[2023] UGHCLD 5

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (LAND DTVTSTON) CIVIL SUIT NO.6O4 OF 20I6

| JOHN IMANIRAGUHA | PLAINTIFF | |----------------------------|------------| | VERSUS | | | t. NEW TAXI PARK LOCK-UP ) | | | owNERS ASSOCTATTON LTD) | | | 2. JOHN FRED KIYIMBA | ) | | 3. JOHN ROGERS TUSINGIZE ) | DEFENDANTS |

#### BEFORE: HON. MR. JUSTICE LAWRENCE TWEYANZE

#### JUDGMENT

#### Introduction

The Ptaintifls action against the Defendants is for a lraudulent breach of contract and his claim is for cancellation of illegal condominium titles, transfers, vesting order for and delivery of titles to l2 (twelve) retail and 2 (two) condominium units out of 38 units illegally appropriated by the Defendants and for which the Plaintiff made full payment: IN THE ALTERNATIVE but without prejudice to the foregoing; an order for refund of UGX.916,900,000/: (Nine Hundred Sixteen Million Nine Hundred Thousand shillings) to the Plaintiff with interest at 25oh as an equitable remedy for money had and received fiom the date of filing this suit till payment in full; general damages, punitive damages, interest on the general damages and punitive damages, costs of the suit.

#### Plaintiffs Claim

The Ptaintitls claim is that: in 2009 having acquired old lock-up shops from old tenants that were demolished at the New Taxi Park and having paid a total sum of

UGX.4.400.000/:(Four Million Four Hundred Thousand Shillings) in both membership and contribution/subscription, the Plaintiff qualified as a member of the l't Defendant company; in 2013, the Plaintiff made an oral agreement with the 2nd and 3'd Defendants, as persons holding the offices of Chairman and Vice Chairman of the l" Defendant, whereby the Ptaintiff would pre-finance or make advance payments to acquire 14 condominium (condo) units (2 wholesale and 12 retail), being part of the redevelopment of the New Taxi Park lock-up shops; the agreed prices were UGX.137,000,000/:(One Hundred Thirty Seven million ) for wholesale and UGX.53,000,000/: for each retail condominium unit; by July, the Ptaintiff had paid a total sum of UGX.916,900,000/= (Nine Hundred Sixteen Mitlion Nine Hundred Shillings); having paid the agreed l4 units, and despite several reminders, the Defendants failed to confirm, allocate and transfer the purchased units to the Plaintiff ; by the time this suit was filed, there existed I l0 better located and commercially viable condo units which the Plaintiff sought orders of this Court to be allocated 14 of them; during the pendency of the suit and in contempt of the interim order vide H. C. M. A No.94l of 2016. the Defendants allocated and transfbrred I l0 units; following these contemptuous transfers, the Plaintiff filed an amended Plaint wherein he sought among others orders in the altemative a refund of the total sum of UGX.9 1 6,900,000/: with interest of 25Yo p.a as an equitable remedy for money had and received by the Defendants from the date of fiting the suit until payment in full.

#### The Defendants'Claim

The Defendants' claim is that : the l" Defendant is a company limited by guarantee incorporated on 22nd January 2007 and has a total of Nine Directors who include the 2"d and 3'd Defendants; the company conducts its business through resolutions passed at periodical meetings held to wit General meetings, special meetings and board meetings; membership of the company is by shop and for one to be a member, they must have paid fees including membership fees of UGX.500,000/: (Five Hundred Thousand Shillings), premium and ground rent of UGX.3,300,000/= (Three Mitlion Three Hundred Thousand Shillings) for a retail shop, UGX.5.000,000/: (Five Million Shillings) for a wholesale shop, UGX.7,000,000/- (Seven Million Shillings) for a toilet unit and UGX.10,000,0667= (Ten Million Shillings) for a banking space and redevelopment f'ees of which 30% is in Uganda Shillings and 70%o in dollars; the l'' Defendant commenced the processes of redevelopment in 2009 which included applying tbr a lease, approving plans and

