Mulindwa v Sheroz Auto Trading Co. Limited (Civil Appeal 65 of 2022) [2023] UGHCCD 398 (27 September 2023)

Full Case Text

#### THE REPUBLIC OF UGANDA

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

### [CIVIL DIVISION]

### CIVIL APPEAL NO. 065 OF 2022

[Arising from Nakawa Miscellaneous Cause No. 356 of 2022]

MULINDWA ASUMAN ============================ APPELLANT

#### VERSUS

SHEROZ AUTO TRADING CO. LTD ================= RESPONDENT

### **BEFORE: HON JUSTICE EMMANUEL BAGUMA**

# **JUDGMENT**

### **1. Background**

The appellant formerly applicant filed an application in the Chief Magistrates court of at Nakawa for a declaration that the respondent illegally impounded Motore Vehicle Reg. No. UBK 733H, Chassis No. KDH2000069314, Engine No. 2KD155193, 2007 Toyota Hiace white in colour, release of the same back to the applicant, damages for lost income and costs. Court dismissed he application with costs to the Respondent and the Applicant being dissatisfied with the judgment and orders of the trial court appealed to this court on the following grounds;-

### **2. Grounds of appeal.**

- *4. That the trial Magistrate erred in law and in fact by failing to find that provisions of the agreement contrary to the law have no legal effect and cannot be relied upon.* - 5. *That the trial Magistrate erred in law and fact in failing to award the appellant the lost earning caused by the Respondent's illegal actions of impounding his motor vehicle without a court order.*

# **3. Legal Representation.**

Counsel Kenneth Tumwebaze of Elgon Advocates represented the Appellant while counsel Sulaiman of M/S Kibirige & Co. Advocates represented the Respondent.

4. At the hearing parties agreed to file written submissions whose details are on record. I have considered the same while writing this judgment.

### 5. **Duty of first Appellant Court**.

The duty of the first appellate court was stated in the case of **Kifamunte Henry Vs Uganda SC, (Cr) Appeal No. 10 of 2007,** where it was held that;

*"…the first appellate court has a duty to review the evidence of the case, to reconsider the materials before the trial judge and makeup its own mind not disregarding the judgment appealed from but carefully weighing and considering it…''*

- 6. This Court therefore has a duty to re-evaluate the evidence to avoid a miscarriage of justice as it mindfully arrives at its own conclusion. I will therefore bear these principles in mind as I resolve the grounds of appeal in this case. - 7. Counsel for the Appellant argued ground 1,2, 3 and 4 together and ground 5 separately.

- **8. Submissions by counsel for the Appellant on ground 1, 2, 3 & 4.** - *1. That the trial Magistrate failed to properly evaluate the evidence on record and thereby arrived at wrong conclusions.* - *2. That the trial Magistrate erred in law and in fact by failure to find that the Respondent had illegally impounded the appellant's motor vehicle without a court order.* - *3. That the trial Magistrate erred in law and fact by failing to find that the Respondent can enforce a lien without recourse to court thereby encouraging the Respondent to take the law in its hands.* - *4. That the trial Magistrate erred in law and in fact by failing to find that provisions of the agreement contrary to the law have no legal effect and cannot be relied upon.* - 9. Counsel submitted that according to Article 26(1) & 2(b) of the constitution as amended ever person has a right to own property individually or in association with others. - 10. Article 26 (2) states that no person shall be compulsorily deprived of property or interest in or right over property of any description except;

b) a compulsory taking of possession or acquisition of property is made under a law which makes provision for;

ii) a right to access to a court of law by any person who has an interest or right over the property.

- 11. Counsel referred to section 22 of the Contract Act 2010 which is against agreement which restricts a party from seeking legal proceedings or limit the time thereof. - 12. Counsel also referred to section 27 of the contract that provides for severing the illegal parts of the contract from the illegal ones.

13. Counsel referred to the case of **Prof Egbert De Smet Vs Juliet Nakassaga Civil Suit No. 387 of 2011court** stated that;

*"It is settled law that a simple clause in an enforceable contract does not oust the unlimited original jurisdiction of the High Court as conferred to it by the supreme law of the land".*

14. Counsel concluded that Respondent relied on clause 6 & 9 of the motor vehicle agreement which provided that the vender shall have authority to impound the car without a court order upon default in payment which clause is illegal and cannot be enforced and restricts the party from exercising his right to legal proceedings.

# **15. Ground 5**

*That the trial Magistrate erred in law and fact in failing to award the appellant the lost earning caused by the Respondent's illegal actions of impounding his motor vehicle without a court order.*

16. Counsel submitted that according to section 45(1) of the contracts Act which provides that; -

When a contract contains reciprocal promises and one party to the contract prevents the other party from performing his or her promise, the contract shall become voidable at the option of the party who is prevented from performing his or her promise

And

A party who sustains a loss as a result of non-performance of a promise under sub section (1) is entitled to compensation from the other party for any loss which he or she sustains.

17. Counsel submitted that the entire balance that was demanded on the agreement would have been fully paid if it wasn't for the Respondent's actions of impounding the motor vehicle which was drawing an income of 100,000/= a day making an income of 3,000,000/= a month.

# **18. Submissions by counsel for the Respondent**

# **19. Ground 1**

*That the trial Magistrate failed to properly evaluate the evidence on record and thereby arrived at wrong conclusions.*

- 20. Counsel submitted that clause 9 of the sale agreement simply provided that if the purchase fails to remit the balance in time, the Respondent was at liberty to impound his vehicle. That this did not in any way restrict any of the parties from commencing or defending themselves against any legal proceedings which is why the Respondent submitted himself before this honorable court and the lower court. - 21. Counsel submitted that clause 6 of the sale agreement provides that the company has authority to arrest his car without any court order and nothing in this close absolutely or totally prohibited the parties from commencing legal proceedings so as to render the clauses herein illegal.

