Wakilii

Kobusingye v Zimbiha (Civil Appeal No. 69 of 2019)

Court of Appeal · [2022] UGCA 201 · 2022 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court ruling upholding a preliminary objection that the Memorandum of Understanding was illegal and unenforceable
Decision
Appeal dismissed; High Court ruling that the Memorandum of Understanding was illegal and unenforceable upheld

The full judgment

Read the complete, verbatim text of this judgment.

Sign in to read the full judgment
Cited — treatment unverified cited in 2 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions — always read the source judgment before relying on it.

Holding

The Court of Appeal dismissed the appeal, upholding the High Court's finding that the Memorandum of Understanding under which the appellant claimed 10% of the respondent's government compensation was a champertous agreement, illegal and unenforceable. The court held that the Contracts Act 2010, including its section 19(2) exceptions, did not apply because the agreement was concluded on 25 August 2010, before the Act commenced on 15 September 2011; statutes do not act retrospectively. The applicable law was therefore common law, under which champerty agreements are void. The court found the agreement was not made in good faith. Having declared the underlying contract illegal, the court held there was no basis to assess quantum meruit.

Facts

The appellant entered into a Memorandum of Understanding with the respondent, her daughter-in-law, on 25 August 2010. Under it, the appellant provided material and financial support to facilitate the administration of an estate, including surveying land, negotiating with government, upkeep of beneficiaries and litigation costs, due to the respondent's financial incapacity. In return, the appellant was to receive a capped amount, expressed as 10% of the value of the subject matter, being the compensation the respondent was awarded after successfully suing the Government in Civil Suit No. 109 of 2011. The appellant sued claiming approximately UGX 3.578 billion for breach of the agreement and specific performance. The High Court upheld the respondent's preliminary objection that the Memorandum of Understanding was champertous, illegal, null and void and unenforceable, and dismissed the suit. The appellant appealed.

Issues

  1. Whether the Memorandum of Understanding between the appellant and respondent was champertous and contrary to public policy.
  2. Whether the exceptions under section 19(2) of the Contracts Act 2010 applied to render the agreement enforceable.
  3. Whether the appellant could rely on the principle of quantum meruit for her contributions despite the illegality of the agreement.
  4. Whether the trial judge improperly considered facts meant for trial in determining a preliminary objection.

Orders

  • The appeal is dismissed.
  • Costs awarded here and below to the respondent.

Key headnotes

Contract Law — Champerty and Maintenance — Enforceability of Agreements to Share Litigation Proceeds
An agreement under which a person without an interest in litigation provides financial support to a party in return for a share of the proceeds or subject matter of the action is champertous, and under common law such an agreement is void, illegal and unenforceable by the courts.
Statutory Interpretation — Retrospectivity — Application of Statute to Contract Concluded Before Commencement
Legislation does not operate retrospectively unless expressly provided, so a party cannot rely on statutory provisions, such as the exceptions in section 19(2) of the Contracts Act 2010, where the contract was concluded before the Act came into force.
Contract Law — Champerty — Good Faith Exception — Test of Tendency to Corrupt Public Justice
While common law recognises a good faith exception permitting bona fide financial assistance to a poor suitor for reasonable recompense, the court must scrutinise the agreement to determine whether it has a tendency to corrupt public justice, and an agreement that does not specify the assistance given and merely caps a percentage share of the proceeds will not qualify for the exception.
Contract Law — Illegality — Quantum Meruit — Unavailability Under Void Contract
Where the underlying contract has been declared illegal, null and void, there is no basis for the court to assess or award compensation on a quantum meruit basis for work done under that agreement.

Legislation cited (9)

  • Contracts Act 2010 s.19(1)
  • Contracts Act 2010 s.19(2)
  • Acts of Parliament Act s.14(2)
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.30
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.2(2)
  • Judicature (Court of Appeal Rules) Directions S.I 13-10 r.86
  • Constitution of the Republic of Uganda Article 28
  • Constitution of the Republic of Uganda Article 126(2)(e)
  • Contracts Act 2010 Commencement Instrument 2011 r.2

Cases cited (9)

  • Fr. Narsensio Begumisa and 3 Others v Eric Kibebaga (Civil Appeal No. 77 of 2002)
  • Price Waterhouse Coopers Inc v National Potato Co-operative Ltd 2004 (6) SA 66 (SCA)
  • Ram Coomar Coondoo v Chunder Canto Mookerjee (1886) 2 AC 210
  • Trepca Mines Ltd [1962] 3 All ER 351
  • Giles v Thompson [1993] 3 All ER 321
  • Factortame Ltd v Secretary of State for Transport [2002] QB 397
  • Trendtex Trading Corp v Credit Suisse [1982] AC 679
  • Shell (U) Ltd and 9 Others v Muwema and Mugerwa Advocates (Civil Appeal No. 2 of 2013)
  • Act Automobile Spares Ltd vs. Crane Bank Ltd and Rajesh Pakesh (supra)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.