Hameyimana v Equity Bank Uganda Limited (High Court Civil Suit No. 714 of 2013) [2015] UGCommC 299 (14 July 2015)

Full Case Text

## THE *REPUBLIC OF UGANDA*

## *IN THE HIGH COURT OF UGANDA* AT KAMPALA

#### *COMMERCIAL DIVISION*

*HIGH COURT CIVIL SUIT NO.* 714 OF 2013

HAM EYIMANA *RICHARD* PLAINTIFF

#### VERSUS

*EQUITY BANK* (U) LTD DEFENDANT

## BEFORE THE HON. MR. *JUSTICE HENRY PETER ADONYO:*

#### *JUDGMENT:*

# 1. Brief *Facts: IO*

*1-5 The, Plaintiff and the Defendant entered into a business deal in which the Defendant provided was in 2-008 as evidenced by an May 2-008. At that time the Defendant was known as the Uganda Micro Finance Ltd. The leasing facility was for the finance and purchase of a motor vehicle known as Mitsubishi FUSO. It was to cost of Ug. Shs. 37,500,000/-. The a Micro leasing facility and this offer letter dated 13th day of*

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*facility had some provisions but the salient feature of the offer was contained in a document known as the Master Lease which contained the following provisions;*

- 1. Asset cost is *Ug.* Shs *57,500,000/-.* - *down payment 2-07 of the amount 5 to be financed in cash amounting to Ug. Shs. 7,500,OOO/* 2.. *The Plaintiff deposit a* - *5. The Plaintiff to make monthly installments of Ug. Shs.* 2.,474,106/= *inclusive of* VAT. - 4. *The monthly installments payments io payment stipulated were to be made over a period of* 2.4 *months. No commencement date for the* - *5. The Plaintiff to comprehensively insure the motor vehicle.* - 6. *The Plaintiff to legal his property comprised in Buddu Block 500 L5 PLOT* 116 *which was pledged as security. mortgage on secure the lease facility with a* - 7. *The Plaintiff to execute the Master Lease together with its schedule and was to issue post dated cheques for the balance on the purchase price of the asset.*

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*\aster lease which formed and gave details of the deal. ■ough the Plaintiff states that he never was availed or saw the e parties then signed the agreement signifying their intention*

*Jowever, the Plaintiff proceeded with the implementation of the deal for he deposited the 2.0% initial deposit which amounted to Shs. 7,500,000/- and thereafter started making installments and reached up to Ug. Shs. 22,54-5,000/- before the motor vehicle was delivered. Sometime later in July 2008 the motor vehicle was delivered to the Plaintiff and the Plaintiff started using it. During the course of utilizing the same, the !rQ motor vehicle broke down and had to be extensively repaired at the cost of the Plaintiff. The Defendant in the meantime had changed to Equity Eank* (U) *Limited from Uganda Micro Finance Ltd. After the repair of the motor vehicle by the Plaintiff it went back on road however- the Plaintiff states that the Defendant IS without any justification aggrieved by the and proceeded to sell it off. The Plaintiff was or a court order impounded the same*

*defendant's action and thus brought this action against the defendant based on claims stated in his plaint.*

*The Defendant denies the Plaintiff's claim and states that it impounded and sold of the motor vehicle upon the Plaintiff failing to honour his obligations to pag the required installments 6 between the parties this matter and thus this judgment. as provided for in the master lease Agreement. The disagreement even during mediation led to the full trial of*

### *2. Issues:*

*During the scheduling of this matter the following issues were IO framed for the determination of the dispute between the parties.*

- *impounding and selling the motor vehicle a) Whether the Defendant breached the agreement bg* - *b) Who of the parties breached the agreement?* - **c)** *Whether the Defendant is entitled to return the FUSO* **AS** *Lorry or its value*

**1**

*d) Whether the Defendant* is *entitled to recover the* sum of *Ug. Shs. 3-8,628.857/= from the Plaintiff.*

*e) The remedies available to the parties.*

*The issues are discussed and concluded as below.*

*Defendant which impounded and sold the motor vehicle. 5. Whether there was a breached of the agreement by*

*The discussions and conclusions of the first and second issues are evident that no contention is raised by either side that the motor IV vehicle was impounded and sold off by the Defendant. The dispute thus is whether the act impounding of the motor vehicle condition agreed to between the parties in their agreement. In regards to this position it is imperative to look at the offer letter which is the contract between parties herein.* A *close scrutiny of the same show that provision for the act of impounding and and eventual selling if off was a there is evidently no* **5:** *according to the pleadings and the evidence on record, it is combined for one leads to the other. First and foremost*