# 22.**Ground 2 &3**

*That the trial Magistrate erred in law and in fact by failure to find that the Respondent had illegally impounded the appellant's motor vehicle without a court order.*

*That the trial Magistrate erred in law and fact by failing to find that the Respondent can enforce a lien without recourse to court thereby encouraging the Respondent to take the law in its hands.*

23. Counsel submitted that the contract Act cannot be applied in isolation of other parent laws. That according to section 51(1) of the sale of goods and supply of services Act states that;-

*"The unpaid seller of goods loses his lien or her lien or right of retention on the good when the buyer or his agent lawfully obtains possession of the goods without reserving the right of disposal of the goods".*

24. Counsel submitted that the right of disposal of goods in the instant case was categorically provided for under clause 7 & 8 of the agreement which left the right of disposal of the car logbook at the preserve of the Respondent and prohibited that Appellant from selling or transferring the suit vehicle to third parties.

- 25. Counsel referred to the case of **Karim Moding Vs Sulaiman Kabanda HCT CA No. 38 of 2018.** - 26. Counsel concluded that clauses 7 and 9 of the sale of agreement formed the basis upon which the Respondent in the instant case exercised his right of lien and repossession of the suit vehicle as clearly stated in paragraph 9 of his affidavit in reply.

# 27.**Ground 4.**

*That the trial Magistrate erred in law and in fact by failing to find that provisions of the agreement contrary to the law have no legal effect and cannot be relied upon.*

- 28. Counsel submitted that the lost earnings prayed for by the Appellant were not supported by evidence and it is even inconceivable that a person who was earning 3000,000/= a month would default on making a monthly payment of the outstanding sums of September, October and December as was required under clause 3 of the agreement. It would be legally wrong to award damages for lost income against a seller who legally reserved his right of lien under the agreement. - 29. Counsel for the Respondent did not submit on ground 5. - 30. In rejoinder counsel for the Appellant reiterated his submissions in chief and contended that the sale of goods Act does not give right to a seller to impound goods without first obtaining a court order.

### 31.**Analysis of court.**

### 32.**Grounds 1, 2, 3 and 4**

- *1. That the trial Magistrate failed to properly evaluate the evidence on record and thereby arrived at wrong conclusions.* - *2. That the trial Magistrate erred in law and in fact by failure to find that the Respondent had illegally impounded the appellant's motor vehicle without a court order.* - *3. That the trial Magistrate erred in law and fact by failing to find that the Respondent can enforce a lien without recourse to court thereby encouraging the Respondent to take the law in its hands.* - *4. That the trial Magistrate erred in law and in fact by failing to find that provisions of the agreement contrary to the law have no legal effect and cannot be relied upon.* - 33. Sections 50, 51, 52 and 53 of the sale of goods and supply of services Act 2018 provides for unpaid seller's lien. - 34. These provisions were considered in the case of **Moding Holding Versus Kabanda Civil Appeal No. 35 of 2015** where court considering sections 38 and 39 of the old act which are the equivalent of sections 50, 51 and 53 held that; -

"The issue of lien is provided for in Paragraph V of the sale of Goods Act which provides for rights of an unpaid seller against goods.

Section 38 defines unpaid seller in these words;

"The *seller of goods is deemed to be an "unpaid seller" within the meaning of the Act-*

*When the whole of the price has not been paid or tendered."*

- 35. In the instant case it is not in dispute that there was a balance. It is therefore my finding that the Respondent was an unpaid seller. - 36. In the instant case, the Respondent in his sale agreement included clause 9 which stated that;

*"If the purchaser fails to remit the balance in time, the respondent was at liberty to impound his vehicle"*

- 37. It is not contested by the Appellant that by the time the Respondent impounded the suit vehicle he was not paying his balance as agreed in the agreement. The Respondent impounded the suit vehicle because the Appellant was not paying the balance as agreed. - 38. Much as the seller/Respondent had already released/passed on the suit vehicle to the buyer/Appellant, he reserved his right of lien under clause 9 of the car sale agreement. - 39. I find that the Respondent legally and lawfully impounded the said vehicle while exercising his right of lien as an unpaid seller which he reserved under clause 9 of the sale agreement dated 21st August 2021. - 40. I accordingly find no merit in these grounds of the appeal. - 41. Grounds No. 1, 2, 3, & 4 fail.

### 42.**Ground No. 5**

*That the trial Magistrate erred in law and fact in failing to award the appellant the lost earning caused by the Respondent's illegal actions of impounding his motor vehicle without a court order.*

- **43.**An award of general damages is in the discretion of court as is always the law will presume it to be a natural and probable consequence of the Defendant's act or omission. See the case of **James Fredrick Nsubuga vs Attorney General HCCS No.13/98.** - 44. Damages are awarded as compensation for the wrong suffered, in the instant case, I have already found as above that the Respondent lawfully and legally impounded the suit vehicle while exercising his right of lien as an unpaid seller reserved under clause 9 of the agreement dated 21st August 2021. - 45. Ground No. 5 fails.

# 46.**Conclusion.**

- **47.**In the final result, the appeal fails with the following orders; - - **1. The appeal is hereby dismissed.** - **2. The decision and orders in Miscellaneous Cause No. 356 of 2022 are upheld.** - **3. The Respondent is awarded costs of this appeal.**

Dated signed, sealed and delivered by email on this **27th** day of **September** 2023

**Emmanuel Baguma Judge.**