Kirugi v Masiko (Civil Suit 457 of 2021) [2023] UGCommC 249 (30 August 2023)

Full Case Text

### THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA ICOMMERCTAL DrVrSrONl

### CIVIL SUIT NO. 457 OF 2O2I

## NANCY P. KIRUGI: : ! : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :: : : : : : : : : : : PLAINTI VERSUS

JOSEPH MASIKO BYAMUKAMA: : : : : : : : : : : : : : : : : : : : : : : : : : DEFENDAN

## BEFORE: HON. LADY JUSTICE ANNA B. MUGf,NYI JUDGMENT

The Plaintiff brought this suit by way of ordinary plaint against the Respond seeking for a declaration that the plaintiff has an interest in Kasubi Fo coftages, an order for compulsory partition of the same, an order directing Defendant to share 50% of the partitioned value and to render an account of profits arising from the business income of the hotel business income eamed sin 2018 to date or in the alternative recovery of canadian dollars 52,75 I being mon disbursed by the Plaintiff to the Defendant, interest at 2g%o per annum, gene damages and costs ofthe suit. t t

The brief facts that constitute the plaintiffs case are that the plaintiff a Defendant met in canada in2ol4 and agreed to enter into a relationship with inte to get married. That during the subsistence of their relationship in 2015, th entered into a partnership or joint venture to jointly pool money to develop Defendant's hotel known as Kasubi Forest cottages; and that money would advanced to the Defendant on an on-demand basis. In addition, they agreed that

Plaintiff would recoup all monies advanced to the Defendant, share in the monthl business profits from the hotel and that one unit ofthe hotel would be used by th parties as their matrimonial home. Finally, that the Plaintiff would contrib money until the completion of the hotel into the state of the art structure and s did until l4th }i4ay 2020.

That over time, the Plaintiffhad advanced a total of Canadian dollars 84,789 an that the Defendant had so far refunded Canadian dollar 32,038 and still ow 52,751. That despite making profits and several demands, the Defendant has nev given the Plaintiffa share ofthe profits from the business. That the Defendant neglected or refused to honour the demands and the Plaintiff seeks to protect h interests in the hotel, hence this suit.

The Defendant filed his Written Statement of Defence wherein he avers that th met in 2014 and that the Plaintiff moved into his residence in 2015 wherein the had a verbal understanding to share living expenses which at the time stood a USD 3000 per month. That after the Plaintiff s 3 children joined them from Ken the expenses rose to USD 5000 per month. He avers that the various amoun transferred to him were her contribution towards living expense, and that he al rendered financial support to her and her family on several occasions. He add that the Plaintiff has no claim on the hotel as it was constructed using his sav and loans from banks; and that the only joint property they have is a farm Kayunga which she transferred in her names therefore that he is not indebted to her. He prayed that the suit be dismissed with costs.

In her reply to the WSD, the Plaintiff avers that she only moved into the Defendant's premises in 2016, and that she had been living in an apartment o Canadian dollars 1,300. That the Defendant had no personal savings and he had obtained a loan from Stanbic bank and also got money from the Plaintiff on demand. She reiterated her earlier prayers.

### **REPRESENTATION**

The Plaintiff was represented by M/S Eland Advocates, and the Defendant was represented by M/S Mayanja & Arinaitwe Advocates and Solicitors.

#### **JUDGMENT**

I have carefully read the pleadings, record of proceedings and witness statements of the parties and considered the oral testimonies and written submissions of both counsel in this matter. The following issues were agreed upon in the joint scheduling memorandum for determination by the Court:

- 1. Whether there was a valid contract and or partnership between the Plaintiff and Defendant for the further development and structural improvement of Kisubi Forest Cottages? - 2. Whether the Plaintiff performed her obligations under the contract and or partnership, and if so? - 3. Whether the Defendant breached his obligations under the contract and or partnership? - 4. What remedies are available to the parties?

#### **Issue One**

Whether there was a valid contract and or partnership between the Plaintiff and Defendant for the further development and structural improvement of Kasubi Forest Cottages?

