Wakilii

Katungye v Byamukama and Another (Civil Suit No. 706 of 2020)

High Court · [2022] UGCOMMC 70 · 2022 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 and debt recovery, heard ex parte after defendants failed to appear despite service.
Decision
Judgment entered for Plaintiff in the sum of UGX 53,859,124/ plus general damages of UGX 5,000,000/ with interest and costs.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where parties entered a joint financing agreement with cross-collateralised security and one party paid the other's defaulted loan portion to redeem their property, the defaulting party's failure to repay that sum after multiple extensions constituted breach of contract entitling the paying party to compensation under Contracts Act 2010 s.61(1), general damages for inconvenience, and interest on both principal and damages.

Outcome

Judgment entered for Plaintiff in the sum of UGX 53,859,124/ plus general damages of UGX 5,000,000/ with interest and costs.

Facts

In July 2016, Plaintiff and Defendants entered an agreement for joint acquisition of business financing from Guarantee Trust Bank. Plaintiff provided his Muyenga property as collateral; Defendants provided Kibanja land at Bruno-Konge. The agreement stipulated each party would pay their respective portions of the loan. Defendants defaulted on their portion despite extensions granted. When GTB advertised sale of Plaintiff's property, Plaintiff paid Defendants' outstanding portion (UGX 112,865,000/) to redeem his collateral. Plaintiff issued statutory notice of default and sought recovery by enforcing mortgage on Defendants' Kibanja land. After further extensions, Defendants made partial payment of UGX 70,265,000/ on 21 February 2020, leaving a balance of UGX 53,859,124/ as of 13 July 2020. Mediation failed. Defendants were served with hearing notices but neither they nor their lawyers appeared. Suit proceeded ex parte.

Issues

  1. Whether the Defendants breached the contract.
  2. Whether the Plaintiff is entitled to the remedies sought.

Orders

  • Defendants to repay the Plaintiff the sum of UGX 53,859,124/.
  • Interest at 18% per annum on UGX 53,859,124/ from the date of filing suit till payment in full.
  • General damages of UGX 5,000,000/ awarded to the Plaintiff.
  • Interest at 8% per annum on general damages from date of judgment till payment in full.
  • Costs of the suit awarded to the Plaintiff.

Rules and key headnotes

Contract Law — Breach of Contract — Joint Financing Agreements — Failure to Repay Loan Portion
Where parties enter a joint financing agreement with cross-collateralised security and one party defaults on their loan portion, requiring the other party to pay that portion to prevent foreclosure on their own property, the defaulting party's failure to repay the sum advanced after multiple extensions constitutes a breach of contract.
Contract Law — Remedies for Breach — Compensation under Contracts Act 2010
Under section 61(1) of the Contracts Act 2010, a party who suffers breach of contract is entitled to receive from the breaching party compensation for any loss or damage caused. Where the non-breaching party paid the breaching party's debt under the contractual arrangement, the sum paid constitutes compensable loss.
Contract Law — Damages — General Damages for Inconvenience and Delay
General damages may be awarded for inconvenience caused by breach of contract where the plaintiff fulfilled their contractual obligations but the defendant did not, and the plaintiff spent years attempting to recover the sum owed. Such damages are intended to restore the wronged party to the position they would have occupied had there been no breach, applying the principle of restitutio integrum.
Civil Procedure — Ex Parte Proceedings — Entitlement to Judgment after Service and Non-Appearance
Where defendants are duly served with hearing notices through their lawyer but neither the defendants nor their legal representatives appear on scheduled hearing dates, the court may grant the plaintiff's prayer to proceed ex parte and enter judgment based on the plaintiff's evidence and submissions.

Legislation cited (4)

Cases cited (4)

  • United Building Services Ltd v Yafesi Muziira t/a Quikfest Builders (HCCS No. 154 of 2005)
  • Cargo World Logistics Limited v Royale Group Africa Limited (HCCS No. 157 of 2013)
  • Ronald Kasibante vs. Shell (U) Limited
  • Gulaballi Ushillani v Kampala Pharmaceuticals Ltd (SCCA No. 6 of 1999)

Full judgment

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

Katungye v Byamukama and Another (Civil Suit No. 706 of 2020) [2022] UGCommC 70 (6 May 2022)
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.