[2025] UGCommC 212

# 5 THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) HIGH COURT CIVIL SUIT NO. 875 OF 2019

# 10 1. MWESIGYE ISHA EVANS…………….……………PLAINTIFFS

# 2. MWESIGYE SARAH

#### VERSUS

# 1. TEBAGALIKA KASIRYE G. W.

2. LIVINGSTONE LUGUMBA………………………DEFENDANTS

15 3. CHRISTOPHER KIZITO

(Administrators of the estate of the Late Yokana Sooka)

# BEFORE: HON LADY JUSTICE SUSAN ODONGO

# RULING

20 This suit was instituted for breach of sale of land contract, recovery and/or refund of Ugx 16,000,000 which was the purchase price, special damages of Ugx 98,553,000/=, interest of 10% per month from the time of default till payment in full, general damages and costs of the suit.

# Background

On 1 25 st November 2004 the plaintiffs purchased land comprised in Block 215 Plot 1245 at Kulambiro, Nakawa Division, Kampala District, at a total price of Ugx 16,000,000 from the defendants who were administrators of the estate of the late Yokaana Sooka. The plaintiffs then registered the land in their names and entry was made on 3 rd February 2006. Under the sale agreement, 30 the defendants warranted that incase the sale to the plaintiffs is frustrated by

claims or problems arising from the vendors' lack of authority or from third

- 5 parties claiming under the estate, the vendors undertake to indemnify the buyers and or refund any funds so far disbursed or any part of the consideration paid. That this may be recovered by summary procedure with a compound interest of 10% per month if not paid within one month of demand. - On 24th 10 September 2010, the plaintiffs sold the land to Akello Christine and Christopher Chakamoi at Ugx 42,000,000/-. However, the subsequent buyers could not take possession because another party, Nabawanuka Christine, claimed a beneficial interest in the estate from which the land was sold. This led to the cancellation of the land registration in the plaintiffs' 15 names and the reinstatement of the original plot to Nabawanuka Christine by the Commissioner Land Registration. Consequently, the plaintiffs had to refund the purchase price and pay legal costs of Ugx 10,053,500 to Akello Christine and Christopher Chakamoi in a separate court case (Civil Suit No. 232 of 2016) which was concluded under a consent judgement. - 20 The plaintiffs then demanded from the defendants the refund of the purchase price, interest and special damages but the defendants have refused to pay. The plaintiffs contend that the defendants' failure to refund the money and their ongoing refusal to do so, along with their deceptive conduct, constitute a breach of contract and have caused significant financial loss. The plaintiffs 25 particularly allege misrepresentation and fraud against the defendants.

The defendant's argument is that the agreement between the plaintiffs and themselves was not frustrated and the plaintiffs even transferred the land into their names without interference from a third party. That they have no knowledge of any subsequent dealings in the land because their transaction 30 with the plaintiff was successful. The defendants deny misrepresentation and aver that the land was sold as part of the estate of the late Yokana Sooka and they had the authority to sell it as administrators of the estate at the time.


- 5 They contend that there is no breach of sale agreement as the land was successfully transferred to the plaintiff now over 15 years since the sale. That the defendant was never called upon to participate in the suit against the plaintiffs and cannot be made liable to its orders. They pray that the suit is dismissed with costs. - 10 By letter to this court from M/s Baraka Legal Associates, by which they informed this court that they no longer have instructions to represent the defendants, they also stated that the 2 nd and 3 rd Defendants are now deceased and that the defendants are no longer administrators of the estate of the Late Yokana Sooka having renounced the same several years ago.

# Representation and Hearing

When this matter came up for hearing, the plaintiff was represented by counsel Ferdinand Musimenta. The plaintiffs appeared in court. The defendants nor their counsel appeared. From the record the summons for 20 hearing had been duly served. The matter proceeded exparte pursuant to Order 9 rule 20 of The Civil Procedure Rules.

I am cognizant that where a defendant does not appear having filed a written statement of defence and trial proceeds exparte, remedies cannot be granted to the plaintiff just as prayed unless they are sufficiently supported by the

25 pleadings (see: Abendeyo Absolom v Amos Kaheru [1995] 111 KALR).

The plaintiff led evidence by witness statement of one witness and addressed the court by written submissions. I have considered the evidence on record and addressed my mind to the submissions of the plaintiff's counsel and the authorities stated therein.


#### 5 Issues for Determination

The Plaintiff proposed two main issues with sub issues. The main issues were: whether the plaintiffs are entitled to recover a sum of Ugx 98,553,000 as special damages, and What remedies are available to the parties.

