Non-financial Contribution by Employees, Without Evidence of Common Intention, Cannot Ground a Constructive Trust. Court of Appeal Clarifies the Limits of Judicial Review and Constructive Trust Claims

Waboga David
Dec 14, 2025
8 min read

Facts

The appellants (Rutaijengwa Elistariko and Tusiime Ianat) filed Civil Suit No. 511 of 2013 against the respondent (Sanyu Scovia Gatete), claiming they were business partners in a shop at Plot 6, Nakivubo Road and entitled to equal shares in her properties: FRV 456 Folio 10 at Plot 27 Martin Road; LRV 3550 Folio 21 at Plot 24 Mackay Road; and FRV 584 Folio 19 at Plot 35 Nakivubo Place. They also sought a share of funds in the respondent's DFCU Bank account (No. 01L6020131100).

The respondent denied any partnership, asserting the properties were solely hers and the appellants were employees, not partners. The High Court (per Lady Justice Flavia Senoga Anglin) ruled that no partnership existed, the appellants were employees who had been remunerated, and most properties (except FRV 584 Folio 19 Plot 35 Nakivubo Place) were solely the respondent's.

The court awarded the appellants an equal interest in Plot 35 Nakivubo Place via a constructive trust, maintained caveats on it, issued an injunction against the respondent claiming sole ownership, ordered equal sharing of rental income (after expenses from March 2011), awarded UGX 1,000,000,000 in general damages to the appellants, and imposed interest rates.

Aggrieved, the respondent filed Miscellaneous Application No. 505 of 2021 for review, citing errors apparent on the record. The Principal Judge (Hon. Justice Dr. Flavian Zeija) granted the review, vacated the original orders favoring the appellants, declared the respondent sole owner of all properties, removed all caveats, issued a permanent injunction against the appellants' claims, and awarded her UGX 100,000,000 in general damages.

The appellants appealed this review decision on eight grounds, seeking reinstatement of the original High Court orders or a fresh appraisal of evidence.

Issues

The appeal raised the following key issues based on the eight grounds:

Whether the Principal Judge erred in reviewing a judgment arrived at through reasoning.
Whether the Principal Judge erred in reviewing a judgment from a hotly contested trial.
Whether the Principal Judge erred by vacating and substituting the trial judge's orders without reviewing the evidence.
Whether the Principal Judge acted as an appellate court by making new findings.
Whether the Principal Judge erred in declaring the respondent sole owner of the suit properties.
Whether the Principal Judge erred in ruling that the appellants had no legal or equitable interest in the properties.
Whether the Principal Judge erred in ruling that even if parties operated from the same shop, the appellants could not obtain an interest in the respondent's properties.
Whether the Principal Judge erred by issuing unpleaded remedies (e.g., general damages and broader injunctions).

Preliminary objections by the respondent included:

(a) The appeal was incompetent without leave of court; and

(b) The grounds were general and contravened Rule 86 of the Court of Appeal Rules.

Submissions

Appellants' Submissions (by Counsel Andrew Kahuma)

Argued Grounds 1-7 together, contending the Principal Judge confused contradictions (grounds for appeal) with errors apparent on the record (grounds for review). The review application grounds were appellate in nature, and the Principal Judge exercised improper appellate jurisdiction. He made unpleaded findings (e.g., on sub-tenancy) influenced by extraneous research, not evidence. The High Court was functus officio post-judgment, and errors should be corrected on appeal. Cited cases like Independent Medical Unit v AG of Kenya and Mapalala v British Broadcasting Corporation.

On Ground 8, argued unpleaded remedies (e.g., UGX 100,000,000 damages) were improper, as per Fang Min v Belex Tours and Travel Ltd. Sought allowance of the appeal, reinstatement of original orders, or fresh appraisal, plus costs.

In rejoinder;

Rejected the preliminary objections, noting the Principal Judge had overruled a similar incompetence claim in a stay application. Affirmed the automatic right of appeal from a granted review. Grounds complied with Rule 86; an alternative prayer for re-appraisal was due to expired appeal time against the original judgment.

