Wakilii

Mac Wange and Another v Danish Land Owners Company Limited and Another (Civil Suit No. 211 of 2012)

High Court · [2013] UGHC 269 · 2013 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of sale agreement and recovery of purchase price, transferred from Commercial Division
Decision
Property ordered to be transferred to plaintiffs; defendants to execute transfer within 7 days; general damages awarded

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The plaintiffs paid UGX 98,175,431.75, exceeding the first instalment under a memorandum of sale for land and development of a house, but the defendants failed to complete construction by the agreed date. The court found the defendants in material breach, noted fraudulent conduct in transferring control to an associated company post-sale, and ordered transfer of the property to the plaintiffs, awarded general damages of UGX 50,000,000, and declared resolutions purporting to vest control in the second defendant null and void.

Outcome

Property ordered to be transferred to plaintiffs; defendants to execute transfer within 7 days; general damages awarded

Facts

On 20 April 2007, the plaintiffs entered a memorandum of sale agreement with the 1st defendant for purchase of land (Block 395 Plot 1264) and construction of a house for UGX 125,000,000, payable in two instalments. Payment was to be remitted to the 2nd defendant's bank account in Denmark on the 1st defendant's direction. The plaintiffs transferred US$36,764 on 25 April 2007 and NOK 80,000 on 21 May 2007, totalling approximately UGX 98,175,431.75, exceeding the first instalment. Construction was to be completed by 1 June 2007, but the defendants failed to complete the house and boy's quarters by that date. The plaintiffs terminated the agreement on 19 July 2007. On 20 January 2008, the 2nd defendant responded by email acknowledging breach and offering refund subject to resale of the property. On 21 September 2007, the 1st defendant's board resolved to transfer all certificates of title and powers of attorney to the 2nd defendant. The plaintiffs lodged a caveat on the property. The plaintiffs' relatives occupied the incomplete house with the defendants' approval, suggesting reinstatement of the contract.

Issues

  1. Whether the parties to the contract fulfilled their obligations.
  2. Whether the 2nd defendant was properly joined to the suit.
  3. Whether there was a breach of the memorandum of sale.
  4. What remedies are available to the parties.

Orders

  • The 1st defendant is ordered to hand over the property comprised in Mailo Register Block 395 Plot 1264 at Seeking measuring approximately 0.080 hectares to the plaintiffs within 3 weeks.
  • The resolutions of Danish Land Owners Ltd Board of Directors made on 21st September 2007 signed by Soren Ostrup are rendered null and void for fraud.
  • General damages of UGX 50,000,000 are awarded to the plaintiffs for breach of contract and inconveniences suffered.
  • Interest of 20% per annum is awarded from the date of judgment until payment in full.
  • The Commissioner Land Registration is directed to register the plaintiffs jointly as proprietors.
  • The defendants are directed to sign the transfer forms immediately and not later than 7 days from the date of this judgment.
  • Costs of the suit are awarded to the plaintiffs.

Rules and key headnotes

Breach of Contract — Failure to Complete Performance by Agreed Date — Vendor's Obligation
Where a vendor undertakes by memorandum of sale to complete construction of a residential house and developments by a specified date and the purchaser pays a substantial portion of the purchase price, the vendor's failure to complete by the agreed date constitutes a material breach of contract, entitling the purchaser to remedies including specific performance or damages.
Cancellation and Reinstatement — Conduct After Purported Termination
Where a purchaser purports to cancel a sale agreement and the vendor thereafter approves occupation of the subject property by the purchaser's relatives, such conduct by the vendor may constitute evidence of reinstatement of the contract and waiver of the cancellation.
Fraudulent Conduct — Post-Sale Transfer of Title and Control
A vendor who, after entering a binding sale agreement with a purchaser, purports by board resolution to transfer certificates of title and powers of attorney over the subject property to a related company acts fraudulently. Such resolutions are void and constitute a breach of the highest order.
Joinder of Parties — Entity Acting as Agent or Principal
Under Order 1 rule 9 of the Civil Procedure Rules, no suit can be defeated by misjoinder or non-joinder of parties. Where a party receives payments under a sale agreement on the express direction of the vendor and subsequently asserts control over the subject property, that party is properly joined as a defendant.
Burden of Proof — Discharge on Balance of Probabilities
Under section 103 of the Evidence Act, the burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence. A party who asserts receipt of a lesser sum than claimed by the opposing party bears the burden of proving that assertion on a balance of probabilities.
Remedies — Specific Performance After Substantial Payment
Where a purchaser has paid a substantial part of the purchase price and the vendor has failed to complete agreed developments, the court may order specific performance by directing transfer of the property to the purchaser rather than ordering refund, particularly where the purchaser seeks such alternative relief and the vendor has acted fraudulently.

Legislation cited (3)

Full judgment

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Mac Wange and Another v Danish Land Owners Company Limited and Another (Civil Suit No. 211 of 2012) [2013] UGHC 269 (30 April 2013)
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.