Keeya v Bank of Africa Uganda Limited (HCT - 00 - CC - CS - 0128 - 2014) [2015] UGCommC 297 (16 January 2015)

Full Case Text

Commercial Court Divisio

# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL COURT DIVISION)

#### HCT - 00 - CC - CS - 0128 - 2014

FRANCIS KEEYA ...... ......................................

#### VERSUS

BANK OF AFRICA (U) LTD ...................................

BEFORE: THE HON. JUSTICE DAVID WANGUTUSI

#### J U D G M E N T:

The Plaintiff's claim is for refund of Ug. Shs.100,000,000= (Uganda) Shillings One hundred million only), general special and punitive damages, interest on all and costs.

The facts which emerged from the pleadings as the Francis Keeya, hereafter called the Plaintiff, bought property comprised in Busiro $15$ Block 349 Plot 169 Nalumunye, herein called the property, from Bank of Africa (U) Ltd hereinafter called the Defendant.

That after he effected payment, the Defendant failed to give vacant possession of the property, thus the suit. This suit is not defended because of the following reasons.

Service of the plaint was effected on the Defendant on the $25th$ The Defendant did not file a defence within the February 2014. $\sqrt{1}$ HCT - 00 - CC - CS- 0128-2014

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requisite period and on the 25th March, a month after, the Plainti applied for judgment in default which was granted and matter was set down for formal proof.

Record of Miscellaneous Application 212 of 2014 shows that the Defendant filed an application for extension of time within which file a defence.

The Defendant did not move to fix the application most probably because it was filed after judgment had been obtained in which $cas$ the Defendant could only proceed after seeking and setting aside the judgment which the application 212 of 2014 did not pray for.

The only witness in the matter was the Plaintiff who told Court that the Defendant had failed to give him vacant possession of the property.

The background to the suit as got from the evidence, is quite straigh forward.

By a letter of instructions dated 05th September 2012, the Defendant instructed Tropical General Auctioneers of P. O. Box 4083 Kampala to advertise and sale the property belonging to one of its customer: M/S Mukulu Kafeero Juliet who had allegedly failed in her financial obligation to the Defendant. This letter of instructions Exhibit P. $\epsilon$ was acted upon by the Auctioneers who advertised the property on 30th October 2012 seeking purchases either through private treaty of public auction, Annex 'B'.

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The Plaintiff put in a bid for Ug. Shs.70,000,000= (Uganda Shillings seventy million only) which was rejected and he increased it to Shs. 100,000,000= (one hundred million shillings) which the Defendant accepted and shown in Annex 'D' Exhibit 4.

The payment must have been made by the Plaintiff because the sale agreement Exhibit P.6, indicated the Shs. 100,000,000= (Uganda Shillings One hundred million only) as the agreed price and in Clause 1(a) read;

*"The purchaser has paid Shs. 100,000,000= (Uganda Shillings One hundred million only) in cash."*

These documents were not disputed by the Defendant. It is therefore my finding that the Plaintiff fully paid for the property.

The Plaintiff also stated that after the payment of the purchase price and the requisite taxes pursuant to Clause 2 of Exhibit P.6, the bank failed to handover vacant possession. Exhibit P.5 which was received by the bank shows that on the 27th January 2013, on the 14th January 2014 and on 4th February 2014, the Plaintiff wrote to the Defendant asking for vacant possession of the property in vain.

The Defendant only and as an informal step wrote on the letter of 4th February 2014, that it could not hand over the land because there was an injunction. The Legal Manager of the Defendant wrote;

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# *"Informally*

*There is an injunction restraining any activity on the land. So we are pursuing how to have the same settled before to effect your request otherwise it will be contempt ofCourt"*

*Io* **r** Interestingly the Legal Manager preferred to treat it "informally". He did not avail a copy of the order to the Plaintiff or this Court when the Defendant was served with the plaint. It follows that ther^ZZ is no proof that an injunction exists. Moreover the Plaintiff reminded the Defendant of the issue of vacant possession as early as January\*-1 2013 and the Defendant did nothing. The conduct can only be'p referred to as unwillingness to handover vacant possession.

