Kagoro v Samalien Properties Uganda Limited (Civil Suit No. 59 of 2010) [2013] UGHCLD 402 (7 May 2013)

Full Case Text

## **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (LAND DIVISION) CIVIL SUIT NO. 59 OF 2010**

**EPIMAC KAGORO PLAINTIFF**

**VERSUS**

**SAMALIEN PROPERTIES (U) LTD DEFENDANT**

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#### **JUDGMENT BY HON. MR. JUSTICE JOSEPH MURANGIRA**

#### **1. Introduction**

#### **1.1 The representation of the parties.**

**J** The plaintiff is represented by Crane Associated Advocates and' whereas the defendant is represented by Kavuma Kabenge & Co. ^dvocates. —

#### **1.2 Facts of the case**

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Around March, 2009, the plaintiff was approached by one Hajji Mulimba Muhamad, a broker, who informed him that the defendant Company was selling the suit property. The plaintiff with due diligence, he physically inspected the suit property and also searched in the Lands registry for any encumbrances and discovered that the same had been mortgaged to Stanbic Bank Limited.

One of the directors in the defendant company then informed the plaintiff that the reason they were selling the suit property was because they were raising money to pay off the mortgage with Stanbic Bank.

The plaintiff then decided to purchase the suit property and him together with the defendant company subsequently entered into and executed d sale agreement on the 6th of April, 2009 at the offices of the defendant company's lawyers. It was agreed that the purchase price would be **USD 1,000,000 (United States Dollars one Million only)** and the defendant company • would use part of this money to discharge its mortgage debt.

I f The plaintiff immediately transferred Ugx **767,524,937/=** to the defendant company on execution of the sale agreement as part payment of the purchas^ price and a further Ugx **300,000,000/=** was on the same day deposited onto the defendant company's bank account no. 014/00/051666/01 in Stanbic Bank.

Subsequently, the plaintiff deposited other amounts to a tune of **Ugx 105,803,800/=** bring the total amount of money part paid to the defendant company to **Ugx 1,173,328,737/=.** —"

However due to the unforeseen circumstances, the plaintiff delayed to bank the balance of the purchase price within the stipulated time. However, towards the expiry of the stipulated

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time, the plaintiff orally requested the defendant company through its lawyer and director for more time within which to pay the balance and they both agreed to his request. In fact the plaintiff continued depositing more money which all translates into the above stated part payment of **Ugx** — **1,173,328,737/=**

company. Unfortunately the plaintiff later discovered that on or around 13th February, 2010 Stanbic Bank had sold the suit property to another person, Property Services, who is now the current registered proprietor so as to realize its mortgage debt and this — io was done with the knowledge and consent of the defendant

The plaintiff immediately proceeded to demand for specific performance of the sale agreement from the defendant company or a refund of the monies already paid to it,^" amounting to **Ugx 1,173,328,737/=** however it refused to refund the same despite the fact that it neither owned and /or possessed the property nor was it transferred to the plaintiff.

### **1.3 The issue agreed upon by the parties**

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**• Whether the plaintiff is entitled to a refund of the part payment of the purchase price due to the sale to a 3rd party by the defendant.**

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#### **2.0 Evidence adduced by the parties**

The plaintiff gave evidence in support of his case. He was the only witness. He supported his case with documentary evidence.

The totality of the plaintiff's examination in chief points to the following:-

I o The plaintiff bought the suit property from the defendant company after physically inspecting it and a sale agreement in regard to the same was also executed. The purchase price for the suit property was to be USD 1,000,000 and the plaintiff made part payment of Ugx 1, 173,328,737/=. This is evidenced by various deposits made by the plaintiff onto the defendant company's bank account with Stanbic Bank.

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However, there was no consideration for this part payment as the plaintiff laterpn discovered that the defendant compgny had sold the same suit property to someone else, Property Services, who is now currently its registered proprietor. The plaintiff therefore, does not have in his possession the suit property and he also lost his money to the defendant company.