Counsel for the Plaintiff cited Sections 2 and 10 of lhe Contracts Act on the definition of a contract and what agreements amount to a contract. He also cited case law on enforceable contracts at law. Specifically, he cited Section 2 (g) that defines a partnership to mean 'a relationship which subsists between or among persons, who carry on a business in common with a view to making profit-' He also defined a course of performance to mean a sequence of conduct concerning a transaction between the parties to it that is fairly to be regarded as establishing a common basis of understanding.

He submitted that it was the evidence of PWl that the Plaintiff and Defendant agreed to pool money to invest, complete and improve Kisubi Forest Cottages as a joint business venture in preparation of their retirement, and that the Defendant received a total of Canadian dollars 84,789 on his account registered to his known email address. That the Defendant admitted to receiving the money during cross examination and only disputed the amount. In addition, that whereas he disputes the existence of the contract, he admitted to refunding some money which is evidence of existence of a valid contract between them. Counsel submitted \*rat such inconsistencies and contradictions can result in the rejection of a witness's evidence unless satisfactorily explained. That there cannot be better evidence than admission of a party himself, and since he admitted to receiving money to pay off part ofthe mortgages he had obtained from Stanbic Bank, Court should find that there was a valid contract between the parties.

In reply, Counsel for the Defendant cited Section I0 (5) of lhe contracts Act onthe requirement of contracts whose subject matter exceeds twenty-five currency points to be in writing, and that for such contracts, signature of the parties is a precondition for their existence. He said all the essential elements of a valid contract are missing as there is even no proof of an offer made and intention to be

bound. He added that as people in a romantic relationship, it is natural that money exchanges hands and there is no proof that those amounts were for the developments of the hotel. That according to Section l0l of the Evidence Act, it was incumbent upon the Plaintiff to prove it.

Counsel for the Defendant added that during cross examination, the Plaintiff failed to show how she used to contribute towards living expenses for the period of 42 months that they stayed together, and that the Defendant proved that her contribution was Canadian dollars 63,000 which was 1,300 Canadian dollars multiplied by the 42 months. That the 3000 Canadian dollars advanced to the Defendant's brother cannot be attributed for the development ofthe hotel, and the same applies to the 3,293.50 Canadian dollars she advanced for air tickets. He also argued that possibly some of the money she sent was for paying her workers in Kayunga, or even her contribution towards the IVF Treatment in South Africa.

Therefore, Counsel concluded that there is no proof that the monies sent by the Plaintiff was for the development of the hotel. In addition, that there is no evidence of existence ofa partnership between the parties, as she does not even know where the hotel is situated and neither has she reached there. He cited Sections 3 and 4 o the Partnership Act on the rules for determining the existence of a partnership and mandatory requirement for registration. He concluded that in the absence of proo or registration or even an oral contract or partnership, the first issue must be answered in the negative.

Having considered the evidence on record and the submissions of the parties, this Court noted that the Plaintiff s case is that she entered into a partnership with the Defendant for the further developments of the hotel. It is not in dispute that the Plaintiff sent money on several occasions to the Defendant as evidenced by PE 10

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(the money transfer statements between the parties) however, the Defendant disputes the existence of a contract or partnership for the development of the hotel. I will therefore now consider whether or not a contract or partnership existed between the parties.

Section l0 (1) of the Conlracls Acl defines a'contract'to mean "......an agreement made with the free consent of parties with capacity to contract, for a lawful consideration and with a lawful obiect, with the intention to be legally bound. " As Counsel for the Defendant pointed out, subsection 5 of the same Act provides that contracts whose subject matter exceeds twenty-five currency points shall be in writing. However, it is trite law that the provisions of the law should be read as whole in order to fulfil its purpose. Therefore, sub-section 5 of section l0 cannot be read in isolation, without giving consideration to sub-section 2 of the same section to the effect that 'a contract may be oral or written and partly written or may be implied from the conduct of the parties.'

Subsequently, it is clear that the provisions of sub-section 5 were never meant to be mandatory and the Courts have severally held that a contract may either be written or oral; and therefore the requirement of signatures as pointed out by Counsel for the Defendant only applies to written contracts. Going by sub-section 2, there is no written contract between the Plaintiff and the Defendant, and whereas the Plaintiff claims there was an oral contract, the Defendant disputes existence of the same. It is now the duty of this Court to determine whether a contract can be inferred from the conduct ofthe parties.

