[2024] UGHC 908

# THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA HOLDEN AT KIBOGA

# HCT-23-CV-CS-0008-2024

# (FORMERLY MUBENDE CIVIL SUIT NO.16 OF 2020)

## LION KING FARMS LIMITED::::::::::::::::::::::::::::::::::::

## **VERSUS**

- 1. LUGEMWA JOHN BOSCO - 2. BWANIKA PETER - 3. NAMAYANJA JANE - 4. NAKUYA MADLENA - 5. MBAZIIRA YUSUF - 6. MARK KATUMBA SENDAGIRE

**:::::::::::::::::::::::::::::::::::::**

# **BEFORE: HON. MR JUSTICE KAREMANI JAMSON. K**

# **JUDGMENT**

# Introduction.

Lion King Farms Limited (hereinafter referred to as the plaintiff) a private limited liability company filed this suit against Lugemwa John Bosco, Bwanika Peter, Namayanja Jane, Nakuya Madlena, Mbaziira Yusuf and Mark Katumba Sendagire (hereinafter referred to as the defendants) jointly and severally for the following orders:

- a) Refund of five hundred forty million shillings $(540,000,000/=)$ being land purchase price, - b) Shillings one hundred and fifty million (shs.150.000.000=) as mesne profits, - c) Seven hundred and thirty-three thousand and three hundred and thirty-three United States Dollars as loss of income and business,

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- d) Alternatively, that the defendants be compelled to surrender the certificate of title and transfer forms for land comprised in Singo Block 706 Plot 2 land at Buwekula, Mpundugulu, Kiboga District measuring approximately three hundred acres (300) $acres$ ) - e) An order for grant of vacant possession of the same land, - f) An order of permanent injunction restraining the defendants from selling, subdividing, alienating, disposing or dealing in the suit land, - g) An order of award of general damages, interest and costs of the suit.

The $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants did not file written statements of defence and an interlocutory judgment was entered against them. The matter proceeded ex parte against each one of them.

The 5^th defendant was never served with summons to file a defence as there is no proof of service at all. There is order by this court for substituted service but no proof that it was ever effected since there is no newspaper filed or an affidavit of service to that effect. The suit against the 5^th defendant is summarily dismissed for want of service of summons.

The 6^th defendant filed a written statement of defence in which he contended that the allegations against him in the plaint are false. That he signed two caveat releases in respect of the suit land in 2017 and 2018. That the 1^st withdrawal was executed and filed on 11^th August 2017 at Mityana land area zonal office while the second one was signed on 19^th June 2018. That he does not have any claim at all in the suit land having signed off the said caveat releases. That the plaintiff is wrong in jointly bringing the suit against him as he has neither obligation nor interest in the suit land. He prayed that the suit against him be dismissed with costs.

### Background.

On the 1^st of August, 2017, a land sale agreement was executed between the plaintiff and the 1^st to 4^th defendants for purchase of 300 acres of land comprised in Singo Block 706

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Plot 2 land at Buwekula, Mpundugulu, Kiboga district (hereinafter referred to as the suit land) at a consideration of 450,000,000/=. At the time of purchase, the $5^{th}$ and $6^{th}$ defendants had lodged caveats on the suit land. On the same day the 1^st, 2^nd, 3^rd and 4^th defendants also entered into another agreement with the 5^th and 6^th defendants by which the $5$ ^th and $6$ ^th defendants were to vacate the caveats upon being paid the sums of money that were due to them. The same agreement was allegedly signed by a one F. R Bogere on behalf of the 5^th and 6^th defendants. In that agreement, the 1^st, 2^nd, 3^rd, 4^th defendants agreed to settle the claims of the $5^th$ and $6^th$ defendant amounting to four million $(4,000,000/=)$ and two hundred twenty-five million shillings (225,000,000/=) respectively.

The plaintiff contends that the 1^st, 2^nd, 3^rd and 4^th defendants have refused to hand over vacant possession of the suit land to the plaintiff nor have the 5^th and 6^th defendants lifted their respective caveats thereon. It is upon that background that the plaintiff brought this suit against the defendants jointly and severally for the orders sought.

The $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants did not file written statements of defendant and upon proof that they were served with summons vide an affidavit of service dated 14^th December 2020 this court entered an interlocutory judgment against them on 22^nd June 2021 and set the suit down for formal proof in accordance with Order 9 Rule 8 of the Civil Procedure Rules. (CPR).

This court ordered a substituted service against the $5^{th}$ and the $6^{th}$ defendants. The $6^{th}$ defendant filed a written statement of defence. The 5^th defendant did not file a written statement of defence and no proof of service against him was adduced. The suit against him has already been dismissed for wasn't of service of summons.

