Osman v Mulangwa (Civil Appeal 38 of 1995) [1996] UGSC 24 (31 October 1996)

# REPUBLIC OF UGANDA

## IN THE SUPREME COURT OF UGANDA AT MENGO

ODOKI, J. S. C., ODER, J. S. C. AND TSEKOOKO, J. S. C.) (CORAM:

#### CIVIL APPEAL NO.38/95

**BETWEEN**

SHARIFF OSMAN :::::::::::::::::::::::::::::::::::: AND

HAJI HARUNA MULANGWA :::::::::::::::::::::::RESPONDENT

(Appeal from the judgement of the High Court of Uganda at Kampala (Mukanza, J.) dated 10 February, 1995)

> IN CIVIL SUIT 701/95

# JUDGEMENT OF TSEKOOKO, J. S. C.:

The appellant appeals against the decree of the High Court whereby the appellant as defendant was ordered to perform his part of the contract of sale by surrendering vacant possession of his house and effecting transfer of its title to the respondent. In addition the appellant was ordered to pay shs.3,000,000/- as general damages plus costs of the suit.

The facts of the case are simple. The appellant is the registered proprietor of a building and land comprised in Kibuga Block 12 Plot No.472 situated at Kisenyi, Mengo Hill Road, Kampala. On 5th January, 1990 the appellant and the respondent entered into a sale agreement (Exh. P.2) by which the appellant sold to the respondent the land and building (hereinafter referred to as the suit premises) at an agreed sale price of US\$12000.

Prior to the execution of the agreement the respondent had paid US\$3000 which was treated as first instalment towards the purchase price.

The agreement stipulated that the respondent was to pay US\$5000 on or before 8th January, 1990 and the balance of US\$4000 on or before 15th April, 1990.

By clause 3 of the agreement the appellant was to occupy the suit premises until 15th September, 1990 when "he shall be required to vacate it and give vacant possession to the purchaser but should he desire to continue staying there, then he shall pay rent to the vendor which shall be agreed upon by consent of both parties."

The respondent paid the US\$5000 apparently in two instalments. He paid a further \$2000 on an uncertain date probably on or before 20th April 1990. He did not pay the balance of \$2000 within the stipulated period.

On 7th August, 1990 the suit premises were damaged by a semi trailer motor vehicle belonging to a Rwandese national. Consequently the appellant, who was still occupying the suit premises, obtained judgement against the owner of the trailer for shs.7,200,000/- The parties are in disagreement as to how much was actually paid by the trailer owner to the appellant, but it is accepted that the appellant repaired the suit premises using the proceeds of that suit.

The appellant did not vacate nor did he hand over vacant possession of the suit premises on 15th September 1990 or at any other time.

Up to now the appellant still occupies some rooms and lets out some other rooms on the suit premises.

$\overline{2}$

Some time in 1991, the appellant appears to have attempted to resell the suit premises to another person. Consequently the respondent lodged a caveat on the title of the suit premises on 13th December 1991. On 6th February, 1992 the appellant through his lawyers purported to rescind the sale agreement. Because of that, and the continued occupation of the suit premises by the appellant, the respondent instituted a suit in the Court below praying for:

- Specific performance of the contract of sale; $(a)$ - Rent due under the said agreement plus mesne profits; $(b)$ - Shs.7,200,000/- as special damages (having been recovered $(c)$ from the trailer owner); - General damages for breach of contract; $(d)$ - (e) Vacant possession of the suit premises; - Interest on the decretal amount at bank rate (45%) p.a. $(f)$ - Costs of the suit. $(q)$

By his defence the appellant denied liability and justified the rescission of the Contract and by the counterclaim the appellant asked for the Caveat to be removed from the title of the suit premises.

Five issues were framed as appear (as appear on the record):-

- (1) Whether the plaintiff was entitled to vacant possession on 15th September, 1990? - Whether his right to possession was absolute or dependent $(2)$ on a contingency? - Whether time was of the essence of the Contract? $(3)$ - Whether the defendant was entitled to rescind the contract $(4)$ of sale? - Whether the plaintiff was entitled to shs.7.2 million after $(5)$ damage to the suit premises? - What in the circumstances are the remedies available to the $(6)$ parties?

The reapondenE EesEified in support of hig claim'(and call'ed <sup>a</sup> valuer, Abdu Bawonga (Pw2) to est.ablish t.he renEals and the value of the suj.t premises. The appellant testified in support of his de fence .

