Wakilii

Muhereza v J & J Trading Co. Ltd and Others (Civil Suit No. 382 of 2018)

High Court · [2022] UGHCCD 256 · 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, fraud, and misrepresentation arising from a property sale and renovation agreement
Decision
Judgment entered for the plaintiff with damages and costs awarded jointly and severally against all three defendants

Observed later treatment

Cited — treatment unverified cited in 3 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 3 times with no adverse treatment recorded; not yet tested on the merits. Citations rising — 3 citing cases on record, 3 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The High Court held that the renovation agreement was void for fraud and misrepresentation where the defendants concealed the existence of insurance cover and secretly claimed indemnity after selling the property to the plaintiff. The court lifted the corporate veil to hold the directors personally liable, finding they had fraudulently enriched themselves at the plaintiff's expense. The plaintiff was awarded special damages of UGX 671,187,680 and general damages of UGX 30,000,000 jointly and severally against all three defendants.

Outcome

Judgment entered for the plaintiff with damages and costs awarded jointly and severally against all three defendants

Facts

The plaintiff purchased property comprising a hotel/guest house business from the defendants for UGX 350,000,000 under an agreement dated 22 January 2016. Before handover, a fire destroyed the property. The defendants persuaded the plaintiff to sign a renovation agreement whereby they would contribute UGX 108,000,000 (later reduced to UGX 100,000,000) toward restoration. The plaintiff borrowed funds and spent UGX 354,675,000 to complete the renovation. The plaintiff later discovered that the property had been insured with AIG Uganda Limited at the time of the fire, and that the 2nd and 3rd defendants had secretly processed and received insurance indemnity of UGX 206,574,183 without disclosing this to the plaintiff. The defendants failed to file a defence despite being served twice with summons.

Issues

  1. Whether the renovation agreement between the plaintiff and the defendants by which he accepted to be paid the sum of UGX 108,000,000 was void on account of fraud or misrepresentation.
  2. Whether the defendants acted wrongfully and/or breached their contract with the plaintiff.
  3. What remedies are available to the parties?

Orders

  • The renovation agreement between the plaintiff and defendants is declared void on account of fraud and misrepresentation.
  • The corporate veil of the 1st defendant is lifted.
  • The plaintiff is awarded special damages of UGX 671,187,680.
  • The plaintiff is awarded general damages of UGX 30,000,000.
  • Interest at 20% per annum is awarded on the special damages from the date of filing until payment in full.
  • Interest at 8% per annum is awarded on the general damages.
  • The 1st, 2nd and 3rd defendants are held jointly and severally liable for all awards.
  • Costs are awarded to the plaintiff.

Rules and key headnotes

Contract Law — Voidable Contracts — Fraud and Misrepresentation — Concealment of Material Facts
Where consent to an agreement is obtained by fraud or misrepresentation, the agreement is voidable at the option of the party whose consent was so obtained. Fraud is committed where there is concealment of a fact by a person having knowledge or belief of the fact, constituting an intentional perversion of truth to induce another to part with something valuable or surrender a legal right.
Contract Law — Unjust Enrichment — Elements — Benefit at Expense of Another
The principle of unjust enrichment requires that the defendant has been enriched by receipt of a benefit, that this enrichment is at the expense of the plaintiff, and that retention of the enrichment is unjust, thereby qualifying restitution.
Contract Law — Breach of Contract — Definition and Consequences
Breach of contract is committed when a party without lawful excuse refuses or fails to perform, performs defectively, or incapacitates himself from performing the contract. It entitles the injured party to sue for damages, treat the contract as discharged, or seek a discretionary remedy.
Company Law — Lifting the Corporate Veil — Fraud by Directors
Under section 20 of the Companies Act 2012, the High Court may lift the corporate veil where a company or its directors are involved in fraud. Fraud must be established to the satisfaction of the court and not merely alleged. Where directors use the company as a mere facade or conduit to perpetrate fraud for their personal benefit, they may be held personally liable.
Company Law — Directors' Liability — Directing Mind and Will of Company
Directors and managers represent the directing mind and will of the company. Where guilty intent or responsibility is being considered, the mind of a company cannot meaningfully be separated from the minds of the directors. The state of mind of directors is the state of mind of the company and is treated by law as such.
Damages & Quantum — Special Damages — Proof Requirements
Special damages must not only be specifically pleaded but must also be strictly proved. Strict proof does not mean proof must always be documentary; special damages can be proved by direct evidence, including evidence of a person who received or paid, or testimonies of experts conversant with the matters.

Legislation cited (5)

Cases cited (14)

  • Fredrick J.K Zaabwe v Orient Bank and Others (Supreme Court Civil Appeal No. 4 of 2006)
  • Betty Kizito v David Kizito Kanonya and 7 Others (Supreme Court Civil Appeal No. 8 of 2018)
  • Greenboat Entertainment Ltd v City Council of Kampala (Civil Suit No. 580 of 2003)
  • Luzinda Marion Babirye v Ssekamatte (Alias Mulwana Samuel) and 4 Others (Civil Suit No. 366 of 2017)
  • Mahabir Kishore & Madhya Paradesh 1990 AIR 313
  • Kensheka v Uganda Development Bank (Civil Suit No. 469 of 2011)
  • Nakana Trading Co. Ltd v Coffee Marketing Board (Civil Suit No. 137 of 1991)
  • Dada Cycles Ltd v Sofitra S.P.R.L. Ltd (High Court Civil Suit No. 656 of 2005)
  • Borham-Carter v. Hyde Park Hotel [1948] 64 TLR
  • Gapco (U) Ltd v A.S. Transporters (U) Ltd (Court of Appeal Civil Appeal No. 18 of 2004)
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Stanbic Bank Uganda Ltd v Ducat Lubricants (U) Ltd and 3 Others (Miscellaneous Application No. 845 of 2013)
  • HL Bolton Co vs TJ Graham and Sons [1956] 3 All ER 624
  • Lennard's Carrying Co Ltd Vs Asiatic Petroleum Co Ltd ([1915) AC 705

Cases citing this judgment (3)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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

Muhereza v J & J Trading Co. Ltd and Others (Civil Suit No. 382 of 2018) [2022] UGHCCD 256 (14 December 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.