Wakilii

Nabaggala v Mtn (U) Ltd & Anor (HCT-00-CC-CS 192 of 2013)

High Court · [2014] UGCOMMC 155 · 2014 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for unpaid rent and damages arising from breach of lease agreement
Decision
Plaintiff awarded US$ 67,000 rent arrears, UGX 25,000,000 general damages, interest at court rate on both sums, and costs against 1st Defendant. 2nd Defendant not liable. 1st Defendant to pay 2nd Defendant's costs.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that a lessee who pays rent to a person fraudulently introduced by its own employee as the lessor's representative remains liable to pay the lessor. The 1st Defendant's obligation under the lease was to pay the Plaintiff directly, and payment to an impostor does not discharge that obligation. The 2nd Defendant was not liable as no contractual relationship existed between him and the Plaintiff. Exemplary damages not awarded for breach of contract. General damages and interest at court rate awarded.

Outcome

Plaintiff awarded US$ 67,000 rent arrears, UGX 25,000,000 general damages, interest at court rate on both sums, and costs against 1st Defendant. 2nd Defendant not liable. 1st Defendant to pay 2nd Defendant's costs.

Facts

The Plaintiff owned land in Nantabulirwa, Seeta, Mukono District. In September 2002 she entered a 10-year lease agreement with the 1st Defendant (MTN Uganda Ltd) for a mast site at an annual rent of US$ 7,000. After an initial payment of UGX 8,000,000, no further payments were made until 2012 when the 1st Defendant sought lease renewal. The 1st Defendant's property negotiator, Peter Kawoya, had introduced a different woman to the 2nd Defendant (a law firm) as the Plaintiff and instructed payments be made through that firm. The lease agreement bore wording stating the Plaintiff was represented by the 2nd Defendant's firm, but this was never read to the illiterate Plaintiff, who never instructed the 2nd Defendant. The 2nd Defendant paid rent to the impostor introduced by Kawoya. The Plaintiff never received the rent and sued both Defendants.

Issues

  1. Whether the 1st Defendant is liable to the Plaintiff for unpaid rent.
  2. Whether the 2nd Defendant was liable to the Plaintiff.
  3. What remedies are available to the Plaintiff.

Orders

  • Judgment entered in favour of the Plaintiff against the 1st Defendant.
  • 1st Defendant to pay US$ 67,000 being rent arrears.
  • 1st Defendant to pay general damages of UGX 25,000,000.
  • Interest at court rate on US$ 67,000 from date of default until payment in full.
  • Interest at court rate on UGX 25,000,000 from date of judgment until payment in full.
  • 1st Defendant to pay costs of the suit to the Plaintiff.
  • 1st Defendant to pay costs to the 2nd Defendant.

Rules and key headnotes

Contract Law — Lease Agreements — Rent Payment — Liability Where Payment Made to Impostor
Where a lessee's employee fraudulently introduces an impostor as the lessor's representative and the lessee pays rent to that impostor, the lessee remains liable to pay the rent to the true lessor. Payment to a person who does not represent the lessor does not discharge the lessee's contractual obligation.
Contract Law — Representation — Authority — Absence of Instructions
An advocate cannot be deemed to represent a party in the absence of instructions from that party or a valid power of attorney. The mere insertion of an advocate's name in a contract document does not create a representative relationship if the purported principal never instructed the advocate and the document was not read to the principal.
Damages & Quantum — Exemplary Damages — Unavailability for Breach of Contract
Exemplary damages cannot be awarded for breach of contract. They are an exception to the compensatory principle, awardable only to punish high-handed, malicious, vindictive, or oppressive conduct, and must be confined to exceptional cases.
Damages & Quantum — General Damages — Breach of Lease — Lost Investment Opportunity
General damages for breach of a lease agreement are compensatory and intended to place the plaintiff in as good a position as money could achieve had the breach not occurred. Where a lessor claims lost investment opportunity from unpaid rent, the court must assess damages based on the material loss suffered, ensuring compensation is neither inadequate nor unduly enriching.
Damages & Quantum — Interest — Compound Interest — Conditions for Award
Compound interest is not awarded simply on the basis of indebtedness or delay in payment. It must be founded on the law applicable to the transaction, the nature of the business, the construction of the agreement, trade custom, the parties' intentions, or the consequences of the commercial transaction. Absent evidence of such factors, compound interest will not be granted.
Damages & Quantum — Interest — Court Rate — Discretionary Award
The award of interest at court rate is discretionary. The basis for such an award is that the defendant has kept the plaintiff out of money which the plaintiff could have used, and the defendant has had the benefit of that money. Interest at court rate compensates the plaintiff accordingly.
Evidence — Burden of Proof — Illiterate Party — Failure to Read Back Contract
Where a contract is signed by an illiterate party and not read back to that party, and the defendant adduces no contrary evidence, the court will find that the party did not understand terms inserted into the contract without their knowledge. A failure to read back material terms to an illiterate party may render those terms ineffective against that party.

Cases cited (6)

  • Uganda Revenue Authority v Wanume David Katamirike (CACA 43 of 2010)
  • ESSO Standard (U) Ltd v Semu Amanu Opio (SCCA 3 of 1993)
  • Hall Brothers SS Company Ltd v Young [1939] 1 KB 748
  • Storms v Hutchinson [1905] AC 515
  • Attorney General v Virchan Mithalal & Sons Ltd (SCCA 20 of 2007)
  • Harbutt's Plasticine Ltd v Wayne Tank & Pump Co. Ltd [1970] 1 Ch 447

Full judgment

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

Nabaggala v Mtn (U) Ltd & Anor (HCT-00-CC-CS 192 of 2013) [2014] UGCommC 155 (13 November 2014)
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.