A CASE OF BROADWAS CONSTRUCTION V MUSA KAS ULE AND OTHERS

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16

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Broadways Construction Company v Musa Kas Ule and Others (Civil Appeal No. 39 of 1971)
[1971] EACA 16 (22 December 1971)

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IN THE COURT OF APPEAL FOR LAST AFRICA

AT KAMPALA

CORAM: (LAW, AG. V.-P LUTTA AND MUSTAFA JJA.)

CIVIL APPEAL NO 39 OF 1971

BETWEEN
BROADWAYS CONSTRUCTION COMPANY…………………….……APPELLANT

AND

MUSA KAS ULE}

DANIEL SERWANIKO}

SAMWIRI D. MUKASA) …………………………………..……………RESPONDENTS

[Appeal from the judgment and decree of the High Court of Uganda at Kampala (Gaudier J.)
dated 8th April, 1971 in Civil Suit No. 714 of 1970]

22nd December, 1971.

LUTTA, J. A.

The appellant (to whom I shall refer hereinafter as “the plaintiff") sued the respondents as
executors of the will or Besweri Kisalita Mulyanti (to whom I shall refer hereinafter as "the
deceased”) for shs. 10, 500/- as money had and received by the deceased for the use of the
plaintiff and for damages for breach of contract and for an in junction to restrain the respondents
from administering the deceased's estate until the plaintiff's claims are satisfied.

The plaintiff alleged in its plaint that on or about 28th July 1967 the deceased agreed to give a
lease to it in respect of mailo land measuring approximately 2.09 acres comprised in F.C. No.
19650 Plot No. 222, Mailo Register Vol. 1126, Folio 7, at a premium of shs 8,OOO/-, which was
subsequently increased to shs 10,000/-.

The plaintiff further alleged in the plaint that the deceased orally agreed to grant a lease and to
obtain the consent of the Minister of Mineral and Water Resources under the Land Transfer Act
(hereinafter referred to as “Cap.202") thereto and to effect registration of the same) and that'
although the consent was obtained the deceased in breach of the agreement sold the said mailo
land on 29th October, 1968 to one Godfray Lule and consequently the lease could not be
registered.

In their defence the respondents stated that the contract entered into between the plaintiff and the
deceased was done in contravention of section 2 of Cap.202 and therefore it was an illegal
contract which is not enforceable; they denied that the contract was subject to the condition of
obtaining the Minister's consent under Cap.202.

'The trial judge held that the whole transaction was riddled with illegalities and dismissed the
suit.

The plaintiff now appeals to this Court against that decision on three grounds! the main ground
being that the learned judge erred in holding that the plaintiff's claim was based on an illegal
contract.

Mr. Korde, for the plaintiff argued that when the minister’s consent was granted on the 8th
October 1968 the contract between the deceased and the, plaintiff became effective and therefore
the subsequent sale of the said mailo land to Godfray Lule on 29th October, 1968 was a breach
of that contract.

On the question of illegality of the contract Mr. Korde argued that a contract expressed to be
subject to the minister's consent is not within the mischief of section 2 of Cap.202, as it is s
contingent contract - which is inchoate at the time it is made; it became Choate and effective as
soon as the consent was obtained.

Relying on the cases of Habib Devji v. P.C. Tarmohamed and Another [1960] E.A. 1022 and
Reginald Ernest Vere Denning v. David Geoffrey Edwardes and Another [1960] E.A. 755 he
submitted that the test was whether the contract was valid at the time it was made and that in the
instant case the contract between the deceased and the plaintiff was a valid contract at the time it
was made, as the contract to enter into possession is not in itself illegal; it is possession without
consent which is illegal) and in any event an offence committed subsequent to a valid contract
cannot vitiate the contract.He also submitted that even if illegal possession vitiated the contract i
the claim for money had and received was not affected by the illegality of possession.

Mr. Binaisa, for the respondents, relying on the case of Mistry Amar Singh v. Serwano Wofunira
Kulubya [1963] E.A. 408 submitted that the object of Cap.202 is to protect Africans by
regulating an,}' transfer of mailo land and by controlling the sale of mailo land to non-Africans
as a matter of public policy and thus the contract in the instant case was illegal as the Minister's
consent had not been obtained as required by section 2 of Cap.202 and as the lease, which was
void ab initio, could not be varied by an oral agreement purporting to incorporate the Minister's
consent as a condition of the lease.

Mr. Binaisa further submitted that a contract to take mailo land on lease without an application
for the Minister's consent is illegal and that in any event the contract, if it is subject to the
consent, must expressly state that it is contingent upon the consent being obtained.
The issue which arises in this appeal is whether the contract between the deceased and the
plaintiff is illegal and void ab initio and consequently the plaintiff cannot recover moneys paid to
the deceased under the illegal contract.