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*that it arises from the provisions of the master lease which his obligation to pay the monthly required monthly installments then the motor vehicle would be impounded and sold off. The Plaintiff denies dd party to the master lease agreement provisions though and even contends that even if that was the condition he never failed to pay the monthly installments for according to him he Exhibit DI and contained the /O supposedly additional provisions to guide the relationships of which referring to the had taken a lease facility failing to meet his obligation. This* /5 *document however is not indicated as being part and parcel of the documents forming the agreement between the two parties before this court for it lacks the signatures of the parties which is envisaged that upon the Plaintiff defaulting on being a paid all the required installments as was required of him. The master lease was exhibited as between the two with part <c> Selling the motor vehicle though the defence of the action was Defendant's right to impound a motor vehicle upon a person who*

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*asked to signify his acceptance forming part and parcel of the d5 agreement between the parties. X/dhat is clear is that after the monthly repayment of up to Ug. Shs. 2-5,54-5,000/ having paid the 2-O7o initial deposit required of him which IO amounted to Ug. Shs 7,500,000/- and also comprehensively insured the vehicle. lease offer was signed the Plaintiff proceeded to pay a total in attention of the Plaintiff who was on top of who testified on evident in the lease offer letter and even Mr. Musinguzi* (PW1) *of the terms therein as behalf of the Defendant could not state as a matter of course as to whether the same was brought to the*

*equitable right over the motor vehicle and could only legally loose his rights his part of a clear term of the contract between the parties is shown which 1 fail to find for while the motor vehicle was impounded and sold by the where appropriate notice of a default on The action of the Plaintiff thus granted him an Defendant apparently more than eight months were still therel*

![](_page_6_Picture_2.jpeg) *the offer fetter which is the document which apparently guided provision as to the impounding and sale of the motor vehicle where there was a default 5 his monthly repayment obligations and even if the court was to take note of the fact that there was a master lease document which apparently provided for this action the same document notice of default in repaying the monthly io evidence of such a notice at all which makes the action of the Defendant to be in breach of contract which according to* P. J. *Bakibinga in his book The Law of Contract in Uganda at page* 167 *is party to a contract without any excuse fails h5 performs it defectively the contract and if that party does not fulfill his contract or incapacitates himself from performing on the part of the Plaintiff to meet or refuses to perform the contract or an action which occurs when a the relationships between the two parties was silent on ana indicates that a for the expiry of twenty four months period facility in court yet installment was to be issued to the Plaintiff but there is no*

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*promise or kas not given the required information to tire other party that he has not perform his duty as mentioned in the contract then such an action is said to be a breach of contract. of the court in the case of Jarvis v May Davis Smith Co.* [1946] 1KI3 3 9 9 *where the court 3 was of the opinion that such action arises out of the obligations undertaken by the parties in a contract. This position amplifies the position*

*breach of contract., it is imperative to note that the letter offer i o agreed to by both parties appears to form the basis of the contractual relationship between the two parties for it provided for the obligations and duties of the parties as as can be- seen below; In order to conclusively determine that indeed there was a*

- a) *The to P^J 2-O7o 7,500,000/=. deposit which is 13 Plaintiff was* - *b) The Plaintiff was to comprehensively insure the Motor Vehicle.*

- c) Tke *Plaintiff was to pay monthly installments of Uy. Shs 2-A7^,iog/-.* - *legal mortgage of property comprised* M. *Block 300 plot* 116. *d} The Plaintiff was to provide a*

*The Defendant on the other hand is stated to have been obliged T> upon the plaintiff fulfilling the above mentioned conditions to procure and make available the motor vehicle to the Plaintiff. Thus according to the testimony of the Plaintiff, he paid Ug. Shs receipt !0 (Exhibit D2-) and he also paid Ug. Shs. 2.,500,000/- cash to an official of the Defendant in fulfillment of the first condition of paying the 207° deposit and then secondly proceeded to make* **s** *deposits as reflected in the table below with Exhibit D3 showing that indeed the Plaintiff made monthly deposits though a close look at the financial statement adduced by the Defendant gives a car dealer and supplier known as Cangu Suppliers Ltd for which he was issued with a 5,000,000/- in cash to a different total amounting to Ug. Shs 37,500,OOO/- as the*

