In a decision that will certainly attract considerable discomfort among land conveyancing practitioners, the Supreme Court has, 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.
The panel hearing the said appeal constituted of Justices Eldad Mwangusya, Faith Mwondha JSC, Prof.Lilian Tibatemwa-Ekirikubinza JSC, Paul Mugamba JSC and Augustine Nshimye Ag.JSC.
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.
The Supreme Court departed, in its reasoning and eventual decision, from the Court of Appeal which had held that misrepresentation of true consideration had no legal effect on the transaction.