Respondent's Submissions (by Counsel Cornelius Mukiibi)

Raised preliminary objections: No automatic right of appeal from a review by a different judge; leave required (citing Nalongo Burash v Kekitiibwa Magdalena and Dr. Sheikh Ahmed Mohamed Kisuule v Greenland Bank). Grounds were general, not specific, inviting a "fishing expedition" (citing Katumba Byaruhanga v Edward Kyewalabye Musoke and National Insurance Corporation v Pelican Air Services). Prayed for striking out the appeal.

On merits:

Grounds 1-2 failed as review powers under Section 82 CPA and Order 46 CPR are not limited by reasoning or contestation.

Grounds 3-4: Principal Judge corrected errors apparent (e.g., constructive trust inference contradicting employee status findings). Cited contradictions in original judgment (e.g., no partnership but interest awarded).

Grounds 5-7: Upheld sole ownership based on no financial contribution or partnership.

Ground 8: Court has discretion under Section 82(b) CPA to award fitting orders, including damages for protracted litigation.

Prayed for dismissal with costs

Legal Representation

Appellants, Represented by Counsel Andrew Kahuma.
Respondent, Represented by Counsel Cornelius Mukiibi.

COURT’S FINDINGS

1. On the Nature and Limits of Review Jurisdiction

The Court of Appeal reaffirmed the settled legal position that the jurisdiction to review a judgment is strictly limited and fundamentally distinct from appellate jurisdiction. A review is not intended to afford an aggrieved party a second opportunity to argue the merits of a case or to correct errors of reasoning.

The Court emphasized that:

“The power to review is not an appeal in disguise. A distinction is drawn between an erroneous decision and an error apparent on the face of the record.”

An error apparent on the face of the record was further defined as one:

“Which stares one in the face without any elaborate argument being needed for establishing it.”

Accordingly, where a judgment suffers from a patent inconsistency, contradiction, or mistake that is self-evident from the record itself, the court is empowered to intervene by way of review. Conversely, where the alleged error requires extensive reasoning, reappraisal of evidence, or competing interpretations of the law, the proper recourse lies in an appeal.

2. On the Trial Court’s Internal Contradictions

The Court found that the judgment of the High Court contained glaring and irreconcilable contradictions between its factual findings and the final orders issued.

Specifically, the trial judge had made firm findings that:

No partnership existed between the parties;
The appellants were employees of the respondent, not co-owners;
The appellants made no financial contribution towards the acquisition of the suit properties;
The appellants had been adequately remunerated for their services.

Despite these unequivocal findings, the trial court proceeded to infer a constructive trust in favour of the appellants over Plot 35 Nakivubo Road, thereby granting them a beneficial interest in land registered solely in the respondent’s name.

The reviewing judge correctly observed that:

“There was no basis for inferring a constructive trust especially that court had not made any factual finding, whether express or implied, on the existence of a common intention.”

The Court of Appeal agreed and held that the trial court’s final orders were wholly inconsistent with its own findings of fact. It reiterated that:

“Where the court makes orders which are conflicting with the findings of fact, or makes two conflicting rulings, that amounts to an error on the face of the record.”

Such an error did not require a process of reasoning or evidentiary re-evaluation to discern; it was immediately apparent upon a plain reading of the judgment.

3. On the Exercise of Review Jurisdiction by the Principal Judge

The Court rejected the appellants’ contention that the Principal Judge had acted as an appellate court.

It found that the Principal Judge:

Did not re-evaluate or re-weigh the evidence on record;
Did not disturb the trial court’s findings of fact regarding the nature of the parties’ relationship;
Confined himself strictly to correcting the inconsistent and erroneous final orders that flowed from those findings.

The Court held that the Principal Judge acted squarely within the scope of review jurisdiction by aligning the final orders with the trial court’s factual determinations. In doing so, the reviewing court merely removed an obvious and “bizarre” anomaly that would otherwise have led to unjust and untenable consequences, including the creation of proprietary interests unsupported by law or evidence.

4. On Constructive Trusts and Employment Relationships

The Court underscored that a constructive trust cannot arise merely from non-financial contributions or from an employment relationship, however long-standing or significant.