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cfoser *look at Exhibit* P7 *which is the account statement reveal this differences making accurate record of the Plaintiffs payment get the table below seems to clearly indicate the repayments made by the Plaintiff in 5 order to meet his lease facility obligation thus; opening balance and loan disbursed for a it to be difficult to be believed that the Defendant had kept an*

| PATE | AMOUNT | | |-----------|----------------|-----| | 25/5/2008 | z^^soo | | | 25/5/2008 | 3,800,000= | | | 25/5/2008 | 2,000,000= | 15) | | 23/5/2008 | 2,480,000= | | | 28/7/2008 | 2,7 70,000= | | | 28/7/2008 | 2,470,000= | | | 02/5/2007 | 450,000= | |

*VJhen the above figures are taken into account can be seen that the Plaintiff did disburse a total of Ug. Shs. 37,500,000/= which* **11:**

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<as *well as the monthly repayments thus making the defendant's act of impounding of the motor vehicle to have not been 5 towards reducing the Plaintiffs obligation. came out of his paying Ug. Shs. 7,500,000/= being 2.0% deposit contractual document but actually ample payments were made justified for it was not in the first place provided for in the*

*Additionally when these repayments the defendant's counter claim of Ug. Shs. 18 ,<32-8,850/=, the explanation >0 whatsoever yet he stated that Plaintiffs bank statement which I find was inaccurate for it left out several evidentially paid amounts which were made and acknowledged by the defendant thus making the testimony of being K5 truthful as there explanation Defendant could acknowledge that the Plaintiff paid Ug. Shs later seems to pale off for the defendant's witness could not even are placed side by side with* PWl *to be so contradictory so as not to be acceptable as as to why the same was arising from the could be no explain how that amount arose as he had no*

*2-4,545,000/= together with the 2-0% deposit during a period of* 14 *months for impounded the motor vehicle to be sold at Ug. Shs 44,000,000 to repag the loan and still be indebted to the tune of Ug. Shs 48,42.8,000/= get those repagments and the sale price clearlg were well above the amount which could have 5 It is also not believable as stated bg the defence witness Lugimbazi 10 the 2.0% initial installment for there was could have handed over Vehicle if the initial installment has not been paid for that condition precedent. purchased the vehicle including interests thus clearlg making me believe that the calculations of the Defendant are cooked up.* (PW1) *that the Plaintiff breached the agreement and never paid was a no wag the Defendant the motor*

Ik *the final analgsis, I find that the defendants account of the* A5 *pagment it received to be false and not based and corroborated evidence making me to conclude that the statement of account adduced in court was falsified to deng th or a ng verifiable*

*huge* amount of money in form of *the monthly repayment so as not to extinguish his rights to the same thus the making the selling the motor vehicle without any contractual provision in that aspect* <5 *lay the Defendant being in total breach of the agreement for presented in court could not be verified as document which could not /O be relied upon. originating from the bank making it a even the bank statement which was motor vehicle having paid a the deposit as well as as truthful since it was not even certified Plaintiff his rights yet he had substantial equitable interest in the*

*From the above therefore it is clear that there was unlawful impounding and selling the motor vehicle by the Defendant in total breach the contract between itself and the Plaintiff since it is evident that the Plaintiff made several payments and had in from his repayment statement and even more so that the motor vehicle was impounded and sold yet the lease period was still fact not defaulted the payment of any of the installment as seen* *subsisting and I would thus hold the defendant responsible for the. breach of the contract accordingly.*

## 4. *Whether the Defendant is entitled to return the FUSO* LORRY *or its value and whether the Defendant is entitled to Plaintiff: recover the sum of Ug. Shs 3-8 ,<o2.8,8 547= from the* -A

*The Plaintiff prays for the return of the motor vehicle or its equivalent value. From the conclusion above, it is clear that the Defendant impounded and thereafter sold the motor vehicle in total breach of the lease facility agreement it had with the ID Plaintiff and thus the only remedy which would put the Plaintiff back to the position he was were there not be breach would be the giving given back to him the vehicle the motor vehicle and pay damages. or its equivalent value of*

*K5 counter claim of Ug. Shs.* 18^2-8,3*57/- alleging that the Plaintiff was still indebted to it to that tune after the selling of the motor vehicle. This has* **15:** As *noted above, the Defendant set up a*

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*already* been *found to contain not justified for Defendant is entitled to any money from tine Plaintiff has Mr. Luyimbazi* (PW1) *when asked to explain how tine Plaintiff came 5 that regards making tine counter claim to arise out of nowhere as its calculations and sums tlnat were not disbursed yet tine statement of account of tine of Ug. Sins 57,500,000/- IO account of the 2-07 deposit that is Ug. Shs 7,500,000/- thus an indication that any other additional repayment had to take that into account from that point onwards thus making the amount demanded* **'<5** *and balances as shown on the statement to be faulty and thus inaccurate as. simplest of questions put to him in Plaintiff while showing that the sum Plaintiff ignored the fact that the Plaintiff was obliged to pay a computation were not only defective but was it based on the Plaintiff further paid the sum of Ug. Shsl no proof that the had already been received by Defendant on no iota of truth and is been adduced for even to be indebted to the Defendant could not even explain the*