Having reviewed the issues within the context of the Applicant's pleadings, I 10 find that they need to be recast. According to Order 15 rule 3 of The Civil Procedure Rules, the court may frame issues from all or any of the following materials; - (a) allegations made on oath by the parties, or by any persons present on their behalf, or made by the advocates of the parties; (b) allegations made in the pleadings or in answers to interrogatories delivered in the suit; 15 and (c) the contents of documents produced by either party. The court may at any time before passing a decree amend the issues or frame additional issues on such terms as it thinks fit, and all such amendments or additional issues as may be necessary for determining the matters in controversy between the parties shall be so made or framed (see Order 15 rule 5 of The

20 Civil Procedure Rules).

The issues framed by this court are: Whether there was a valid contract between the Plaintiffs and the Defendants? Whether the defendants acted fraudulently and misrepresented material facts? What are the remedies available to the plaintiffs?

#### 25 Plaintiffs' Submissions

The plaintiffs submitted that the defendants are bound by the agreement they entered into. That under paragraph 6 of the sale agreement between the plaintiffs and the defendants, the defendants warranted that in case the sale to the plaintiffs is frustrated by claims or problems arising from the vendors' 30 lack of authority or from third parties claiming under the estate, the vendors undertake to indemnify the buyers and or refund any funds so far disbursed

5 or any part of the consideration paid. That indeed the sale was frustrated under the subsequent sell and transfer. Hence entitling the plaintiffs to a refund of Ugx 16,000,000 and 10% penal interest.

The plaintiffs submitted that they are entitled to special damages of Ugx 98,553,000 comprising the purchase price of Ugx 16,000,000, 10% interest,

10 refund of the decretal sum of Ugx 67,500,000 in HCCS 232 of 2016 commenced by the subsequent purchasers, taxed bill of costs in the sum of Ugx 10,053,000 and instruction fees of Ugx 5,000,000.

# Determination by Court

# 15 *ISSUE 1: Whether there was a valid contract between the Plaintiffs and the Defendants?*

The idiosyncrasy of contract law lies in its unique blend of predictability and flexibility, allowing it to address the diverse needs and expectations of contracting parties while maintaining a coherent legal framework. Unlike 20 areas of law governed by strict statutory rules, contract law often relies on principles of fairness, custom and mutual consent enabling parties to craft agreements tailored to their specific circumstances. This adaptability is balanced by established doctrines such as offer and acceptance, consideration, and capacity, which provide the necessary structure to ensure 25 enforceability and protect against unfair practices. By these doctrines, contract law has established the criteria for a valid contract providing essential guidance for courts and tribunals in their decision-making process.

Chitty on Contracts (28th Edn) Vol 1, para. 2-001) guides that to constitute a 30 valid contract there must be two or more separate and definite parties to the contract; those parties must be in agreement that is, there must be consensus 5 ad idem; those parties must tend to create legal relations in the sense that the promises of each side are to be enforceable simply because they are contractual promises; the promises of each party must be supported by consideration or by some other factor which the law considers sufficient; generally speaking the law does not enforce a bare promise (nudum pactum)

10 but only a bargain.

The plaintiffs' plaint explicitly states that their cause of action arises from a "breach of a sale of land contract". A "SALE AGREEMENT" dated November 1, 2004, between the defendants (as vendors/administrators of the estate of the late Yokana Sooka) and the plaintiffs (as purchasers) is attached 15 as Annexure "A" to the plaint. This document details the sale of land comprised in Block 215 Plot 1245 at Kulambiro. There was payment of purchase price of UGX 16,000,000 under the said document and the same was acknowledged by the defendants. An "ADDENDUM FOR

ACKNOWLEDGEMENT OF MONEY" (Annexure "B"), dated July 21,

- 20 2005, acknowledges receipt of UGX 16,000,000 as part payment, with a remaining balance of UGX 2,000,000. A "FINAL MEMORANDUM OF SALE" (Annexure "C"), dated June 1, 2009, confirms that the balance of UGX 2,000,000 was received as full and final settlement of the buyers' liability. The plaintiffs aver that upon purchase they registered the land in - 25 their names. A "Certificate of Title" for Block 215, Plot 1537, attached as Annexure "D", shows Mwesigye Isha Evans and Mwesigye Sarah as the registered proprietors.

