Halling Manzoor v Serwan Sing Bahra (Civil Suit 151 of 95) [1997] UGHC 6 (26 February 1997)

## THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA

### CIVIL SUIT 151/95

# HALLING MANZOOR ...................................

- VERSUS -

SERWAN SINGH BAHRA ...................................

BEFORE THE HONOURABLE LADY JUSTICE L. E. M. MUKASA-KIKONYOGO

#### **JUDGEMENT**

Halling Manzoor Ahmed here-in-after to be called the plaintiff sued Sarwan Singh Bahra hereinafter to be called the defendant for specific performance of a contract for the sale of land and developments comprised in Plot 684 Block 12 Rubaga Road Kampala and Plot 176 sixth street Industrial Area Kampala to be referred to as the suit properties.

The plaintiff's case is that by a written agreement dated 1st April, 1994, the defendant agreed to sell to the plaintiff both suit properties as pounds 5000. The agreement was made in England. It was produced into court as Exh. P.1. The plaintiff paid pounds to the defendant in full and settlement of the purchase price.

The suit properties being Departed Asian Properties were subject to The Expropriation laws of this country at the expulsion of Asian in 1972 by Idd Amin. In the written Agreement it was stated that the defendant would give the plaintiff a power of Attorney to enable him repossess the suit properties. Attorney subsequently given to the plaintiff was produced as Exh. P3. The plaintiff at his own expense travelled from London to Uganda to tulfil and perform his obligations as agreed between him and the defendant. Having played his part the defendant failed to transfer the suit properties into the name of the plaintiff. He (the defendant) instead his lawyers at that time Hunt and Greig to write to the plaintiff

$\mathbf{1}$

subsequently given to the plaintlff was produced as hxh. PJ. lhe plaintilf at his ovn expense ttavelled lron London to USanda to lultit and perlorn his obllgations as a8reed bet{reen hin and the defendant. Having played his parl the defendant failed to transfer the suit properties into the nane of the plaintiff. He (the defendant) instead his lawyers at that tine Hunt and UreiS to vrile to the plalntiff and inforn hir that he (the defendant) had repudiated the agreerent. It l,as clained by the delendant that he had discovered that the suit properties valued lor nore that pounds 5OOO the agreed purchase price paid to him. He (the defendant) said that he was induced to sell the suir prclpertles to llin due to the nisrepresentation nade by the plaintiff ro hin. t he defendant further instructed his lavyers to refund pounds 5OU0 ro rhe plaintilt by cheque. he also oflered refund of reasonable expenses incurred in connection rvith the tepossession to the platntiff. Upon recelpt of the letter rescinding the contract produced as Exh. p. J. the plaintiff rejected it. He had incurred a lot of expenses and travelled fror EnSland to Uganda to repossess the suit properties on behaH ol the defendant. He had persuaded him (the defendant) to return to uganda or to send sotneone to repossess the suit properties ior hin but he refused. lhe derendant sald he feared to return to Uganda. It vas out of synpathy for the defendant that the plaintiff bought the suit properties lrom hin, He (the plain t ifl ) denied having nade any misrepresentation to the defendant in any forn.

The plaintitl ls, hence, asking this court to pass judSenent in hls Iavour for speclflc perfornance of the contract, [esne profits, costs of this action and any other relief.

fhe defendant told this couri that he ovns the sult p(operties registered in his nane, In 197J hevas lorccd toleave thiscountry by ldd Amln. lnnediately before his departure he was robbed of his car and other property by the soldiers. He panicked and lef t at once. He dec.lared rhe suit properties whilsr ln England rhere he had taken refuge. lhis yas in a certain olfice in lhe Uganda Hlgh

)

Connission in London vhich rras handling the Departed Asians properties.

the delendant cane to knov the plainriff uhilst they were in London. He (the plaintiff) oltered to assist him to the sult properties vhich had been taken over by Governnent in 19iJ. The defendant vanted to return to Uganda to clair the sult properties but the plaintift varned hin againsr it. He told lrin that Asians yho Left uganda ln L913 were not advised to return to Uganda. He vas golnS to be harassed if he did. tlesides his nane was displayed at E.ntebbe Airport as one of the vanted persons. He (the defendant) believed the plaintiff. that is vhat in fact induced hin to sell the ptoperties to the plaintitf.

