Manibhai Devidas Patel v Waduwa and Another (Civil Appeal 7 of 1998) [1998] UGCA 33 (1 December 1998)

#### THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

HON. MR. JUSTICE S. T. MANYINDO, DCJ; HON. MR. JUSTICE A. CORAM: TWINOMUJUNI, J. A.; HON. LADY JUSTICE C. N. B. KITUMBA, JA

# CIVIL APPEAL NO.7 OF 1998

MANIBHAI DEVIDAS PATEL ....... $\ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots$

### **VERSUS**

STEPHEN WADUWA .................................... FLAVIA WADUWA ....................................

> (Appeal from the Judgment of the High Court at Mbale before the Hon. Justice A. Kania dated 14th November 1997 HCCS No.3 of 1997).

### JUDGMENT OF KITUMBA, J. A.

This is an appeal against the judgment of the High Court (Kania, J) in which the appellant's suit for Ug. Shs.10,000,000= being commission for a contract and general damages for breach of contract was dismissed with costs to the respondents. The appellant was ordered to pay Ug. Shs.5,000,000= on the respondent's counter claim. The facts giving rise to this appeal are briefly as follows. The appellant was the manager of the property at Plot 45 Naboa Road, Mbale. The registered proprietors were out of Uganda. The respondents who were tenants wished to buy the property. The appellant agreed with the respondents to introduce them to one Praful Chandra Ranchhodbhai Patel (hereinafter called the agent) to negotiate for the purchase of the property. The appellant was to receive Uq. Shs.20,000,000= as commission. On 1-12-1995 the respondents and one Martin Malinga, now deceased, executed a sale agreement, exhibit P5, with the agent. In the agreement the respondents agreed to pay Ug. Shs.35,000,000= for the property in

$\mathbf{1}$

agreed instalments but the final instalment would only be payable when the agent had obtained power of attorney from the registered proprietors and on delivery of the title to respondents, free from The appellant was a witness to this agreement, incumbrances. (exhibit $P.5$ ).

On the same day, the appellant signed exhibit P1 acknowledging receipt of Shs.10,000,000= from the respondents and Malinga. The acknowledgement contained the following proviso.

"PROVIDED that if the sale of the entire plot is not accomplished with six (6) months, I shall refund the said money with interest to the said purchasers with 20% interest p.a."

Prior to the execution of the agreement of 1-12-1995 there was apparently a verbal agreement concerning the same subject matter and the terms of both agreements were rather similar. In pursuance of the verbal agreement the first respondent gave the appellant two undated cheques one for Ug. Shs.15,000,000= (exhibit D3), and another for Uq. Shs.5,000,000= (exhibit P2). The appellant wrote, exhibit D2, dated 26-10-1995, acknowledging receipt of both cheques, undertook to negotiate for the purchase of the property on behalf of the respondents and to return the cheques if the deal failed.

By September 1996, though the respondents had taken physical possession of the property, the agent had not yet completed all formalities to enable him to deliver to the respondents the title free from incumbrances. The appellant believed that the sale was accomplished when the respondents gained physical possession. On the basis of exhibit P1, he filed a suit vide HCCS No.3/97 claiming for the balance of the commission of Ug. Shs.10,000,000= and general damages for breach of contract. In their written statement of counter claimed refund of respondents $\mathbf{a}$ defence the

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Uq. Shs.10,000,000= plus 20% p.m. as per exhibit P1. The learned trial Judge found that the sale had not been completed within the meaning of section 51 of the Registration of Titles Act (Cap 205). He dismissed the suit and awarded Ug. Shs.5,000,000= on the counter claim as the respondents only had 50% shares in the property. Hence this appeal.

The appeal is on six grounds namely:-

- That the learned trial judge erred in fact and in law $\mathbf{1}$ . when he held that the contract between the appellant and the respondent was subject to performance of the contract between the vendor and the respondents. - That the learned trial judge erred in law when he failed $2.$ to hold that inspite of Exhibit P1 the agreement dated 1- $12 - 1995$ , the appellant was entitled to his full commission of Shs.20,000,000= in accordance with the original agreement exhibit D2 dated 26th October, 1995. - That the learned trial Judge formed an unbalanced view of $3.$ the evidence and in the result reached conclusions which were insupportable if the appellant's case was duly considered. - That the learned trial judge erred in law when he held 4. that the parties were in Pari delictor when exhibit P1 was signed. - That the learned trial Judge erred in fact when he failed 5. to hold that the existence of exhibit D1 dated 26th October, 1995 rendered exhibit P1 superfluous. - That the learned trial judge erred in law when I 6. considered the interests of Martin Malinga which did not

form part of the respondent's pleadings whereas Martin Malinga did not apply to be a party to the proceedings.