I

The trial judge found most of Ehe issues in favour of the respondenE, i.e.. issues 1& 2 in Ehe affirmaEive and issues 3, 4 and 5 in Ehe negaEive. He held EhaE. t.he respondenE was not enEiEled to shs .7 ,2OO , OOO / - . The judge never made any finding on the count.er-c1aim which, we were informed from the bar by Mr Muwayi re -Nakana, counsel- for Ehe appelIanE here and in the court below, EhaL iE (the counter-cIaim) was abandoned. This informaEion is misleading because Mr Muwayire during his submissions in the court below asked for judgemenL on Ehe counEer-cIaim and for shs,24m/- as damages.

The appellanL has appealed against t.hese findings. The respondent has cross-appealed against some of the findings of the trial judge. The appeal contains four grounds. The notice of cross-appeaL cont.ains 3 grounds.

The complainE in the first ground of appeal is thats Ehe trial judge erred in law and facc in holding thaE Ehe parties intended that by l-5th September, 1990 the respondent. would be enEiEIed Eo vacanL possession irrespective of whether he had or had not paid the purchase money fu11y. This complainE relates Eo tshe resolution of Ehe first issue by Ehe Eria). judge in favour of the respondenE.

Mr Muwayire -Nakana, counsel for tshe appeIlant., referred t.o clauses 2 and 3 of Lhe sale agreemenE (exh. P2) and conEended that if the t.ria1 judge had read the whole agreement he would have concluded in effecE that. the respondenE was noE. entitled to possessj.on unEil he had paid the whole of the purchase price.

Learned counsel further conEended that. unt.il fuI1 payment of Ehe purchase price by the purchaser, the appellant as vendor retained a lien on the property, the subject of saIe.

He relied on passages in LvsaqhE vs. Edwards (L876) 2 Ch. D. 499 aEpate 505 and Philips vs. SilvesEer ()-8'72) I Cha. A. 173 at pages 175 and 177 in support of his argumenEs.

Mr Tibaijuka for the respondent adopted the arguments he had raised at. the crial of the suiE. He relied on cLauses 3, 4 and 6 or the agreement. The effect of his submissions is t.hat. the provisions of clause 3 entit.led t.he respondent to possession of the suiE premises regardless of whether or not the fu11 purchase price had been paid on 15.4.90. Learned counsel submit.t.ed t.hat t.he agreement had been drafted by Mr Muwayire -Nakana. as counsel for the appellant, who did noE insert in Ehe agreement any qualifications t.o the contents of clause 3, by operation of the docErine of conlemporanea exposj-tio, clause 3 musE be strictly consErued so EhaE. any ambiguicy Ehat may arise from the consErucEion of E.he agreement is held againsE the appellanE and in favour of Ehe respondent.

As regards the doctrine of 1ien, Mr Tibaijuka contended, that it. was not available to the appeLLant; first. because it h,as not relied on in Ehe Eriaf court and, secondly, E.hat E.he existence of clause 3 in the sale agreemenE shows a contrary inEenEion to Ehe effecE tshat the appellant never intended to rely on the doctrine of 1ien. Counsel relied on the same authorities cited by Mr Muhrayire, i.e. LysauqhE ' s case (supra) and PhiIlips ( supra ) to support these submissions.

Since the sale agreement was drawn by an advocate, if the advocate had adopted the provisions of S.208 and conditions seE out in the twenty firsE schedule (Table I rAr I ) Eo Registrat.ion of Titles Act (RTA) the respondent's case would have been disposed of wiEh least argument.

As the schedule was not referred to, let me refer to the contents of the sale agreement.

Omitting some irrelevant words in the opening paragraph, the sale agreement reads as follows:

## "AGREEMENT OF SALE

AN AGREEMENT made this 5th day of January, 1990 BETWEEN OSMAN IBRAHIM of P. O. Box 30304, KAMPALA (hereinafter called the vendor....) of the one part, AND HAJI HARUNA MULANGWA of P. O. Box 5592, KAMPALA (hereinafter referred the to as purchaser.....) of the other part.

WHEREAS:

- (a) The vendor is the owner of all that piece of land above-mentioned/described and comprised in KIBUGA Block 12 Plot 472 developed with a residential house (hereinafter called the land). - (b) The vendor has agreed to sell the land and the purchaser has agreed to buy the said land on terms hereinafter appearing.

