Luyiga Kavuma v Mulira (Civil Suit 17 of 2021) [2022] UGHCLD 254 (16 November 2022) | Breach Of Contract | Esheria

Luyiga Kavuma v Mulira (Civil Suit 17 of 2021) [2022] UGHCLD 254 (16 November 2022)

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# THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA **LAND DIVISION** CIVIL SUIT NO.17 OF 2021 LUYIGA LINDA KAVUMA:::::::::::::::::::::::::::::::::::

#### **VERSUS**

PETER MULIRA::::::::::::::::::::::::::::::::::::

# **BEFORE: HON. JUSTICE TADEO ASIIMWE**

#### **JUDGMENT**

This suit was brought by Plaintiff against the Defendant for breach of contract seeking the following orders;-

- 1. An order for specific performance of the agreement and addendum between the plaintiff and the defendant and deliver up physical land and certificate of tittle for the said 2 acres. - 2. In the alternative without prejudice to the fore going, an order to the defendant to pay the current market value of two acres. - 3. An order for mesne profits. - 4. Interest on (b) and (c) above - 5. General damages - 6. Costs of the suit

### **BACKGROUND:**

The plaintiff's case is that on the 27<sup>th</sup> of July 2009 the plaintiff and the defendant entered into an agreement for the defendant to sell part of his land comprising in Block 260 Land at Kigo, Ziranumbu to the plaintiff measuring 2 acres at a consideration of UGX. 130,00,00/- ( one hundred and thirty million shillings only) the plaintiff paid full $\int$ $\int$

$\overline{a}$ $\overline{a}$ $\mathcal{A} = \{ \mathcal{A} \in \mathcal{A} \mid \mathcal{A} \in \mathcal{A} \}$

purchase price however the defendant has since failed to provide the 2 acres of land up to date.

On the other hand, the defendant in his written statement of defence denied the plaintiff's case and averred that it is true there was an agreement for sale of two acres to the plaintiff and that the defendant delivered two acres to the plaintiff and that the plaintiff appointed a surveyor who has up to now never brought his report. That it is rather premature for the plaintiff to demand specific performance. He further stated that the agreement between the parties was concessional and that if the tittle deed was not availed, the plaintiff's money would be availed. He further stated that due to late payment of the plaintiff, family members surveyed the entire land and the suit land fell with in another beneficiaries land. That he made a promise to produce a tittle deed but the process was frustrated by the Land Office, which delayed to make corrections on the same.

At scheduling, both parties agreed to the following issues:

- 1. Whether there was a breach of the sale agreement by the defendant - 2. If so which defence does the defendant have? - 3. What remedies are available to the parties?

At the trial, Counsel Nyonyintono Asuman and Ntono Lydia represented the plaintiff while the defendant represented himself since he is an Advocate.

Each party produced one witness to prove their respective allegations, that is; Linda Luyiga Kavuma (PW1) and Peter Mulira (DW1).

Both parties were directed to file written submissions but only counsel for the plaintiff filed written submissions, which I shall consider in this judgement.

### **RESSOLUTION.**

Issue No. 1&2

1. Whether there was a breach of the sale agreement by the defendant $A$ $A$ $A$ $A$ $A$ $A$ $A$ $A$ $A$ $A$

## 2. If so which defence does the defendant have?

There is no other way through which this can be resolved save for applying the terms of the agreement between the parties. Counsel for the Plaintiff ably referred to the principles for interpretation of written agreements. Among these, is the principle that a contract shall be interpreted according to the common intention of the parties as expressed in the proposition that;

People who freely negotiate and conclude a contract should be held to their bargain rather that the Judges, should not intervene by substituting each, according to his individual sense of fairness, terms which are contrary to those which the parties have agreed upon themselves; see Stockloser versus Johnson [1954]1 ALL ER 640.

I also understand that 'the objective sought to be achieved in construing any contract...is to ascertain what were the major intention of the parties as to their legal obligations each assumed by the contractual words in which they sought to express them'. Pioneer Shipping Ltd versus B. T. P Tioxide Ltd (1982). AC724. It is trite that;

"When one speaks of the intention of the parties to the contract, one speaks objectively, the parties cannot themselves give evidence of what is to be taken as intention which was and what must be ascertained is what is to be taken as intention which reasonable people would have had, if placed in the situation of the parties".

