[2023] UGHC 510

# **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT LUWERO CIVIL APPEAL NO. HCT-17-LD-CA-0016-2023 (ARISING FROM LUWERO CHIEF MAGISTRATE'S COURT AT WOBULENZI LAND CIVIL SUIT NO. 024 OF 2019) KAZIBWE FREDDIE MBAZIRA………………APPELLANT V NTWATWA DOUGLAS…………………………. RESPONDENT BEFORE LADY JUSTICE HENRIETTA WOLAYO JUDGMENT**

## Introduction

- 1. By a memorandum of appeal filed on 31.1.2024, the appellant Kazibwe appealed the judgment of HW Kyomuhangi Happy Anne Senior magistrate grade one delivered on 14.3.2023 on four grounds of appeal to which I shall revert later in the judgment. - 2. On 29.1.2024, I gave a schedule to file written submissions with which both parties complied. I have carefully considered submissions of both counsel.

## Background facts

3. By a plaint filed on 6.9.2019, Ntwatwa sued Kazibwe for breach of contract the particulars of the breach were that on 27.12.2013, the parties entered into a sale of land agreement described as Bulemezi Block 159 Plot 1972 with developments thereon at an agreed price of UGX.5,200,000/. In addition to the agreement, Kazibwe gave Ntwatwa a signed transfer form; two passport photos; the duplicate certificate of title, and mutation forms. It was Ntwatwa's claim that Kazibwe declined to deliver vacant possession hence the suit.

- 4. In his written statement of defense filed on 30.9.2019, Kazibwe averred that the transaction was for a loan and the title was delivered as security and denied there was a sale. - 5. In her judgment, the learned trial magistrate found for Ntwatwa and made the following orders: - a. UGX. 7,000,000/ general damages for the wrong suffered by the plaintiff Ntwatwa with interest at court rate from date of judgment until payment in full. - b. In the alternative, Ntwatwa is ordered to refund the purchase price of 5,200,000/ with interest at commercial rate from 27.12.2013 until payment in full. - c. Mesne profits of 3,000,000/. - d. Costs of the suit. - 6. Dissatisfied with the judgment, Kazibwe appealed to this court hence this judgment.

# Duty of the first appellate court.

- 7. It is the duty of this court as a first appellate court to re-evaluate the case by subjecting the evidence presented to the trial court to a fresh and exhaustive scrutiny before coming to its own conclusion. - 8. **In Father Narsensio Begumisa and 3 Others v Eric Tibebaga SCCA 17 of 2002; [2004] UGSC 18 (22 June 2004) Ulii,** court observed that it is a well-settled principle that on a first appeal, the parties are entitled to obtain from the appeal court its own decision on issues of fact as well as of law. Although in a case of conflicting evidence the appeal court has to make due allowance for the fact that

it has neither seen nor heard the witnesses, it must weigh the conflicting evidence and draw its own inference and conclusions.

# Burden of proof in the trial court

9. During the trial, the burden of proof was on the plaintiff to prove his case while both parties had a burden to prove the facts they alleged, on a balance of probabilities. Sections 101 and 106 of the Evidence Act Cap.8 refers.

# 10. Two issues were framed at the trial:

- a) Whether there was a valid sale agreement between the parties. - b) Remedies.

Resolution of the appeal

## **Ground one**

*The learned trial magistrate erred in law and in fact when she failed to properly evaluate the evidence and arrived at a wrong decision that there was a valid sale agreement dated 27.12.2013.*

# **Ground two**

*The learned trial magistrate erred in fact and in law when she found that the appellant had breached the agreement.*

- 11. I have re-evaluated the evidence adduced in the trial court and the following facts emerge. There is consensus between the parties that there was an agreement between the two made on 17.12.2013. In fact both parties do not challenge the existence of this agreement. What is in dispute is whether PExh. ID No.1 can be construed as a binding contract in law. - 12. While Ntwatwa asserts that the agreement should be interpreted literally, Kazibwe maintains it should be placed in context because his intention was to use it as collateral for a loan of 3,700,000/ plus interest but not to sell his property.