Section 2 of Cap.202 (omitting the provisos which are not relevant to this case) provides as
follows_

“No non-African or any person acting as his agent shall without the consent in writing of the
Minister occupy or enter into possession of any land of which an African is registered as
proprietor (other-wise than "by receiving rents and profits payable by non-Africans who have
gone into occupation or possession with the consent of the minister) or make any contract to
purchase or take on lease or accept a gift inter vivos or a bequest of any such land or of any
interest therein other than a security for money “

The wording of this section is very wide indeed and clearly shows that the intention of the
legislature was to prohibit both the occupation or entering into possession by a non-African of
mailo land whose registered proprietor is an African by or through any transaction! whatsoever;
to which the Minister has not given his consent; and to make any contract to purchase or to take
on lease or accept any interest in the same without the consent of the Minister.

In other words; the wording of section 2 is so wide as to render any transaction which does not
have the Minister's consent illegal.

A breach of section 2 becomes punishable under section 4(1) of Cap.202. Thus to try to enforce a
transaction or a contract which did not comply with the requirements of section 2 of Cap.202
would be trying to enforce an illegal transaction or contract.

It is not disputed that the minister’s consent was obtained after a period of over one year (in fact
14 months) from the date of the contract and after the plaintiff had already taken or entered into
possession of the said mailo land.

Thus under section 4(1) of Cap.202 the plaintiff had incurred liability for a criminal act and
could have been prosecuted for a breach of section 2 of Cap.202.

However Mr. Korde contended that the plaintiff and the deceased orally agreed that the said
contract would be subject to the condition of the deceased obtaining the Minister's consent. In
other words, the said contract was contingent upon the consent of the minister being granted.
Against this contention Mr. Binaisa argued that an oral contract cannot vary the terms of a
contract in writing in respect of the sale or lease of the land and submitted that the contract which
must be in writing must expressly state that it is contingent upon the consent being obtained.

The respondents in their defence denied that the contract was subject to the condition of
obtaining the minister's consent. Although the learned judge dealt with this matter, he did not
make a finding as to whether or not the contract was contingent upon the consent of the minister
being obtained. It seems to me that a decision on this point was not necessary as the learned
judge found :-

a)

the plaintiff agreed to take on lease the said mailo land in respect of which it had paid all moneys
due from it under the lease,

b)

the plaintiff was given full access to the said mailo land and a letter (Annexure B) to establish its
ownership,

c) plaintiff had entered into possession of the said mailo land and paid rent for some places to
keep its plant and

d) the formal consent from the Minister was sought more than one year after (a)s (b) and (c)
above.

In my opinion whether or not the contract was contingent the plaintiff should not have agreed to
take on lease the said mailo lands paid rent and other moneys in respect of places to keep its
plant and entered into possession of the said mailo land without first obtaining the Minister's
consent.

The plaintiff was all along in breach of section 2 of Cap.202 and in my view the Minister's
consent subsequently given on 8th October, 1968 did not expunge the plaintiff's liability for its
criminal acts.

The contract and the entering into possession of the said mailo land before the consent was given
were prohibited by law and the contract was therefore void ab initio, and nothing that was done
subsequently (that is, the granting of the consent by the Minister) had the effect of rendering it an
enforceable contract, particularly in view of section 4(1) of Cap.202.

In my view the cases of Habib Devji v. P.C. Tarmohamed and Another (supra) and Reginald
Ernest Vere Denning v. David Geoffrey Edwardes and Another (supra) are distinguishable in
their details.

In the former case the lease was entered into, or, rather: drawn up after the Governor's consent
was granted and there was no prior occupation or entering into possession of the mailo land in
question. In the latter case there are material differences between the relevant Kenya Acts and
the corresponding Uganda Act, the effect of which is to make the decision therein inapplicable in
the instant case. In such circumstances the case of mistry Amar Singh v. Serwano Wofunira
Kulubya (supra) is clear authority for holding that a non-African has no right without the
Minister's consent to occupy or enter into possession of the land or to make any contract to take
the land on lease.

The next question which then arises in the instant case is whether the plaintiff can recover
moneys paid in pursuance of a contract which is clearly illegal. The plaintiff is a party to the
illegal contract or transaction and it bases its claim on the same illegal contract. It is well settled
that no action can be maintained on a contract which is prohibited by statute - see Gordon v.
Chief Commissioner of Metropolitan Police (1910) 2 K.B.D. 1080, and as was said by Bowen,
L.J. in Melliss v. Shirley Local Board (1885) 16 Q.B.D. 446 at page 454

“…no man can recover in an action founded on that which is a breach of the provisions of a
statute”

In my view the learned judge correctly hold that the whole transaction was so ridiculed with
illegalities that the court should not be made an instrument or enforcing obligations arising out of
it particularly when the plaintiff is implicated in the illegalities.

In the circumstances, I would dismiss the appeal with costs.

LAW, AG.V-P.

I have read the jud6ment prepared by Lutta, J.I agree with it and cannot usefully add anything.
There will be an order in the terms proposed by Lutta J.A.

MUSTAFA, J .A.

I have read and agree with the judgment prepared by Lutta, J .A. and concur in the order
proposed by him.