NOW THIS AGREEMENT WITNESSETH as follows:

- The vendor agrees to sell and the purchaser agrees to buy 1. free from any incumbrances whatsoever. - The price for the said land has been agreed at US 2. \$12,000 (United States Dollars) Twelve thousand payable in the manner hereinafter appearing.

$\mathsf{6}$

- (i) US\$3, OOo (three thousand dollars) has already been paid t.o the vendor by the purchaser the receipE of which the vendor acknowledges by signing these presents. - (ii) US\$5000 (Five Ehousand dollars) on or before 8th January, 1990. - (iii) The balance of US\$4000 dollars) on or before 15th ( Four Apri I , thousand 1990. - <sup>3</sup> The vendor shall occupy tshe said and unEil 15th Septerber, 1990 when he shalI be reguired Eo vacate iE and give vacanE possession to Ehe purchaser, but should he desire to conEinue sEaying tshere then he shall pay renE to the vendor which shalI be agreed upon by consenL of both parties. - 4 The vendor shall, hand over Ehe certificate of title respecE of tshe said land Eo Ehe purchaser after completion of payment of the purchase price. 1n - 5 The vendor guarantees that. he has noE before Ehe date of this Agreement soLd, mortgaged or let by way of securiEy or entered inEo any agreement creaEing lien in said land and that he will aI1ow the purchaser quieE and uninEerrupted possession and occupat j.on of the land. - 6 The vendor hereby undertakes !o execuEe and deliver aIl, and any necessary documents of tsransfer relaEing Eo t.he said land after completion of the purchase price. - 7 The met lega1 fees for preparation of Ehis AgreemenE shall be by Ehe purchaser.

IN WITNESS WHEREOF, the parties hereto have set their hands hereto the day and year first above written.

| SIGNED AND DELIVERED :::::::::::::::::::: | | |--------------------------------------------------------|-----------| | by the said SHARRIF OSMAN IBRAHIM :::::::] | | | "Vendor" :::::::::::::::::::::::::::::::::::: | | | | | | <pre>In the presence of Hirje Dere ::::::::::]</pre> | | | <pre>Witness :::::::::::::::::::::::::::::::::::</pre> | | | | | | SIGNED & DELIVERED | | | by the said HAJI HARUNA MULANGWE ::::::::] | | | | SIGNATURE | | | | | In the presence of NAMAKAJO MUBASHIR :::::] | | | "WITNESS" ::::::::::::::::::::::::::::::: | | | | SIGNATURE | | DRAWN & FILED BY: | | | $M/C$ MITLIANTED NAVANA C CO | |

M/S MUWAYIRE-NAKANA & CO. ADVOCATES, PLOT 46 WILLIAM STREET P. O. BOX 9474 KAMPALA"

Clearly the word "vendor" appearing for the second time in clause 3 is a mistake. The correct word must be "purchaser."

It is true as a general proposition that a sale agreement, or any agreement for that matter, must be read as a whole in order to give meaning or effect to the intention of the parties. A study of the above quoted contents of the sale agreement leaves no doubt at all that Mr Tibaijuka must be right in his submission that the parties to this agreement intended that the purchaser's possession of the suit premises was not contingent upon final payment of the purchase price.

Ot.herwise clauses 4 and 6 woufd be unnecessary. Any ambiguity arising because of the existence of clause 3, 4 and 5 would have to be resolved against the appellant since it was his advocate who drew the agreement. See J. F. Lally Vs. Uqanda Commercial Bank r Dorted in vol .3 <sup>7</sup> <sup>3</sup> of the Digest of Decisions of the E. A. Court of Appeal at page <sup>20</sup> and see Law of contracE by Cheshire and I.rI t. 5th Ed.. Daqe 11 <sup>3</sup>

The ]earned Erial Judge dealt wiEh this matEer aE page 4/5 of his judgement thus (after quoEing clause 3) ;

> ',The plaint if f as Pw1 t.estif ied that he was enEitled Eo vacanE possession by l-5th September, 1990 as per clause 3 of E.he agreement.. And Ehe defendant as DW1 maintained thaE clause 3 was expressed intencions of the parties and this has been apparently seen by Ehe learned counsel throughouc their submissions.