doing construction. The arrangement was for members to pay, build and own: the mother title for the suit land had been mortgaged to DFCU bank and when the l't Defendant desired to create condominium titles, DFCU bank appointed its agent M/s Tibeingana & Co. Advocates to handle the process; the Plaintiff just like other members desired to own shops in the l" Defendant's project, he paid a total sum of UGX.909,796,150/: (Nine Hundred Nine million Seven Hundred Ninety Six Thousand One Hundred Fifty Shillings) as at 26th July 2016; on22d August 2016, the Board of the I'r Defendant computed the Ptaintifls money into shops and on 30'r' August 201 6, the I'r Defendant through her lawyer wrote to the Plaintiff informing him of his 1 0 shops and asking him to inspect them; the Plaintiff was also asked to pay a balance of USD 3,868.967 (Three Thousand Eight Hundred Sixty Eight Dollars) being a balance for redevelopment of his lockups and UGX.18,800,000/= (Eighteen Million Eight Hundred Thousand Shillings) for stamp duty for transfer of his condominium titles into his names as per the letter dated 26'h July. 201 8; the Plaintiff was allocated his ten shops but he refused to take them on for his reasons, he also refused to sign transfer forms and to pay transfer fees for his units.

#### Defendant's Counterclaim

In the Counterclaim, the Defendants seek for: an order that the Counter-Defendant pays to the Counter-Claimant money amounting to USD 3,868.967 (Three Thousand Eight Hundred Sixty Eight Dollars) being a balance of the redevelopment of his lockups; an order that the Counter-Defendant pays to the Counter- Claimant money amounting to UGX.18.800,000/: (Eighteen Million Eight Hundred Thousand Shillings) for transfer of his condominium titles into his names and costs of the counterclaim.

The Defendants reiterated statements in their joint written Statement of detbnce and stated among others that: the Counter-Def-endant made a contribution to the ['t Def'endant to a tune of UGX.909,796,1501: (Nine Hundred Nine million Seven Hundred Ninety Six Thousand One Hundred Fifty Shitlings); the money paid by the Ptaintiff was computed and he was allocated nine Retail shops and one wholesale shop subject to him paying the balance of USD 3,868.967(Thee Thousand Eight Hundred Sixty Eight Dollars) being a balance of the redevelopment of his lockups and UGX.18,800,000/: (Eighteen Million Eight Hundred Thousand Shillings) for transfer of his condominium titles into his namesl the Counter-Defendant has ref'used

to pay the money yet it is required by the l'r Defendant; the Counter-Defendant was allocated shops but he has refused to take them on for his reasons.

#### Representation

At the hearing of the suit, the Ptaintiff was represented by Counsel Brian Kabayiza while the Defendants were represented by Counsel Martin Muhumuza

#### Issues

At scheduling, the parties agreed upon the following issues for determination of Court: -

- I. Whether or nol there wos on agreement between the parlies - ll/helher or not the ogreement wus breoched and by who? 2. - Whether or not lhere was any fraudulent deolings by the Defendonts? 3. - W'hal remedies are ovoilable tu the ptrties? 4. - ll/hether the Counterclaim discloses o couse of aclion? 5. - 6. llhether the umended Plaint discloses a cause of action againsl the 2n't and 3'd Defendants?

With regard to issues raised above. upon reading the pleadings and evidence ofthe parties, I have found it necessary to amend issues I and 2 in order to completely dispose of the controversy between the parties. These issues are amended pursuant to O. l5 r.5( I ) of the Civil Procedure Rules, and are amended as fbllows:

## Issue I: Llhelher or nol lhere wos o conlr ct between purlies? Issue 2: Ll/hether or not the controcl wos breuched und hy who?

The PlaintiftTCounter-Defendant called one witness, himself as PW I to prove his case and he was cross examined on his witness statement.

The Defendants/ Counterclaimants on the other hand called one witness to defend/prove their case to wit: John Rogers Tusingize, the 3'd Defendant (DWl ). The witness was cross examined on his witness statement.

### Locus visit

When Court visited Locus, it observed that: the Plaintilf was allocated 5 shops in the basement of Retail Block 2 along Namirembe Road; Plaintiff was allocated 4 shops on Retail Btock I which is still under construction yet the Plaintiff paid money in 2016; the shops allocated to the Ptaintiff by the I " Defendant are not commercially viable.

Afler the hearing, Court directed both Counsel to file their written submissions, the details which are on Court record and I have considered them in my judgment.