It is the submission by Counsel for the plaintiff that the defendant company's actions therefore were intended to defeat the plaintiff's interests and also to unjustly enrich itself. That the plaintiff is therefore entitled to a refund of the monies it paid to the defendant company as there was total failure of the consideration on'the defendant company's part. *1*

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It must be noted that this evidence was never challenged by the defence through cross examination as they chose noltn.---------

The defendant company called two witnesses, Edward Mperese (DW2) and Victoria Nakyagaba (DW1), both directors of the defendant company. DW1 and DW2 are husband and wife. —

#### **DW1, Victoria Nakyagaba**

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DW1 adopted her written witness statement as her examination in chief. She was thoroughly cross examined by Counsel for the plaintiff.

On cross examination by the plaintiff's counsel, she testified in 1 ° Court that she was one of the representatives of the defendant company while the sale agreement was being executed. She told this Court that the plaintiff paid Ugx 767,52^,937/= in cash on the execution of the agreement and she also told Court that the plaintiff also deposited other amounts of money onto the — f-S defendant company's bank account in Stanbic Bank.

She told Court that when Stanbic Bank sent them a demand to repay their mortgage debt, **they decided to sell the property to someone else so as to clear the debt with the Bank.** She admitted that consequently the suit property was not transferred to the plaintiff despite the fact that the defendant company took the plaintiff's monies. When asked whether the said monies could be

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refunded she stated that it **was not possible as the same had already been spent.** She told Court that the plaintiff was never informed at any one time that the suit property was sold to someone by Stanbic Bank and yet the defendant company was aware of this at all times as it was part of the negotiations for the sale as per annexture "B" on the witness statement of Nakyagaba Florence.

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She told Court that Stanbic Bank was able to sell the suit property at **Ugx 1, 500,000,000/=** which meant that the defendant company kept **Ugx 500,000,000/=** which was in excess of the money that the defendant company owed to Stanbic Bank, in addition to the monies already part paid to it by the plaintiff.

She admitted to this Court that it was nowhere in the agreement that the plaintiff was not to be refunded his part payment for the suit property for failure to complete the purchase price in the stipulated time.

This DWl's evidence supports the claim of the plaintiff. For her to say that the defendant cannot refund the money to the plaintiff because they have already spent the money, such statement does not hold any water at all. To say the least she is just being dishonest. Her being a Director of the defendant assisted the defendant to commit acts of dishonesty against the plaintiff. The **•** defendant and DW1 are all out to cheat the plaintiff of the money they had and received from the plaintiff. Such dishonest acts by

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the defendant and its two directors (DW1 and DW2) cannot be condoned by Courts of law.

#### **DW2: Edward Mperese:**

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DW2 also adopted his written witness statement as his examination in chief. He was seriously cross examined by Counsel for the plaintiff.

On cross examination, he told Court that he indeed entered into and executed a sale agreement with the plaintiff for the suit property where in the plaintiff made a party payment of **Ugx 767,524,937**/= for the suit property and that the rest of the money was to be paid into the Stanbic Bank account for the defendant company. He claimed that he was not aware of Stanbic Bank's intentions and finally the sale of the suit property to the third party. He stated that he wcp also not aware that Stanbic Bank was able to sale the same for **Ugx 1,500,000,000/=** and that he was not — l-£~ aware of the whereabouts of **Ugx 500,000,000/=** which was in excess of the mortgage debt owed to Stanbic and therefore was transferred back to the defendant company. However, when the plaintiff's counsel reminded him of the paragraphs in his statement, he changed his mind and said he knew it was sold at — 3-^ **Ugx 1,500,000,000/=.**

He admitted that annexture "C" to his evidence in chief was entered into on his behalf by his lawyers and that its paragraph (iii) which provided that the defendant company was to present a/

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buyer to the Bonk for the said purchase was a fundamental term of the consent judgment.

