[2021] UGHCLD 401

# THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA

### (LAND DIVISION)

# CIVIL SUIT NO. 143 OF 2016

$\mathsf{S}$

# 1. MICHAEL LWANGA

2. NULUWOOZA MIRIAMU....................................

### **VERSUS**

BALIKUDDEMBE JOSEPH.................................... $10$

Before: Lady Justice Alexandra Nkonge Rugadya

### **JUDGMENT**

#### 15 Introduction:

The plaintiffs filed this suit jointly and severally seeking a declaration that they are beneficial equitable owners of the land comprised in Block 488, plot 1 at Nankonge Ssisa, Wakiso district, measuring approximately 4 acres and 2 acres, respectively; an order for specific performance in respect of the contract executed between the plaintiffs and the defendant on the 3^rd September, 2012.

In the alternative, a refund of the purchase price with interest thereon at commercial rate of 25% per annum from the date of executing the agreement until full payment; general damages for breach of contract of sale of land; and costs of the suit.

### **Brief facts:**

The plaintiffs' action is based on their claim that on the 3^rd day of September, 2012 entered into 25 separate agreement with the defendant.

The plaintiffs paid *Ugx 60,000,000/*= for 4 acres while the 2^nd plaintiff paid *Ugx 30,000,000/*= for 2 acres. They jointly claim that he signed the transfer and mutation forms and handed over

the necessary documents to enable them transfer the title into their names and he however failed to hand over possession, thus failing to honor his obligations under the contract.

The defendant in denying the allegations pleaded that he had been hospitalized which prevented him from taking the necessary action to amicably resolve the dispute.

#### $\mathsf{S}$ **Representation:**

The plaintiffs were represented by *M/S* C. *Mukiibi* & Co. *Advocates*, while the defendant was initially represented by **M/S Bwengye, Aisu & Co. Advocates.** Personal service was effected on him on 19^th August 2020 as per affidavit of service dated 31^st August, 2020 requiring him to attend the hearing on 1st September, 2020.

10 Service had been effected to him again, as per affidavit of service dated 7^th October, 2020. The process server Mr. Charles Ssemwezi had again later contacted the defendant on 22^nd October, 2020 on his mobile number, notifying him of the hearing fixed for 28^th October, 2020.

The two agreed to meet in the Chambers of *M/S Mugerwa & Co. Partners Advocates* to effect service, where the notice was served to the defendant himself. That evidence is availed on the return copy.

Another affidavit dated 28^th October 2020 by Mr. Ssemwezi Charles indicates that service was effected to Mr. Mugerwa who had informed him that the defendant was not available and advised him to return on 26^th October 2020. On that day, he received a copy of the hearing notice duly receipted and acknowledged.

20 On 28^th October, 2020, the matter was adjourned to 2^nd November, 2020. In a yet another affidavit of service dated 2^nd November 2020, the process server had again contacted the defendant on his mobile number to inform him about the change in dates.

He depones that the defendant had informed him that the matters between him and the plaintiffs had been settled, a claim which the plaintiffs however denied.

25 Satisfied that sufficient efforts had been made by the plaintiffs to effect service to the defendant and also about his lack of interest in defending himself which was demonstrated by his failure to turn up in court on each of those occasions, this court proceeded to hear the matter in his absence.

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## Issues:

- 30 The following were the issues identified for determination: - 1) Whether the defendant has a plausible defence to the claim.

Nabol

- 2) Whether the defendant breached the agreement - 3) Remedies available

### Consideration of the issues:

### Issue No. 1: Whether the defendant has a plausible defence to the claim.

By virtue of section 101 (1) of Evidence Act, Cap. 6, whoever desires court to give judgment $\mathsf{S}$ to any legal right or liability depending on the existence of any facts he/she asserts must prove that those facts exist. (George William Kakoma v Attorney General [2010] HCB 1 at page 78).

The burden of proof lies therefore with the plaintiff who has the duty to furnish evidence whose 10 level of probity is such that a reasonable man, might hold more probable the conclusion which the plaintiff contend, on a balance of probabilities. (Sebuliba vs Cooperative Bank Ltd. [1982] HCB 130; Oketha vs Attorney General Civil Suit No. 0069 of 2004. The principle equally applies to this case where proceedings were *exparte*.

Order 6 rule 30 of the CPR provides for striking out of pleadings on ground it discloses no 15 reasonable cause of action or answer and in any such case or in case of the suit or defence being shown by the pleadings to be frivolous or vexatious. Court may in that case order judgment to be entered accordingly.

Bearing the above principles in mind, the plaintiffs' argument is that the defence was frivolous and on that account, ought to be struck out with costs for failure to give a reasonable answer to the plaintiffs' claims.