The suit was thereafter set down for hearing ex parte against the $1^{st}$ , $2^{nd}$ , $3^{rd}$ , $4^{th}$ , and $6^{th}$ defendants and hence this judgment.

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## Representation.

The plaintiff was represented by Mr. Muziki Moses of M/S Kirunda and Co. Advocates. The $6^{th}$ defendant's written statement of defence was filed by M/S Majoli, Bogere, Mutakirwa Advocates.

## **Burden and Standard of Proof.**

Section 101(1) of the Evidence Act Cap 8 provides that whoever desires court to give judgment as to any legal right or liability dependent on the existence of facts which he or she asserts, must prove that those facts exist. This position was fortified in the case of Uganda Petroleum Co. Ltd -V- Kampala City Council Civil Suit No.250 of 2005, where it was held that in civil cases the burden lies on the party who alleges to prove his or her case on the balance of probabilities.

#### Issues for determination.

- 1. Whether there was a valid land sale agreement between the plaintiff and the $1^st$ , $2^nd$ , $3^rd$ , and $4^th$ defendants. - 2. Whether there was breach of the agreement by the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants. - 3. Whether the claim by the $5^{th}$ and $6^{th}$ defendants on the suit land was cleared by the $1$ ^st, $2$ ^nd, $3$ ^rd and $4$ ^th defendants. - 4. What are the remedies available to the parties?

### Evidence presented.

The plaintiff led evidence of one witness.

PW1 Mwajuma Muduru stated that she is the Company Secretary of the plaintiff Company a duly incorporated with capacity to transact in Uganda. That on $1/8/2017$ , the plaintiff purchased the suit land measuring 300 acres from the 1^st, 2^nd, 3^rd, and 4^th defendants at 450,000,000/ $=$ . That at the time of purchase, the 5^th and 6^th defendants had caveated the suit land but they agreed to lift the caveats upon being compensated by the

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1^st to 4^th defendants. That on $2/8/2017$ , the plaintiff made full payment of the contractual amount of $450,000,000/$ = to the defendants which was paid as follows;

- a) Shs. 225,000,000/= was paid to the $6^{th}$ defendant as full and final refund. - b) Shs. 200,000,000/= was paid to the 1^st defendant through his account in Centenary bank - c) Shs. 21,000,000/= was paid to the 2^nd, 3^rd and 4^th defendants as co-administrators of the $1^{st}$ defendant. - d) Shs. 4,000,000/= was paid to the 5^th defendant to cover his interests in the land and cause removal of his caveat on the suit land.

PW1 further stated that despite being compensated, the $5^{th}$ and $6^{th}$ defendants have never lifted their respective caveats off the suit land. That the defendants have to date refused to give the plaintiff vacant possession of the suit land as they are still in occupation. That the plaintiff had already made plans on how to use the suit land for a maize project which has not been done because the plaintiff's employees were prevented from accessing the land by squatters on the land who claimed to have obtained interest from the 1^st, 2^nd, 3^rd and 4^th defendants. That as a result of the defendants' actions, the plaintiff has suffered loss of income and business for which it seeks to be awarded compensation.

## Resolution of issues.

1. Whether there was a valid land sale agreement between the plaintiff and the $1^st$ , $2^nd$ , $3^rd$ , and $4^th$ defendants.

### **Submissions**

The learned counsel for the plaintiff submitted that the sale agreement between the plaintiff and the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants was valid and binding on all the parties. Counsel referred to section 10 of the Contract Act 2010 on the definition of a contract. Counsel stated that the contract between the plaintiff and the 1^st, 2^nd, 3^rd and 4^th defendants for sale of the suit land constituted a valid contract under the Ugandan laws. That all the parties who entered into the agreement had the capacity to contract as the

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plaintiff is a company incorporated under the laws of Uganda and the 1^st to 4^th defendants are all adults presumed to be of sound mind at the time of entering into the contract. That they contracted over a lawful object (suit land) for valuable consideration of $450,000,000/$ =. They did so with intention to be legally bound. Their intention is manifest in the fact that some of them even entered a side agreement which they agreed to vacate the encumbrance from the certificate of title. He cited the case of EbbzWorld Limited and Vicent Depaul Nyuma –V- Tonny Rutakirwa HCCS NO. 398 OF 2023.

#### Analysis.

Section 9 (1) of the Contracts Act (formerly section 10) defines a contract as an agreement made with the free consent of parties with capacity to contract for a lawful consideration and with a lawful object, with intention to be legally bound.

The contract at hand is a land sale agreement which is categorized as a contract under the laws of Uganda and therefore governed by the Contracts Act Cap 284.