He prayed this court to allow the appeal and reverse the whole judgment in his favour.

At the hearing of the appeal, Mr. Owori, learned counsel for the appellant, abandoned grounds 4 and 6.

Learned counsel argued grounds 1, 2, and 3 together. I will deal with grounds 1 and 3 together. As grounds 2 and 5 are similar, I shall handle them jointly.

In ground 1 learned counsel for the appellant argued that the learned trial judge erred in law and in fact in holding that the contract between the appellant and respondent depended on the contract between the agent and the respondent to which the latter was not a party.

The complaint in ground 3 was that the learned trial judge failed to consider the evidence properly and came to conclusions which were not supported by evidence.

Learned counsel, submitted that the appellant performed his part of the contract by introducing the respondents to the agent with whom they executed an agreement on 1-12-1995 for the purchase of the property. The respondents were in possession of the property which in counsel's view was evidence that the sale had been completed. Learned counsel for the appellant contended that there was part performance of the contract as the respondents had taken possession of the property and renovated the premises, and that part performance should be the basis for the appellant to get his Mr. Owori asserted that in the circumstances, the commission. equitable principle that a party may not set up the statute where the other party has been induced to act on the strength of the

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contract applies. He requested this Court to ignore section 51 of the Registration of Titles Act.

In response, Mr. Emoru learned counsel for the respondents, submitted that the grounds raised by counsel for the appellant were baseless. Exhibit P1 was very clear. The completion of the sale was conditioned on a number of events which the appellant was aware of. These events did not take place within the stipulated time of The respondents had to execute another agreement six months. (exhibit P3) with the agent dated 8th July 1996. The previous agreement (exhibit P5) had failed. This was well after six months Possession of property by the respondents did not had elapsed. mean that the sale had been completed or that the respondents had acquired the title.

The learned trial Judge found that the terms of the contract, Exhibit P $\mathfrak{A}$ , were clear and at p.48 of his judgment stated as follows:-

I If the clauses in the contract are very clearly expressed and there is nothing to enable the court to put upon then a different construction from what the words import, the words must prevail. Chitty on Contracts, General Principles 25th Edition Sweet and Maxwell Page 144 Paragraph 286.

With the above canon of contract construction I have no doubt in my mind whatsoever that in P1 the plaintiff and the defendants intended the natural meanings of the wording of that document. To my understanding the defendants undertook to pay in full and final settlement the goodwill due to the plaintiff by paying him an additional shs.10,000,000= on the sale agreement between themselves and Praful Chandra being completed. The plaintiff on his part undertook to refund the Shs.10,000,000= paid to him by the defendants if the completion of the sale did not materialise within six months from the time of such undertaking."(sic)

$\mathsf{S}$

I agree with the learned trial Judge's finding on the facts and statement of the law. Mr. Owori's complaint that the learned trial judge finding that the contract between the appellant and respondents depended on the contract of sale is incorrect. The learned trial judge in his judgment stated:-

"The plaintiff knew he had no duty under the sale agreement and in fact he could not enforce its performance. But he consciously went ahead and undertook to refund the money in the event the sale was not completed within six months. His undertaking must be taken on its face value as an independent contract by which he ought to be bound. His duties were not connected with whether the contract between the defendants and the vendor succeeded or not. In fact it is irrelevant that the defendants took vacant possession of the premises because it was they entered the premises under a contract the did not necessarily affect frustration of which the obligations of the plaintiff to the defendant" (sic).

I am unable to faulter the learned trial judge on that point.

In my view grounds 1 and 3 should fail.

I now turn to grounds 2 and 5 which are that the judge erred in basing his decision on exhibit P1 instead of exhibit D2. Learned counsel for the appellant's argument, is that the exhibit D2 is a valid agreement made between the respondents and the appellant on 26th October, 1995. He contended that in the circumstances Exhibit P1 is superfluous and the learned trial Judge erred to rely on it to deny the appellant his commission.

