Kato v Kimbowa and Another (Civil Suit 155 of 2020) [2023] UGHCLD 132 (19 May 2023)

### THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA

# LAND DIVISION

# ctvtL sutT No. 155 0F 2020

5 KATO EVARESTO- PLAINTIFF

VS

# 1, KIMBOWA ERIC

2. LERA MAISHARAH ------DEFENDANTS

#### 10

#### JUDGMENT

The Plaintiff lvlr Kato Evaresto brought this action against the Defendants jointly and severally seeking;

- 1 <sup>A</sup>declaration that the Defendants breached the agreement for sale of a house - located at Katooke Wamala-Nabweru Division district measuring 40ft by 70ft between the P laintiff and the Defendants dated 1st J uly 201 8. - 2 An order Ior rescission of the sale of land/house agreement between the Plaintitf and lhe Defendants. - 3 An order for vacant possession of the house located at Katooke Wamala-Nabweru

Division, Wakiso District.

- 4 General damages for breach of contract. - 5. Punitive and exemplary damages. - 6 lnterest at commercial rate on 4 and 5 from the date ofjudgment until payment in full. - 7. Costs of the suit. 25

#### PLAINTIFFS' CLAIIU

Mr. Kato Evaresto, the Plaintiff purchased a plot of land on Kabaka's land measuring 40ft by 70ft situate at Wamala Kalongoti, Kyadondo from Mr. Kibirige Noah at UGX 10,000,000/= on the 1 5th October 2014. He later developed it by erecting a residential house where he lived with his family until 20'18, when he decided to sell it to get a bigger house.

On the 1Oth April 20'18, the Plaintiff sold the suit property to the Defendants, a married couple, at UGX 80,000,000/=. They took possession upon execution of the agreement after making a deposit of UGX 24,000,000/=. Under the agreement, completion of payment of the balance was to be made by the end of December 2018. Another term of therr agreement was that the Plaintiff would take possession of the Defendants' house situate at Kazo Angola, as security for completion of payment of the purchase price. And that the Plaintiff would vacate the house thereafter.

But less than two months later, in June 20'18, the Plaintiff was forcefully evicted from the Defendants' house. They had sold it without his knowledge and in breach of the sale agreement. Conseq uentially, the Plaintiff was forced to rent a house from Mr. Manzi Ronald at Kazo Central at UGX 500,000/=, from June 2018 to July 2019.

Meanwhile, the Defendants refused to pay the Plaintiff s balance on their purchase of the suit property. He sought the assistance of the LC I Chairperson Mr. Kisembo Francis and his lawyer friend, a Mr. Seyiga Abdul Swabuk to help him secure his money. Following a meeting with the Defendants, the parties entered a final agreement dated 1't July 2018 which cancelled the first agreement.

According to the '1st July 201 B agreement, the Defendants would pay the balance of UGX 56,000,000/= not later than 31't December 2018. ll they failed to do so, the Plaintiff reserved the right to sell the suit property and refund the Defendants' money. The Defendants failed to pay the balance by 31sr December 2018. All efforts by the Plaintiff to sell the house were unsuccessful since the Defendants refused to hand over possession, effectively repelling all prospective buyers.

Around January 20'19, the Plaintiff sold his car and with the proceeds attempted to refund the Defendants' money so they could vacate the suit property. They declined the money and held on to the suit property.

ln response, the Plaintiff filed a suit at the Chief Magistrates' Court of Nabweru vide Civil 5 Suit 2 ot 2019 after the Area Local Councrl failed to resolve the matter This suit was delermined in the Plaintiffs favour and a decree was issued ordering the Defendants to vacate the suit property lt later turned out that the decree was set aside since the Grade One Magistrate lacked jurisdrction to entertain the suit

Eventually, the Plaintifi instituted this suit to enable hrm obtarn jushce and fairness by being granted the prayers contained in his pleadings He contended that he has suffered inconveniences, stress, trauma, suffering and unprecedented rental costs as a result of the eviction from the Defendants' house and their refusalto pay hrs outstanding balance 10