> In essence the parties could not. go outside the expressed Eerms of Ehe sale agreement

The submissions made before us by both advocaEes are virtually a regurgitaEion of t.he submissions Ehey made in the Erial court. The Erial Judge considered the submissions. During examinationin-chief the respondent IPw1] stated that IP.35 of proceedings] :

> "I was supposed to take possession of the house on 15Eh September, 1990. I did not take possession of E.he house. The defendant could not alfow me to ent.er. Since then I have never entered that house up to date. "

Later, towards the end of examination-in-chief, he testified EhaE: "Around 15th September, 1990 the date of entering the house I talked to him about the rent issue, we agreed that 8 rooms each should be rented at shs.30,000/- and other rooms at shs.20,000/- each. And one which is a shop was to be rented at shs.50,000/and those occupied by the defendant, he had to pay more of shs.150,000/-."

During cross-examination the respondent testified:

"For our defendant (sic) we agreed that I was to enter before final payment. What was to come first was to pay first before I would enter the house, but we later verbally agreed that I take possession and pay the balance later. We agreed that if by 15th September, 1990 he has not got out he should remain in the house but instead pay me rent. ........ After 15th September 1990 $\mathbf{I}$ demanded rents from the defendant, and also I demanded the rent from other tenants....."

Towards the end of cross-examination the respondent further testified that:

> "On 15th September 1990 we sat together with Osman, estimated how much money could be realised from the tenants by each tenant including where he was staying and by so doing I protected (sic) his integrity by not showing that Osman was going away and that I was their new Landlord."

During examination-in-chief, this is what the appellant stated about possession (page 45):

"We agreed that if he finishes payment on 15th April, 1990 or before he would come and enter the house. I would give him documents I would still be there up to September, 1990. Before September if I am still there would pay rents like any other ordinary tenant."

This evidence contradicts clause 3. Later the appellant testified:

> "Mr Mulangwa did not come to take possession of the house on 15th April, 1990 because he had not paid the balance. After September, 1990 Mr Mulangwa could not demand rents from me because the house did not belong to him."

A little later the appellant testified that:

"What was catered for (in agreement) was to pay the final balance by 15th April, 1990 and I to leave the house by September, 1990. There was no provision for them to pay house rent to the plaintiff. The plaintiff was not entitled to the rent of the house because he had not finished payments of the balance and I had not handed over the title to him."

The conclusion I draw from the positions of evidence reproduced above and the reading of the sale agreement is that transfer of the title in the suit property was dependent on the completion of payment of the purchase price.

But possession was not necessarily so dependent. The denials to the contrary by the appellant only shows that the appellant became wise (because of the delay in final payment of the purchase price.

The maxim contempora exposito est optima et fortissima in leg the best way to construe a document is to read it as it would have read when made) is applicable here. That is to say the agreement and particularly clause 3 thereof must be construed as it was when it was executed. Jiwaji Vs. Jiwaji (1968) E. A. 547 is authority for the proposition that courts will not make contracts for parties but courts will give effect to the clear intentions of the parties. Possession was to pass on 15th September, 1990 regardless of whether the purchase price had been completed or not. To hold otherwise is to place a different meaning to the agreement and to render as unnecessary clauses 4 and 6. In other words the court would not be giving effect to the intentions of the parties.

I think that clauses 4 and 6 did exclude the doctrine that a vendor of real property retains a lien in the property for the unpaid balance of the purchase money. Therefore, the cases of Lysaught (supra) and Phillips (supra) do not help the appellant.

A study of the cases relied on by both Mr Muwayire and Tibaijuka shows that the contentions of Mr Tibaijuka are correct.

The facts in Phillips Vs. Silvester (supra) are these. The plaintiffs were the trustees under the will of Rev. S. H. W. Naney, who had, on 4th August 1865, agreed to sell to the defendant John Silvester, for £8500, certain lands; the purchase to be completed on 25th March when the defendant would be let into possession. If the purchase was then not completed, the defendant was, until completion, to pay interest at the rate of 5 per cent on £8075, the balance of the purchase money.

A dispute arose between the plaintiffs and the defendant whether a certain piece of land in the occupation of a railway company was included in the agreement for sale; and after several attempts to arrange the dispute the plaintiffs filed a suit for specific performance of the agreement.

The case was heard in February, 1872 when the decree for specific performance was granted against the defendant; the defendant was ordered to pay the balance of £8075 with interest whereon at the rate of 5% from 25.3.1866. The court further ordered that the purchaser (defendant) must be allowed to set off against the interest payable by him the amount of rent which have been received (if he had been allowed possession from 25/3/1866 and the amount of deterioration since $25/3/1866$ . The plaintiff appealed against the portion of the decree allowing set off because of rent received and cost to remedy deterioration since 25/3/1866. Lord Selborne, L. C., dismissed the appeal. In the course of his judgement the Lord Chancellor made the following statement to which both Counsel referred us (at page 176):

> "By the effect of the contract, ......., according to the principles of equity, the right to the property passes to the purchaser, and the right of the vendor is turned into a money-right to receive the purchase money, he retaining a lien upon the land which he has sold until the purchasemoney is paid." The vendor became a trustee for the purchaser.