The 1st defendant's Written Statement of Defence admits that they as the administrators of the estate of the late Yokana Sooka sold land comprised in

30 Block 215 Plot 1245 land at Kulambiro to the plaintiffs. The 1st defendant further avers that *"the sale was complete and successful, the transfer was made and for 12 years no complaint was brought to their knowledge".* It is also stated that *"the*


5 *sale/purchase agreement between the plaintiffs and the defendants was not frustrated in anyway as the defendants successfully sold the land and handed over vacant possession".*

All this would lead to the inference that indeed the parties had the intention to be bound and actually created legally binding relations under the sale 10 agreement. However, as stated above, the fundamental feature of contract law is that it relies on mutual consent and affirms the necessity that each party has the legal capacity to enter into the agreement. The tenet of capacity to contract requires that a person should not be disqualified from contracting by any law to which he or she is subject *(see: section 10 Contracts Act Cap 284).*

- 15 This aspect is critical for the enforcement of rights both by the party and against such party. In the absence of legal capacity, one cannot be held to any standard of accountability which by all means is core to the reason for entering into a contract. - From the case before this Court, at the time the plaintiffs and the defendants 20 executed the said agreement, the land was not registered in the names of the defendants or the administrators of the Estate of late Yokana Sooka. I note, even if the print is relatively illegible, that the name on the certificate of title, which was cancelled to enable entry of the names of the plaintiffs was that of Nabawanuka Christine. The land indeed belonged to her having been registered thereon under Instrument No. KLA25008412 on 16 25 th May 2003.

Under the Succession Act, an administrator holds legal title to estate property in trust for the beneficiaries, not as an owner. The administrator's role is fiduciary, not proprietary.

30 In *Dr. Diana Kanzira v Herbert Natukunda Rwanchwede (Civil Appeal No. 81 of 2020),* the Court of Appeal emphasized that administrators act in trust for beneficiaries and cannot dispose of estate property without authority or in breach of the trust. Administrators do not obtain ownership and cannot

 5 alienate estate property unless: They are duly appointed; They are acting within the scope of their authority; They act for the benefit of the estate and its beneficiaries.

The plaintiffs paid to the defendants Ugx 16,000,000 under a purported sale agreement for the suit land. However, the defendants were not the registered

10 proprietors and could not pass good title to the plaintiff. Undeniably, the plaintiffs received no title, no rights and no obligations for the defendants were disqualified by law from entering into agreements for disposing of such property.

Consequently, since the administrators had no title and acted without

15 beneficiary consent, there was want of lawful object and absence of capacity. In light of this the contract was void ab initio. I therefore answer the issue in the affirmative.

## ISSUE 2: *Whether the defendants acted fraudulently and misrepresented* 20 *material facts?*

The free consent of the parties is a fundamental requirement for the validity of any contract. This implies that all parties must agree to the terms of the contract without any coercion, undue influence, fraud, misrepresentation, or mistake. Where consent is found to have been obtained by any one or more 25 of these aspects, it shall be void or voidable at the option of the party from whom the consent was obtained. *(see: section 12 and 15(1) Contracts Act, Cap 284).* The Contracts Act provides appropriate guidance on agreements procured by fraud or misrepresentation and their implication on both the plaintiff and the defendant depending on the finding of the Court.

30 If consent is obtained through misrepresentation, or by fraudulent silence, the contract is not voidable, if the party whose consent was secured had the means of discovering the truth through ordinary diligence *(see section 14 and*


- 5 *15(2) contracts Act).* It follows that if a party's consent to a contract is obtained through fraud or misrepresentation, that party may choose to require that the contract be fulfilled, ensuring they are placed in the position they would have been in if the representations made had been true *(section 15(4) Contracts Act).* - 10 Several judicial decisions have shaped the definition of fraud with the common thread being that it involves a deliberate falsehood or deceptive promise meant to benefit the individual making it, ultimately eroding the foundation of mutual trust.

The Supreme Court in *Frederick Zaabwe V Orient Bank Ltd v Ors SCCA* 15 *No.04/2006* , defined fraud was to mean:

- 1. An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or surrender a legal right; - 2. A false representation of a matter of fact whether by words or by 20 conduct by false or misleading allegations or by concealment of that which deceives and is intended to deceive another so that he shall act upon it to his legal injury; - 3. Anything calculated to deceive whether by a single act or combination or by suppression of truth or suggestion of what is false, whether it is 25 by direct falsehood or innuendo by speech or silence word of mouth or gesture; - 4. A generic term embracing all multifarious means which human ingenuity can devise and which are resorted to by one individual to get advantage over another by false suggestions or by suppression of the 30 truth and includes all surprise, trick, cunning, dissembling and any unfair way by which another is cheated.


- 5 Notably, fraud can arise from silence when an individual deliberately withholds information that is crucial to another part's decision-making. The failure to disclose material facts can be just as deceptive as an outright lie.