## Determination of issues

## Issuel: Whether or not there was a contract between the parties

Counsel for the Plaintiff submitted that there was both oral agreement/contract between the Plaintifl 2nd and 3'd Defendants acting as members of Board of Directors, Chairman and vice Chairman respectively acting for and being authorized representatives and or with apparent authority to act for the 1" Defendant.

Counsel further submitted that beyond the existence of an oral agreement between the parties, the oral agreement has since evolved and is now partly oral and partly in writing as per PEX1, PEX5 and DEX6. Counsel invited Court to find that there was a contractuaI relationship between parties.

Counsel for the Defendants among others submitted that there was an oral agreement between the Plaintiff and I "' Defendant whose terms were that: the PlaintifI pays money, the said money is computed into units worth it and the said units are allocated to him. That the Plaintiff was allocated the shops but that he rejected them. Counsel further submitted that there was no contract between the Plaintiff. 2nd and 3'd Defendants.

#### Court's decision

I have carefully studied the pleadings, evidence and submissions ofboth Counsel on this issue and I hereunder proceed to make my decision.

The question of the existence of a contract is a question of [aw. Section 2 of the Contracts Act,2010 defines a contract as an agreement enforceable by law made with free consent of parties with capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally bound.

Under Section l0(l) of the same Act, for a contract to be exist, an agreement has to be made with free consent of the parties with capacity to contract, for a lawt'ul consideration and with a lawful object, with the intention to be legally bound.

Under Section l0(2) of the same Act provides that a contract may be oral or written or partly oral and parlly wriften or may be implied from the conduct of the parties

In the case of Elizabeth Nabatanzi Lugudde Katwe Vs Attorney General C. A. C. A No.53 of 2013, the Court cited with approval the case of Green Boat Entertainment Ltd Vs City Council of Kampala H. C. C. S No.0580 of 2003 where the essential elements of a valid contract were stated thus: -

"ln lax,, tt'hen v'e talk of a conlract, ve mean an agreement edorceable at law. For a controct to be valid and legally' enforceable, there must be: capacity to contract; intention to contract: consensus ad idem: valuable consideration,' legtlitt'' of purpose; and suflicient certainry) of terms. If in a given transaction any of them is missing, il could as x,ell be called something other than a contract."

In the instant case, from the pleadings and evidence of the parties on record, it is clear that some essential elements of a valid contract are missing. The terms of the contract are not certain. The Plaintifls claim is that the contract/agreement was for the purchase of l4 condominium units while the Det'endants are claiming that the Plaintiff was only entitled to l0 condominium Units. There is no clear term on whether the Plaintiff was entitled to specific shops. With regard to the amount paid, the Plaintiff claims he paid as sum of UGX.916,900,9667= (Nine Hundred Sixteen million Nine Hundred Thousand Shillings) for 14 condominium Units while the Def'endants claim that the Plaintiff paid a total sum of UGX.909,796,150/=(Nine Hundred Nine million Seven Hundred Ninety Six Thousand One Hundred Fifty Shillings) which was for l0 condominium units. The above differences clearly indicate that there was no meeting of mind/ consensus ad idem by the parties.

All in all, I find that there was no valid contract between parties. Issue one is answered in the negative.

Having answered issue I in the negative, it follows therefore that the other issues connected to the claim of contract also fail.

The above notwithstanding, the Ptaintiff altematively sought for a refund of UGX.916,900,000/: (Nine Hundred Sixteen Million Nine Hundred Thousand shillings) fiom the Defendants as money had and received which is an equitable remedy meant to prevent unjust enrichment.

ln the case of James Ojwiya Vs Betty Mutisa H. C. C. S No.2l22 of 2016 Court cited with approval an Indian case of Mahabir Kishore & Madhya Pradesh 1990 AIR 313, where it was held that the principle of unjust enrichment requires that:

"First that the Defendant has been enriched by the receipt ofa benefit; secondly that this enrichment is at the expense of the Plaintil/and thirdly that lhe retention oJ'the enrichment is unjltst. "

This very principle has been well expounded upon in the case ofShenoi & Another Vs Maximou 120051 EA 280 where Court stated:-

"According to Halsbury's law of England....the principle is that where one person has received monel,,from another under circumstances such as in this case, he is regarded in law as having received it to the use of that other. The law implies a promise on his part or imposes an obligation upon him to make payment to the person entitled. In default, the person may maintain an action for money had and received to his use According lo this authority, the obligation to refund the money is imposed upon the person who received it. "

Relying on this very principle, Kainamura J while considering a similar situation in the case of Kensheka Vs Uganda Development Bank H. C. C. S No.469 of 20ll was of the view that where it is proven that money was received fbr no services delivered then it is obligatory that the person who received it to refund it.