The Lord Chancellor expanded on his statement later in his judgement at page 178 that:

> "But although it is true that each party is entitled to refuse to alter the possession until the whole contract is completed, it is not true that when the parties differ upon some subordinate parties differ upon some subordinate question as to the manner of completing the contract whether in the form of the conveyance or in the parcels, ......,

it is not true that giving possession to the vendor would be a departure from the ordinary course of proceeding.

Possession may be changed before completion. But payment of the purchase-money before completion is not according to the ordinary <pre>course of proceeding ........"</pre>

It should here be observed that the agreement between the vendor and the purchaser in the case to which I have just referred provided for payment of interest if the balance of the purchase money remained outstanding beyond 25/3/1866, the date on which the purchaser should have taken possession. It is clear from the passages I have referred to above that even if there remains unpaid balance the property in the lands passed to the purchaser when a deposit was made. Further even when the trustees refused to surrender possession for a whole six years, i.e., between the date of sale and dismissal of the appeal in February, 1872, eventually the trustees surrendered possession of the property.

The principle in Phillip's case runs through all the cases cited to us, namely Lysaght Vs. Edwards (supra), Jones Vs. Gardner (1901) 1 Ch. 191; Engell Vs. Fitch (1868-9) L. R. 4 Q. B 659 Ex. Ch.; Hillington Estates Co. Vs. Stonefield Estates Ltd (1952) 1 Ch. 627 and Openda Vs. Ahn (1982-88) 1 K. A. R. 294

Let me briefly examine Lyaght Vs. Edwards (supra) whose facts bear remarkable similarities to the case before us.

On 23/12/1874, a written agreement was entered into between S. B. Edwards and the plaintiffs, whereby S. B. Edwards agreed to sell and the plaintiffs agreed to purchase a mansion-house called The Bury and certain messuages, farms, and lands at a partly freehold and partly copyhold price of £59,750.

The agreement provided that the vendor should, before the completion of the purchase, procure the copyhold to be enfranchised; that £3000, part of the purchase-money, should be paid at once, and the residue on 11.10.1875; and that on payment of the balance of the purchase- money the vendor should execute a proper conveyance. Part of the property which formed the subject of the contract consisted of a farm and lands called The Bury Farm.

The deposit of £3000 was duly paid. an abstract of the title was delivered, and, after requisitions had been made thereon, the title was accepted by the plaintiffs on $1/5/1875$ .

S. B. Edwards died on 12.6.1875, having made a will dated $22/7/1873$ giving his personal estate to E whom he appointed executor, and devised all his real estate to his cousin Hubbard and his friend Muller upon trust for sale, and having also devised to Hubbard alone all the real estate which at his death might be vested in him as trustee. Upon the death of S. B. Edwards the question arose whether the concurrence of his heirsat-law or customary heir was necessary in order to give a complete title and conveyance to the plaintiffs. In other words since it was difficult to trace the heir-at-law or customary heir of the testator, the question was: did the trustees Hubbard and Muller, or the trustee Hubbard, take the legal estate in freehold and copyhold lands which the testator had sold before he To decide this question the plaintiffs instituted an died. action for specific performance against the sole executrix (wife of the deceased) some other person jointly with Hubbard and Muller.

When considering the case Jessell, M. R. begun his judgement with a passage (at page 506) a portion to which we were referred by both Mr Muwayire-Nakana and Mr Tibaijuka.

The learned Master of the Rolls stated after posing the question "What is the effect of the contract?" that:

> "It is that the moment you have a valid contract for sale the vendor becomes in equity a trustee for the purchaser of the estate sold, and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase-money, a charge or lien on the estate for the security of the purchase-money, and a right to retain possession of the estate until the purchasemoney is paid, in the absence of express contract as to the time of delivering possession."

Clearly this passage which was relied upon both here and at the trial by counsel for both parties states the common sense view that where parties expressly state in their contract the time at which delivery of possession is to take effect, the doctrine of lien is inapplicable. That exactly is the position in this appeal.

Therefore the first ground of appeal must fail.

