A search on the register at the Land Offices is enough: Attorney General V Henley Property Developers Limited (Civil Appeal 421 of 2021) [2023] UGCA 1 (09 January 2023)
Background to the case.
The Appellants appealed against the judgement and decree of Wamala J in HCCS No.747 of 2016, wherein they were sued by the Respondent seeking for compensation from them due to the acts of his agent, the Registrar at Mukono Land Office, that had led the Appellants to suffer financial loss (loss of the purchase price of the suit land it had paid to the vendors) that was premised on the cancellation of its title on grounds that a freehold title, in relation to the suit land, had prior been issued to Sugar Corporation of Uganda Limited(SCOUL). The Respondent claimed for payment of adequate compensation, special damages and lost earnings, general damages, interest and costs of the suit arising as a result of cancellation of their certificate of title and the trial court granted the same.
Prior to purchasing the said land, the Respondent conducted three searches on the register at the Mukono District Land Office, and was given search reports that confirmed that indeed the vendors were the owners of the said land. They went ahead and concluded the purchase of the land and paid UGX 6,097,200,000/=. The Respondent went ahead and got registered as the owner of the said land.
Three years after being registered as the owner of the said land, the Respondent received a notification from the Commissioner Land Registration (CLR) of her intention to cancel its certificate of title on grounds that it had been issued in error. On 5th September, 2016, the CLR cancelled the said certificate of title. The Respondent subsequently sued the Appellant because they were aggrieved by the cancellation. One of the contentions of the Appellants in opposition of the suit was that; the Respondent should have done a physical search on the said land as it would have helped them discover that the land was already owned by someone else.
The trial Judge decided the suit in favour of the Respondent. He held that the Respondent had exercised sufficient due diligence by obtaining a search report from the Mukono District land Office. His Lordship further held that information on the register is always correct. The appellant being dissatisfied with the judgement appealed to the Court of Appeal on five grounds.
Ruling of the Court of Appeal
The Court of Appeal in agreeing with the Trial Court observed that under the Torrens system, the register is everything, except in cases of actual fraud on the part of the person dealing with the registered proprietor, such person upon registration of title has indefeasible title against the whole world. As such, a certificate of title is indefeasible except on the ground of fraud, which in this case was not proved. The court further held in agreement with the Trial Judge that assurance is granted to a registered proprietor of land by virtue of the operation of the Torrens system of registration. Security under this system of title is based on four principles which are; indefeasibility (cannot be impeached); registration (title is by registration); the curtain principle abolition of notice or exhaustive inquiry; and assurance (compensation upon detrimental reliance).
Court further observed that the registrar guarantees the accuracy of all the particulars contained on the register and that the register is conclusive evidence of ownership and thus, there is no need to search behind or beyond the certificate of title to ensure proven ownership of the land. Once a person is given such assurance by the custodian of the Land Register, as was the case herein, should such information turn out to be false, a party who has relied upon it to their detriment has a cause of action against the giver of such information irrespective of whether the action or omission of the Registrar was negligent or simply erroneous. Therefore, the Court of Appeal agreed with the findings of the trial court and dismissed the appeal as it was with no merit.
Case decided on the same principle
Kilama V Laker and Ors (Civil Appeal 21 of 2017) [2020] UGHC 171 (27 February 2020)
In this case, His Lordship Stephen Mubiru was elaborate in explaining the “curtain” and “mirror” principles as was in the Court of appeal in the earlier discussed case. He went ahead to observe that; the three fundamental principles which underlie the title registration system and generally accepted are: the mirror principle (that the register reflects accurately and completely all of the current facts material to the title); the curtain principle (that the register is the sole source of information necessary to the purchaser. The register contains all information about the title, historical search behind the registers to verify that the title is good is unnecessary); and the insurance principle (that anyone who suffers a loss should be compensated. Compensation is for loss of rights if there are errors made by the Registrar of Titles about the validity or accuracy of title).
Relevant provisions of the Registration of Titles Act, Cap 230
This decision affirms the provisions of the Registration of Titles Act, Cap 230 particularly Sections 59 and 176 respectively which provide that production of a certificate of title in the name of the registered owner is sufficient proof of ownership of the land except on proof of fraud or illegality.
Effect of the Court’s ruling
In as much as the Register of titles has been “called to alert” by the Court of Appeal, the flipside of this ruling is that in as much as it states the principle of the law as laid down in the Registration of Titles Act, it presents some complications some of which include; ignoring the physical search which is also a very key step in doing due diligence when it comes to land transactions. A physical search is extremely important as one is able to know the actual status on the land by interviewing the neighbors or people you may find occupying the land; something that a search on the register may not be able to reveal. In underscoring the importance of a physical search in addition to a search on the register, the Court of Appeal, in the case of Sir John Bagaine Vs Ausi Matovu CACA 7/96 (29.10.98 at Kampala From HCCS 878/94 at Kampala) held that: lands are not vegetables, which are bought from unknown sellers. Lands are very valuable properties and buyers are expected to make thorough investigations not only of the land but also of the owner before purchase. Therefore, a physical search on the land is as important as the search on the register.
Concluding Observations.
Land is one of the most precious and valuable things one can own and it is therefore prudent that in addition to conducting a search on the register, a prospective buyer should still carry out an additional due diligence of a physical search. This in our opinion, shall go a long way in reducing on land disputes in the country.
Disclaimer: No information contained in this alert should be construed as legal advice from Namara Musinguzi & Co. Advocates or the individual authors, nor is it intended to be a substitute for legal counsel on any subject matter
