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Jima Properties Ltd v Kampala Land District Board (HCT-00-CC-CS 805 of 2007)

High Court · [2014] UGCOMMC 220 · 2014 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of monies paid under a void lease agreement and damages for loss of bargain
Decision
Judgment entered for the plaintiff with damages totaling UGX 700,000,000 and US$ 105,000 plus interest

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that under the Torrens system of land registration in Uganda, the rule in Bain v Fothergill limiting damages to expenses does not apply where a District Land Board erroneously allocates land it does not own. The plaintiff is entitled to damages for loss of bargain measured by the difference between contract price and market value at breach, plus loss of prospective profit where the defendant was aware of the plaintiff's business purpose.

Outcome

Judgment entered for the plaintiff with damages totaling UGX 700,000,000 and US$ 105,000 plus interest

Facts

In 2004, the plaintiff applied for and was granted a 5-year lease of Plot 19 Bombo Road by the 1st defendant, with extension to 99 years upon completion of construction. The plaintiff paid lease dues of UGX 108,403,350, received a certificate of title, and prepared building plans for a hotel at a cost of US$ 150,000, paying submission fees of UGX 32,829,139 to the 2nd defendant. Before construction commenced, the 1st defendant notified the plaintiff that the lease had been granted in error as the land was not within its jurisdiction but belonged to Uganda Land Commission. The certificate of title was cancelled. The defendants conceded they had no authority over the land and agreed to refund monies received, leaving only the quantum of damages and interest for determination by the court.

Issues

  1. Whether the Plaintiff could recover US$ 150,000 for preparation of building plans.
  2. Whether the Plaintiff is entitled to general damages for loss of bargain and prospective profit.
  3. What rate of interest should be awarded on the decretal sum.

Orders

  • US$ 105,000 awarded being 70% of expenses for building plans.
  • General damages of UGX 700,000,000 awarded under the heads of loss of bargain and prospective profit.
  • Interest on UGX 136,164,489 at 18% per annum from December 2004 to May 2012.
  • Interest on US$ 105,000 at 18% per annum from June 2005 till payment in full.
  • Interest on general damages at 6% per annum from date of judgment till payment in full.
  • Costs awarded to the Plaintiff.

Rules and key headnotes

Land & Property — Lease — Defective Title — Application of Bain v Fothergill Rule under Torrens System
The rule in Bain v Fothergill, which limits a landlord's liability for defective title to out-of-pocket expenses, does not apply in Uganda's Torrens system of land registration where certificates of title provide conclusive evidence of ownership and the land registration system eliminates the historical difficulty of ascertaining good title.
Contract Law — Breach of Contract — Damages — Loss of Bargain
Where a defendant land board erroneously allocates land it does not own, damages for loss of bargain are recoverable and are measured by the difference between the contract price and the market value of the land at the date of breach, not merely the out-of-pocket expenses incurred by the plaintiff.
Contract Law — Breach of Contract — Damages — Loss of Prospective Profit — Foreseeability
Under the second limb of Hadley v Baxendale, damages for loss of prospective profit are recoverable where the defendant was aware of the plaintiff's specific business purpose at the time of contract and such loss was reasonably in the contemplation of the parties as liable to result from the breach.
Administrative Law — District Land Board — Duty to Ascertain Authority — Erroneous Allocation
A District Land Board owes a duty to ascertain that it has authority over land before offering it for lease. Where the board erroneously allocates land outside its jurisdiction, it cannot rely on the rule limiting damages to expenses but is liable for full contractual damages including loss of bargain and prospective profit.
Damages & Quantum — Interest — Commercial Rate — Discretion of Court
Interest is awarded to compensate a plaintiff who has been kept out of money that the defendant has had the use of. Where the plaintiff is a business person who could have put the money to commercial use, a rate reflecting the average commercial bank lending rate during the relevant period is appropriate, and the court may award interest at 18% per annum on liquidated sums and 6% per annum on general damages.

Legislation cited (1)

Cases cited (14)

  • Storms Bruks Aktie Bolay v John & Peter Hatarison [1905] AC 515
  • Flureau v Thornhill (1776) 2 WM Bl 1078
  • Bain v Fothergill (1874) LR 7 HL 158
  • AVG Management Science Ltd v Barwell Developments Ltd [1979] 25 CR 43
  • J.H Café's Ltd v Brownlow Trust Ltd [1950] 1 All ER 894
  • Wroth v Tyler [1973] 1 All ER 917
  • Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 1 All ER 997
  • The Heron II [1969] 1 AC 350
  • Hadley v Baxendale (1849) 9 Exch 341
  • Makula International v Cardinal Nsubuga [1982] HCB 11
  • Ocharm Plumbers & Associates Ltd v Drury (U) Ltd (HCCS 723 of 2006)
  • UBC v Simba (K) Ltd & Ors (CACA 12 of 2014)
  • Superior Construction & Engineering Ltd v Notay Engineering Industries (1981) Ltd [1992] 3 KLR 24
  • Harbutt's Plasticine Ltd v Wayne Tank & Pump Co Ltd [1970] 1 QB 447

Full judgment

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

Jima Properties Ltd v Kampala Land District Board (HCT-00-CC-CS 805 of 2007) [2014] UGCommC 220 (18 December 2014)
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.