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Hameyimana v Equity Bank Uganda Limited (High Court Civil Suit No. 714 of 2013)

High Court · [2015] UGCOMMC 299 · 2015 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract arising from a micro-leasing facility agreement
Decision
Defendant's counterclaim dismissed; plaintiff awarded return of vehicle value, refund of all payments made, damages for breach of contract, loss of profits, special damages, interest and costs

Observed later treatment

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Holding

The court held that the defendant breached the micro-leasing facility agreement by impounding and selling the plaintiff's motor vehicle without contractual authority and before the lease period expired. The master lease document allegedly authorising impoundment was not shown to be part of the parties' agreement. The plaintiff had made substantial payments totalling UGX 37,500,000 including the 20% deposit and monthly instalments. The defendant's account statement was found to be inaccurate and falsified. The plaintiff was entitled to recover all sums paid and damages for breach of contract and loss of profits.

Outcome

Defendant's counterclaim dismissed; plaintiff awarded return of vehicle value, refund of all payments made, damages for breach of contract, loss of profits, special damages, interest and costs

Facts

In 2008 the plaintiff and defendant (then Uganda Micro Finance Ltd) entered into a micro-leasing facility agreement for purchase of a Mitsubishi FUSO motor vehicle costing UGX 37,500,000. Under the offer letter the plaintiff was to pay a 20% deposit of UGX 7,500,000, make monthly instalments of UGX 2,474,106 over 24 months, comprehensively insure the vehicle, and secure the facility with a mortgage on his property. The plaintiff paid the deposit and made monthly payments totalling UGX 24,545,000 over 14 months before the vehicle was delivered in July 2008. The vehicle later broke down and was extensively repaired at the plaintiff's cost. The defendant (now Equity Bank) then impounded the vehicle without notice or court order and sold it for UGX 44,000,000 before the 24-month lease period expired. The defendant claimed the plaintiff owed UGX 38,628,857 after the sale.

Issues

  1. Whether the Defendant breached the agreement by impounding and selling the motor vehicle.
  2. Who of the parties breached the agreement?
  3. Whether the Defendant is entitled to return the FUSO Lorry or its value.
  4. Whether the Defendant is entitled to recover the sum of UGX 38,628,857 from the Plaintiff.
  5. What remedies are available to the parties?

Orders

  • Plaintiff entitled to return of motor vehicle value of UGX 57,500,000.
  • Defendant to refund UGX 7,500,000 being 20% advance payment.
  • Defendant to refund UGX 24,545,000 being monthly deposits for fourteen months.
  • Plaintiff awarded UGX 62,211,005 as loss of profits from future earnings from 2009 to date of judgment.
  • Plaintiff awarded general damages for breach of contract of UGX 50,000,000.
  • Plaintiff awarded special damages: UGX 8,770,000 (repairs), UGX 4,200,000 (comprehensive insurance), UGX 1,120,000 (arrangement fees), UGX 800,000 (inspection fees), UGX 10,800,000 (value of Irish potatoes on vehicle at impoundment).
  • Interest at commercial rate of 24% per annum on UGX 62,211,000 and special damages from date of filing suit.
  • Interest on general damages of UGX 50,000,000 at court rate of 6% per annum from date of judgment till payment in full.
  • Defendant's counterclaim dismissed.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Breach of Contract — Impounding and Sale Without Contractual Authority
Where parties enter into a leasing facility agreement and the lease offer letter contains no provision authorising impoundment and sale of the leased asset upon default, the lessor acts in breach of contract by impounding and selling the asset without such contractual authority, even if a separate master lease document allegedly contained such provision but was not shown to form part of the parties' agreement.
Breach of Contract — Definition and Application
A breach of contract occurs when a party without excuse fails or refuses to perform the contract, performs it defectively, or incapacitates himself from performing, arising out of obligations undertaken by the parties in the contract.
Equitable Interest — Effect of Substantial Part Performance
Where a lessee under a leasing facility pays the required deposit and makes substantial monthly repayments, such payments grant the lessee an equitable interest in the leased asset which can only be lawfully extinguished upon appropriate notice of default on a clear term of the contract.
Documentary Evidence — Account Statements and Verification
A bank statement presented in evidence which is not certified as originating from the bank cannot be relied upon as truthful, particularly where the statement contains discrepancies with acknowledged payments and receipts.
Loss of Profits — Assessment in Breach of Leasing Contract
Where a lessor wrongfully impounds and sells a leased vehicle used in a transport business, the lessee is entitled to recover loss of profits based on projections showing the net profit capable of being generated by the transport business during the period from wrongful impoundment to date of judgment.

Cases cited (1)

  • Jarvis v May Davis Smith Co [1946] 1 KB 399

Full judgment

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

Hameyimana v Equity Bank Uganda Limited (High Court Civil Suit No. 714 of 2013) [2015] UGCommC 299 (14 July 2015)
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.