The complaint in ground two of the appeal is that the judge erred in fact and law in holding that the defendant waived his rights to insist on payment as agreed and that the appellant had not demanded payment for two years. In other words this ground hinges on the issue whether time was the essence of the contract. This ground of appeal arises from the answer given by the trial judge to the third issue. I have quoted the third issue already in this judgement.

Mr Muwayire's submissions on this ground mainly dwelt on whether the respondent paid the third instalment of US\$2,000 before, on or after $15/4/1990$ or $20/4/1990$ .

In counsel's view Ehe respondents attempted to pay the balance of \$2,000 after he received the notice rescinding Ehe sale in February 1992. Mr Tibaijuka, for the respondent, conEended, in effecE, EhaE the appellant waived the tsime for compleEion of payment .

The principle aE common law and in equity is EhaE, in Ehe absence of a conErary inEention, time is essenEial, even chough iE has noE been expressly made for by the parties. Performance must. be compleEed upon the precise date specified, oEherwise an action Iies for breach; contract. bv Cheshire And FifooE, 5Eh Edition, paqe 466.

However, in equity time is essenEial

- (1) If Ehe parties expressly stipuLate in the contract t.haE it sha11 be so; - Q) If, in a case where one party has been guilty of undue deIay, he is notif j,ed by Ehe other that unless performance is completed wit.hin a reasonable t.ime, t.he conE.ract will be regarded as broken: Slickney Vs. Keeble (1915) A. C. <sup>386</sup> - (3) If tshe naEure of Ehe surrounding circumsEances or of the subject maEEer makes it imperative that. the agreed date should be precisely observed. See Cheshire (supra) page 467.

I think Ehat the paragraph I of Ehe answer tso ground 2 is partly provided by wriEten staEement of defence.

In paragraph 10 of his plaint Ehe respondent pleaded Ehat.

rrln spite of repeated reminders and/or demands by Ehe pla j,nEif f , the defendant has failed neglecEed and/or refused tso honour

7'7

hj.s part of the said agreement of sale nor has he remitted E.he paid sum. Instead the defendant has made every efforE to rese11 E.he premises, and the plaintiff has been constrained to lodge a caveat, (Annexture r1r.ll

The sum referred to here is shs .7 .2m/ -

rn his defence (para.8) the appellant pleaded, in part, that

"with regard to para.10. the defendant avers t.hat having patiently waiEed for Ehe plainEiff Eo fulfil his obligaEion for over 2 years to no avail and having made repeated demands Eo the plaintiff to pay Ehe purchase price of E.he house which were ignored and neglecEed, he was enEiEfed to rescind tshe cont rac <sup>E</sup>

Thus by his own pleading, the appellant sat on his rights for over two years before he soughE Eo resciod the conEracE because of the respondent's failure to pay Ehe balance of the purchase money wi.thin the time stipulaEed by Ehe contract.

The evidence of borh Ehe appellant and the respondent clearly shows thaE Ehe Ewo parEies discussed the paymenE of Ehe balance of \$2000 and payment of rent by appellant to t.he respondenE long af:er L5/4/1990 (the last day for the payment ) and 15/9/L990, the day when the respondent should have taken possession of L.he suit premises,

ft is not.eworthy thaE although Ehe agreement required US\$5000 be paid in lumpsum before or by 8/1/a990, that. money was in fact paid in two instalments of \$300 and \$4?00. This is one instance of the evidence that the parties were in pract.ice casual about Ehe time element. Further the agreemenE in clause 2 (iii) required Ehe balance of 94000 tso be paid on or before L5/4/1990. If EhaE. date was t.he dateline for completion of payment and E.hus making time essenEial , why did the appeLLant accept only \$2000 af t.er :-5/4/L990? The respondent was categorical Ehat \$2000 was paid af|er !5/4/t990, The appellant was certainly evasive on whether or noE Ehis money was paid afler l5/4/L990. For my parE I accepE the evidence of the respondent. on t.his poinE EhaE he paid \$2000 afEer 15/4/1990. Inatead of rescinding the contract. because of the respondent's failure t.o compfete payment by L5/4/1990, tshe appellant accepted part-paymenE. There is no satisfacEory explanation why Ehe appeLlanE accepEed \$2000. The appellant.'s attitude towards time elemenE about completion of payment is confirmed by his admission as late as 23/5/1994 t.hat he was prepared Eo give the suiE premises Eo Ehe respondent j.f the Iat. E.er paid more money for the premises.