In the case of Greenboat Entertainment Ltd -V- City Council of Kampala HCCS No. **0580 of 2003, the court defined a contract as follows;**

"In law, when we talk of a contract, we mean an agreement enforceable at law. For a contract to be valid and legally enforceable, there must be: capacity to contract; intention to contract; consensus and idem; valuable consideration; *legality of purpose; and sufficient certainty of terms. If in a given transaction any* of them is missing, it could as well be called something other than a contract".

## See also: Kabagambe Mathias V Kahire Nobert HCCS No. 389/2016

It follows therefore that enforceability of a contract determines validity of a contract. The question to determine is whether the contract in the instant case is enforceable.

The determinants of enforceability of a contract are the following ingredient:

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#### a. Capacity to contract

Section 10 of the Contracts Act states that a person has capacity to contract where that person is aged 18 years or above, is of sound mind and not disqualified from contracting by any law which he or she is subject.

In the instant case, the land sale agreement was entered into between the plaintiff a private limited liability company which had the capacity to sue and be sued vide the Certificate of incorporation marked exhibit P.2. The $1^{st}$ , $2^{nd}$ , $3^{rd}$ , and $4^{th}$ defendants who are all adults presumed to be of sound mind. This shows that all the parties had capacity to contract

#### **b. Intention to contract and be legally bound.**

In determining the intention of the parties several factors have to be considered which include the contents of the agreement, the language and conduct of the parties, relationship between the parties and a presumption arising out of that relationship, the context in which the agreement was made and other relevant circumstances.

In the instant case, the intention to contract can be deduced from the parties' ability to endorse the contract entered into. It was undisputed evidence of PW1 Mwajuma Muduru that the plaintiff entered into a land sale agreement with the 1^st, 2^nd, 3^rd, and 4^th defendants and the agreement dated $1/8/2017$ and was admitted in evidence as Exh. P.3. On page 3 of the agreement the agreement was signed by the $1^{st}$ , $2^{nd}$ , $3^{rd}$ , $4^{th}$ defendants and the representative of the plaintiff on behalf of the plaintiff company. In the case of **William** Kasozi -V- DFCU Bank Ltd HCCS NO. 1326 OF 2000, court noted that it is the law that when a document containing contractual terms is signed, then in the absence of fraud, or misrepresentation, the party signing it is bound by its terms.

I do concur with counsel for the plaintiff that further intention to be legally bound by the agreement is seen from the subsequent agreements entered into between the parties. One of these being the agreement to lift the caveat between the $1^{st}$ , $2^{nd}$ , $3^{rd}$ , $4^{th}$ defendants and the 5^th and 6^th defendants (Exh. P.4) dated $1/8/2017$ . The other agreement is the fulfilment

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of undertaking agreement dated $2/8/2017$ (Exh. P.5) in which the defendants acknowledged receipt of the payment for the purchase of the suit land. This shows that there was an intention by the parties to be bound by the agreement in this case.

## c. Valuable consideration.

The evidence of the plaintiff shows that the plaintiff paid $450,000,000/$ = for the purchase of the suit land. This evidence was not disputed. Exh. P.5 shows how the said moneys were shared between to the defendants. This evidence was not disputed by any of the defendants at all. The 6^th defendant in his written statement of defence admitted that on $11/8/2017$ , he executed a caveat withdrawal upon settlement of his interest.

Am therefore convinced that there was a valuable consideration given.

### d. Lawful object.

This simply means that the motive, purpose, design for which the contract is entered into should be lawful and not against public policy.

The agreement entered into was for purchase of land comprised in Singo Block 707 Plot 2 land at Buwekula, Mpundugulu, Kiboga district. No evidence was adduced to show that the purpose of the land sale agreement entered between the plaintiff and the $1^st$ , $2^nd$ , $3^rd$ and $4^th$ defendants was for an unlawful purpose.

Based on the above findings, it is my conclusion that the land sale agreement dated $1/8/2017$ between the plaintiff and the 1^st 2^nd 3^rd and 4^th defendants is valid and lawful.

It should however be noted that there is no evidence that any valid contract existed between the plaintiff and the 5^th and 6^th defendants. The plaintiff entered and agreement with the $1^{st}$ , $2^{nd}$ $3^{rd}$ and $4^{th}$ defendant. In the same agreement exhibit P.3 the parties refer to the $5^{th}$ and $6^{th}$ defendants.

However, the same reference did not make the $5^th$ and $6^th$ defendants parties to the same agreement which they were not signatories to. The subsequent agreement exhibit P.4 was between the 1^st 2^nd 3^rd and 4^th defendants and the 5^th and 6^th defendants. The plaintiff was

$-$ *niem* not party to the same and cannot derive any rights from it despite the same referring to her. See Section 64 of the Contract Act.