13. The English translation of the agreement is reproduced below:

Date: 27.12.2013

AGREEMENT FOR SALE OF A PLOT AND HOUSE

*I Kazibwe Freddie, resident of Muyenga Wobulenzi Kisawe Zone have sold a plot together with a building to Mr. Ntwatwa Douglas a resident of Wobulenzi. I have sold it at 5,200,000/ cash. The building has six (tenements). I have given him the transfer to enable him sever off the land.*

*Signed both parties Witnesses: Lutaaya Fred and Mubiru Yahaya Chairman LC1 Kigulu.*

- 14. The literal interpretation of the agreement is that Kazibwe sold Ntwatwa *'a plot with a building'* at *5,200,000/* and that he had given him '*a transfer form to sever off'* the portion sold. - 15. The location, whether it is on titled land or kibanja, and whether or not the buyer had taken possession are facts that are missing from the document. At this point, **Section 10(1) of the Contract Act Cap. 284** permits oral evidence to prove a contract when it provides that a contract may be partly oral and partly written. - 16. The evidence on location is provided by both parties who are in agreement that it is located on Bulemezi Block 159 Plot 1972 measuring 0.047 hectares although this was not reflected in the written agreement. - 17. Regarding the exact size of the portion sold, this can be deduced from the testimony of Kazibwe who insists that he sold only six rooms although the learned trial magistrate visited the locus and found that the apartments are double rooms and therefore twelve rooms. The learned magistrate concluded that it is not

possible that the intention was to sell six rooms because it would mean breaking up the building to separate the six rooms from the other six rooms. I am in agreement with the learned magistrate in this regard that the intention was to sell the six tenements or mizigos as units not individual rooms.

- 18. With that said, it is evident from Kazibwe's testimony that the six rooms are located on the same plot wherein he resides, a fact confirmed by the magistrate when she visited the locus. This important fact is missing from the sale agreement although the fact that it mentions that the buyer was to sever off his portion implies Kazibwe did not intend to sell the whole land but only a portion of it. - 19. This brings me to the admission by both parties that Kazibwe has never given vacant possession to Ntwatwa and in fact, he still collects rent from the tenants. - 20. The legal effect of this undisputed fact is that while the parties intended to be bound by the sale agreement especially when Ntwatwa paid Kazibwe 5,200,000/, the latter did not perform his part of the contract which failure is construed as a breach. - 21. Counsel for the appellant submitted that the contract between the parties was in fact a contract to borrow money and that the certificate of title was handed over as collateral. Like the trial magistrate, I find that this is not a credible defense especially because Kazibwe is a surveyor and therefore is deemed to be literate in land matters. - 22. In conclusion, I find that the learned trial magistrate properly evaluated the evidence and found that there was a valid contract of sale of land between the parties which contract Ntwatwa fully performed but which Kazibwe breached. Ground one of appeal fails.

#### **Ground three**

*The learned trial magistrate erred in law and in fact when she granted an order for specific performance culminating into an eviction against the appellant.*

#### **Ground four**

*The learned trial magistrate erred in law and in fact when she awarded excessive general damages of 7,000,000/; mesne profits of 3,000,000/; and in the alternative a refund of 5,200,000/.*

#### *Specific performance*

23. Counsel for the appellant submitted that the order for specific performance be set aside. While **Section 63(1) of the Contracts Act Cap. 284** provides for the remedy of specific performance where a party is in breach, Section 63(2) lists circumstances where the order many not be given. The relevant provision for purposes of this appeal is **Section 63(2)(b)** that stipulates as follows:

A party is not entitled to specific performance where-

*The specific performance will produce hardships which would not have resulted if there was no specific performance.*

24. Specific performance has its origin in equity and therefore it is not available as of right unlike the remedy of damages once a breach is established. This means that specific performance may be given if damages would be inadequate or when it is the only remedy. This was the case in **Sky Petroleum Ltd V Petroleum Ltd [1974]1 ALL ER 954** where the court granted an injunction that had the effect of specific performance of a contract because the defendant was restrained from breaching a contract for supply of petroleum products at a time when there were shortages. The court reasoned that damages were an inadequate remedy since for 'al practical purposes' substitute performance would not be available in time to prevent the plaintiff going out of business.

