[2025] UGCommC 69

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [COMMERCIAL DIVISION] **CIVIL SUIT NO. 0180 OF 2021**

**TWESIGYE EPHRAIM::::::::::::::::::::::::::::::::::::**

#### **VERSUS**

## <table> KAYONGO PAUL::::::::::::::::::::::::::::::::::::

## **BEFORE: HON. LADY JUSTICE ANNA B. MUGENYI**

#### **JUDGMENT**

The plaintiff filed this suit claiming breach of contract, an order for refund of the purchase price, general damages, interest, punitive damages, declaratory orders and costs of the suit against the defendant.

The plaintiff's facts giving rise to this claim are that on 4^th October 2019, the plaintiff and defendant entered into a contract for the sale of land comprised in plot 11342 block no. 383 land at Kitende, Bweba to which the plaintiff made a full payment of Ugx 60,000,000/= as consideration.

Upon purchase of the land, the plaintiff was furnished with the duplicate certificate of title and transfer instruments to effect the transfer of the title into the plaintiffs name.

Upon the lodgement of the said transfer documents, the plaintiff discovered that the defendant handed over to him a forged duplicate certificate of title and subsequently the same was cancelled from the lands office as the plaintiff could not transfer the land.

The plaintiff thus contends that the defendant breached the terms of the contract of the sale of land and fraudulently obtained Ugx $60,000,000/$ = from the plaintiff while aware that the duplicate certificate of title handed over to him was forged.

#### **REPRESENTATION**

The plaintiff was represented by M/s MACB Advocates

## **DECISION**

I have addressed my mind to the pleadings of the Plaintiff, the evidence adduced during the hearing, and the submissions of counsel in this matter. The Issues for determination by this Court are:

- 1. Whether the defendant breached the land sale agreement. - 2. Whether the plaintiff is entitled to the refund of Uganda shillings sixty million only (Ugx $60,000,000/$ =) being money had and received by the defendant as purchase price. - 3. Whether the plaintiff is entitled to the remedies prayed for

The defendant failed to file a defense in this case and this court entered a default judgment against him on the 1^st October 2021 and this suit is therefore before this court for formal proof.

During the hearing for formal proof two witness statements were filed by Twesigye Ephraim (PW1) and Tugarukye Gilbert (PW2) which were admitted as their evidence in chief.

In the case of Hajji Asumani Mutekanga v Equator Growers (U)Ltd SCCA No.7 of 1995 it was held that:

"A Defendant who neither enters appearance nor files a defence is precluded from taking part in the proceedings during formal proof hearing when there is a subsisting interlocutory judgment. It was further held that where an interlocutory judgment has been entered in favor of the Plaintiff, the question of liability of the Defendant is no longer in issue. What is in issue is the assessment of the quantum of damages."

### Issue 1

## Whether the defendant breached the land sale agreement.

Section 1 of the Contracts Act (Cap 284) defines a contract as a contract enforceable by law defined in section 9. Section $9(1)$ of the Contracts Act defines a contract as an agreement made with the free consent of parties with the capacity to contract, for a lawful consideration and with a lawful object with the intention to be legally bound. PW1 in paragraph 2 of his witness statement stated that on the 14^th of October 2019, he entered into a contract for the sale of land with the respondent for land comprised in plot 11342 block no. 383 land at Kitende, Bweba to which he made a full payment of Ugx $60,000,000/$ =. This evidence was corroborated by PW2 who testified and confirmed that indeed there was a land sale agreement entered into by the plaintiff and defendant on the 14^th October 2019 in paragraph 13 of his witness statement. PW2 also stated that he signed on the land sale agreement as a witness,

PE1 contains a land sale agreement dated the 14^th of October 2019 between the plaintiff and defendant for the sale of land situated at for a consideration of Ugx 60,000,000 and indeed PW2 was one of the witnesses in the said agreement. This shows that all the essential elements of a contract were fulfilled.

I, therefore, find that there was a contract for the sale of land between the plaintiff and the defendant.

Having found that there was a land sale agreement between the parties, this court will now determine whether the said contract/agreement was breached by the defendant.