The doctrine of privity prevents a third party from suing on contract to which he or she is not a party.

According to the case Abdurahman Elamin versus DHABI GROUP & 2 Ors Court of Appeal of Uganda CA No.215 of 2013 it was held that one who is not a party to the contract cannot be sued or sue on it. (Also see the case of Beswick v Beswich 1967] 2 All ER 1197)

The plaintiff did not prove any case against the $5^th$ and $6^th$ defendants. The case against the 5^th defendant has already been dismissed for lack of services and I now dismiss the case against the $6^{th}$ defendant for failure to prove the same proved against him.

2. Whether there was breach of the agreement by the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants

#### **Submissions**

The learned counsel for the plaintiff submitted that the $1^{st}$ , $2^{nd}$ $3^{rd}$ and $4^{th}$ defendants breached the land sale agreement. He cited the case of Standard Chartered Bank (U) Ltd **-V- Akitine Paul HCCS No. 389 of 2018** to define breach of contract. Counsel submitted that the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants breached the contract by failing to provide vacant possession, unencumbered title and quiet possession of the suit land to the plaintiff. That under clause 3 of the agreement, the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants undertook to provide vacant possession of the land. The plaintiff made all efforts to take possession of the suit land without any success. That Instead of handing over the suit land, the 1^st, 2^nd, 3^rd and $4^th$ defendants became very elusive and difficult to locate.

Counsel further submitted that the 1^st, 2^nd, 3^rd and 4^th defendants failed to provide an unencumbered title and their clearance of the $5^{th}$ and $6^{th}$ defendants' claims over the land. That in the agreement dated $1/8/2017$ (Exh P.4) between the 1^st to 4^th defendant and the $5^th$ and $6^th$ defendants, the 5th and $6^th$ defendants agreed to vacate their caveats having

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received compensation. That the vendors agreed to settle the caveators' claims which was not done and the caveats have not been vacated. Further that the 1^st, 2^nd, 3^rd and 4^th defendants agreed to surrender the duplicate certificate of title, transfer forms, passport photographs and a copy of their national identity cards to the plaintiff but till to date the same has not been done. That the defendant's actions were fraudulent and constituted misrepresentation.

#### Analysis.

Breach of contract is defined in the *Black's Law Dictionary* $5^{th}$ *Edition pg* 171 as where one party to a contract fails to carry out a term.

In the case of Stanbic Bank Uganda Limited -V- Haji Yahaya Sekalega T/A Sekalega Enterprises High Court Civil Suit No. 185 of 2009 at page 6 court observed that;

"A breach of contract is the breaking of the obligation which a contract imposes which confers a right of action in damages to the injured party. It entitles him to treat the contract as discharged if the other party renounces the contract or makes *performance impossible or substantially fails to perform his promise."*

In the case of Dr. Karuhize Byarugaba –V- Richard Lumu civil suit no. 419 of 2018. 2023 **UGHCLD 40 (11 January 2023) the court held that;**

"In a contract for sale of land, the vendor has the primary obligation to convey *the land to the purchaser free from any encumbrances. The vendor will be in breach* of the obligation to convey the land free from encumbrances, where there remain on the land persons who are lawfully in possession such as tenants or licensees; or where there are trespassers on the land; or where there are legal impediments to the enjoyment of property. (Megarry & Wade: The Law of Real Property, 9th Edition, Stuart Bridge, Elizabeth Cooke and Martin Dixon, Sweet & Maxwell, London, 2019 at paragraphs 14-088; and 14-089)"

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In the instant case, the plaintiff contends that the 1^st, 2^nd, 3^rd and 4^th defendants breached the contract by breaching clauses $1, 3$ and $5$ of the sale agreement.

In clause 1 of the agreement, the vendors ( $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants) warranted to transfer the suit land free of any encumbrance whatsoever, all their interest in the said property to the purchaser. (plaintiff).

In clause 3, the vendors warranted to handover vacant possession of the suit land to the purchaser and introduce the purchaser as the new owner to the authorities of the area upon execution of the agreement.

In clause 5, the vendors further warranted to pass good and unencumbered title to the purchaser and that the purchaser was to enjoy quiet possession of the same without any interference from the vendors or their agents and that the title shall vest in the purchaser.

It was undisputed evidence of PW1 that the plaintiff made all efforts to take possession of the land and procured services of JB Surveying Services to conduct the subdivision of the land but the defendants became very elusive and difficult to trace. That to date, the defendants are still in occupation of the land and have failed to vacate the same. Further still that the caveats lodged by the 5^th and 6^th defendants on the suit land have never been vacated and the $1$ ^st, $2$ ^nd, $3$ ^rd and $4$ ^th defendants refused to hand over the certificate of title and transfer forms to the plaintiff to enable it transfer the suit land into its name.