In paragraph p of her witness statement, PWI stated that in 2015 she and the Defendant agreed to enter a number of joint businesses to prepare for their retirement in Uganda so they entered a joint venture or partnership to jointly pool

resources for the development of a hotel which was a shell of buildings then. She said the completion and furnishing works were done with her knowledge and financial input. That even the horticulturalist was her worker from her farm in Kayunga and that she paid for all the costs. Further, PWI in paragraph x stated that they agreed that she would recoup all her contributions and money advanced to the Defendant for the development, and that she would share in the monthly business profits as well as continue to contribute finances for the continuous improvement of the hotel as and when the need arose and the same would be recoverable over time.

PW I stated that she sent the monies on an on-demand basis and the money transfers are evidenced in PE l0 from pages 73 to 83 of the Plaintiff s Trial Bundle (PTB). That together with money she gave in cash and some money borrowed from her friend a one Janet Langat, the money was totalling to Canadian dollars 84,789 out of which 52,751 is owing. PWI said she purchased some items for the hotel and that they were transpofted by the Defendant's sister as illustrated by PE 12 (the visa card statements). She said the Defendant started paying back some monies and has so far paid Canadian dollars 32,038 as shown by received transfers from pages 75of the PTB and that he stopped refunding when the relationship ended.

From the evidence on record it is evident that money exchanged hands, however, the purpose is not clear but being that the two were in a romantic relationship, it is probable that the monies were for helping each other. There is no consistent pattem in which the monies were sent and I find that there are inconsistencies in the evidence of both parties. Whereas DWI in paragraph vii denied ever borrowing any money from the Plaintiff and claimed that what is reflected in PE l0 is her contribution towards living expenses, PE l0 at page 75 of the PTB shows that the first money sent by the Plaintiff to the Defendant was CAD 1,000 sent on 20ft July 2015 way before she moved in with the Defendant and agreed to share bills.

Whereas the Plaintiff claims to have given money to clear the Defendant's loan with Stanbic bank, he denies the same. PE 9 only shows email conversations between the Defendant and a one Charlotte Among on the 19ft March 2019 and he forwarded the message to the Plaintiff the following day, the same day when the bank also acknowledged completion of a transaction of USD 879.96. However, the said money is not reflected on PE 10, and even if the Plaintiffsaid she gave the Defendant cash, it would not make sense if they were together that he would forward the message to her. On the other hand, if she had sent monies using another account like she claims, she ought to have produced a bank statement like PE 10. I find that this allegation has not been proved as PE 9 is not conclusive on who paid the money. According to PE 10, at page 78, only CAD 130 was sent to the Defendant on 20th March 2019.

Conceming the money paid for the flight tickets in PE 11, the Plaintiff paid Canadian dollars 3293.50, which the Defendant does not deny in cross examination although he said that he had not asked for the money, and that he was willing to pay. Whereas his argument does not hold for not paying back the money, the Plaintiff has not proved that it was money borrowed towards the development of the hotel. The Plaintiff through PE 12 also claims to have purchased some items for the hotel, however, there is no proof that it was under an arrangement of a partnership as she claims because the Defendant also produced proofofreceipts of monies totalling Canadian dollars 6,358.28 sent on various occasions using World Remit marked as DE 2 sent to Marx Maragua, the Plaintiffs husband in Kenya, between 2015 and 2016. During cross examination, the Plaintiff also admitted to sending some monies to the Defendant's wife.

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I find that the conduct of the parties coupled with the irregular nature o transactions between the parties, does not prove the existence of a contract or partnership between the parties.

It is a well- known principle of law that in civil matters the burden of proof is on the Plaintiff. I find that the Plaintiff has failed to prove the existence of a contract or partnership by conduct between the Plaintiff and the Defendant. Subsequently, the first issue is resolved in the negative.

### Issues 2,3 and 4

exercrse. Considering that I issue one was resolved in the negative, it follows therefore that Issues 2, 3 and 4 do not arise and resolving them is a futile and inconsequential

In the circumstances and from all the fore going, the suit is hereby dismissed with costs to the Defendant.

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HON. LADY JUSTICE ANNA B. MUGENYI

DArED......... . x..l.t. I.:x.zs