In cross - examinat ion the appellant stated (page 50)

"I was not happy when the plaint.iff sued me to courE instead of coming to me for negotiaEions. If he had come E.o me instead of suing me iE would have been good. "

I thj.nk, therefore, Ehat. the appellant waived his righE rescind Ehe conEracE on account of the respondenE's faj. Lure pay all t.he \$4000 by l5/4/L990. rn other words E j.me \$/as noE, the fact.s, of essence in the contract. Eo Eo on

when cross-examined by Mr Muwayire the respondent sEaEed Ehat baLance of \$2000 dollars and he refused. IaEer my advocate wrote to him to aLLow him (sic) pay the balance but he refused.

I also wenE to his advocate he also refused. In 1991, I tried several times Eo pay the defendant t.he balance and he refused and his witness is the defendanE's advocate. "

The appellant did not seriously challenge Ehis part of respondent's vit.af evidence. Mr Muwayire did not pin down respondenE on dates by for insEance, asking the dates aEEempCs to pay were made. the the when

At the end of cross-examination, the appellant tsesEified that-

"I asked Haruna several times to pay the balance but he was E.eIIing me to hold on. "

This confirms the inference I draw Ehat the, appellanE did not treaE time as of essence. InsEead the appellant secretly attempted Eo rese1l the sui. E premises. Hence the filing of caveaE by Ehe respondenE. FurEher I t.hink thaE the appellant's evidence was unreliable. During his evidence-in-chief he EesEified thaE (page 45 of proceedings) -

> "When we made the agreement for tshe sale of Ehe house I and Mr Mulangwa were aware of Ehe purchase of the machinery in Italy. when we made the agreement its was the pfaintiff who suqqested t.hat Ehe final amount for the Davment of the balance be fixed on 15th ApriL l-990. "

However, during he claimed that cross - examinaE ion he contradicEed himself when - (page 49)

> 'I did not mention abouE the purchase of t.he machine in the agreement wiEh Mulangwa because Eha! i,ras unnecessary.

Mulangwa was buying my house. He was not concerned with the machinery."

In these circumstances ground two must fail.

Ground three in the appeal complains that the judge misconstrued issue No.4; that the evidence on the record did not support the judge's conclusion on issue No.4.

Mr Muwavire"s submissions on this issue were half hearted. He criticised the trial judge for holding that the respondent cannot be permitted to rescind the contract and at the same time retain the deposit of US\$10,000 made by the respondent. Mr Muwayire's contention that the issue of refund of the money was not put to the appellant when he testified is incorrect. Further $Mr$ Muwayire contended that the appellant suffered loss and therefore should not refund the deposit.

I agree with Mr Tibaijuka that the appellant was asked when he gave evidence whether he could refund the deposit. the loss which Mr Muwayire raised in justification of withholding the deposit by his client is untenable. I understood the loss to be the claim by the appellant that he was in process of acquiring a machine to make food for children and that the delayed payment of US\$2000 by the respondent led to failure by the appellant to get the machine.

I find no need to go into the details of the failure by the appellant to acquire the food machine because I am satisfied on the evidence as a whole that at the time of making the sale agreement, acquisition of the machine was not an essential element in the sale of the suit premises. The evidence of the appellant which I quoted above when concluding ground two is against the appellant.

fndeed even h,hen the appellant filed his writtsen staEement of defence as LaEe as 2f/la/192, three years afEer the contracE was made, Ehe issue of loss was not menEioned even t.hough a counterclaim was included in t.he defence. The appellant's alleged loss is I think an aftserthought.

If Ehis appeal succeeds ground raised to justify In any case the fourth entitled t.o rescind the about whaE should happen there would in my opinion be no valid the withholding of Ehe deposj,t money. issue was whether Ehe appeIIanE was contracE. There rras no iesue framed to the deposit money.

I have held that the appellant. waived Ehe time wit.hin which Ehe payment of the lasE instalment was to be made. There had cerEainly been negotiats j,ons between the parEies aimed aE seEtling E.his maEE.er. BoEh parties being moslems resorEed to their broEhers in Islam to solve t.he dispuEe. This was nearly two years after the due date of payment of last insEalmenE.

Having reviewed all the evidence I cannot see any faulE in the conclusions of the trial judge t.haE the appellant cannoE wiE.hhold E.he deposi! after the same appellant had purporEed Eo rescind Ehe conEract. In my view ground Ehree must. fail.

The fourE.h and acEualfy tshe lasE ground of appeal complains tshats che Iearned judge erred in law and fact by finding EhaE the appellant was in breach of the contracE and thaE the judge erred in giving remedies Eo the respondenE.