Section 10 (1) of the Contracts Acts 2010 defines a contract as an agreement made with a free consent of parties with the capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally bound.

Harlsbury's Laws of England 4<sup>th</sup> Edn Vol. 9 page 12 Paragraph 15 and cited in Dr. Vincent Karuhanga v NIC and UNRA (2008) U. L. R at page 666 are;

- a) There must be an offer and acceptance, which correspond with each other. - b) Each promise or obligation must be supported by consideration passing from the other party.

$\overline{\phantom{a}}$

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- c) Parties must have intention to create legal relations. - d) Each party must have the capacity to contract and if an agent, actual or apparent authority to each contract. - e) The terms of the contract must be apparent and complete. - f) Any special formalities required by law in particular contracts $f$ - must be complied with. g) The agreement must not be rendered void either by some common law or statutory rule or by some inherent defect.

It is now settled law that once a contract is valid, it automatically creates reciprocal rights and obligations between the parties thereto and 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. (See: Lady Justice C. K. Byamugisha in the case of William Kasozi versus DFCU Bank Ltd High Court Civil Suit No.1326 of 2000).

According to Sections 42 (1) and 67 of the Contract Act, 2010, a contract is to be performed either within a reasonable time or at that time provided by the applicable trade usage/practice to the contract in question.

Breach of a contract occurs where one party to a contract fails to carry out a term of the said contract; when a party neglects, refuses or fails to perform any part of its bargain or any term of the contract, written or oral, without a legitimate legal excuse. (See: Ronald Kasibante vs. Shell Uganda Ltd HCCS No.542 of 2006 (2008) ULR 690).

It follows therefore hat when one party to a contract fails to perform his or her obligation or performs then in a way that does not correspond with the agreement, the guilty party is said to be in breach of the contract and the innocent party is entitled to a remedy.

It is trite law that in all civil matters, the onus rests on the plaintiff who must adduce evidence to prove his or her case on the balance of probabilities if she is to obtain the relief sought.

In this case it was the plaintiff's unchallenged evidence that on the 27<sup>th</sup> of July 2009 the parties entered in to an agreement for the defendant to I.a.m Mun

$\overline{\mathbf{r}}$ $\overline{a}$ sell part of his; and comprised in Block 260 Land at Kigo, Ziranumbu to the plaintiff measuring 2 acres at a consideration of UGX 130,000,000/ $=$ . That the plaintiff paid full purchase price that however, the defendant has since failed to provide the 2 acres of land up to date.

From the record, it is clear that the parties executed an agreement for sale of land and an addendum to the purchase agreement exhibited as PE1 and PE7 respectively. The defendant did not contest the agreements. As per PE1, the purchaser was to pay the purchase price in three instalments, the last one being by end of November. The seller/vendor was to deliver an encumbered tittle deed, a transfer and a consent of transfer. In default, the vendor would have an option to terminate the contract and refund full deposit. It was also expressly stated that if the vendor does not pass good title, he would refund the purchase price.

The vendor/defendant/ DW1 relied on the above agreement and stated that although it is true that he was unable to deliver vacant possession due the family survey that extinguished the subject matter, the plaintiff was equally to blame for late payment, which entitled the defendant to rescind the contract. He further stated that non-compliance to the contract entitled the plaintiff to only the purchase price as per PE1.

However, by the end of November 2009, when the last instalment was to be paid, the vendor had a right to rescind the contract. Instead, the vendor accepted the last instalment out of time and did not rescind the contract. He went ahead to sign an addendum to PE7 wherein he conceded to failure of performance as regards the subject matter and instead committed a different piece of land.

At this stage, the effect the defendant's conduct and the addendum constituted a waiver by the Defendant of his right to claim payment of the last instalment by end of November 2009 short of which would entitle him to rescind the contract. Besides even when he failed to perform the contract in PE1, there is no evidence on record that he refunded the purchase price.