In response Mr. Emoru, learned counsel for the respondent contended that exhibit P1 was the basis of the action filed by the appellant against the respondents. The counter claim arises from the same and the appellant did not deny that he signed Exhibit P1 voluntarily. Counsel for the respondents supported the trial judge's finding on this matter. He submitted that the appellant

$\mathsf{6}$

filed his suit prematurely before the sale was completed. Counsel affirmed that when the sale is completed the appellant will be paid the balance of Ug. Shs.10,000,000=.

$\mathcal{L}^{\mathcal{L}}$

submissions of learned counsel for the with the agree $\mathbf{I}$ respondents. The appellant sued the respondent on the agreement of 1-12-1995 (exhibit P1) and not the agreement of 26-10-1995. I have noted that the learned trial judge did not at all consider exhibit D2 in his judgment and he was right, as the pleadings were not based on it. The suit must be decided on the pleadings and issues framed from the pleading and the pleadings have a purpose. As was stated by Oder, J. S in Interfreight Forwarder (U) Ltd K East African Development Bank S. C. C. A. No.33 of 1993.

"The system of pleadings is necessary in litigation. It operates to define and deliver it with clarity and precision the real matters in controversy between the parties upon which they can prepare and present their respective cases and upon which the court will be called upon to adjudicate between It thus serves the double purposes of informing each them. party what is the case of the opposite party which will govern the interlocutory proceedings before the trial and which the court will have to determine at the trial. See Bullen & Leacke and Jacob's Precedents of Pleadings, 12th Edition, page 3. Thus, issues are formed (sic) on the case of the parties so disclosed in the pleadings and evidence is directed at the trial to the proof of the case so set and covered by the issues framed therein. A party is expected and is bound to prove the case as alleged by him and as covered in the issues framed.

He will not be allowed to succeed on a case not so set up by him and be allowed at the trial to change his case or set up a case inconsistent with what he alleged in his pleadings except by way of amendment of the pleadings."

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The appellant was free to bring his action on any contract which he made with the respondents and draft his pleadings accordingly. He elected to base his action of exhibit P1 and is therefore bound by his own pleadings.

Grounds 2 and 5 must also fail.

For the reasons stated above I would dismiss the appeal with costs to the respondents here and the court below.

Dated at Kampala this .......day of December 1998.

Cres atursa. C. N. B. KITUMBA JUSTICE OF APPEAL.

$\mathcal{L} = \mathcal{L}^{\mathcal{L}}$

#### THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

#### CIVIL APPEAL NO.7/98

THE HON. MR. JUSTICE S. T. MANYINDO, DCJ. CORAM: THE HON. MR. JUSTICE A. TWINOMUJUNI, JA. THE HON. LADY JUSTICE C. N. B. KITUMBA, JA.

MANIBHAI DEVIDAS PATEL ..................... APPELLANT

#### - VERSUS -

STEPHEN WADUWA .......................... 1ST RESPONDENT FLAVIA WADUWA ............................. 2ND RESPONDENT (Appeal from the judgment of the High Court

at Mbale (Kania, J.) dated 14th November 1997 in HCCS No.3 of 1997.)

#### JUDGMENT OF TWINOMUJUNI, J. A.

I have read the judgment in draft, of Hon. Lady Justice C. N. B. Kitumba, J. A. I agree with it and the orders proposed by her therein.

Dated at Kampala this ....... day of De Cember 1998.

OMUJUNT

# THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

**CORAM:** HON. MR. JUSTICE S. T. MANYINDO, DCJ; HON. MR. JUSTICE A. TWINOMUJUNI, J. A.; HON. LADY JUSTICE C. N. B. KITUMBA, JA.

# CIVIL APPEAL NO. 7 OF 1998

# <table> MANHIBHAI DEVIDAS PATEL APPELLANT

### **VERSUS**

<table>

STEPHEN WADUWA 1<sup>ST</sup> RESPONDENT

FLAVIA WADUWA..................................

(Appeal from the Judgment of the High Court at Mbale before the Hon. Justice A. Kania dated 14<sup>th</sup> November 1997 HCCS No.3 of 1997).

# **JUDGMENT OF MANYINDO, DCJ**

I had the advantage of reading the judgment of Kitumba JA in draft. I agree with it. I think the appellant was over optimistic in hoping and indeed undertaking to see the transaction through within the short period of six months. Until the transaction is completed - transfer of title completed, the appellant cannot claim the full commission.

As Twinomujuni JA also agrees, the appeal is dismissed with costs here and in the High Court.

DATED at Kampala this day of December 81

raugmidi

S. T. MANYINDO **DEPUTY CHIEF JUSTICE.**