# Remedies

#### Refund:

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**t** Special damages: The Plaintiff prayed for a refund of the Shs. 100,000,000= (Uganda^. **cP** Shillings One hundred million only). It is the finding earlier in this judgment that the Plaintiff indeed paid the sum to the Defendant. His intention was to purchase the property. Since the Defendant failed to handover the property, the Plaintiff is entitled to the refund tl of the Shs. 100,000,000= (Uganda Shillings One hundred million only). The Defendant is ordered to refund the sum as prayed. \*\*■

From the evidence on record the Plaintiff after paying the money for purchase, also paid the valuation fee Shs. 3,000,000/= (Uganda %cr- *00* - *CC-CS- 0128-2014* /4

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Shillings three million only), Shs. 5,000,000/= (Uganda Shillings five million only) survey and Shs. 800,000/= (Uganda Shillings eight hundred only) as transfer money Exhibit P.8. He also went through the rigors of registration which he eventually did in January 2014. *CommaviafCourt (Division* **^7**

> The property was not available. He went through all this inconvenience for nothing. He made payments that he claimed in paragraph 7 of the plaint totaling Shs. 11,000,000/= (Uganda Shillings eleven million only). This evidence was not controverted and I see no reason to disbelieve him. He is therefore awarded Shs. 11,000,000/= (Uganda Shillings eleven million only) special damages as claimed.

# General damages:

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The Plaintiff prayed for general damages.

It is trite that general damages are the sums which in the circumstances fall to be paid by reason of some breach of duty or obligation as imposed by the contract, Hall Brothers S S Company Ltd V Young (1939) 1 KB 748.

In the instant case, the Defendants were obliged to put the Plaintiff in vacant possession of the property on payment of the agreed sum. The Plaintiff did his part. The Defendant failed to do its part. Its for that reason that Court finds them liable in damages to the Plaintiff.

Damages are compensatory and not a punishment. Their purpose is to place the Plaintiff in as good a position as to the extent of that money could do if the breach complained of had not occurred.

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**Commercial Court Division**

Damages are measured by material loss suffered by the Plaintif Court must therefore be careful ensuring that it does – not unnecessarily enrich the Plaintiff but in the same vein not to deny him appropriate compensation.

The damages must be a direct, natural or probable consequence of 5 the breach that has caused the dispute, Storms V Hutchinson (190 AC 515.

The damages must be within the limits the Defendant can afford Nyambura Kigaragari VAgrippina Mary Aya [1982 - 88] 1 KAR 768

These damages are however awarded on proof of loss occasioned. In $10$ evidence the Plaintiff stated that he had been inconvenienced. He said he had been tortured both physically and mentally. His money had been tied up for almost a year and the programme he ha intend for the land had been frustrated.

He wrote several letters to the Defendant to be put in possession by $15$ was ignored. As I said above he was inconvenienced and put to mental torture. In view of the foregoing, I find this a fit and prop $\blacksquare$ case wherein the Plaintiff deserves general damages.

> Taking all the circumstances and the treatment the bank accorded him into consideration, he is awarded general damages of Sh $5,000,000/$ = (Uganda Shillings five million only).

### **Punitive damages:**

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The Plaintiff also claimed punitive damages. Punitive damages are awarded when the Defendant has been proved to have been high handed and oppressive. Counsel for the Plaintiff submitted that the Defendant did not hand over vacant possession of the property and further that it ignored the Plaintiff's pleas for vacant possession. Counsel for plaintiff submitted that this amounted to high handedness.

In my view, I do not consider that as high handed. It could fall in the bracket "failure to do what they were obliged to do" but does not amount to highhandedness. In any case the reason why they did not hand over vacant possession was because there were other disputes in respect of the property. I do not find this a proper case where in punitive damages would be awarded. They are therefore denied.

# **II** Interest:

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The Plaintiff prayed for interest at the prevailing bank rates.

Award of interest is discretionary. The reason for such award is because the Defendant has kept the Plaintiff out of his money and the Defendant has had use of it himself. He therefore ought to compensate the Plaintiff, Lord Denning, Harbalts Plasticine **Ltd** V Wyne Tank & Pump Co. **Ltd** (19701 1 Ch B 447.

In the instant case the Defendant received the Plaintiff's money and executed an agreement on the 6th November 2012. As an Engineer the Plaintiff could have invested the money and probably multiplied

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Commercial Court Division

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it. The Defendant kept the money and most probably being a bank lent it out at bank interest. In the circumstance I find an award of interest appropriate. The special damages shall therefore attract interest at 20% p.a. while general damages shall attract interest of 6% p.a.

In the result, judgment is entered in favour of the Plaintiff as follows;

- a) The Defendant refunds Shs. $100,000,000=$ - b) Special damages of Shs. $11,000,000=$ - c) General damages of Shs. $5,000,000=$ - d) Interest on (a) and (b) of 20% p.a. from $06th$ November 2012 till payment in full. - e) Interest on (e) at 6% p.a. from date of judgment till payment in full. - f) Costs of the suit.

David K. Wangutusi **JUDGE**

Date: ...

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