- 25. The plaintiff came to court six years after the contract was made which means he sat on his rights and in the meantime, the value of the property had increased which can be construed as a form of hardship under Section 63(2) (b) of the Contracts Act. As submitted by counsel for the appellant, Ntwantwa only resurfaced when his advocates Barungi, Baingana & Co. Advocates sent the appellant a demand note dated 30.5.2019. He who seeks equity must not be indolent for equity aids the vigilant. In these circumstances, general damages are adequate for the breach. - 26. Furthermore, given the pressure on land, it was incumbent on the respondent to protect his interests when entering the contract. For instance, the contract is silent on when the respondent was to take possession and control since these were rentals. It was not enough for the buyer to take possession of the land title and transfer forms but it was essential that the buyer proactively takes immediate steps to secure his interests which was not done. Indeed even the transfer of title was never effected but again, the respondent did not buy the entire land but only the portion that had the rentals a detail that came out at the trial and also vaguely in the agreement which makes reference to severance of the portion purchased. - 27. The effect of the foregoing finding is that if specific performance were to issue, the contract is such that there is still work to be done, i.e, curving out the building of six tenements from the parcel of land that was sold which calls for a surveyor and orders to the Registrar of Titles to effect transfer and possible orders of eviction. In other words, it was impractical for the learned trial magistrate to order specific performance nearly ten years after the breach of contract of sale of land whose possession was not voluntarily ceded by the seller in the first place. For the foregoing reasons, I set aside the order for specific performance. Ground one succeeds.

*The alternative order*

28. Regarding the alternative order for Kazibwe to refund 5,200,000/, I agree with counsel for the respondents that it is irregular since the learned magistrate had given orders of specific performance which orders I have set aside.

#### *General damages*

29. Counsel for the appellant submitted that the general damages were excessive. I agree with the submission of counsel for the respondent that the purpose of general damages is to place the plaintiff in the position he would have been had the defendant performed his part of the contract. **Sanjay Datta V Yob Yobe Okello HCT-00-CC-CS-0081-2013** cited by counsel for the respondent is instructive. As further submitted by counsel for the respondent, for me to interfere with the award, I must be satisfied that it was manifestly excessive. Had Ntwatwa handed over vacant possession, Ntwatwa would have been enjoying the property. Since this did not happen, I find the sum of 7,000,000/ reasonable as general damages to compensate him for the breach of contract. The award of general damages shall carry interest at 8% p.a from date of the lower court judgment until payment in full.

## *Special damages*

30. As Kazibwe proved that he received 5,200,000/ which is in the sale agreement, the appellant shall refund the respondent Ntwatwa 5,200,000/ special damages which is money had and received. The award of special damages shall carry interest at commercial rate of 20% p.a from date of judgment of the lower court until payment in full.

## *Mesne profits*

31. These accrue where a person has been wrongfully been dispossessed of his land. **Section 2(m) of the Civil Procedure Act Cap. 282** defines mesne profits as those profits which a person in wrongful possession actually received or ought to have received with ordinary diligence. The appellant was not in wrongful possession given that it was a case of breach of contract for sale of land and not that he was

on the land wrongfully through trespass. As the facts of the case do not disclose this principle, the 3,000,000/ awarded as mesne profits is set aside.

Costs

32. While the appeal substantially fails, the fact that ground three of appeal on specific performance has succeeded; the award of 3,000,000/ mesne profits has been set aside and the order in the alternative has been set aside, it means the appellant will pay 70% of the taxed costs of the appeal and the lower court.

# Orders

- I. In the premises, the appeal substantially fails and I make the following orders: - II. The order for specific performance against the appellant is set aside. - III. The order for the appellant to pay 3,000,000/ as mesne profits is set aside. - IV. The appellant Kazibwe Freddie Mbazira shall pay Ntwatwa Douglas 7,000,000/ as general damages for breach of contract with interest at court rate of 8% from date of judgment of the lower court until payment in full. - V. The appellant Kazibwe Freddie Mbazira shall pay the respondent Ntwatwa Douglas 5,200,000/ as special damages with interest at commercial rate of 20% from date of lower court judgment until payment in full. - VI. The appellant shall pay 70% of the taxed costs of the appeal and the trial court to the respondent.

# **DELIVERED VIA ECCMIS THIS 23RD DAY OF APRIL 2025.**

# **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

# **LADY JUSTICE HENRIETTA WOLAYO**

# Legal representation

Legal Aid Project of Uganda Law Society, Luwero Branch for the appellant.

Praxlex Advocates for the respondent