The Iearned trial judge in his decree ordered

- (1) Specific performance of Ehe conEracE appellanE was to give the respondent possession of the suiE premises; so thaE. t.he vacant - Q| General damages in the sum of shs . 3m,/ f or breach of the conEract,'

Interest on shs. $3m/-$ at court rates; $(3)$

Costs of the suit. $(4)$

I am persuaded by the reasoning in the cases of Lyghat (supra) Phillips (supra) and Hillington (supra) that the learned trial judge was justified in granting the prayer for Specific Performance.

I am fortified in my view by the persuasive authority of the Kenyan Court of Appeal decision in Openda Vs. Ahn (1982-88) I K. A. R. 294 whose facts briefly are:

## Openda Vs. Ahn (1982-88) 1 K. A. R. 294

The appellant (Openda) owned property in Lower Kabete Road Nairobi. He advertised it for sale in January 1977.

The respondent (Ahn) inspected the property and agreed to purchase it for Kshs.480,000/- and paid a deposit of Kshs.20,000/- on $25/1/1977$ , the date on which the sale agreement was executed. By 21/3/1978, Openda had through his faults not fulfilled his part of the contract. On 19/5/1978 Ahn filed a suit seeking specific performance. This was decreed by the High Court of Kenya on 14/5/1980. On appeal to the Kenya Court of Appeal against the judgement of the High Court of Kenya ordering specific performance and awarding damages to the Respondent, Openda, the appellant contended inter alia that the agreement had been subject to his showing and delivering a clear title, that the appellant's (Openda's) wife had subsequently been found (in another suit) to be the joint owner of the property, and that the respondent had failed to actually tender the balance of the purchase price, or to establish that he was ready and

willing to complete the transaction.

The Kenya Court of Appeal held, inter alia -

that since the appellant had $(iii)$ wrongfully repudiated the contract and persisted in such repudiation, he could not object that the respondent had failed to carry out the "perfectly useless exercise" of actually tendering the balance of the purchase price. The judgements of Kneller and Hancox, J. J. A., was to the effect that the purchaser need not deposit cash to complete the contract.

The appeal was decided on $8/7/1983$ and the appellant was ordered to carry through the sale agreement nearly six years after the contract was executed by the parties.

In the case before us since the respondent had within the stipulated time paid over 83% of the purchase price, which was

substantial performances, in order for the appellant to be entitled to repudiate the contract, the appellant should have informed the respondent about the repudiation immediately after 15/4/1990. Like in the Kenyan case of Openda Vs. Ahn (1982-88) 1 K. A. R. 294, the appellant kept the contract alive by discussing payment of the balance with the respondent. Even during the hearing of the case the appellant was willing to transfer the house if more money was paid. On the other hand I accept the argument by Mr Muwayire that the evidence available does not justify the award of shs.3m/- or any amount, as general damages. In my opinion this award is therefore wrong and should be set aside.

Consequently the Order of interest thereon is wrong. I would have awarded interest on the balance of \$2000 at the rate of 12% p.a. for $15/4/1990$ .

Costs are normally awarded to a successful litigant. There are no reasons why this should have been the case.

In the result ground four succeeds only in part relating to the award of general damages of shs.3m/-. But it fails as respects the other orders.

I would dismiss this appeal save as it relates to the award of shs.3m/- general damages. I would vary the judgement of the trial Court by setting aside the order awarding general damages. Otherwise I would award to the respondent the costs of this appeal and of the Court below.

I have considered the submissions of Mr Tibaijuka and of Mr Muwayire on the cross appeal. My view of the matter is that although the main appeal has been dismissed, the appellant was entitled to remain in possession till 15/9/1990. Accordingly the respondent had no basis on which to claim shs.7.2m/- which was intended to repair the damaged house. Money was used to repair the house.

Furthermore although I have held that the appellant did not breach the contract, his delay in trying to enforce specific performance disentitles him from claiming for misne profits. I think that it would be inequitable to order the appellant to pay mesne profits and rent on the facts available. I would therefore dismiss the cross-appeal with costs to the respondent on the cross-appeal.

Consequently I would confirm the decree of the trial $\operatorname{Court}$ save that the decree be varied by excluding the award of shs.3m/- as general damages.

Delivered at Mengo this

$3134$ day of October 1996.

$J. W. N$ **TSEKO JUSTICE OF SUPREME COURT**