Wakilii

Paul Kanyansi v Fred Hasibiri (Civil Appeal No. 56 of 2021)

Court of Appeal · [2025] UGCA 260 · 2025 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court judgment and decree
Decision
Appeal dismissed with costs; the trial court's orders, including the Ugx 118,000,000 award for improvements to redeem the property, affirmed.

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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.

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Holding

The Court of Appeal dismissed the appeal. Where a loan agreement provided that on default the transaction would mutate into an outright sale of the secured property at the creditor's option, the respondent's taking possession and improving the property was a legitimate exercise of contractual rights, not an illegality. Denying compensation for the improvements would unjustly enrich the defaulting appellant, so the trial court rightly ordered him to pay Ugx 118,000,000 to redeem the property. A party who is himself in breach cannot claim general damages and must plead and prove any such claim. A ground of trespass not contained in the memorandum of appeal was struck out under Rule 102(a) for want of leave.

Facts

In August 2005 the parties entered a friendly loan agreement under which the respondent advanced Ugx 6,650,000 to the appellant, who pledged his incomplete premises on Plot 9 Samson Were Road, Busia, as security. The agreement provided that on default the transaction would mutate into an outright sale of the property to the respondent at his option, and the appellant surrendered the lease offer. The appellant defaulted. The respondent obtained the lease offer from the Busia District Land Board, acquired a certificate of title, and completed the structure into habitable apartments. The respondent sued for declaratory orders confirming the sale; the appellant counterclaimed for cancellation of title and trespass. The trial court declared the respondent's title null and void but ordered the appellant to repay the loan and to pay an additional Ugx 118,000,000 for the improvements in order to redeem the property, granting 120 days, failing which the respondent could seek foreclosure. The appellant appealed against the Ugx 118,000,000 award and the refusal of general damages.

Issues

  1. Whether the trial judge erred in ordering the appellant to pay an additional Ugx 118,000,000 for improvements made by the respondent, on the basis that the order sanctioned an illegality.
  2. Whether the trial judge erred in finding that the appellant did not prove his claim to general damages.
  3. Whether the appellant could argue a ground of trespass that was not contained in the memorandum of appeal and for which leave to amend had not been obtained.

Orders

  • Appeal dismissed.
  • Ground three (trespass) struck out as it was not contained in the memorandum of appeal and no leave to amend was sought.
  • The judgment and orders of the High Court affirmed.
  • Costs awarded to the respondent, both in this court and in the court below.

Key headnotes

Contract Law — Signed Agreements — Binding Effect
When a document containing contractual terms is signed, the party signing it is bound, in the absence of fraud or misrepresentation, and it is immaterial whether he read the document or not.
Damages & Quantum — Restitution — Unjust Enrichment — Compensation for Improvements
Where a creditor takes possession of secured property under a contractual mutation clause following the debtor's default and expends money improving it, denying him compensation would unjustly enrich the defaulting debtor; restitution requires that the defaulting party pay for the improvements to redeem the property.
Damages & Quantum — General Damages — Pleading and Proof
A plaintiff bears the burden of pleading and proving a claim for general damages, and a party who is himself in breach of contract cannot recover general damages, since such damages do not flow from any wrongful act of the other party.
Civil Procedure — Grounds of Appeal — Rule 102(a) — Leave to Amend
Under Rule 102(a) of the Judicature (Court of Appeal) Rules, a party may not, without leave of the court, argue a ground not specified in the memorandum of appeal; obtaining leave is an essential step, not a mere procedural matter, and a ground argued without it will be struck out.
Contract Law — Mutation Clause — Security and Default
A clause providing that, on the debtor's default, a secured loan transaction mutates into an outright sale of the property at the creditor's option is a legitimate and enforceable exercise of contractual rights and does not amount to an illegality.

Legislation cited (4)

  • Contracts Act Cap 284 s.9
  • Contracts Act Cap 284 s.60
  • Judicature (Court of Appeal) Rules r.102(a)
  • Judicature (Court of Appeal) Rules r.93

Cases cited (19)

  • Masaka Municipal Council v Takaya Frank (Civil Appeal No. 173 of 2015)
  • Isiah Kabali & Anor v Attorney General (Civil Appeal No. 50 of 2007)
  • Interfreight Forwarders (U) Ltd v EADB (Civil Appeal No. 52 of 1995)
  • Fang Min v Belex Tours & Travel Ltd (Supreme Court Civil Appeal No. 6 of 2013)
  • Mahabir Kishore & Madhya Paradesh 1990 AIR 313
  • Bank of Uganda v Kibuuka & 4 Others (Civil Appeal No. 281 of 2016)
  • Lipkin Gorman v Karpnale [1991] AC 548
  • Nipun Norattam Bhatia v Crane Bank Ltd (Civil Appeal No. 75 of 2006)
  • Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] 2 All ER 722
  • HAM Enterprises Ltd & 2 Ors v Diamond Trust Bank (U) Ltd & Anor (Civil Appeal No. 13 of 2021)
  • UBN Plc (Registrar Department) vSEC [2004J 1 NISLR p. 115
  • Stanbic Bank v Kalule Deo (Civil Appeal No. 278 of 2016)
  • Hall Brothers Steamship Co Ltd v Young (1938) 43 Com Cas 284
  • Stroms Bruks Aktie Bolag v J & P Hutchison [1905] AC 515
  • Gullabhai Ushillingi v Kampala Pharmaceuticals Ltd (Supreme Court Civil Appeal No. 6 of 1999)
  • Hajj A. Mutekanga v Equator Growers (U) Ltd [1995-1998] EA
  • Kiyaga v Seguija & Anor (Civil Appeal No. 76 & 37 of 2010)
  • Sukuton Ali v Augustine Kapkwonyong & 2 Ors (Civil Appeal No. 117 of 2012)
  • Dr. Sheikh Ahmed Mohammed Kisuule v Greenland Bank (In Liquidation) (Supreme Court Civil Appeal No. 11 of 2010)
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.