Wakilii

Kemigisa v Wamani (Civil Appeal 6 of 2022)

High Court · [2024] UGHC 37 · 2024 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from judgment of Magistrate Grade 1, Hoima in a land sale dispute
Decision
Appeal partly allowed. Appellant must refund UGX 4,000,000 to respondent but is not liable for general damages. Costs awarded to appellant.

Observed later treatment

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Holding

The High Court held that the respondent breached the land sale contract by failing to pay the balance of the purchase price within the stipulated time. Time was essential in the contract. The appellant was entitled to rescind the contract. However, having received UGX 6,500,000 from the respondent and refunded only UGX 2,500,000, the appellant must refund the remaining UGX 4,000,000. The award of general damages to the respondent was set aside as the appellant was the innocent party.

Outcome

Appeal partly allowed. Appellant must refund UGX 4,000,000 to respondent but is not liable for general damages. Costs awarded to appellant.

Facts

On 17 August 2016, the respondent purchased land from the appellant for UGX 7,500,000. He paid UGX 4,000,000 initially and later paid UGX 2,500,000 on 14 January 2017, leaving a balance of UGX 1,000,000 to be paid in June 2017. The respondent failed to pay the final instalment. The parties then agreed that the appellant would refund the amounts already paid. The appellant refunded UGX 2,500,000, leaving a balance of UGX 4,000,000. The appellant subsequently sold the land to a third party (the 1st defendant). The respondent then sued seeking vacant possession, a declaration of ownership, or alternatively specific performance and damages. The trial magistrate found for the respondent in part, ordering refund of UGX 4,000,000 and awarding general damages of UGX 3,000,000. The appellant appealed.

Issues

  1. Whether the trial magistrate properly evaluated the evidence on the record.
  2. Whether the respondent breached the land sale agreement by failing to pay the full purchase price within the stipulated time.
  3. Whether the appellant was entitled to rescind the contract and sell the land to a third party after the respondent failed to complete payment.
  4. Whether the award of general damages of UGX 3,000,000 to the respondent was justified.
  5. Whether the trial magistrate was entitled to order specific performance for refund of UGX 4,000,000 when this was not specifically pleaded by the respondent.

Orders

  • A declaration that the 1st defendant is the lawful owner of the suit plot of land having lawfully bought the same from the 2nd defendant is upheld.
  • An order of specific performance against the 2nd defendant to refund a sum of UGX 4,000,000 is set aside and substituted with an order that the appellant refunds the balance of the purchase price to the respondent amounting to UGX 4,000,000.
  • The order that the appellant pay the respondent general damages of UGX 3,000,000 is set aside.
  • The order for costs is set aside and substituted with an order for costs in favour of the appellant both in the lower court and on appeal.

Rules and key headnotes

Contract Law — Time of Performance — Essence of Time — Land Sale Agreements
In a land sale agreement, where the parties expressly stipulate the date for payment of the purchase price, time is essential to the contract. A seller of residential property does so for a reason and if the purchase price is not paid in time, the seller is likely to suffer loss or injury. Time fixed by parties in a contract is essential in law, particularly in contracts for sale and purchase of land since land prices vary from time to time.
Contract Law — Breach of Contract — Failure to Pay Purchase Price — Right to Rescind
Where a purchaser of land fails to pay the balance of the contractual price within the stipulated time, the purchaser is in breach of contract. Although the purchaser who has paid a substantial deposit acquires an equitable interest in the land, payment of the balance cannot be held in perpetuity. The partly paid vendor retains the right to rescind the contract upon the purchaser's failure to complete payment in a reasonable time.
Land & Property — Equitable Interest — Effect of Deposit Payment — Vendor as Trustee
In a deal of immovable property, upon payment of a deposit, property passes to the purchaser who acquires an equitable interest in the property and the vendor becomes the trustee who holds the property in trust for the purchaser. The legal title remains with the vendor until the final payment when the legal title passes to the purchaser. However, this does not entitle the purchaser to indefinitely delay or never pay the balance of the contractual price.
Contract Law — Rescission — Effect on Subsequent Sale to Third Party
Where a purchaser acknowledges having failed to complete payment of the purchase price on land and orally agrees to be refunded the contract price, the purchaser ceases to have any interest in the land. The vendor, having rescinded the contract, may pass good title to a third party purchaser and is at liberty to deal with the land in any manner she deems fit.
Contract Law — Rescission — Obligation to Refund Purchase Price
Where a vendor rescinds a land sale contract due to the purchaser's breach and regains possession and ownership of the land which is then sold to a third party, the vendor cannot be allowed to regain the land and at the same time retain money received on the contract of sale. The vendor must refund the purchase price already paid by the defaulting purchaser.
Civil Procedure — Unpleaded Matters — Power of Court to Grant Relief
Under section 98 of the Civil Procedure Act and section 9 of the Magistrates Courts Act, a court may make an order on an unpleaded matter for ends of justice to be met and to ensure that all matters in controversy between the parties may be completely and finally determined and multiplicities of legal proceedings are avoided. A court can decide an unpleaded matter if the parties have led evidence and addressed court on the matter in order to arrive at a correct decision and finally determine the controversy between the parties.

Legislation cited (2)

Cases cited (6)

  • Kifamunte Henry v Uganda (Supreme Court Criminal Appeal No. 10 of 1997)
  • Sharif Osman v Haji Haruna Mulangira (Supreme Court Civil Appeal No. 38 of 1995)
  • Osuman v Jaffer & Others v Nandlalmak H. Karia & Another (Supreme Court Civil Appeal No. 53 of 1995)
  • Nakana Trading Co. Ltd v Coffee Marketing Board (High Court Civil Suit No. 137 of 1991)
  • Simba (K) Ltd & 4 Others v UBC (Supreme Court Civil Appeal No. 3 of 2014)
  • Contract by Cheshire and Fifoot, 6th edition, page 466

Full judgment

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

Kemigisa v Wamani (Civil Appeal 6 of 2022) [2024] UGHC 37 (25 January 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.