He did not knov the valueof the suit properties. lhe plalntiff told hir that he vould visit Uganda to find out the conditiolr the properties vere in. On return lhe plaintiff told hin (the defendant) that thcy rvere in a very bad condition. He. the defendant, testlfied that he vas nisled by rhe plalntifl about security situation in Uganda, After tiving hin the pover of Attorney to repossess the suit properties and after the sale he found out that things vere not as bad as the plalntifl had told hin,

When cross etanined on the agreenent he signed, the detendant replied that he had not realised that it was ln those terms. He \rras told by tlreclerk in the plalntiff's lavyer's chanbers that pounds 5000 was a deposit. He thought that the flnal purchase prlce vas going to be lixed alter thc plaintitf had inspected the suit properties on his visit to Uganda. Ihe clerk told hin tat he would be paid ntore arter the proper yaluation oI the suit properties.

I.urther the agreenent vas written in EnSland vhich he did not understand. Itwas translated to hir by the plaintitf's advocate's clerk but not urorcl by vord. Heonly gave hiE the gisr of it. the plalntiff rold hir rhat the suil properries did not value much bul about pounds 5000.

He, the defendants, after Setting assurance that alt was well in Uganda, decided to return. He did not have any problens at the Airport. He also found the

suil properties itr good condition. He. thel.etore, instructed his lawyers at thaf tlne Hunt and Greig to srrlte lo the plaintiff to complain and inlorn hlD that the defendant vanted to resclnd the contract. He oflered lo refund pounds together with any other expenses incurred in connection witlr the transaction. l he plaintiff apparently reJected the olfer, He, instead,instructed his counsel to fllethis suit.

I he defendant further testified that he rras advised by his counsel that the conlract between hin and the plaintlfl was null and void. Ihls is because at the tiLe il vas slgned the ninister's consent to transfer the suit propetties rrhich yas essenllal had not been obtained, He (the detendant) ryas not wiltinS to lransrer the suit properties into the plaintlff's nane, He is, instead, asking this court to order the plainttfl tocause the caveat to be renoved Iron the suit properties and to disniss his case with costs.

Uhen cross exanined on the agreenent he signed. the defendant replied that he had not realised that ir was in those terns. He vas told by llre clerk in the plaintiff's lavyer's chanbers that pounds j000 was a deposit. He thought that the final purchase prlce rras going to be fixed after the plaintitl had inspected the suit propertles on his visit to Uganda. The clerk told him that he vould be pald nore alter the proper valuation ol the suit properties.

Further the agreement was vritten in EnSlish vhlch he did not understand. It vas translated to him by the plalntlff's advocate's clerk but nor vord by vord. He only gave hir the Sist of ir. lhe plainriff told hin thar the suir properties dld not value nuch but about pounds 5000,

He, the defendant. after getring assurance that all rras vell in Ugan<ta. decided to return. He did not have any problen s al the Airport. He also found the sult properties in good condition. He. theretore, instructed his lawyers at that titre Hunt and Urei8 to [rrlte to the plaintifl to conplain and inforn hin that the defendant wanted to rescind the contract. He offered to refund pounds 5OOO toSether vith any other expenses lncurred in connection vith the transactio. The

plaintiff apparently rejected the oller. He, instead. instrucled his counsel to file this suit.

fhe defendant further testified that he vas advised by this counsel that the contract betveen hin and the plalntllf vas null and void. lhis is because at the tineit uas signed the ninister's consent to transfer the suit properties whlch was essential had not been obtained. He the defendant) r,as not villinS to transfer the suit propertles into the plaintiff,s name. He is. instead, asking thls court to order the plalntlff lo cause the caveat to be ,enoyed iron rhe suit properties and lhe disniss his case rrith costs,