DW2 further confirmed to Court that paragraph 4 of the annexture "A" on his written examination in chief, the sale agreement, which provided as follows: ------S

" **warranty to title, the vendor herby warrants good title to the land and undertakes to pass good title to the purchaser and to indemnify the purchaser in full in case of defect in title and to claim by a third party. The vendor warrants that there is no material fact in — (***0* **his knowledge, which may adversely affect this sale. In the event that the vendor fails to pass good title to the purchaser, the vendor undertakes to repay the full purchase price to the purchaser in full on immediate notice and demand."** (Underlining is mine for emphasis)

He therefore admitted that he never refunded the plaintiff the party payments made in regard to the suit property contrary to the above quoted provision.

DW2 also admitted that there was no term in the sale agreement — *9-°* which provided that the plaintiff would not get a refund of the part payments made if he did not complete payments of the purchase price within the stipulated time.

On re-examination he stated that he did not refund the party payments mdde because the plaintiff did not honour the terms of the agreement in regard to helping the defendant, company service its mortgage debt with Stanbic Bank.

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DW2's evidence also shows that the defendant sold the suit property to a third party and that it never made any refund of the money had and received from the plaintiff. In essence the DW2's evidence in many aspects supported the plaintiff's case.

# **3. Resolution of the only issue raised by the Court — s**

Counsel for the defendant, Mr. Musa Nsimbe, submitted that from the evidence of both DW1 and DW2 the defendants sold all its interest in the suit land/property and its own consideration for such sale the defendant company received **Ug.hs 767, 524,937/=** only. That it was, the plaintiff's obligation under 2 (b) of the agreement—• I ° to service the loan and take his property free from any encumbrance. He relied on a few cases in support of his arguments. To the contrary, Counsel f<pr the plaintiff Mr. Nsamba Abas Matovu submitted that the plaintiff is entitled to a refund of the part payments he made in regard to the suit land/property— *iS~* amounting to **Ug. Shs 1,173,328,737/=.** He based his arguments on the evidence that was adduced by both parties. He further, relied on a number of authorities in support of the plaintiff's case.

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As seen from the evidence adduced in this Court, there was total lack of consideration on the part of Defendant Company despite —2- *°* the huge sums of money deposited and paid by the plaintiff onto the defendant company's bank account as part payments for ttAe suit property. The suit property was instead sold to a third party

**9** with the full knowledge and consent of the defendant company. DWl's and DW2's evidence is to the effect that the defendant received the part payments from the plaintiff and that the suit property was sold to the third party, (Property Services). In that respect the arguments by Counsel for defendant in his\*—S" endeavours to deny liability by the defendant does not merit justice at all. The defendant and its Directors (DW1 and DW2) are out to cheat the plaintiff of his money.

Further, as per clause 4 of the sale agreement between the plaintiff and the defendant company, the defendant companywarranted good title to the suit property. Ye the defendant never handed over the suit property to the plaintiff. Instead the defendant who was the trustee of the suit property for the plaintiff without any colour of right sold the suit property to the 3rd party.

f J \_ In the case of **William Kasozi v DFCU Bank Ltd HCCS No. \_\_\_ I 1326/2000,** Court stated inter alia that, it is trite law that when a document containing contractual terms is signed, then in the absence of fraud or misrepresentation, the party signing it is bound by its terms

The defendant company in this instant case is, therefore, bound — ° by the terms of the agreement. The defendant company failed to pass good title to the plaintiff and therefore as per the terms of the **• •** agreement, which are binding on it since it signed the agreement,

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it should therefore re-pay the part payments made by the plaintiff as demanded by him.