That no withstanding, the parties signed an addendum which varied the subject matter of the PE1. In the addendum which was to be read with PE1, the vendor under took to hand over the tittle deed by $30<sup>th</sup>$ January 2019.

What is clear from the record is that the alternative land in PE7 had squatters and the plaintiff was unable to survey it. Although the defendants claim is that the said land is available, he intimated to court in cross-examination that he was not willing to show the plaintiff the said land because he was brought to court. Definitely, that kind of response is clarity of shear impunity and evidence that the purported land does not exist or is not capable of offering vacant possession. It is no wonder that the defendant promised different land but did not describe it in PE1. This would still go back to PE1 at the point of breach.

Besides for what it is worth the last clause of PE7 where the vendor undertook to hand over the tittle deed by 30th January 2019 was definitely breached by the defendant who failed to hand over the tittle deed by 30<sup>th</sup> January 2019.

I therefore find that the plaintiff ably demonstrated that indeed there was breach of the contract of sale of land to the defendant.

# Issue 2: Whether the Plaintiff is entitled to any remedies.

The plaintiff sought for an order for specific performance of the agreement and addendum between the plaintiff and the defendant and deliver up physical land and certificate of tittle for the said 2 acres, in the alternative without prejudice to the fore going, an order to the defendant to pay the current market value of two acres, An order for mesne profits, Interest on (b) and (c) above, General damages, Costs of the suit.

However, in his submissions he did not submit or furnish evidence as regards mesne profits. I shall therefore not address that remedy.

I will proceed to deal with other remedies.

1. An order for specific performance of the agreement and addendum between the plaintiff and the defendant and deliver up physical land and certificate of tittle for the said 2 acres

$\tilde{\mathcal{I}}$ $\cdot$ The remedy of specific performance is provided for under Section 64 of the Contract Act which states;

Where a party to a contract, is in breach, the other party may obtain an order of Court requiring the party in breach to specifically perform his/her promise her under the contract.

A party is entitled to specific performance of a contract where;

- 1. It is not possible for a person against whom a claim is made, *to perform the contract.* - 2. The specific performance will produce hardships, which would not have resulted if there was no specific performance. - 3. The rights of a third party acquired in good faith would be *infringed by the specific performance.* - 4. Specific performance would occasion hardship to a person against who a claim is made, out of proportion to the benefit likely to be gained by the claimant; - 5. The person against whom the claim is made is at the entitled, although in breach to terminate the contract; or - 6. The claimant committed a fundamental breach of his or her obligations under the contract, but in cases where the breach is not fundamental, specific performance is available to him or her subject to his or her paying compensation for the breach.

In the instant case, it is very clear those at all material times 13 years ago, the defendant failed to perform his part of the bargain considering the fact that both pieces of land offered to the plaintiff in PE1 and PE7 are unavailable for vacant possession. For the first piece of land comprised in block 260 land at Kigo, Ziranumbu (as per PE1), the defendant confirmed in the addendum that delivery of the same to the plaintiff was made impossible a reason he offered the plaintiff an alternative land as per PE7.

Ironically, the defendant did not describe the alternative land in PE7, which is a clear indicator that the vendor was even not sure of which land he intended to offer to the plaintiff or that it was not available for vacant possession.

This in my view explains why the vendor still failed to perform his obligation as regards the undescribed subject matter in PE7.

It would therefore be unreasonable for court to issue orders in vain. The plaintiff would definitely not benefit from an order of specific performance.

I shall therefore not grant this remedy.

### 2. GENERAL DAMAGES

Black's Law Dictionary 9th Edn at page 445 defines damages as the sum of money which a person wronged is entitled to receive from the wrong doer as compensation for the wrong. It is trite law that damages are the direct probable consequence off the act complained of. Ref: Storms versus Hutchison (1905) AC 515.

In the case of Assist (U) Ltd. versus Italian Asphalt and Haulage & Anor, HCCS No. 1291 of 1999 at 35 it was held that;' the consequences could be loss of profit, physical, inconvenience, mental distress, pain and suffering'.