In the absence of clear evidence—express or implied—of a common intention to share beneficial ownership, the doctrine of constructive trust has no application. The Court warned that allowing employees to acquire proprietary interests solely on the basis of labour or skill would dangerously blur the line between employment and ownership, and would unjustifiably expose employers to speculative claims.

5. On the Award of General Damages

While upholding the review and the corrective orders relating to ownership, caveats, and injunctions, the Court found that the Principal Judge erred in awarding UGX 100,000,000 in general damages to the respondent.

The Court held that:

“The circumstances in this case do not warrant any award of general damages which were not sought in the pleadings.”

The respondent had not prayed for general damages in the application for review, nor had she filed a counterclaim in the main suit. Additionally, there was no evidentiary basis demonstrating loss, damage, or inconvenience warranting such an award.

Relying on Fang Min v Belex Tours & Travel Ltd, the Court reaffirmed the settled principle that:

“It is now well established that a party cannot be granted relief which he or she has not claimed.”

The award of general damages was therefore found to be an error of law and was set aside.

HOLDING

The appeal failed on Grounds 1–7
The review was lawful and properly exercised;
The Principal Judge acted within the permissible limits of review jurisdiction.
The appeal succeeded on Ground 8:
The award of UGX 100,000,000 in general damages was set aside.
The appeal partly succeeded.
The respondent was awarded three-quarters (¾) of the costs of the appeal.

KEY TAKEAWAYS

1. Review Distinguished from Appeal

The review is for correcting errors apparent on record, not rehearsing erroneous decisions. The power must be exercised with great circumspection where appeal remedy exists.

2. Error Apparent on Face of Record Defined

An error is "apparent" when it:

It is self-evident without an elaborate argument
Can be seen by pointing to it and saying, "Here is the error."
Admits to no reasonable dispute
Stares one in the face from the record itself

3. Contradictory Orders Constitute Apparent Error

When a court makes factual findings but issues orders contradicting those findings, this constitutes an error apparent on the record, not merely an erroneous decision.

4. Constructive Trust Requirements

For constructive trust to arise, there must be evidence (express or implied) of common intention that the property be shared beneficially. Employment relationship alone, even with non-financial contributions, does not create such trust.

5. Employee Contributions vs. Partnership Interest

Employees' services and contributions to business success, even if significant, do not automatically create property interests. Being "well remunerated" negates claims of beneficial ownership.

6. Relief Must Be Claimed

While courts have discretion to grant reliefs not specifically claimed in the interest of justice, this power should be exercised sparingly and only when:

Justice demands it
Evidence supports the relief
Circumstances are exceptional
Not contrary to pleadings and evidence

7. Limits on Unclaimed Relief

Courts cannot grant general damages where:

Not pleaded in original claim or counterclaim
No evidence of loss or damage
The party was not disadvantaged
Would amount to a charitable donation

8. Review Not Barred by "Hotly Contested" Trial

The fact that a trial was contested or judgment reached through reasoning does not bar review if genuine errors are apparent on the record.

9. Functus Officio Doctrine

Once judgment is delivered, the court is functus officio, but review jurisdiction remains for correcting patent errors apparent on record.

10. Automatic Right to Appeal from Review

When a review application succeeds and reverses a favorable judgment, the aggrieved party has an automatic right of appeal without seeking leave.

PRACTICAL IMPLICATIONS

For Litigants;

Distinguish clearly between grounds for appeal and grounds for review
A review is not an alternative to an appeal where time has expired
Cannot use a review to re-argue a case or correct errors of law requiring reasoning

For Legal Practitioners;

Draft judgments ensuring final orders align with factual findings
When seeking review, identify specific self-evident errors, not matters requiring argument
Plead all reliefs sought; cannot rely on the court's discretion for major remedies
Frame grounds of appeal specifically, not generally

For Courts;

Exercise review powers cautiously where an appeal remedy exists
Ensure final orders flow logically from factual findings
Grant unclaimed relief only in exceptional circumstances with an evidentiary basis
Distinguish between correcting patent errors and rehearing cases

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