At the close of the defendant's case hls learned counsel, l{r. Nangvale. asked the court to disniss the plaintilf's clalr[ and order hir to rerove the caveat fron the suit properties. He heavily relied on the fallure to obtain the nlnlster,s consent vhich he subnitted was latal to the plaintiff's case. As Iar as he vas concerned the contract to sell the suit properties was illegal and the defendant couldnot have passed any interest to theplaintit, vithout the ninister,s consenr as required by Section / of I he Exotoor iated P roDe r tie <sup>s</sup> cl I982. He refe r r ed EA 76. vhere it \$,as held rhat Ihe Land Iranslcr Act makes ille8al all thing of possession and all contracts made without the consent of the ninister, that the contract vas void abinition and that ihe subseguent consent had no effect and finally that no money paid under aU illegal corllract nray be recovered. the court to the case oI Broadvavs (-onstruction co, ys. Nassule and others.lg/2

Likevise in the present case, the nlnister's consent was obtained long after the contract of sale ol the suit properties. lt had no elfect. Ihe plaintifl is neither entltled to speciflc perfornance sought for nor refund of the purchase prlce. ln cases ol illegal contracts the loss ,.. where it ,a1ls.

Secondly it vas argued by the learned counsel for the defendant that the plaintiff i/as not entitled to speciflc performance, due to talse representatlons he had nade to the defendant. He told ttre defendant that his life vould be in danter

if he returned to Uganda. He was a wanted person. He was scared to return to Uganda to repossess the suit properties. He believed the plaintiff and that induced him to sell his two properties to the plaintiff. The plaintiff did not tell him the true value of the suit properties. When he (the defendant) eventually came to Uganda he found that it was for more that pounds 5000 he was given by the plaintiff. He submitted that those misrepresentations vitiated the contract.

In lengthy reply running to almost 50 pages Mr. Lule, the learned counsel for the plaintiff asked the court to reject the defendant's case and his counsel's instead pass judgment in favour of the plaintiff and grant him the reliefs prayed for.

As far as he was concerned there were no false representations made by the plaintiff about the situation in Uganda and the condition of the suit properties. He gave reasons and cited a number of authorities to support his contentions.

With regard to the issue of illegality, Mr. Lule submitted that the case of Broad ways Construction Co. vs. Kasule Supra was distinguishable from the present one. The sale in that case was under. The Land Transfer Act. whereas in the present one the relevant law applicable to the sale agreement is Section 7 of The Expropriated Properties Act. The provisions of Section 2 of The land Transfer Act are very wide and render any transaction which does not have the minister's consent illegal. Its provisions are mandatory. Mr. Lule explained that there cab be no ting of tenure of any kind of land in the transaction into the purchaser's name unless the minister has first given consent under The Land Transfer Act.

However, the wording of <u>Section 7 of The Expropriated Properties Act which</u> reads as follows:

"Any property or business transferred to a joint venture company or to a former owner under the provisions of this Act shall not be sold or otherwise disposed of without the written consent of the minister until after five years from the date of such transfer. As far as Mr. Lule was concerned the provisions of

$\mathcal{L}^{\bullet}$ Section 7 of The Expropriated Properties Act cannot be interpreted to mean that the minister's consent is a condition absolute. The section does not absolutely prohibit any transfer. To support his contention he referred to the testimony of D. W.2. Minister Basoga Nsandhu who stated that a transaction made without the minister's consent is registerable with the Minister's consent. Where, therefore, like in the present case a certificate of repossession is issued to the former owner and it gets registered as again was done in this case the former owner acquires a vested interest and title in the property. In short to Mr. Lule Section 7 of The Expropriated Properties Act is directory and not mandatory. As a procedural provision, he submitted that, the court has a wide discretion to grant the relief against the disability imposed by Section.

Four issues were framed for this court to determine and are as follows;-

- $1.$ Whether the plaintiff induced the defendant by misrepresentation to sell the suit properties to him. - $2.$ Whether the agreement was illegal and the plaintiff acquired no interest inconsequence. - $3.$ Whether the plaintiff's suit is misconceived on the ground of the purchase price having been repaid. - $4.$ Whether the plaintiff is entitled to the remedies sought.