Consequent to the above, in the case of **Mubaraka Batesaki v Mubaraka Magala Civil Appeal No. 29 of 2002** while referring to the case of **Dies & Anor v British & International Mining & Finance — 5 Corporation Ltd, [1939]I. K. B 729,** Court held that part payment of the purchase price is refundable.

cases. In this instant case, the plaintiff made a part payment, which ought to be refunded by the defendant as per the above cited **—**----------- ---------------------------- **—' / D**

Again while referring to another case of **Stockloser vs Johnson, [1954] I. A. E. R 603 at 637,** Court stated interalia that **(Denning L.)**

> **15 " it seenjis to me that the cases show the law to be this, when there is no forfeiture clause, if mone^ is handed over in part payment of the purchase price,** **and the buyer makes default as to the balance, then so long as the seller keeps the contract open and available for performance, then the buyer cannot recover the money but once the seller rescinds the contract or treats it as at an end owing to the buyer's — default, then the buyer is entitled to recover his money by action at law, subject to a cross claim for damages..."**

*I* In the instant case by the defendant selling the suit property to Property Services, :it tantamounted to the defendant rescinding — *2- £* the contract between it and the plaintiff. And by the above authority, the plaintiff is entitled to a refund of his money.

It is also apparent that there was no forfeiture clause in the sale agreement in this instant case, once the suit property was sold to the 3rd party with the defendant company's knowledge and consent; that Defendant Company had thereby put the contract to an end. It was therefore entitled to refund the plaintiff's part payment amounting to Ugx 1,173, 324,173/=.

The defendant company had the option to be compensated in damages for the balance of the purchase price if it took it that the plaintiff had breached the contract. However the defendant acting through DW1 and DW2 chose not to follow this course and— 1 ° it is therefore bound to refund the part payment to the plaintiff.

When re-examined, DW2, one of the directors of the defendant corryDany stated the he never refunded thef money demanded by the plaintiff because the defendant company had failed to compete the balance of the purchase price. However, this course — *Is"* of action is wrong, the defendant company is only entitled to seek for damages together with the balance from the plaintiff for failure to complete the balance of the purchase price in stipulated time. It is not entitled to withhold the plaintiff's part payment, contrary to the terms of the agreement which are very —2\_<-> clear, and at the same time sold the property which was the subject of the said contract. ;

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balance of **Ugx 1,500,000,000/=.** The balance **Ugx** then remained onto the defendant company's it enjoined'it. The defendant company therefore Further, the defendant company should not be allowed to unjustly enrich itself. The mortgage debt owed to Stanbc Bank amounted to **Ugx 1,082,114,198/=** at the time of the defendant company consenting to sell to the third party. And the bank was able to sell with consent and approval by the defendant company, the suit" property at **500,000,000/=** account and had been paid twice for the same property, by the plaintiff and partly by the 3rd party. This tantamount to unjust enrichment and — ' 0 this Court cannot allow that. This Court would order that the defendant company refund the sums paid by the plaintiff as the suit property was transferred and is currently owned by a 3rd party rather than the plaintiff contrary to terms of the 6th April, 2009 agreement. ——— ~

*f Q-O* J It is my considered opinion, therefore, that that the foregoing authorities and the evidence adduced in Court apply with equal force to the case in question. All the above show that the plaintiff is indeed entitled to a refund of the monies that he paid to the defendant company and that the actions of the defendant company were only aimed at defeating the plaintiff's interests in the suit property and also to unjustly enrich itself.

During cross examination of both DW1 and DW2, they both admitted to glaring truth that there was no term referring to any kind of default and forfeiture by the plaintiff of any part payment. \_

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In fact, both witnesses for the defence admitted to the existence of a clause regarding refund of the part paid amount by the defendant in case of failure to pass good title to the plaintiff, which to the least, they fundamentally failed to do.

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DW1 and DW2 being the Directors of the defendant are the' perpetuators of dishonesty dealings that were committed by the defendant. It is also my considered opinion that DW1 and DW2 being the only Directors of the Company are the very people who swindled the plaintiff of his money. They are just hiding their faces behind the defendant company. As Christians, DW1 and DW2 should repent before God and their fellow Christians, and cause the defendant to refund to the plaintiff his money.

Therefore, the contention by Counsel for the defendant that the plaintiff was not entitled to a refund is not only unjust but isj. not legal at all, neither is it provided for in the written agreement — 1^ entered and signed by the plaintiff and the defendant nor could it be an equitable remedy.

