Wakilii

Abdalla Faraj v Odimbe and company Advocates (Civil Suit No. 962 of 1986)

High Court · [1998] UGHC 38 · 1998 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for declaration that a purported share transfer agreement is invalid and for damages
Decision
The contested share transfer agreement was declared void. The plaintiff was awarded Shs. 50,000,000/= in general damages (Shs. 20,000,000/= from first defendant and Shs. 30,000,000/= from second defendant) plus interest and costs. Several other claims for damages were dismissed.

Observed later treatment

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Holding

The High Court held that a purported share transfer agreement executed by an illiterate plaintiff was illegal and void for non-compliance with s.4 of the Illiterates Protection Act Cap. 71. The Act requires that a person writing a document for an illiterate must write their own full name and address on the document, which implies they instructed the illiterate and read over and explained the document. The defendant advocate failed to comply. The Court found no fraud or pari delicto but awarded general damages to the plaintiff for deprivation of his business shares.

Outcome

The contested share transfer agreement was declared void. The plaintiff was awarded Shs. 50,000,000/= in general damages (Shs. 20,000,000/= from first defendant and Shs. 30,000,000/= from second defendant) plus interest and costs. Several other claims for damages were dismissed.

Facts

The plaintiff, an illiterate businessman, jointly owned the New Elgon Cinema in Mbale with Mohamed Suleman and Abdul Majid (who fled in 1979). A written agreement purported to transfer the plaintiff's shares to the first defendant Ali Omar for Shs. 2,500,000/=. The agreement was prepared by the second defendant, R. A. Odimbe & Co. Advocates, whose partner witnessed the signatures. The plaintiff alleged he believed he was signing a loan agreement to secure money lent by the first defendant and never understood he was transferring his shares. He denied seeing the other parties sign. After returning from leave, he was told he no longer had a stake in the business and given a copy of the contested agreement. Mohamed Suleman died before the suit was instituted.

Issues

  1. Whether the agreement (Annexture 'A' to the plaint) is correct by s.4 of the Illiterates Protection Act.
  2. Whether the plaintiff is estopped from challenging the validity of the agreement.
  3. Whether there was misrepresentation and deceit.
  4. Whether the parties were in pari delicto when Annexture A was executed.
  5. Whether the plaintiff is a member of that class of persons protected by the Illiterates Protection Act.
  6. Whether the plaintiff is entitled to rescind the contract contained in Annexture 'A' of the plaint.

Orders

  • Annexture 'A' (the contested agreement) is declared null and void and not binding on the plaintiff.
  • Declaration that there was no contract of sale of the plaintiff's shares in the New Elgon Cinema to the first defendant.
  • The first defendant shall pay the plaintiff Shs. 20,000,000/= as general damages.
  • The second defendant shall pay the plaintiff Shs. 30,000,000/= as general damages.
  • General damages awarded with interest at the rate of 21% per annum from the date of judgment until payment in full.
  • Costs of the suit awarded to the plaintiff, with the first defendant to pay 40% and the second defendant to pay 60%.
  • Claims for loss of income (Shs. 300,000/= monthly and Shs. 4,800,000/= to date), claim for repossession of cinematograph or Shs. 200,000,000/= in default, and claim for trespass dismissed.

Rules and key headnotes

Illiterates Protection Act — Requirements for Valid Execution — Section 4 Compliance
Where a document is prepared for an illiterate, s.4 of the Illiterates Protection Act requires that the person who writes the document must write on it their own true and full name and address, and this implies they instructed the illiterate and read over and explained the document to them. Witnessing the signature of an illiterate, or noting the drafter's name in a corner of the document, does not satisfy s.4 requirements. A document failing to comply with s.4 is illegal and void.
Illegality — Protective Statutes — Right to Rescind
Where a statute is enacted to protect a particular class of persons and a contract is made illegal by that statute, the protected party is not in pari delicto. The injured party has a right to bring an action to defeat the contract after it is completed, even if the other party acted without fraudulent intent. The maxim 'in pari delicto potior est conditio defendentis' does not apply where the statute was intended for the protection of one class against oppression by another.
Estoppel — Signature by Illiterate — No Estoppel Where Protection Statute Violated
An illiterate person is not estopped from challenging the validity of a document bearing their signature where the document does not comply with protective legislation. The principle that a signatory is presumed to have read and understood a document does not apply to an illiterate person who is incapable of reading it.
General Damages — Deprivation of Business Interest — Proof Required
Where a plaintiff claims loss of income or special damages arising from deprivation of a business interest, such loss must be specifically pleaded and proved. In the absence of proof, claims for quantified loss of earnings will be dismissed. However, general damages may be awarded for deprivation of enjoyment of shares in a business over an extended period.
Partnership — Dissolution on Death of Partner — Effect on Shares
The death of a partner dissolves the partnership. Upon dissolution, each partner (including the estate of a deceased partner) takes their share. A surviving partner is not entitled to the entire business to the exclusion of the other partners' shares.

Legislation cited (1)

Cases cited (3)

  • Kiriri Cotton Company Ltd v Ranchoddas Keshavjee Dewani (60 E.A. 241)
  • Browning -vs- Morris (1778) 2 Cowp. 790
  • Kearley -vs- Thomson (1890) 24 QBD. 742 (CA)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Abdalla Faraj v Odimbe and company Advocates (Civil Suit No. 962 of 1986) [1998] UGHC 38 (27 August 1998)
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.