The 1^st plaintiff, Mr. Lwanga Charles, the sole witness, testifying as **PW1** told court that both him and the 2^nd plaintiff had jointly entered into negotiations for independent portions of land each comprised in **Block 488, Plot 1 at Nankonge Ssisa, Wakiso district.** Both transactions took place around the same time.

$25$ **PExh 1** was a sale agreement between him and the defendant, dated $3^rd$ September, 2012 for the suit land. The contract was signed in the presence of the local authorities.

**PExh 2** was the sale agreement between the defendant and the $2^nd$ plaintiff, signed same day and also witnessed by the local leaders. A demand letter /notice of intention to sue dated 29^th July, 2014 is also marked as **PExh 3**.

30 The letter was written by counsel for the plaintiffs. It was corroborative proof that the defendant had failed to hand over the transfer documents title, despite the fact that the full amounts had been made to him.

Autory

In his submissions, the learned counsel argued that the defendant failed to respond to the allegations and that since his defence was evasive it ought to be struck out, with costs.

In the WSD, the following is all he had to state in his defence:

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4. In reply to paragraph (4a), (4b) and (4c) of the plaint, the defendant shall further aver and contend that he was only acting in good faith to mitigate and amicably solve poor mannerism in his office by one of his junior legal colleagues brought on to the plaintiffs friend Kayiira Mathias.

5. The defendant shall further aver that because he has been greatly ill being hospitalized for close to over 3 years, this grossly affected his intended action of good will to have this issue solved amicably and with a lot of civility.

6. The defendant denies the rest of the contents of the plaint and shall put plaintiffs to strict proof of the allegations therein.

7. Save for the submission of the jurisdiction of this honorable court, no liability of any kind is admitted ....

The contents above speak for themselves. I could not agree more therefore that the defence lacked 15 clarity and persuasion, was evasive, and therefore insufficient to support a proper defence.

Counsel cited the decision in Hubbuck and Sons Ltd vs Wilkison Heywood and Clerk Ltd (1899) 1 QB 89. Indeed where the court is able to say that the defence is insufficient, then the pleadings ought to be struck out.

The plaintiff still however has to satisfy court that the case as presented by him/her would merit 20 the reliefs sought.

**PExh1- PExh3**, the evidence relied on by the plaintiffs was not challenged and indeed neither contract was affected by any illegality or other vitiating circumstances.

To date, the defendant has failed to honor the obligations spelt out in both contracts and has 25 failed to advance any justification for such failure despite the fact that on numerous occasions he has been served, and even acknowledged the service of the court papers.

The first issue is therefore answered in the affirmative.

### Issue No. 2: Whether the defendant breached the agreement:

A breach occurs when a party neglects, refuses or fails to perform any part of its bargain, or any term of the contract, written or oral without legitimate excuse.

Jerbary

It is the breaking of the obligations which a contract imposes and this confers a right of action for damages on the injured party. It entitles him or her to treat the contract as discharged if the other party renounces the contract or makes the performance impossible or substantially fails to perform his promise; the victim is left suing for damages, treating the contract as discharged or seeking a discretionary remedy. (Ronald Kasibante vs Shell Uganda Ltd HCCS No. 542 of

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The defendant's efforts to deny that the full amounts as per the undertaking in the agreement had in this case been feeble, bordering on an admission. He did not deny the allegation of failure by him to hand over the titles vacant possession, signed transfer forms, mutation forms, passport photographs as per clause 4 of each respective agreement, which were conditions considered by

this court to have been crucial to the perfomance of the contract.

In clause 7 of each of the respective agreements which were drafted in similar content and form, the parties committed themselves to live by the doctrine of utmost good faith in each transaction. The defendant in failing to comply with an important aspect of the contract thus failed to conduct

himself with utmost good faith. 15

2006 [2008] ULR 690).

Not only did he fail to effect the transfer as per the commitments made by him, he also failed to make any response to the written demand made to him in writing by the plaintiffs' lawyers. (PExh 3); and, when the chance was availed to him he also failed to explain to court why he could not honor his side of the bargain. It becomes therefore a foregone conclusion that he breached the

20 two contracts.

> The plaintiffs on their part took the trouble to have the agreements endorsed by the area leaders, sufficient proof that they were *bonafide* in their respective transactions.

As per the case of Ismael Jaffer Allibhai and others vs Nandalar Harvijan Karia & another SCCA N. 53 of 1995, court observed that in a sale of immovable property, upon payment of a deposit, the property passes to the purchaser who acquires an equitable interest.

It is also well-established as a general principle that a purchaser who has concluded a sale agreement with the owner immediately becomes the owner of the land, and the vendor becomes a trustee in title. (See: Semakula &another vs Sentiba, Civil Appeal No. 5 of 2013).