In this case, the defendants intentionally, deceitfully and calculatedly 10 concealed from the plaintiffs that they did not have the right to sell the land and misrepresented their authority to sell the land for the purpose of obtaining money from the plaintiffs. The conduct of the defendants was characterised by deceit and deliberate misrepresentation.

I therefore answer this issue in the affirmative.

## *ISSUE 3: What are the remedies available to the plaintiffs?*

As cited above, the effect on the contract by the said fraud and misrepresentation is contingent on whether the party whose consent was secured had the means of discovering the truth through ordinary diligence*.* 20 This speaks to the concept of constructive notice - the assumption that an individual has knowledge of a fact, even if they do not have actual, direct knowledge of it, because the information was available through proper and reasonable diligence.

25 In *Draza Moses Versus Abdul Salam Saron Kamdad, Civil Suit No. 0016 of 2013*, Justice Stephen Mubiru cited Lord Esher MR in *English and Scottish Mercantile Investment Co v. Brunton [1892] 2 QB 700, CA,* who defined constructive notice to mean:

30 *"The right term to be applied to the process, an inference of knowledge may be drawn from proved fraudulent abstention from inquiry. There is an inference of fact known to common lawyers which comes somewhat near to it. When a man has statements made to him of something which is against him, and he abstains*


5 *from making further inquiry because he knows what the result would be or, as the phrase is, he 'wilfully shuts his eyes,' then judges are in the habit of telling juries that they may infer that he did know what was against him. There is no question of constructive notice, or constructive knowledge about inference; it is actual knowledge that is inferred."*

## Justice Mubiru continued:

*"If faced with a set of facts, an individual does not draw the obvious inferences or make the obvious inquiries, the question is: why not? If it is because, however foolishly, he did not suspect wrongdoing or, having suspected it, had his* 15 *suspicions allayed, however unreasonably, that is one thing, but if he or she did suspect wrongdoing yet failed to make inquiries because 'he did not want to know' or because he regarded it as 'none of his business,' that is quite another. Such conduct is dishonest, and those who are guilty of it cannot complain if, for the purpose of civil liability, they are treated as if they had actual knowledge."*

Knowledge of a fact can be established directly or inferred from the circumstances. This comprises: actual knowledge; willfully shutting one's eyes to the obvious; willfully and recklessly failing to make such inquiries as an honest and reasonable man would make; knowledge of circumstances 25 which would indicate the facts to an honest and reasonable man; knowledge of circumstances which would put an honest and reasonable man on inquiry. (As per, *Peter Gibson J. in Baden v Societe Generale, [1993] 1 W. L. R. 509).*

In respect to agreements for purchase of land, courts have guided that the 30 purchaser is obligated to inquire into the status of the land, including possession and title history, or risk purchasing subject to undisclosed rights. (see: *Uganda Posts & Telecommunications v Abraham Kirunda, Civil Appeal No. 208 of 2018, Sir John Bagire v Ausi Matovu, Civil Appeal No. 7 of 1996).*

From the facts of this case, the plaintiffs were in fact under the obligation to conduct due diligence on the land prior to payment of the purchase price. I observe that the plaintiffs based their cause of action on the defendants' alleged misrepresentation, fraud, and breach of contract. They averred that 10 they were "led to believe the evidence of the former" (referring to the defendants' representations) and relied on the duplicate certificate of title. This suggests a reliance on the sellers' information rather than independent verification prior to purchase. Evidently, the certificate of title by itself did not have the names of the defendants either as owners or as administrators of 15 the estate of the Late Yokana Sooka. It was in the name of Nabawanuka Christine, who had been the registered proprietor since 2003. The plaintiffs never contacted her or inquired as to her interest in the land, nor did they confirm the administrators' right to deal in the land. Further, no evidence in the pleadings shows that the plaintiffs conducted searches or due diligence

20 before completing the transaction.

In the present circumstances, I find that the plaintiffs willfully shut their eyes to the obvious and failed to make the necessary inquiries, thus inferring knowledge. They did not bother to engage Nabawanuka Christine, thus 25 affirming constructive notice and knowledge of an existing interest. Additionally, the administrators were not the registered proprietors of the said land. This should have been a red flag for them. I am inclined to impute fraud on their behalf. In as much as the defendants had secured the plaintiffs' consent by fraud and misrepresentation, the plaintiffs had the means of 30 discovering the truth with ordinary diligence but they opted not to.


- 5 In light of this, the contract is not voidable. Consequently, the plaintiffs can therefore not insist that the defendants put them in the position in which they would have been if the representations had been true. This suit is hereby dismissed and each party is to bear their own costs. - Dated, signed and delivered electronically this 9 th 10 day of July, 2025.


Susan Odongo JUDGE

15