Wakilii

Lin Chunxiong and Another v Haji Lubega (Civil Suit 324 of 2021)

High Court · [2023] UGCOMMC 77 · 2023 Judgment for Plaintiffs AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money and breach of contract following a settlement agreement
Decision
Judgment entered for the Plaintiffs with orders for payment of UGX 238,000,000 plus interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that a land sale agreement between a non-citizen and a Ugandan citizen, though initially prohibited under the Land Act, was saved by the exceptions in the Contracts Act where the non-citizen was ignorant of the illegality and the parties subsequently entered a memorandum of understanding to transfer the land to a Ugandan citizen. The settlement agreement requiring the defendant to refund UGX 238,000,000 was valid and enforceable, as the defendant failed to prove torture or duress. The defendant breached the settlement agreement by failing to refund the money.

Outcome

Judgment entered for the Plaintiffs with orders for payment of UGX 238,000,000 plus interest and costs

Facts

The 1st Plaintiff, a Chinese national, purchased land from the Defendant for UGX 250,000,000 under a sale agreement dated 4 May 2018. Upon realizing he could not legally acquire freehold land as a non-citizen, the parties entered a memorandum of understanding on 20 November 2018 to transfer the land to the 2nd Plaintiff, a Ugandan national. The Plaintiffs jointly paid UGX 238,000,000 to the Defendant, and the land was transferred to the 2nd Plaintiff on 29 January 2019. The Defendant refused to give vacant possession. The Plaintiffs instituted criminal proceedings, following which the parties entered a settlement agreement on 28 July 2020 requiring the Plaintiffs to return the certificate of title and the Defendant to refund UGX 238,000,000 within four months. The Plaintiffs complied but the Defendant did not refund the money. The Defendant counterclaimed, alleging the settlement was obtained through torture and coercion and that he was owed UGX 22,000,000 as an unpaid balance.

Issues

  1. Whether the Settlement Agreement dated 28th July 2020 is valid, and if so whether the Defendant breached the terms thereof
  2. Whether the 1st Plaintiff is indebted to the Defendant in the sum of UGX 22,000,000 as alleged
  3. What remedies are available to the parties?

Orders

  • Preliminary objection overruled.
  • Judgment entered for the Plaintiffs against the Defendant.
  • Payment of UGX 238,000,000 ordered.
  • Interest of 8% per annum on UGX 238,000,000 from the date of filing the suit until payment in full.
  • Costs of the suit awarded to the Plaintiffs.
  • Defendant's counterclaim dismissed.

Rules and key headnotes

Illegality — Non-citizen acquisition of freehold land — Exceptions under Contracts Act
Where a contract's object is prohibited by law but the plaintiff was ignorant of the illegality at the time of payment and the illegal object was never effected, the plaintiff may recover money paid under the contract pursuant to the exceptions in section 19(2)(a) and (b) of the Contracts Act 2010.
Land acquisition — Non-citizens — Freehold and mailo land
A land sale agreement in itself does not constitute acquisition of freehold land unless the registered owner signs a transfer form, the form is lodged for registration at the relevant Land Registry and given an instrument number, and the instrument of transfer is registered.
Duress — Threat of prosecution — Validity of settlement agreement
A threat to commit a lawful act, such as lawful arrest and detention by police, does not amount to duress. A contract entered into under duress is voidable, not void, and the party who has the right to avoid the contract loses that right by affirming the contract expressly or impliedly through acquiescence.
Burden of proof — Torture allegations
For a court to find that torture occurred, the victim must present credible evidence properly verified by medical reports. It is insufficient for witnesses to present sworn affidavits claiming torture without medical evidence to corroborate the claims and without explaining how the torture was inflicted.
Breach of contract — Settlement agreements — Enforcement
Where parties enter a valid settlement agreement and one party honours its obligations but the other party fails to perform within the stipulated time, the non-performing party is in breach and the performing party is entitled to enforce the agreement.

Legislation cited (14)

Cases cited (8)

  • Makula International v Cardinal Nsubuga (Supreme Court Civil Appeal No. 4 of 1987)
  • Sherman & Ellis Inc. v. Indiana Mutual Causality Co. 41 Fed Rep (2nd) 588
  • Nsibambi Mudashiru v Kasule Joseph (High Court Civil Suit No. 244 of 2014)
  • Henry Williams v. James Bayley (1866) L.R. 1 H.L.200
  • Livingstone v. Rawyards Coal Co. (1880) 5. App Cas 259
  • Bukeni Ali and 48 Others v Attorney General (High Court Miscellaneous Cause No. 10 of 2021)
  • Rose Nafuuma Muyiisa v Ruth Kijambu (Civil Suit No. 651 of 2013)
  • Nilecom Ltd v Kodjo Enterprises Limited (Civil Suit No. 18 of 2014)

Full judgment

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

Lin Chunxiong and Another v Haji Lubega (Civil Suit 324 of 2021) [2023] UGCommC 77 (27 July 2023)
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.