With regard to the first issue whether the defendant was induced by misrepresentation to sell the suit properties to the plaintiff, this will depend on whether this court accepts the defendant's evidence on this point as amounting to misrepresentation. The defendant testified that he had lived in England since 1973, that is a period of 23 years yet he did not understand English. I find this hand to believe because I wonder how he had been communicating with people in England all that time. He, therefore, claimed that he did not understand the terms of the written agreement due to the language barrier. The agreement exhibited into court was not read back to him word by word. He was only told the gist of it

$\overline{1}$

$\cdot^{\bullet}$

$\mathcal{L}$

by a clerk in the plaintifl's advocate's chambers. lhe said clerk told him that pound vas belng paid to hin as a deposit. He vas golng to be paid nore after the proper evaluation of the properlies. In the vritten agreenent betrveen the parties. the defendant stares inter alia that he confirned that the said sun of pounds 5000,00 u/as full and final paynent ot all sutrs due to hin by the plalntlff, Further the defendant clained that the plaintilf told him scaring stories about the securily situarion in U ganda and in particular that llis (lhe delL-ndant's) llfe would be in danSer if he cane to U ganda lo clain the suit properties back in person. He believed hin and for that reason the detendant teared ro cone to Uganda and was induced to sell his two pieces of land to rhe plainriff.

I {rould be declined to believe the detendant,s story. ll he leared tor his Itfe he did not have to sell the suit properties to the ptatntiff or give hin the power of Attorney. He could have sent some other people like his childrcn vhich according to his evidence are big. on the evidence before court t find thls clain rather thouSht on the part ol the delendant. 1, tlrerelore, rind that he rvas nor induced by nisrepresentation made by the plaintiff to sell him the suit propertles. He parted uith theD volunlarily, but nol on Ialse representations.

As far as the second issue of lUegality of contract is concerned, at the tine lhe sale agreenent uras concluded betveen the parties the suit properties had by operation of the lav vested into Government. Section 4 of I he Assets of ljeparte<l Asians Decre e2 7 oI 199i.) reads that:-

"Any Assets declared by the departing Asian including any property or buslness recorded ln the reSister kept under s.3 ol this l)ecree and any assets left behind by any Aslan who failed to prove citizenship at the tine and in the nanner specifled by Governnenl shall. wlthout any further arrthorlty, vest ln the Govern nent "

It is conceded that the defendant gave the plaintiff a pover of attorney at the tlme the agreenent vas nade which later enabled the plaintitl ro repossess

l

that suit properties or his behalt and into hls name. Houever, on li 4/94, the defendant vas not the reglstered ovner of both suit properties as it is stated ln the rrrltten agreerent, Ovnership thereot vas st.lll yested in the Governnenl. lt reverted to lhe defendant on repossession r,hich accordiltg to E.xh. p.6 ['as on 5th Iuly,1994. lt is not correct as the plaintitl stated in his evidence that the aBreement sale of the suit properties vas concludeded after the repossession. It could not have been possible, because the agreenent sale in ryhich the defendant atreed to glve hin the pover of attorney vas nade on 1.4.94 that was three ronths before the certificate of repossesslon ryas issued by the minister. I he same letter addressed to the defendant. tXH. P.6 further states that the plaintiff collected the certificate of repossession issued in the detendanl,s nare on llth Ju1y,1994. Before the repossession on Jt'1 t94 the defendant had no interest of any descriptlon in the suit properties. More importantly so he dld not have the legal interest in the propertles vhich would have perhaps given the plaintiff an equltable interest in the sane properties. lhe delendant vould not have passed tltleor any interest over property yhtch did not belong to hin. Ihere vas no land to sell to the platntiff and. hence. there vas no sale at all.

It ls of course conceded that the defendant got his legal interest back on 511194 aflet the issue of certiticate <.rr repossesslon. Further there is evidence that the plaintiff obtained the necessary ninister's consellt to transfer but it is of no effect as there \*,as no sale in law. the lssue ol lUegaltty. hence, does not arise, because there vas no contract at all. fhe plaintlffs claim nust therefore, fail that ground alone.