In the case of Cargo World Logistics Limited v Royale Group Africa Limited HCCS 157 of 2013, Honorable Justice Henry Adonyo relied on the case of Ronald Kasibante v Shell (U) Limited HCCS No. 542 of 2006 reported in (2008) HCB **162** to define breach of a contract thus:

"breach of a contract is the breaking of the obligation which a contract imposes, which confers a right of action for damages on the injured party. It entitles him to treat the contract as discharged if the other party renounces the contract or makes its performance impossible or substantially fails to perform his promise. The victim is left with suing for damages, treating the contract as discharged or seeking a discretionary remedy."

Section 33 (1) of the Contracts Act, 2010 provides that:

"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, under paragraph 3 of the land sale agreement(PE1), the defendant had a duty to immediately surrender the title to the land to the plaintiff which he is to use without any interference and in paragraph $4(c)$ , the defendant had a duty in compliance with the terms of the agreement not to do anything that will conflict with or result in the breach or constitute a default under any of the terms, conditions of any agreement to which he is a party.

PW1 testified that the defendant handed over to him signed transfer forms and the duplicate certificate of title but on reaching the land office they were cancelled for being a forgery hence he could not transfer the land. This evidence was corroborated by PE2 which are transfer forms to the land signed by the defendant and PE4 which is a duplicate certificate of title double-crossed with the words forged and signed.

By the defendant giving the plaintiff a duplicate certificate of title that was forged and therefore could not be transferred, he breached his obligations under paragraphs 3 and 4 of the land sale agreement. He had an obligation and duty to transfer and give a good title.

I, therefore, find that the defendant breached the land sale agreement.

#### Issue 2

## Whether the plaintiff is entitled to the refund of Uganda shillings sixty million only (Ugx 60,000,000/=) being money had and received by the defendant as purchase price.

It is the unchallenged evidence of PW1 that when they entered the land sale agreement, he paid the agreed consideration of Ugx 60,000,000/=. This was corroborated by the evidence of PW2 who confirmed that the plaintiff paid Ugx $60,000,000/$ = as consideration for the land in dispute to the defendant.

Further, in paragraph 2 of PE1 which is the land sale agreement, it is stipulated that the defendant sells the land to the plaintiff at Ugx $60,000,000/$ = payable by the receipt and signing of the agreement. This agreement was executed on 4^th October 2019 and signed by both parties.

I therefore find that the plaintiff has proved that he paid Ugx $60,000,000/$ = to the defendant as the purchase price and is hence entitled to a refund of Ugx $60,000,000/=$

The plaintiff is accordingly entitled to a refund of Ugx $60,000,000/=$ (sixty million shillings only) which was the purchase price of the land.

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#### Issue 3

## Whether the plaintiff is entitled to the remedies prayed for

#### a) General Damages

Counsel for the plaintiff submitted that the plaintiff has suffered great economic loss due to the defendant's actions since he was unable to use the suit land for over three years and prayed for general damages of Ugx 30,000,000/:

## Section 6l (1) ofThe Contracts Act,7 of20l0, provides that:

' 'Where there is a breach of contract, the party 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'"

General damages are a direct natural or probable consequence of the act complained ofand are awarded at the discretion ofthe court and the purpose is to restore the aggrieved person to the position they would have been in had the wrong not occurred as rightly held in cases of Hadley v Baxendale (1894) 9 Exch 341 and Robert Cuossens v Attorney General SCCA No. 8 of 1999.

This award is also assessed on the value of the subject matter, the economic inconvenience that the defendants may have been put through, and the nature and extent of the injury suffered as held in the case of Uganda Commercial Bank v Kigozi 120021 EA 305 at 313.

The plaintiffin the instant case has been deprived ofboth the use ofthe land he purchased and the money he paid as consideration for over five years' The value of the subject matter in question was Ugx 60,000'000/:.

I, therefore, award general damages of Ugx 10,000,000/: which is sufficient compensation for the inconvenience caused to the plaintiff by the defendant.