#### DEFENCE AND COUNTERCLAIM

The Defendants denied the Plainliffs claim and asserted that in April 2018, the Plaintiff agreed to trade the suit property valued at UGX 80,000,000/= in exchange for the Defendants' house. Since the Plaintiffs house was of more value than theirs, they agreed to give the Plaintiff some money in addition to hrs house as per the agreement dated 1orh April 2018 15

lnitially, lvlr. Kimbowa, the 1sr Defendant, paid an instalment of UGX 8,000,000/= as consideration However. the Plaintiff later convinced him that heshould sell offhis house which he was in occupation of and give him the proceeds The Plaintiff also suggested that the 1sl Defendant could pay the balance of the consideration at a later date

It was after thrs arrangement that the 'lsr Defendant identified buyers for his house whrle the P la intiff was still in occupation of it They paid the purchase price to hrm and he in turn paid the Plaintiff another inslalment of UGX 16,000,000 on 22id July 20'18 The Plaintiff agreed to immediately move out so that its buyers could move in. At this pornt, the 1sr

Defendant had made a total payment of UGX 24,000,000/= to the Plaintiff, leaving a balance of UGX 56,000,000/= tor the suit property

Sometime later, the Plaintiff approached the 1.r Defendant, in the company of PW2, Mr Seyiga Abdul Swabuk with a better deal. They proposed execution of a fresh agreement in respect ot the sult property. The Plaintiff convinced the 1sr Defendant that he had secured the certrficate of title for the suit land and wanted to sell him his legal interest in it.

Upon that understanding, the parties signed a new agreement dated 1'1 July 2018 whrch had the effect of cancelling their prior agreement. Subsequently, it was frustrated when the l sr Defendant discovered that the suit land was Kabaka's land and not Pflvate Mailo land as the Plaintiff had indicated For this reason, the 1"r Defendant declined to pay the balance of UGx 56,000,000/= and requested a refund of his UGX 24,000,000/= deposit instead: as a conditron to return the lsrDefendant's land and house

The Plaintiff refused and demanded the Defendants vacate his house since they had failed to pay the balance by 3lsrDecember 2018 as agreed Andwiththeaidof thearea L C 1 Chairman, the Plaintiff atlempted to forcefully evict them without making the refund. Fearing for the safety of their lives, the Defendants deployed security guards at a very costly expense to protect themselves from the Plaintiffs threats

To amicably settle the matter, the lstDefendant/'l.tCounter Claimant made a proposal to the Plaintiffwhich was rejected He maintained that this whole situation is a product of the Plaintitfs makrng and prayed that the Court dismiss the Plaintiffs suit with costs and allow the Counterclaim prayers to wil.

- 1 A declaration that the counter defendant is in breach of the contract - 2. General damages for breach of the agreement - 3 Special damages of UGX 24,000,000/= - 4 lnterest on (b) and (c)

# 5 REPLY TO THE COUNTERCLAIM

The Plaintiff asserted that the 1"r Countercla imant knew that the land is Kabaka's land as it was clearly stated under the recitals of the final purchase agreement daled '1sr July 2018 He was therefore in breach of the terms o[ the purchase agreement when he failed to pay the outstandrng balance of UGX 56,000,000/= by 3'1"r December 2018 and refused

to vacate the suit property despite several requests For these reasons, the Counterclaimants were not entjtled to any reliefs sought

#### REPRESENTATION

The Plaintiff was represented by Mr. Musiige Faisai of I\.4/S MSM Advocates while the Defendants were represented by Ms. Katerega Jennifer and Mr Wandera David of M/S JN Katerega Advocates & Legal Consultants.

Both Counsel filed written submissions which I have duly considered

During scheduling the following issues were agreed upon by the parties for this court's resolution;

10 ISSUES

- '1. whether there was any breach of the contract dated 1"t July 2018 between the parties, and if so, by \rvhom? - 2. What remedies are available to the parties? - 15 I did notrce however, that Counsel for the Detendants, in her submissions, belatedly introduced a'preliminary objection'for lhis court's resolution as the 3'd issue between the parties This was not withstanding that Counsel duly executed the Joint Scheduling Memorandum. The scheduling conference is mandatory undet Otdet 12 rule 1(1) of the civil Procedure Rules. ln the case ofStanbic Bank (Uganda) Limited v Uganda Cros - 20 Limited Tsekooko JSC, explained that it is at the stage of scheduling conference that the proper issues would emerge-

ln this suit, the two issues above emerged lfind that itwas improper for Counsel for the Defendant to raise a third issue that was not agreed upon between Counsel for the parties under their Scheduling lvlemorandum The disadvantage that rs created affects not only the opposite side but the courl as well ln my view, the 3'd rssue was irregularly before this court and I decline to address it

#### RESOLUTION

parties, and if so. bv whom?