The law on documentary evidence is very clear, once the terms of contract have been reduced into a form of writing (document), oral evidence varying the contents and or terms of the same - contract is inadmissible. **See Sections 91** & **92 of the Evidence Act Cap 6 and Muwonge v Musah [2004] 2 EA 187.**

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*1 °* In the above cited case which has similar facts like the instant case, it was held while dismissing the contention that it was a condition precedent that the purchaser was to pay the mortgage, installments, a fact that was not part of the agreement, as follows; ■=— • " **the admission of evidence that the appellant was aware of the -'''-^ respondent's indebtedness of NPART at the time of the sale agreement, so as to condemn him for breaching the agreement by failing to pay the balance of the purchase price in time to enable the respondent to redeem his mortgage would contradict, vary, add to or subtract from the terms of the sale agreement"**

f It must be noted that it is not adduced anywhere in evidence that the agreement entered into by the parties provided as condition the payment of the installments to Stanbic was mandatory • reguirement in the agreement neither can it be discerned from its reading^ ---------------------------------------------------------------------

The actions of the defendant were only aimed at defeating the plaintiff's interests and unjustly enriching itself. It therefore goes without saying that whereas the plaintiff was aware at all times of Stanbic Bank's mortgage over the suit property while he purchased and is therefore bound by the terms of the agreement, it was not a condition precedent neither was it an assignment and this does not necessarily mean that the defendant is entitled to retain the part payment while at the same time befitting from the sale of the suit property to the 3rd party. The plaintiff made a part payment of **Ugx 1,173,328,737**/= while Stanbic/ Bank also —9-^

advanced the defendant **Ugx 500,000,000/=** as proceeds from the sale of the suit property to a 3rd party. The defendant was thus paid twice for the same property.

The argument by the defendant that the plaintiff was aware of the mortgage at all times and did not fulfill his obligations in discharging it is therefore not allowed to stand; as it is not only unsupported by the agreement'-but also unfair in its entirety. The defendant had unjustly enriched itself.

It is also very important to note that the **defendant jointly with DW2 in HCCS No. 452 of 2009** had already hatched intentions to— I *&* defraud the plaintiff. In that case the defendant and DW2 entered into a consent judgment with Stanbic Bank which entirely dispossessed the plaintiff of his rights in the suit land. In all these endeavours, I must say, that the lawyers for the parties, as legal advisors to the parties to the consent judgment manipulated their way out for the defendant and DW2 in order to cheat or/ and defraud the plaintiff. Allow me at this juncture to reproduce in this judgment the said consent judgment, which I hereby do herebelow:-

"THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISON) CIVIL SUIT No. 452 of 2009

1. SAMALIEN PROPERTIES (U) LTD 2. EDWARD MPERESE :::::: VS

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PLAINTIFFS

## 1. STANBIC BANK UGANDA LTD

2. EPIMAC KAGORO :::::::

## DEFENDANTS

## CONSENT JUDGMENT

*By of* the Parties hereto it is hereby agreed as follows;

- (i) The plaintiffs recognizes and agrees to the validity of the 1st defendant's 's mortgage and further charge incumbraces over the properties comprised in; (a) Kyadondo Block 38 plot 220 at Wandegeya - (b) Kyadondo Block 203 plot 2071 at Bwaise - (c) LRV 283 Folio 3 plot 25 Nakivubo Place

I O And admit the indebtedness of Ug. Shs. 1, 032, 722, 290/= owed on the 1stdefendant's loan account No. 0138405166601 as at the 4th December,-2009 secured by the said mortgage and further charge.