#### b) Punitive Damages

Counsel for the plaintiff submitted that the actions of the defendant were malicious, high-handed handed and oppressive towards the plaintiff. Counsel contended that the defendant after receiving the whole purchase price from

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the plaintiff handed over to him a forged duplicate certificate of title well knowing that the same would not be transferred in his name and prayed that the court should award punitive damages.

## In the case of Ahmed EI Termewy v Hassan Awdi & Others HCCS No. 95 of 2Ol2 the Honorable Lady Justice Elizabeth Musoke held thus:

" Punitive or exemplary damages are an exception to the rule that damages generally are to compensate the injured person. These are awardable to punish, deter, and express outrage of court at the defendant's egregious, highhanded, malicious, vindictiye, oppressive and/or malicious conduct. They are also awardable for the improper interference by public officials with the rights of ordinary sub.iects ".

### She further stated that:

"Unlike general and aggravated damages, punitive damages focus on the defendant's misconduct and not the injury or loss suffered by the plaintiff, They are in the nature ofafine to appease the victim and discourage revenge and to warn society that similar conduct will always be an affront to society and also the court's sense of decency. They may also be awarded to prevent unjust enrichment. They are awardable with restraint and in exceptional cases, because punishment, ought, as much as possible, to be confined to criminal law and not the civil law of lort and contract " .

In the instant case, the act of the defendant handing over a forged certificate of title to the defendant upon purchase not only depicted malicious conduct on his part but was also egregious. Such conduct needs to be discouraged in the community at all costs.

I, therefore, award punitive damages of Ugx 1,000,000/:.

### c) Interest

Counsel for the plaintiff submitted that taking into account that the plaintiff has been kept away from the use of his money and the ever-rising inflation and depreciation rates, the court should award an interest of 24%o per annum

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on the decretal sum, general damages and punitive damages from the date of the breach until payment in full.

## Section 26(2\ of the Civil Procedure Act provides that:

"where the decree is for payment of money, the court may, in the decree, order interest at such a rate as the court deems reasonable to be id on the nrlnc IDdlsuma udaed from the date of the suit to the date of the decree tn addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date ofpayment or to such earlier date as the court thinksfit".

In determining a just and reasonable rate, courts take into account the everrising inflation and drastic depreciation ofthe currency. A Plaintiff is entitled to such rate of interest as would not neglect the prevailing economic value of money, but at the same time one which would insulate him or her against any further economic vagaries and the inflation and depreciation of the currency in the event that the money awarded is not promptly paid when it falls due. (Kinyera v the Management Committee of Laroo Building Primary School HCCS 099/2013).

In the instant case, the plaintiffhas been deprived ofhis money and use ofthe land since 201 9 which is more than five years. The value of Ugx 60,000,000/: as was in 2019 is definitely not the same today due to the rising costs and the value of land which he purchased but did not use has definitely appreciated in value.

I, therefore, award an interest of tYo per annum on the decretal sum from the date ofjudgment until payment in full.

### d) Costs of the suit

Section 27(1) of the CPA gives the court the discretion to determine the costs of the suit and by whom the costs of the suit are to be paid This discretion must be exercised judiciously and not arbitrarily.

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The general rule is that a successful party is awarded costs unless there are good reasons to deny it. (Jennifer Behange, Rwanyindo Aurelia, Paul Bagenzi v School Outfitters (U) Limited CACA No.53 of 1999).

The plaintiff is the successful party in this case and I see no reason for denying him the costs ofthe suit.

In the final result, judgment is entered for the plaintiffagainst the defendant in the following terms; -

- a. Ugx 60,000,000/: (sixty million shillings only) as special damages. - b. Ugx 10,000,000/: (ten million shillings only) as general damages. - c. Ugx 1,000,000/: (one million shillings only) as punitive damages' - d. Interest on the sum in (a) and (b) above at the rate of 8% per annum from the date ofjudgment until payment in full. - e. The costs ofthe suit.

⁺r\h3, HON. LADY JUSTICE ANNA B. MUGENYI DArED....... .....t.0.. J. Y..). )- 2. lh\* h