A contract is defined under section 10 the Contracts Act 2010 as follows; 10. Agreement that amounts to a contract

A contract is an agreement made with the free consent of pafties with capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally bound.

0 Section 33 of the Contracts Act 2010 provides for the obligation of the parties as follows;

### 33. Obligation of parties

The parties to a contract shall perform or offer to perform, their respective promises, unless the performance ls dlspensed with or excused under this Act or any other law.

The subject matter of this suit is the agreement between the Plaintiff and the 1't Defendant dated 1st July 2018. By that agreement, Exb. P.'l , Mr. Kato Evaresto, the 1sr Defendant is the purchaser and Mr. Kimbowa Eric, the Plaintiff was the vendor. The land is described under paragraph 4 of the agreement as;

' ... Kabaka's land at Wamala, Kalongooti, Kyadondo measuring 40ft by 70ft by 40ft by 70ft described on the land title as .. .'

On that date it was agreed by both parties under clause (a) that the consideration for the land was UGX 80,000,000/=; under clause (b) that the Plaintiff had already received UGX 24,000,000/= as part payment for the purchase of the land from the 'lstDefendant and under clause (c) that the payment of the balance would be not later than 31't December 2018. I shall reproduce Clause (d) below in its entirety; 25

'The purchaser/buyer irrevocably covenants that should he fail to pay the said money before the date stipulated herein above, the vendor shall have a right to sell the propeiy and reimburse the purchaser up to an amount which he will have deposited on the purchase of the said propefty'

It is an undisputed fact that the 'lstDefendant failed to pay the UGX 56,000,000/= within the stipulated time. Section 47 of the Contracts Act 2010 provides;

#### 47. Failure to perlorm within a fixed time

- Where a pafty to a contract promlses fo do a certain thing at or before the specified time but fails to do the thing at or before the specified time, the contract or the pari of the contract that has not been performed, becomes voidable at the option of the promisee, if the intention of the pafties was that time was of the essence to the contract 10 - The l"tDefendant testified that he discovered that suit land was not Private Mailo land but it was Kabaka's land, which led to frustration of the contract. He, therefore demanded his refund of the deposit he made before could vacate the suit premises. Counsel for the Plaintiff dismissed the 1sr Defendant's claims as ridiculous since the land is described as Kabaka's land under the agreement Exb. P.1 . Counsel relied on the cases of William Kasozi v DFCU Bank Ltd HCCS No. 1326 of2000; Harry Sempa v Kabagambe David HCCS No. 4OB of 2014 and Future Stars lnvestment (U) Ltd v Nasuru Yusuf HCCS No.0012 ol2017, tosubmitthatthe 1'r Defendant was in breach of contract, by defaulting on his payments and refusal to vacate the suit premises. 15 20 - Counsel for the Defendants argued that with regard to the 2nd Defendant, she was not a party to Exb. P.1, so she could not be in breach. With respect to the 1'r Defendant, Counsel submitted that the 'lstDefendant gave reasons why he did not fully perform his obligations. She argued that his obligations were vitiated by a mistake as to the subject matter. 25 - A reading of Exb. P.1 demonstrates that both parties treated time as of the essence. ln particular, the Plaintiff testified that he made several attempts to find buyers for the house. 30

The 1st Defendant admitted that he resisted the sale of the suit land. But he maintained that the breach was justified since he was waiting for the refund of his UGX 24,000,000/=, as a prerequisite to relinquish possession to the Plaintiff. To assert his position, he fortified the suit premises with security guards which move inevitably kept the Plaintiff locked out and unable to sell the house. From the 1sr Defendant's point of view, he was protecting his interests.

The contractual principle of respecting the contractual wishes of the parties was expounded in Crane Bank Ltd v Nipun Narottam Bhatia (Civil Appeal 2 of 2O'l4l [2015] 16 (20 August 2015); where Arach-Amoko, JSC held;

'ln my opinion, the Learned Justlces, having rightly found that there was indeed a defect in title which had prevented the respondent from transferring the title to the appellant, should have respected the wishes ofthe contracting parties and allowed them to exercise the agreed solution under clause 2 of their agreement, which was simply, to allow the respondent to refund the deposit in full so that the beneficial interest in the suit property could revei to the estate of the Respondent's late parents.'