- (ii) The 1st defendant shall allow the 1st plaintiff up to the 31st December, 2009 to pay the above indebtedness plus such further interest as may have accrued thereon. ---------- — - -0-0 (iii) Should the 1st plaintiff fail to make payment by the 31st December, 2009 the 1st defendant shall be at liberty to realize the aforementioned securities provided it is agreed that in doing so that the 1st defendant shall allow the plaintiffs up till the 10th January 2010 to introduce a buyer to purchase the security comprised in (i) (c ) above, LRV 283 folio 3 plot 35 Nakivubo place and pay the loan balance by the 15th January, 2010. —---------"" " - (iv) Should no purchaser as described in Clause (iii) above be availed and/or should the said loan balance not be paid by such purchaser by the 15th January, 2010 the 1st defendant shall be at liberty from that date to sell any and all the securities as it shall deem fit. f - (v) The plaintiffs shall pay the 1st defendant costs of this suit. ----------—

We consent;

SGD SGD

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MASEMBE, MAKUBUYA, ADRIKO KARUGABA & SSEKATAWA ADVOCATES (MMAKS ADVOCATES)

KAVUMA KABENGE & CO. ADVOCATES COUNSEL FOR THE PLAINTIFF —- D

GIVEN UNDER my hand and the seal of this Honourable Court this 15th day of Dec. 2009.

*I* 17 \* DRAWN BY: MASEMBE, MAKUBUYA, ADRIKO KARUGABA & SSEKATAWA ADVOCATES SGD REGISTRAR

(MMAKS ADVOCATES), 3RD FLOOR, DIAMOND TRUST BUILDING, PLOT 17/19, KAMPALA ROAD, **KAMPALA**

After the said consent judgment the defendant who was the plaintiff in HCCS No. 452 of 2009, on 4th February 2010 withdrew the said suit from the defendant (who is the plaintiff in this case).

Equally important to note is the fact, the defendant and DW2 in the same HCCS No. 452 of 2009 withdrew the aforesaid suit fromthe plaintiff. For the purposes of educating the parties, I hereby reproduce the said withdrawal herebelow:-

| " THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL COURT) HCCS NO. 452 OF 2009 | | | | |----------------------------------------------------------------------------------------------------------------------------|--|-------------------------|--| | Samalien Properties (U) Ltd Vs | | plaintiff | | | 1. Stanbic Bank (u) Ltd 2. Epimac Kadoro | | Defendants 1 | |

## NOTICE OF WITHDRAWAL

TAKE NOTICE that the plaintiff hereby wholly discontinues the suit $\overline{\phantom{a}}$ -1 ( against the 2nd defendant.

Dated at Kampala this $4^{\text{th}}$ day of February, 2010.

$\mathsf{Sg}\mathsf{d}$ M/s Kavuma Kabenga & Co. Advocates"

All the above incidents were done by the defendant and DW2 at the back of the plaintiff. I must say that the plaintiff at the hands of $-2$ o the defendant, DW2 and their lawyers was a victim of circumstances. He was hoodwicked and cheated from the word "go". 1 wonder, without shame or remorse DW1 and DW2 vigorously came out to defend their defence to the suit.

Consequent to the above, it is clear that the defendant, DW2 and its lawyers were greatly involved in the sale of the suit property to the 3rd party, Property Services. As a result, the plaintiff was left in-"- the cold and only at the mercy of the law and God. Such absurdity in land transactions should not be condoned by Courts of law. Through judgments like this one our people should be told and taught to **always say the truth and to live by the truth.** Cheating and defrauding fellow men is not only condemned at -— *0* law but also by the scriptures in the Holy Bible and the Colon.

Furthermore, Counsel'for the defendant submits that the delay by the plaintiff in paying the installments caused the eventual sell of the property and that such delay defeats thefplaintiff's interests.

It is in evidence that the delay was there but was both reasonable — i S" and consented to by the defendant. In the unchallenged evidence in chief by the plaintiff, paragraphs 7, 9 and 10, the attached annexture (the bank statement of the defendant) particularly P4-12 and 13, 14, 16, 17 respectively confirm that the plaintiff continued making deposits in respect of the purchase price, for example, specifically in October, November, December 2009, January and February, 2010. It must be noted that it's during these months that the defendant decided to sell to a third party thereby breaching the agreement. *1*

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When there is reasonable delay in the payment of the contractual sum, the contract is not fundamentally affected. Therefore the defendant's submission, that the plaintiff failed to fulfill his obligations under the sale agreement in regard to the mortgage is not true and cannot stand. In the case of **Right Side Properties vs** Gray [1974] 2 ALLER 1169, it was held that reasonable delay in completing the payment of the purchase price is not fatal to a contract for the sale of the land so long as the purchaser is willing to complete payments.