As regards the third issue vhether the plaintill,s suit vas in any case nisconceived on the ground that the purchase price had been repald to hin. lhls rrould not have been the case had it not been for the aforesaid finding on the second issue. Il there had been a valid contract hetveen the parties the plaintlff rould not have been bound to accept the refund and any other offers. Haviltg

reiected lhe allegation ol nisrepresenration by the plaintilf depending on the evldence adduced it is possible that rhe plaintitl vould have hatl a valid clain against the defendant. In any case the plalntiff had not accepted the defendant's offer of the relund of Pound 5000 and the reasonable expenses. so ir could be sald that he ryould have been estopped by his ovn conduct fron suing for any other remedy.

As for the fourth lssue ,hether the plaintlff is entitled to any renedies he prayed for, the ansver ro this question is nol hard rolind. Having ruled thai the defendant had not repossessed his legal interest in rhe suit propertles at the tine he purported to sell the sane to the plainti,. on 1.4.94 the plaintilr could not have acquired an equitable interest to entitle hin ln this case to specific perforrance. It yould not be avallable to hin.

Ulth regards to refund of pound 5OOO paid as purchase prlce to the defendant, it vas argued by lr{r. Nangwale thar it was not recoverable. He based his contention on the decision in the case of Broad wa ys corrstruclior) Co. Vs. sule and ot Supra vhere it vas held intel. alia thal tlo noney paid under an illegal contract may be recovered. However, the present case is distinEuishable fron the Broadnav case supra in thar in the present case there was no contract illegal or valld. rhe defendant has no justification Ior keeping the purchase price of pound 5000. That would be unjustifiable enrichnenr. It is not his money. He dld not sell anything or re.der any services to the plaintiff. lhe Eoney has to be relunded to rhe plainrifl.

Further it is a fact that rhrough the plaintiff's efforts the defendant ,as able to repossess the suit properties. lt vas not disputed by the delence that the plaintiff incurred expenses in connection vith the repossession. rhe plaintiff travelled several tines fron London to uSanda as indicated by the air tickets produced into court by the ptalntiff. He also paid tor Horel bilts and other expenses durlng his stay in uganda as indicated by the recciprs also produced

l0

-l

t

and exhibited into court. It was apparently in recognition of that the defendant offered to refund to the plaintiff reasonable expenses incurred by him in connection with repossession.

It is true as submitted by Mr. Nangwale special damages must be specifically proved. Unfortunately this was not done in respect of the expenses in the present case presumably because the plaintiff was convinced he had a strong case against the defendant and as such there was no need to claim those expenses. If specific performance was granted to him he would have kept the properties. The aforesaid notwithstanding 1 am of the view that the plaintiff would still be entitled to disembursement of all those proved expenses incurred by him in connection with the repossession.

For the aforesaid reasons the plaintiff's suit against he defendants for specific performance in dismissed. He is hence, hereby ordered to remove the caveat he lodged on the suit properties forthwith.

However, the defendant is ordered to refund pound 5000 paid to him by the plaintiff on 1.4.94 for the purported sale of the suit properties. He is also ordered to pay to the plaintiff all the costs incurred by the plaintiff in connection with the repossession of the suit properties which are shown and proved by the documentary evidence exhibited into court by the plaintiff and any other reasonable expenses which had been contemplated in the defendant's earlier offer for disbursement before the filing of this suit.

Bearing in mind the valuable service the plaintiff rendered to the defendant whom he flew from London to Uganda to reclaim the suit properties for the defendant, let each party bear its own costs of this suit.

> L. E. M. MUKASA-KIKONYOGO JUDGE

26.2.97

$\overline{11}$

$\mathcal{L}$

Dated at Kampala this 26th day of February, 1997

26.2.97

$1.$

Judgment delivered and signed.

Mr. P. K. Nsibambi holds a brief for Mr. Lule for the plaintiff.

Mr. Richard Okolanga for the defendant.

Odongo Court Clerk.

L. E. M. MUKASA-KIKONYOGO JUDGE 26.2.97