At the time of executing the contract, the Plaintiff and the 1st Defendant were both aware that the suit land was Kabaka's land. Counsel for the Plaintiff rightly pointed out that the words, 'Kabaka's land' are used to describe the land under Exb. P.1 . There was a provision for a 'Block' and 'Plot' number to be indicated, but the particulars were left blank on the contract. And there was no mention of a certificate of title in the name of the vendor and its transfer to the purchaser; two key elements when the subiect matter of the sale agreement is Private Mailo land. Nonetheless, the parties affixed their signatures to the agreement; fully committing to the undertakings therein, including the 3'l't December 2018 deadline, within which the lstDefendant was enjoined to pay the balance of UGX 56,000,000/=. Exb. P.1 was not a complicated agreement. And I find that it was the duty of this court to respect the parties wishes by dismissing all of the 1st Defendant's extraneous additions to the contract as mere excuses, not at all binding on the Plaintiff. <sup>I</sup> agree with Counsel for the Plaintiff and find that the 1st Defendant was in breach of Clauses (c) and (d) of the contract. 0 5 30

With respect to the 2nd Defendant, however, there was no evidence that she was a party to the contract. This fact was apparent on the face of the agreement. I agree with Counsel for the Defendants that since she did not participate in the contract, she could not be held liable for its breach under the Contracts Act 2010.

lssue 1 is hereby resolved in the affirmative. There was breach of contract by the '1sr Defendant

# 10 lssue <sup>2</sup>

# What remedies are available to the parties?

The Plaintiff's prayer is that the sale agreement dated 1't July 20't8 be rescinded, a right accruing to him under section 47 of the Contracts Act,2010, supra, and effected bythe operation of section 53 of the Act as follows;

53. Consequence of rescisslon of voidable contract

(1) Where a person at whose option a contract is voidable, rescrnds it, the other party to the contract need not perform any promise contained in the contract.

(2) A party who rescinds a voidable contract shall, if that pafty received any benefit from the other pafty to the contract, restore the benefit to the person from whom it is received

According to Black's Law Dictionary, 2'd Edition; 'To rescind means to abrogate, annul, avoid, or cancel a contract; particularly, nullifying a contract by the act of a pafty.'

- 25 The Plaintiff's act of taking legal action against the 1't Defendant, hardly a month after the specified payment deadline, was a clear demonstration of rescission of their agreement. And in my view, his prayer for vacant possession is justified. For almost 5 years, the 'lsr Defendant has illegally occupied the suit property to the detriment of the Plaintiff. General damages for the gross inconvenience suffered by the Plaintiff are in order and I award a - 30 sum of UGX 35,000,000/=. I decline to make any award for punitive or exemplary damages nor for mesne profits, since I am not persuaded that these have been sufficiently

proved Exb P 5, the batch of rent receipts do not indrcate who the Plaintiffls landlord was Only the name of the Plaintiff is available, rendering the receipts unhelpful

As far as the 1'r Defendant is concerned, I order a refund of UGX 24,000,000/= by the Plaintiff, at zero interest The sum being the benefit received by the Plaintiff from the '1st Defendanl, under their agreement which the former was enjoined to restore under section 56 (a) of the Contracts Act, 2010. The decision to order zero interest stems from the 1'r Defendant's behaviour He practically took the law into his own hands when he barricaded himself in the suit property for several years after failing to honour his end of the agreement His actions do not deserve to be rewarded

ln conclusion, I dismiss the counterclaim, enter judgment for the Plaintiff and order as follows;

- 1. A declaration that the Defendants breached the agreement for sale of <sup>a</sup> house located at Katooke Wamala-Nabweru Division district measuring 40ft by 70ft between the Plaintiff and the Defendants dated 1.t July 2018. - 2. An order for rescission of the sale ol land/house agreement between the Plaintiff and the Defendants. - 3. An order for vacant possession of the house located at Katooke Wamala-Nabweru Division, Wakiso District with immediate effect. - 4. General damages for breach of contract of UGX 30,000,000/= - 5. lnlerest al court rate on (4) from the date ofjudgment until payment in full. - 6. A refund of UGX 24,000,000/= to the lstOefendant. - 7. Costs of the suit. r. - 25

Olive Kazaarwe Mukwaya

JUDGE

19tn May 2023

Delivered by email to Counsel for the Parties 30