From the sale agreement (Exh. P.3), it is clear that the plaintiff was well aware of the caveats lodged on the suit land by the $5^th$ and $6^th$ defendants at the time of execution of the said agreement. Clause 13 of the agreement stipulates that the caveat lodged by third parties namely Mbaziira Yusuf and David Mark Katumba (5^th and 6^th defendants respectively) shall be lifted by the said caveators immediately upon their claim being settled by the vendors.

In addition to that, the said vendors ( $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants) went ahead to enter into a side agreement (Exh P.4) dated $1/8/2017$ with the 5^th and 6^th defendant (caveators)

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agreeing to settle the claims of the caveators upon which they were to lift their caveats from the suit land. I however take note of the fact that the said agreement was signed by a one counsel Fred Bogere of Majoli Bogere Mutakirwa Advocates on behalf of the 5^th and $6^th$ defendants.

Whereas I am of the view that the same agreement (Exh. P.4) has got a number of irregularities and is rather questionable, this did not take away the fact that the vendors warranted to settle the claims of the said caveators and to handover vacant possession of the suit land to the plaintiff which was not done. The search statement dated $15/10/2020$ showed that the caveats lodged by the 5^th and 6^th defendants had not been lifted. Further still, the certificate of title and transfer forms were not handed over to the plaintiff for the purposes of transferring the land in its name.

Section 32 (1) of the Contracts Act stipulates that;

(1) The parties to a contract shall perform or offer to perform their respective promises, unless the performance is dispensed with or excused under this act or any other law.

In the instant case, based on the above findings, the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants did not perform their promises as stipulated in the land sale agreement therefore their actions and omissions amount to breach of contract. Issue no.2 is resolved in the affirmative.

3. Whether the claims by the $5^th$ and $6^th$ defendants on the suit land were cleared by the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants.

As already noted, at the execution of the land sale agreement (Exh P.3), it was blatantly clear that the plaintiff/purchaser was well aware of the interests of the $5^th$ and $6^th$ defendants as well as their respective caveats on the land that was being purchased. Despite knowing all that, the plaintiff went ahead to purchase the suit land subject to the said interests. In clause 13 of the agreement, it was agreed that the vendors would settle the claims of the caveators.

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This led to execution of another side agreement called 'an agreement for lifting caveat' (Exh. P.4). The agreement was between the $1^{st}$ , $2^{nd}$ $3^{rd}$ $4^{th}$ defendants and the $5^{th}$ and $6^{th}$ defendants acting through $c/o$ Majoli Bogere Mutakirwa Advocates.

Clause 2 of Exh P.4 states

"by appending their signatures on these presents the caveators through their legal representative acknowledge the receipt of the sums above said which was owing to them and do admit that the debt against the vendors is fully and finally settled and they have no further claims against the vendors."

I have already laid down the elements of a valid and binding contract. The entry into a contract with an intention to be legally bound is very crucial. In this case whereas the agreement in Exh P.4 states that it was between the $1^{st}$ , $2^{nd}$ , $3^{rd}$ , $4^{th}$ on one hand and the $5^{th}$ and $6^{th}$ defendants on the other hand, the $5^{th}$ and $6^{th}$ defendants did not append their respective signatures on the said agreement. The agreement shows that it was signed by Fred R. M Bogere as the caveator who was alleged to be the legal representative of the 5^th and $6^{th}$ defendant.

There is no evidence that was adduced by the plaintiff to show that indeed the said R. M. Bogere was the legal representative or a lawful attorney of the 5^th and 6^th defendants authorizing the said Bogere to enter into the agreement on their behalf.

Further in clause 4 of the said agreement, it was stated that the vendors ( $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^th$ defendants) authorized the purchaser (plaintiff) to pay the money due to the $6^th$ defendant amounting to two hundred and twenty-five million shillings $(225,000,000/=)$ directly into the account of Fred M Bogere in Barclays Bank. This further shows that the money was not directly paid to the 6^th defendant by the 1^st, $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants.

Counsel for the plaintiff submitted that the $6^th$ defendant filed a written statement of defence wherein he denied having any claims in respect of the suit land however the said $6^th$ defendant did not come to court to confirm on the same.

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The above notwithstanding, the 6^th defendant stating in his written statement of defence that he did not have any claims on the suit land does not imply that his interests were settled by the $1^{st}$ , $2^{nd}$ $3^{rd}$ and $4^{th}$ defendants.