In addition to the above, there was no forfeiture clause in the $-10$ agreement that stated that the defendant company was entitled to retain the part payment in the event of the plaintiff failing to fulfill his obligation under the agreement to service the loan from Stanbic Bank. When there is not forfeiture clause and the seller rescinds the contract or treats it as $\alpha$ t an end owing to the buyer's $-15$ default, then the seller is only entitled to a claim for damages and the buyer can also recover his part payment. This was stated inter alia in the case of the Stockloser v Johnson [1954] ALLER 630 AT 637.

It should also be noted that once a contract for sale of the land has been concluded, in equity, the vendor holds the property in $\sim 2^{\circ}$ trust the purchaser as the purchaser has a beneficial interest in the same. In the case of the Juliet Nandecha vs Edward Kayongo Civil Suit No. 187 of 2005, Court held inter alia that, upon receiving a substantial part payment of the purchase price, the defendant at

**common law had become a mere trustee holding the land in the trust for the plaintiff and therefore had no right to sell , Court subseguently held that the plaintiff was entitled to a refund of purchase price.**(underlining is mine for emphasis)"

In this instant case, the plaintiff made a party payment of **Ugx** — S **1,173,328,737/=** for the suit property. This is quite a substantial sum of money, yet he did not get value for his money as the property was sold to a 3rd party with the knowledge and consent of the defendant and DW2 as evidenced hereinabove.

In any case, since the contract of sale is no longer enforceable as —-1 b to specific performance by the defendant. The plaintiff's purchase price was had and received by the defendant who thereby gained an advantage which accrued to it, and it has taken no steps to refund the f money to the plaintiff. It is therefore, unconscionable if the defendant who sold the suit property and -—' at the same time got Shs 500,000,000/= as balance from the suit property it had sold and also be entitled to retain the money had and received from the plaintiff. Even if it was to be said that the defendants cannot be said to have acted improperly, it is hardly a case where because of the default on the part of the purchaser that they should be allowed to keep the money had and received from the plaintiff.

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In the case of **Mlay vs Phoneas (1968) EA 569** it was held that:

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**"a transferee of property which from its very nature is inalienable is entitled to recover back his purchase money from the transfer, if the transfer is declare illegal and void".**

**I'D** In the instant case, therefore, the money paid to the defendant by the plaintiff which is not only an earnest but is also part of the purchase price that is recoverable by the plaintiff. In the case of **Harjit Singh Mangat vs Christine Lillian Nakito, Ray Treon and Attorney General, High Court of Uganda, Commercial Court, HCT** - CS **No. 442 of** 2003, judgment delivered on 18th */5/2006. My* brother, **Hon. Mr. Justice Geoffrey Kiryabwire,** on a similar point of law, held that:

**"The Plaintiff has prayed for a refund of the money he paid the first defendant. As found in answer to the first issue, the first defendant by agreement received the sum of Shs 175,000,000 for the sale of the suit land. However, since the sale was not valid she is orde/ed to refund the said Shs. 175,000,006/= as money had and received for a contract whose consideration had totally failed for want of title". —-**

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The instant case is on all fours based on similarly principle of money had and received as well set out in the 2 cases cited above. Therefore, in the same way and applying the said cited cases to this case, the plaintiff's claims in the plaint are valid. The plaintiff is entitled to a refund of his monies. —-—

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In the premises, the only issue framed by the parties is answered in the affirmative. The plaintiff is entitled to a refund as claimed hereinabove from the defendant with interest at 25% per annum from the date of receipt of the money by the defendant till payment in full plus costs of the suit. ----- ------ - SC

**(-0** In his submissions, Counsel for the defendant made submissions in respect of the counterclaim by the defendant against the plaintiff Mr. Musa Nsimbe from Kavuma Kabenge & Co. Advocates submitted that the defendant is in its defence raised a counterclaim for special and general damages, arising out of the plaintiff's breach of the sale agreement for plot 25 Nakivubo place. The plaintiff in his pleadings and evidence did not respondent to the counterclaim.

pW2, Mperesa Edward, testified that fthe defendant had 3 securities all of which were subject to Stanbic Bank's mortgage; that's plot 25 Nakivubo Place, Kyadondo Block 203 plot 207 at Bwaise.

