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Al Malik Group Uganda Limited & Another v Magala & Another (Civil Suit 753 of 2020)

High Court · [2024] UGCOMMC 265 · 2024 Judgment for Plaintiffs — Partial Recovery AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money paid under a joint venture agreement
Decision
Judgment entered for the Plaintiffs for partial recovery of money advanced under the memorandum of understanding

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that the defendants did not breach a joint venture memorandum of understanding because the plaintiffs failed to meet their reciprocal obligation to pay UGX 8,000,000 per month, which was necessary to enable the defendants to evict existing tenants. Under section 44 of the Contracts Act, the defendants had lawful excuse for non-performance. However, the plaintiffs were entitled to a partial refund of UGX 38,573,000, being the balance of monies paid after acknowledging receipt of UGX 50,000,000 already refunded.

Outcome

Judgment entered for the Plaintiffs for partial recovery of money advanced under the memorandum of understanding

Facts

In July 2014, the plaintiffs entered into a memorandum of understanding with the defendants to establish a joint venture car bond on land owned by the defendants. Under the agreement, the plaintiffs were to pay UGX 8,000,000 per month to enable the defendants to evict existing tenants and make the land available for the business. The plaintiffs paid a total of UGX 88,573,000, which the defendants acknowledged. However, the land was never made available, and in 2016 the defendants entered into subsequent agreements with third parties for the same land. The plaintiffs demanded a refund of their money. At a meeting in May 2016, the defendants admitted they owed the plaintiffs and undertook to repay within five months, but did not do so. The defendants testified that they could not proceed because the plaintiffs refused to continue making the agreed monthly payments necessary for eviction proceedings. The defendants claimed they refunded UGX 50,000,000 to the second plaintiff in December 2017, and paid a further UGX 38,530,000 to a representative of another party to the memorandum, though no evidence of the latter payment was produced.

Issues

  1. Whether there was breach of contract by the Defendants.
  2. Whether the Plaintiffs are entitled to a refund of the monies paid to the Defendants.
  3. What remedies are available to the parties?

Orders

  • The Defendants pay the Plaintiffs UGX 38,573,000 as money due and owed to them.
  • Interest on the principal sum at the rate of 21% from the date of judgment until payment in full.
  • The Defendants pay costs of the Plaintiffs.

Rules and key headnotes

Contract Law — Reciprocal Promises — Failure to Perform — Lawful Excuse Under Section 44 Contracts Act
Where a contract contains reciprocal promises and one party prevents the other from performing by failing to perform its own reciprocal obligation, the contract becomes voidable at the option of the prevented party under section 44 of the Contracts Act, and the prevented party has lawful excuse for non-performance.
Contract Law — Breach of Contract — Material Breach Going to Root of Contract — Effect on Obligations
Where a breach goes to the root of the contract, the injured party may elect to put an end to the contract, and both sides are released from those obligations which remain unperformed.
Contract Law — Unjust Enrichment — Money Had and Received — Entitlement to Refund
In an action for money had and received, liability is based on unjust enrichment, and the action is applicable whenever the defendant has received money which, in justice and equity, belongs to the plaintiff. A party is entitled to a refund of money paid where the recipient cannot justify retention of the benefit.
Evidence — Burden of Proof — Section 103 Evidence Act — Proof of Payment
Under section 103 of the Evidence Act, the burden of proof as to the existence of a particular fact lies on the person who wants the court to believe in the existence of that fact. A party alleging payment must prove it with evidence.
Damages & Quantum — General Damages — Refusal to Award Where Plaintiff Failed to Perform Reciprocal Obligation
General damages will be declined where, although a party is entitled to recovery of money paid, that party failed to meet its own reciprocal obligations under the contract.
Damages & Quantum — Punitive Damages — Exceptional Remedy — Not Recoverable for Breach of Contract
Punitive or exemplary damages are an exception to the rule that damages are to compensate the injured person. They are awarded to punish egregious, high-handed, malicious, vindictive, or oppressive conduct, and are not generally recoverable for breach of contract. They are awardable with restraint and only in exceptional cases, because punishment ought, as much as possible, to be confined to criminal law and not the civil law of tort and contract.

Legislation cited (4)

Cases cited (5)

  • Kabaco (U) Ltd v Turyahikayo Bonny (Civil Suit No. 014 of 2021)
  • Lombard North Central plc v Butterworth [1987] QB 527
  • Kashugera Tumwine & Another v Magara & Another (HCCS No. 576 of 2004)
  • Maruri Venkata Bhaskar Reddy v Bank of India (Uganda) Ltd (Civil Suit No. 804 of 2014)
  • Uganda Revenue Authority v Wanume David Kitamirike (Civil Appeal No. 43 of 2010)

Full judgment

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

Al Malik Group Uganda Limited & Another v Magala & Another (Civil Suit 753 of 2020) [2024] UGCommC 265 (3 September 2024)
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.