Counsel for the plaintiff stated that the 1^st, 2^nd 3^rd 4^th and 5^th defendants did not file their written statement of defence or participate in the hearing of the case. As a result, the court entered interlocutory judgment against them. Counsel cited the case of **Nabbona and 2** Others –V- Mukasa and 2 others HCMA No. 1072 of 2021 where the court held that facts adduced in evidence that are neither denied or rebutted are presumed to be admitted.

On $17^th$ May 2022, this honorable court issued an order to have the summons to file a defence in this suit renewed and served onto Messrs Majoli Bogere Mutakirwa advocates on behalf of the $5^{th}$ and $6^{th}$ defendants. However, the said law firm only filed a written statement of defence of the 6^th defendant. This implied that they did not have instructions to represent the 5^th defendant Mbaziira Yusuf.

Further, in clause 5 of Exh P.4, and in clause 3 (d) of 'the fulfillment of undertaking (Exh P.5) it was stated that four million shillings $(4,000,000/=)$ that was due to the Yusuf Mbaziira (5^th defendant) for caveat removal was retained by the plaintiff for the benefit of the $5$ ^th defendant.

From the above findings, no conclusive evidence was brought to show that the claims by the 5^th and 6^th defendants on the suit land were cleared by the 1^st, 2^nd, 3^rd and 4^th defendants. In any case plaintiff was not a party to the agreement that was executed between the defendants and cannot lay any claim over it. This issue is answered in the negative.

## 4. What are the remedies available to the parties?

## a) Specific performance.

Counsel for the plaintiff prayed that the court issues an order for specific performance compelling the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants to surrender to the plaintiff the certificate

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of title and transfer documents of the suit land, to ensure that the 5^th and 6^th defendants vacate their caveat on the suit land and to be granted vacant and quiet possession of the suit land.

# Analysis.

Section 63 of the Contracts Acts provides for the remedy of a right to specific performance.

Subsection 1 states that where a party to a contract, is in breach, the other party may obtain an order of court requiring the party in breach to specifically perform his or her promise under the contract.

Subsection 2 goes further to provide instances where specific performance of a contract may not be ordered. These include where $-$

- (a) it is not possible for the person against whom the claim is made, to perform the contract: - (b) the specific performance will produce hardships which would not have resulted if there was no specific performance; - (c) the rights of a third party acquired in good faith would be infringed by the specific performance; - (d) specific performance would occasion hardship to the person against whom the claim is made, out of proportion to the benefit likely to be gained by the claimant; - (e) the person against whom the claim is made is at the time entitled, although in breach, to terminate the contract; or - (f) the claimant committed a fundamental breach of his or her obligations under the contract; but in cases where the breach is not fundamental, specific performance is available to him or her subject to his or her paying compensation for the breach.

See also: Mutange Cainan -V- Afromix Construction Ltd and Anor HCCS No. 118/2020, Kyarimpa Sarah -V- Harriet Nassozi Hewett HCCS No. 0794/2016.

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In the instant case, whereas the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants sold the suit land to the plaintiff, the same land was subject to the interests of the 5^th and 6^th defendants wherein each of them lodged a beneficiary's caveat and the same have not yet been vacated. The search certificate presented by the plaintiff himself reflects another beneficiary's caveat lodged thereon and is not a subject of these proceedings.

I have already found that there is no proof that the claims of the $5^th$ and $6^th$ defendants were settled by the 1^st to 4th defendants. The plaintiff was well aware of the caveats lodged by the 5^th and 6^th defendants but went ahead to purchase the suit land before caveats were lifted. Granting specific performance in this case would affect the rights of the $5^{th}$ and $6^{th}$ defendants and other third parties whose interests have not been interrogated. I therefore find that ordering for specific performance is not ideal in this case and I decline to do so. An order for specific performance not granted.

### b) Special Damages.

A purchaser of land has an obligation to conduct thorough due diligence on the land and the vendor prior to executing a contract for purchase of land. The purchaser is under a duty to mitigate the loss once he or she has discovered the misrepresentation of material facts.

It is my holding that the only damages which the plaintiff/purchaser can recover from the defendants are those that are a direct result of the vendor's breach of the contract. I do refer to Section 60 of the Contracts Act (2010) which provides for compensation for loss or damage caused by breach of contract

**Sub-section** (2) provides that the compensation referred to in subsection $(1)$ is not to be given for any remote and indirect loss or damage sustained by reason of the breach.

**Sub-section (4)** provides that in estimating the loss or damage arising from a breach of contract, the means of remedying the inconvenience caused by non-performance of the contract, which exist, shall be taken into account."

$-$ *wam* Counsel for the plaintiff claims for the following damages under specific damages.