.

In the instant case, the Plaintiff led evidence that he paid the Defendants a total sum of UGX.916,900,000/= (Nine Hundred Sixteen million Nine Hundred Thousand Shillings) for the purchase of l4 condominium Units and that the same were never given to him. The Plaintiff adduced the evidence of payments in PEXI which I have reviewed and found not totaling to the sums claimed in the amended Plaint. However, the Defendants admitted both in their joint Written Statement of Defence and evidence that the Plaintiff only paid UGX.909.796,150/:(Nine Hundred Nine million Seven Hundred Ninety Six Thousand One Hundred Fifty Shillings) which was for l0 condominium unils.

Therefore, since the Defendants admit that the Ptaintiff paid UGX.909,796,1501= (Nine Hundred Nine million Seven Hundred Ninety Six Thousand One Hundred Fifty Shillings) to the l'' Defendant, I find that the Plaintiffis entitled to the refund of the same. I order that the l't Def'endant refunds UGX. 909,796,150/= (Nine Hundred Nine Million Seven Hundred Ninety Six Thousand One Hundred Fifty Shillings) since the same was received by it. There was no evidence that the Plaintiff paid the said sum to the 2"d and 3'd Defendants in their personal capacities so they shall not refund the money.

Similarly, the Plaintiff sought for interest on the ret'und. It is trite that a Plaintiff who has been wrongly deprived of his or her money is entitled to interest. The basis of award of interest is that the Defendant has taken and used the Plaintiff-s money and benefited. Consequently. the l" Defendant ought to compensate the Plaintiff for the money. See: Sietco Vs Noble Builders (U) Ltd SCCA No.3l of 1995.

It is now about six years since the l'r Defendant detained the Plaintifls money and has never attempted to refund the money to the Plaintiff. lt is natural to believe that the l'' Defendant company benefited from the use of the said money and as such, it ought to compensate the Plaintiff.

The Plaintiff in the Plaint prayed for general damages and punitive damages

With regard to the prayer for general and punitive damages, the Plaintiff did not prove them, therefore the same are denied.

The plaintiff prayed tbr interest on the money to be refunded.

Under Section 26(2) olthe Civil Procedure Act, Court has powers to award interest if not agreed upon. The principle has been confirmed by decided cases where it is stated that:-

"Where no interest rate is provided, the rate is Jixed at the discretion of the trial judge." See: Crescent Transportation Co. Ltd Vs Bin Technical Services Ltd C. A. C. A No.25 of 2000.

In the instant case. Court will exercise its discretion to award interest on the refund. taking into account that this was a commercial and land transaction and the l'' Defendant has held the Plaintifls money since 2016. Accordingly, I award the interest at 25Vo pff annum from the date of filing the suit till payment in fult.

With regard to costs, Section 27(2)ot the Civil Procedure Act provides that a successful party is entitled to costs unless for a good cause, the Court orders otherwise. See:James Mbabazi & Another Vs Matco Stores & Anor C. A Civil Reference No.l5 of2004. t

In this case, the Plaintiff having succeeded in his altemative action against the l't Def'endant, I order that the 1'r Defendant pays the costs of the suit to the Plaintiff.

All in all, judgment is entered for the Ptaintiff against the l't Defendant as follows:

- a) An order is granted of a refund of UGX.909,796,1501= (Uganda Shillings Nine Hundred Nine Million Seven Hundred Ninety-Six Thousand One Hundred Fifty) with an interest of 25%o p.a from the date of filling the suit ^till payment in full. - b) The Plaintiff is awarded costs of the suit. I so order.

Dated at Kampala this l6't'day of January, 2023.

LAWRENCE TWEYANZE JUDGE 1610U2023

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