## In Haji Asuman Mutekanga versus Equator Growers (U) Ltd. SCCA NO. 7 of 1995, Oder JSC (RIP), held that;

'With regard to proof, general damages in a breach of contract are what a Court (or jury) may award when the Curt cannot point out any measure by which they are no to be assessed, except in the opinion and judgment of a reasonable man'.

I this case taking into account the economic value of the property and the time it has taken the Plaintiff to successfully pursue her rights from November 2009 when the defendant entered the understanding together with her.

The general inconvenience occasioned to the Plaintiff for 13 years, a figure of shs.100, 000,000/- million (one hundred million only) would be fair and adequate.

In the circumstances, the sum of Ug shs. 30 million (fifty million) as proposed by Counsel would be fair compensation in damages.

THE HOUSE $\sqrt{ }$

### 3. In the alternative without prejudice to the fore going, an order to the defendant to pay the current market value of two acres

In the instant cases, it is not in dispute that 13 years ago the plaintiff paid a sum of UGX 130,000,000/= for two acres of land to the defendant. It is also not in dispute that the said land has never been delivered to the plaintiff. Ideally, the interest of the plaintiff was the suit land whose value has definitely appreciated in 13 years from the day the last instalment was paid.

It is definitely fair that the current market value of land, which is the subject matter in PE1, is awarded to the plaintiff.

The plaintiff is therefore awarded the current market value of the said 2 acres of land comprised in block 260 land at Kigo, Ziranumbu.

However, I find that the value of the said land determined by private valuer at a tune of 1.2 billion Uganda shillings as per PEX9 is excessive. Therefore, the actual market value should be determined by a government valuer and a private valuer appointed by the Deputy Registrar of this Court to make a joint report in 30 days from the date of this Judgment.

#### 4. INTEREST.

Similarly, the Plaintiff sought for interest on the refund. It is trite that a Plaintiff who has been wrongfully deprived of his or her money is entitled to interest. The basis of award of interest is that the Defendant has taken and used the Plaintiff's money and benefited. Consequently, they ought to compensate the Plaintiff for the money. See Sietco versus Noble Builders (U) Ltd S. C. C. A No.31 of 1995.

It is now about 13 years since the Defendant detained the Plaintiff's money. The Defendant have never attempted to refund the Plaintiffs money. It is natural to believe that she had benefited from the use of the said money and as such, she ought to compensate the Plaintiff.

Under S.26 (2) of the Civil Procedure Act, Court has powers to award interest if not agreed upon." The principle has been confirmed by decided cases where it is stated that;

"Where no interest rate is provided, the rate is fixed at the discretion of the trial judge." See Crescent Transportation Co. Ltd versus Bin Technical Services Ltd C. A. C. A No.25 of 2000.

In the present case, Court will exercise it discretion to award interest on the refund, taking into account that this was a commercial transaction and that the defendant has held the Plaintiff's money since 2009. Accordingly, interest is awarded at the Court rate of 15% per annum from the date of filing the suit until payment in full.

#### Costs:

Under S.27 (2) of the Civil Procedure Act, a successful party is entitled to costs unless for good cause, Court orders otherwise. See also the case of James Mbabazi & anor versus Matco Stores Ltd & Anor; CA Civil Reference No.15 of 2004.

In the instant case, the Plaintiff being the successful party is awarded the costs of the suit and Judgment is accordingly entered for the Plaintiff in the following terms;

- 1. The Defendant is in breach of the terms of the contract for the sale of the suit property comprised Block 260 land at Kigo, Ziranumbu. - 2. The Defendant is hereby ordered pay the market value of the suit land in PE7 (as determined by a private and government valuer) $\gt$ to the plaintiff at an interest rate of 15 percent per annum from the date of judgement until payment in full. - 3. The Plaintiff is granted to Ug shs. 50,000,000/- (fifty million only) as general damages for breach of the contract. - 4. The Plaintiff is awarded costs of the suit.

I so order. $\frac{1}{\sqrt{2}}$ **TADEO ASIIMWE JUDGE** $16/11/2022$ .