- $\dot{i}$ . the purchase price – $450,000,000/$ = - $\ddot{\text{ii}}$ . hiring survey services $-3,700,000/=$ - iii. hiring an investigator $-23,400,000/=$ - iv. hiring tractors to till the land $-36,000,000/=$ - lodging caveat and expenses incurred during the meeting with squatters in $\mathbf{v}$ . hopes of settling – $30,000,000/=$

# Analysis.

The general principle on special damages as held in **Gapco (U)** Ltd -V- A. S. Transporters (U) Ltd CACA No. 18/2004 and Haji Asuman Mutekanga -V- Equator Growers (U) Ltd, SCCA No.7/1995 is;

"Special damages must be specifically pleaded and proved, but that strictly proving does not mean that proof must always be documentary evidence. Special damages can also be proved by direct evidence; for example, by evidence of a person who received or paid or testimonies of experts conversant with the matters".

#### $\mathbf{i}$ . Purchase price

The plaintiff claimed for recovery of $450,000,000/$ = for the purchase of the suit land.

The sale agreement dated $1/8/2017$ (Exh P.3) stipulated that the purchase money was paid to the $1$ ^st, $2$ ^nd, $3$ ^rd, $4$ ^th defendants before appending the signature. The caveats were there after supposed to be lifted upon the vendors settling the caveators' claims amounting to shillings two hundred and twenty-five million (shs.225.000.000).

The agreement for lifting the caveat (Exh p.4) between the vendors and the caveators shows that at the request of the $1^{st}$ , $2^{nd}$ , $3^{rd}$ and $4^{th}$ defendants the plaintiff deposited $221,000,000/$ = into the account of a one Fred M. Bogere counsel for the vendors. This was fulfilment of an undertaking by the $6^{th}$ defendant dated $2/8/2017$ (Exh P.5). Shs

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$200,000,000=$ for the vendors was transferred to the account of Lugemwa John Bosco the $1$ ^st defendant and Shs 21.000.000= was paid in cash to the four vendors.

In the same agreement shs. $4,000,000/$ = meant for the 5^th defendant remained in possession of the plaintiff and was not paid out.

In the same agreement it stated that the plaintiff was entitled to vacant possession of the land in issue.

Despite the plaintiff not being a party to the agreement of undertaking dated 1^st of August 2017, the same agreement sunder clauses 4 and 8 guarantees that the plaintiff paid the money in issue.

Basing on the above evidence I conclude that the plaintiff paid the money according to the instructions of the $1^{st}$ to $4^{th}$ defendants. In total amount the plaintiff paid is shs. 446,000,000= after retaining shs.4.000.000= which it is entitled a refund of.

Therefore, the plaintiff is entitled to a refund four hundred forty-six million shillings (446,000,000/=) as purchase price of the suit land from the 1^st, 2^nd, 3^rd and 4^th defendants.

### ii. Hiring an investigator, hiring tractors to till the land and Hiring survey services.

The plaintiff's only witness stated that the plaintiff hired an investigator, hired surveyor and hired tractors to till the land.

All these claims were not pleaded and hence cannot be raised in evidence and submissions.

In the case of Alice Kisoke & Anor versus Katalihwa Ruhanga MA O118 of 2022 at Fort **portal** it was held that it is settled law that party cannot be allowed to succeed on case that is not put forward by him or her in the pleadings. I decline to ward the same.

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## iii. Lodging a caveat and expenses incurred during the meeting with squatters in hopes of settling

The plaintiff pleaded and referred to this expenditure in the evidence of PW1. However, there is no other evidence which was adduced to prove. This is not granted.

#### iv. **Mesne profits**

Counsel for the plaintiff prayed for mesne profits in the sum of $150,000,000/$ =. He stated that the plaintiff intended to use the suit land measuring 300 acres for commercial agriculture purposes. However, the defendants have continued to enjoy the value of the suit land to the detriment of the plaintiff.

## Analysis.

Mesne profits of property mean those profits which the person in wrongful possession of the property actually received or might with ordinary diligence have received from it, together with interest on those profits, but shall not include profits due to improvements made by the person in wrongful possession.

In Vivo Energy (U) Limited -V- Shire Petroleum Company Limited Civil Suit No. $008/2016$ , the court stated that;

'in assessing mesne profits, the proper starting point is the value of the land encroached upon. They are in general awarded because the defendant has made *improper use of an asset of the plaintiff. In economic terms, there has been a transfer of value for which the wrong doer must account''*

In the case of George Kasedde Mukasa -V- Emmanuel Wambedde and 4 Ors HCCS NO. 409/1998 It was held that it is settled law that wrongful possession of the defendant's *land is the very essence of a claim for mesne profits.*

In this case, the plaintiff simply prayed for an award of $150,000,000/$ = in mesne profits but did not stipulate how the same has come about.