That the defendant decided to sell plot 25 Nakivubo place and redeem plot 220 Wandegeya and plot 207 Bwaise. That when the plaintiff failed to service the loan as agreed, all defendant's securities were exposed to sale and this prompted the defendant to instruct its lawyers M/s Kavuma Kabenga & Co. Advocates to block the sale of the properties. The said Lawyers Lodged Civil Suit No. 4^2 of 2009 at the expense of the defendant.

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The above submissions are not correct; HCCS No. 452 of 2009 was filed by the defendant jointly with DW2 against Stanbic Bank and the plaintiff (as defendants). In the consent judgment quoted hereinabove in this judgment, the defendant reached a settlement with Stanbic Bank. The duo together with DW2 struck ck deal to defeat the interests of the plaintiff. Subsequently, the defendant jointly with DW2 withdrew their claims from the plaintiff vide HCCS no. 452 of 2009 (see the withdrawal of the suit from the plaintiff quoted hereinabove in this judgment).

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f In such circumstances, the defendant's counterclaim does not—>c have a cause of action against the plaintiff, in fact the defendant's counterclaim is frivolous and vexatious as against the plaintiff. It was just intended to mount pressure on to the plaintiff, in the premises, therefore, whatever claims DW2 uttered in his evidence if they are there at all, amount to falsehoods. There is no justifiable claim in the counterclaim against the plaintiff.

It should be noted that the defendant never found it necessary to frame an issue on the counterclaim. Even in the defendant's witnesses' evidence counsel for the defendant never led any evidence to prove the counterclaim. For the fact that the defendant never bothered to have an issue on the counterclaim^^-0 framed and no evidence was led 'to prove its claims against the plaintiff, the counterclaim was taken to have been abandoned The defendant's counsel was, therefore, out of order when he

**24**

*1*

**I**

*\**

on a counterclaim when it was addressed himself in his submissions not in contention as an issue.

In any case, as I have already found hereinabove in this judgment that the plaintiff was not at fault at all, there would be no cause of action , by the defendant against the plaintiff in the counterlaim.—-<T Further, the defendant never led evidence to prove its case on the balance of probabilities as against the plaintiff. In that respect, I hold that the defendant's counsel's submissions amount to evidence from the bar. In any event Counsel for defendant during the scheduling of the suit neyjeu-fremed-xin\_jssue\_ on—the - counterclaim, i

In that respect, the submissions by Counsel for defendant are struck out and the counterclaim is accordingly dismissed with costs to the plaintiff^ f

## **4. Conclusion**

**(**

**J**

**!**

this the In the result and for the reasons given hereinabove in judgment, judgment is entered in favour of the plaintiff in following orders: that:-

(a) The plaintiff is entitled to a refund by the defendant of Shs 1, 173,328,737/= with interest at 25% per annum from the date of receipt-of the said money by the defendant from the plaintiff till payment in full.

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**\***

- The defendant shall pay the abovestated money in $(a)$ $(b)$ above with the said interest to the plaintiff as soon as practicable but not later than fourteen (14) days from the date of this judgment. - Failure by the defendant to comply with the order in (b) $\leq$ $(c)$ above, the execution process against the defendant shall issue hence without further delay. $\dot{\cdot}$ - Costs of the suit and the counterclaim are awarded to the $(d)$ plaintiff.

Dated at Kampala this $7\pi$ day of May, 2013. – i D

MURANGIRA JOSEPH JÚDGE