R Patel v The Commissioner Land Registration & ors, among others courts held that the Registrar of Titles did not have such powers, others insisted on interpreting the provision of the law broadly to include fraud. This application of the law caused confusion and debate until the Supreme Court’s decision in Hilda Wilson Namusoke & 3 Ors v Owalla’s Home Investment Trust (E.A) Limited,

The Supreme Court in an appeal arising from Hilda Wilson Namusoke & 3 Ors v Owalla’s Home Investment Trust (E.A) Limited, unanimously held that the Commissioner of Land Registration does not have powers to cancel a certificate of title on the ground of fraud. The court reasoned;

1. That upon amendment of the Land Act, all the other grounds which empowered the Registrar of Titles to cancel a certificate of title were imported into the land Act save for fraud. The Supreme Court held that the absence of fraud in the new provision was deliberate.

2. That an allegation of fraud is so serious in nature and is required to be specifically pleaded and strictly proved before a court of law.

3. That whereas fraud is not authorised by the law and is therefore an illegality, fraud is a very special type of illegality.

4. Finally the Supreme Court decided that the Court of Appeal erred in relying on its decision in the case of Edward Rurangaranga which was an authority that expounded a statutory provision that was no longer law at the material time.

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