Wakilii

Candiru Asina Binnia v Centenary Rural Development Bank Limited (Civil Suit No. 0022 of 2016)

High Court · [2017] UGHC 120 · 2017 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for damages for breach of contract arising from annulled property sale
Decision
Suit dismissed as incompetent on grounds that the plaintiff's claim arose from a fraudulent transaction in which she was found complicit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed a claim for damages arising from a property sale that was annulled on grounds of fraud. Applying the maxim ex turpi causa non oritur actio, the court held that where both parties to a property transaction were found complicit in fraud leading to the annulment of title, the plaintiff cannot recover losses from that transaction. The court will not lend its aid to a person whose cause of action is founded upon a fraudulent transaction. Each party was ordered to bear their own costs due to mutual misconduct.

Outcome

Suit dismissed as incompetent on grounds that the plaintiff's claim arose from a fraudulent transaction in which she was found complicit

Facts

In 2010, the plaintiff purchased mortgaged land from the defendant bank following foreclosure advertisement for UGX 55,000,000. She transferred the title, took possession, renovated the premises, and leased them. The mortgagor sued the defendant and the auctioneer challenging the foreclosure. The plaintiff joined as co-defendant and counterclaimant. In 2015, the High Court found that both the plaintiff and defendant had fraudulently connived to dispose of the property, ordered cancellation of the plaintiff's title and return of the property to the mortgagor, and dismissed the plaintiff's counterclaim with costs of UGX 16,669,000 plus execution costs of UGX 8,000,000. The plaintiff then sued the defendant for recovery of the purchase price, renovation costs, legal costs, lost rent, and general damages totalling UGX 324,050,650 plus general damages of UGX 115,000,000.

Issues

  1. Whether the plaintiff is entitled to compensation for the sale of land comprised in LRV 3571 Folio 13 Plot 10 Abure Road, Arua by the defendant which was cancelled by the court.
  2. What remedies are available to the parties.

Orders

  • Suit dismissed by reason of being incompetent.
  • Each party to bear their own costs.

Rules and key headnotes

Ex Turpi Causa Non Oritur Actio — Fraud — Recovery of Losses
Where both parties to a contract have been found by a court to have fraudulently connived in a transaction, neither party may bring a claim arising from that transaction, as the maxim ex turpi causa non oritur actio (no claim arises from a base cause) precludes the court from lending its aid to a plaintiff whose cause of action is founded upon a fraudulent act.
Indemnity — Fraud — Illegal Transaction
A plaintiff who was found to have used an agreement for the unlawful purpose of fraudulently depriving another person of property cannot subsequently rely on the same agreement to claim indemnity or other relief against the other contracting party.
Competency of Suit — Fraud — Ex Turpi Causa
A suit is incompetent where the plaintiff cannot sustain their claim without relying upon a transaction that a court has previously found to be tainted by fraud in which the plaintiff was a party. The cause of action must exist independent of the illegal transaction.
Costs — Misconduct — Ex Turpi Causa
Where a successful defendant has been found guilty of misconduct relating to the circumstances leading up to the litigation, the court may deny that party costs even though costs ordinarily follow the event under section 27(2) of the Civil Procedure Act. Where both parties are equally at fault in fraudulent conduct, each party may be ordered to bear their own costs.
Ex Turpi Causa — Public Policy — Integrity of Legal System
The doctrine of ex turpi causa non oritur actio applies to deny recovery where lending the court's assistance to persons involved in serious criminal or dishonest activity would reflect adversely on the administration of justice and undermine the integrity of the legal system. The court weighs the gravity of the anti-social act against the social harm that will be caused if the right is enforced.

Legislation cited (1)

Cases cited (4)

  • Hardy v Motor Insurers' Bureau [1964] 2 QB 745
  • Safeway Stores Ltd v Twigger [2011] 2 All ER 841
  • Mason v Clarke [1955] AC 778
  • Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873

Full judgment

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

Candiru Asina Binnia v Centenary Rural Development Bank Limited (Civil Suit No. 0022 of 2016) [2017] UGHC 120 (21 December 2017)
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.