**Issue No. 2** is therefore also determined in favour of the plaintiffs.

#### 30 Issue No. 3: Remedies.

The plaintiffs sought for an order for specific performance of their contracts executed between them and the defendant on the $3^rd$ September, 2012.

(Julio 9)

In the alternative, they sought a refund of the purchase price with interest thereon at commercial rate of 25% per annum from the date of executing the agreement until full payment; general damages for breach of contract of sale of land; and costs of the suit.

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Since there was no disputing the fact that the two agreements were entered into between the parties; full amounts were paid; and that the defendant had failed to honor his obligations under each of those agreements, I am inclined to agree that the plaintiffs are entitled to some reliefs.

## a. Right to specific performance/refund:

Section 64 of the Contract Act, No. 7 of 2010 provides for the right to specific performance, where a party to the contract is in breach to specifically perform his or her promise under contract.

In the alternative, the plaintiffs requested for a refund of the purchase price with interest at the commercial rate from the date of executing the contract till payment in full, in the event of failure to comply with the order for specific performance.

Section 61 of the Contract Act No. 7 of 2010 provides that where there is breach the party 15 who suffers the breach is entitled to receive from the party who breaches the contract compensation for any loss or damage caused to him or her.

A party who seeks specific performance as in the present case, must in my view do a bit more to satisfy court that several years after the contract was signed it is still possible to execute such order.

The agreements in this case were made on 3^rd in September, 2012 for the land comprised in 20 Busiro Block 488 plot 1at Nankonge Ssisa Subcounty, Wakiso.

The suit was filed in 2016 but it was not until November, 2020 that the matter was heard and concluded. Within a space of eight years, a lot may have happened on the suit land and this cannot rule out the possibility that bonafide 3^rd party interests may have been created.

The only way to rule out this possibility would have been to present an area schedule and/or 25 search certificate, to establish the current ownership of the suit land, which the plaintiffs failed to do.

That therefore left them with the option of a refund of the sums paid in form of purchase price, together with interest accruing.

30 b. Interest:

Unborg

As laid out in Premchandra Shenoi & Anor versus Maximor SCCA NO. 31/2003 the basis for the award of interest is that the defendant has taken (as proved in this case and presumed therefore to have used) the plaintiff's money and benefited. Consequently, the defendant ought to compensate the plaintiffs for the money taken and used for a decade, for his sole and exclusive benefit.

$\mathsf{S}$

### c. General damages:

Damages are the direct probable consequences of the act complained of. Storms vs Hutchison (1905) AC 515; Kampala District Land Board & George Mitala vs Venansio Babweyana, Civil Appeal No. 2 of 2007.

The damages may accrue as a consequence due to loss of use, loss of profit, physical 10 inconvenience, mental distress, pain and suffering. A plaintiff who suffers damage due to the wrongful act of the defendant must be put in the position he or she would have been in, had she not suffered the wrong.

In Robert Caussens v Attorney General SCCA No.8 of 1999 it was pointed out that the object of the award of damages is to give the plaintiff compensation for the damage, loss or injury he or 15 she has suffered.

In the assessment of the quantum of damages courts are mainly guided by the value of the subject matter, the economic inconvenience that the party was put through at the instance of the opposite party and the nature and extent of the breach. (Uganda Commercial Bank V Kigozi

[2002]) 1 EA 305. 20

> As observed earlier, as purchasers who had concluded a sale agreement with the defendant, the plaintiffs immediately became respective owners of the suit land, and the vendor a trustee in title and therefore owed each plaintiff a duty of care. (See: Semakula &another vs Sentiba, supra).

The plaintiff may not therefore prove that he/she suffered general damages, it is enough if he/she shows that the defendant owed such duty which he/she breached. (See: KALEMERA & OTHERS 25 VS UNILIVER (U) LTD & ANOTHER [2008] HCB 134 AT 136).

In light of the above, it is the conclusion by this court that the plaintiffs have discharged the legal burden to prove that they are entitled to the following reliefs:

1. A refund to be made to Mr. Michael Lwanga for a sum of Ugx 60,000,000/=, with 30 interest payable at the prevalent commercial rate per annum, from 3^rd September, 2012, till payment of the full amount;

lives by

- 2. A refund to be made to Ms Naluwooza Mariam, for a sum of Ugx 30,000,000/=, with interest payable at the prevalent commercial rate per annum, from 3^rd September, 2012, till payment of the full amount; - 3. General damages of Ugx 50,000,000/= for breach of contract, to be paid to each plaintiff, with interest at a rate of 10%, payable from date of delivering this judgment, until payment in full; - 10

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4. Costs of the suit.

I so order,

Alexandra Nkonge

Delivered via exail.<br>Albert 18/2021.

**Judge**

11^th May, 2021