It is already my finding that the $1^{st}$ $2^{nd}$ $3^{rd}$ and $4^{th}$ defendants breached the contract by denying the plaintiff vacant possession of the land and hence I find that the plaintiff is entitled to mesne profits. I find that the amount claimedshs. $150.000.000=$ is quite high and not justified.

I find that an amount of twenty million shillings (shs. $20,000,000/$ =) in mesne profits appropriate in this case. I grant the same.

#### Compensation for loss of income and business $\mathbf{v}$ .

In the evidence adduced, PW1 stated that the plaintiff purchased the impugned land with the intention of engaging in commercial agriculture and made a loss of USD 733,334.

The learned counsel for the plaintiff submitted that the plaintiff purchased the suit land with an intention of engaging in commercial agriculture whereby its intended plans and projections would have seen the plaintiff realize USD 733,334 had the plaintiff commenced operations on the land immediately upon purchase. That the actions of the defendants deprived the plaintiff of the commercial benefit of the funds she invested in purchasing the suit land. Counsel cited the case of Robert Cuissens -V- Attorney General SCCA No. 08 Of 1999.

# Analysis.

In the case **Robert Coussens -V- Attorney General (supra)**, Order JSC stated that;

*"an estimate of prospective loss must be based in the first instance on a foundation"* of solid facts; otherwise it is not an estimate, but a guess. It is therefore, important that evidence should be given to the court of as many solid facts as possible. One of the solid facts that must be proved to enable the court assess prospective loss of earnings is the actual income which the plaintiff was earning at the time of his *injury. (underlined emphasis mine)*


In the instant case, PW1 stated that the plaintiff intended to carry on a maize project on the suit land that was going to bring about returns of USD 733,334. The plaintiff did not bring any evidence to prove that they had been carrying on the said project and

how the same had previously earned. The intended project seems to have been a new project that the plaintiff had never carried out. Therefore, it is difficult for this court to estimate the prospective earnings of the intended maize project. This prayer is therefore not granted.

## c. General damages.

General damages are damages awarded to a party for any loss or inconvenience caused. They are a direct natural or probable consequence of the act complained of and follow the ordinary course or relate to all other terms of damage whether pecuniary or none pecuniary, future loss as well as damages for paid loss and suffering. **See: Wakabi Simon** -V- Apollo Kantinti HCCS No. 1245 of 2018.

Counsel for the plaintiff called upon this court to exercise its discretion to grant the plaintiff general damages.

I do find that indeed the plaintiff has been so inconvenienced by the acts of the defendants. In the circumstances I consider general damages of $30,000,000/$ = appropriate in this case.

#### $d$ . **Interest.**

Section 26 (2) of the Civil Procedure Act cap 282 provides that:

$(2)$ Where and insofar as the decree is for the payment of money, the court may, in the decree, order interest at such a rate as the court deems reasonable to be paid on the principle sum adjudged from the date of the suit to the date of the decree, in addition to any interest adjudged on such principle sum for any period prior to the institution of the suit, with further interest at such rate as

TMann

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# the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit."

The plaintiff's counsel prayed for interest at a rate of 25% per annum on the pecuniary awards and on the costs of the suit.

It is a settled position of the law that interest is awarded at the discretion of court. I find the rate of 25% rather too high. I award interest at a rate of 18% per annum on general damages mesne profits awarded from the date of this judgment until payment in full.

# **e.** Costs of the suit.

Section 27 of the Civil Procedure Act Cap 282 provides that costs shall follow the event. The plaintiff in this suit is entitled to costs. In the circumstances, I grant costs of the suit to the plaintiff.

In conclusion judgment is entered in favor of the plaintiff with the following orders that:

- a) There is a valid land sale agreement between the plaintiff and the $1^st$ , $2^nd$ , $3^rd$ and 4^th defendants. - b) The 1^st, 2^nd, 3^rd and 4^th defendants breached the terms of the contract for the sale of the suit land in issue. - c) The 1^st 2^nd 3^rd and 4^th Defendants shall pay back to the plaintiff 446,000,000/= being the money paid as purchase price for the suit land. - d) The plaintiff is awarded twenty million shillings $(20,000,000/=)$ in mesne profits - e) The Plaintiff is granted to thirty million shillings $(30,000,000/=)$ as general damages for breach of the contract.

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- f) Interest of 18% per annum shall be payable to the award in (c) above from time of delivery of this judgment till payment in full. - g) The Plaintiff is granted costs of the suit. - h) The suit against the $5^{th}$ and $6^{th}$ defendants is dismissed without costs.

I so order.

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KAREMANI JAMSON. K **JUDGE** 01/10/2024