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**16:**

*period op* 14 months *to explanation is given in the statement of account get even the Defendant had the audacity to impound the motor vehicle when reason given at sold at Ug Shs Td-,000,000/- after it was impounded and this having gone towards the reduction of the Plaintiffs obligation while it is evident that the IO facility period amounts of money in relations to this activity way that the Plaintiff would still be indebted to the Defendant yet he paid the deposit, the repayments and the sale accruals from the sale of the motor vehicle in addition to the cost of a comprehensive insurance. Thus I find that the figure claimed Shs. T4,000,000/ the facility period had not yet expired with no was utilized to pay off the balance on the lease are put together 2-T,S4-5, OOO/- as installments for a there could be no was yet to expire thus meaning that if all the cover the loan yet that amount is not accounted for and no amount was not accounted for as all . The other thing to note is that after the motor vehicle was in the counter is speculative for if Ug.*

**17:**

the figure *of Ug.* Shs. 18,628,817/= *as a balance could not arise and thus would be dismissed accordingly witin tine Plaintiff being entitled to tine return of tine values of money he paid towards tine securing of tine motor vehicle accordingly which is Ug. Shs.* 3 7,100,000/=.

## S. *VJhat remedies are available?*

*The Plaintiff made prayers for the return of the motor vehicle. I have already found above that he is entitled to the return of the motor vehicle whose value was Ug. Shs 57,500,000/=.*

*to The Plaintiff further adduced that he paid the 7,500,000/= being a 2-07, advance towards the securing of the lease facility and Shs. 2-4,545, OOO/= for fourteen months which money was had and received by the Defendant who unlawfully impounded the to pay for the same was still subsisting. I would find that the plaintiff is entitltled to recover the same for the defendant unlawfull* **18:** *a further monthly deposit to the sum of Ug. sum of Ug. Shs motor vehicle yet the period when the Plaintiff was*

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*breached the terms of agreement between the parties and. ought Ug. Shs. 7.7,54-5&gt; OOO/- being deposits for fourteen months. 7,500,000/= being a 7-O7o advance payment and the sum of to refund the money it received amounting to Ug. Shs*

*financial loss for wrongful impounding of the motor vehicle as seen from Exhibit* PIO *which reveals that a transport business profit of Ug. Shs 57-,7-11,005/= during the period in question and thus that amount would be awarded to the Plaintiff for he* /o *have earned that amount in profits based impounded by the Defendant. I would award him so that amount as loss of profits from future earnings from 7-009 todate. was capable of generating a net on the projections of The Plaintiff did also suffer a the defendant had the motor vehicle not been illegally*

*The Plaintiff also prayed to be awarded general damages for breach of contract for the fact that by the Defendant by its act of impounding the motor vehicle well before the lease period* **19:**

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*expired and selling it off without notice breached the contract fact which is not denied and has been found to be true thus the Plaintiff would be entitled for that breach to the tune of Ug. Shs. 7>O ,OOO,OOO. between itself and the Plaintiff . That is a*

*The Plaintiff indicated that he incurred special damages which were computed and tabulated in document Exhibit P4 as below:*

- *Ug. Shs* 8*,770,000/- repairs.* - **0<)** *Ug. Shs. 4,2.00,000/= Comprehensive Insurance* - *Ug. Shs. 1,12-0,000/-arrangements fees (W* - *Ug. Shs 000,000/- Inspection fees* - *Ug. Shs 10,800,000 value of the Irish potatoes from Kisoro that were on the vehicle at the time, it was impounded.*

*All these were never rebutted as claimed. or denied. I would find that ample proof has been shown by the Plaintiff and I would award them* v **I**

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**20:**

aiwm for *loss of* business *the* general *damages of Ug. Shs. -50,000, OOO at the court rate of* 6% *per annum from the date of this judgment till payment in b full all on the Ug. Shs (52-,2-11 ,OOO/- and the special damages from the date of filing this suit and interest on I would also award interest at commercial rate of 2-T7° per*

*The Plaintiff should be awarded costs of the suit as the successful party.*

## *(5. Orders:*

**I**

*I do so make orders in respect of the claims found as against the lrO Defendant indicated specifically above accordingly.*

*HENRY* PETER *ADONYO*

*JUDGE*

14th *JULY 2.010*

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