Nipun Bhatia & Another v Boutique Shazim Limited (Civil Appeal No. 179 of 2015)

Observed later treatment

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.

Holding

The Court of Appeal allowed the appeal, holding that where a sale agreement expressly provides that it will lapse on failure to pay by a stipulated date, time is of the essence and the agreement lapses automatically on default. The trial judge erred in relying on extraneous evidence (a separate tenancy agreement and cheque dates), contrary to Evidence Act s.91, to find that time was not of the essence. Specific performance cannot be granted to a purchaser in breach, who came to equity with unclean hands and was guilty of laches, and where the order caused extreme hardship. The respondent became a trespasser upon lapse of the agreement and was liable for mesne profits.

Outcome

Appeal allowed; High Court judgment set aside; mesne profits of US$ 327,356 plus US$ 3,000 per month awarded to appellants until vacant possession delivered

Facts

In July 1995 the second appellant and her late husband, registered proprietors of property on Buganda Road, entered into a sale agreement with the respondent for US$ 117,300. The respondent paid US$ 50,000 on execution. Clause 2(b) provided that the balance of US$ 67,300 was payable within 75 days, failing which the agreement would lapse and the property revert to the vendors, subject only to a refund of the US$ 50,000. The respondent paid the balance nine days after the deadline. The vendors rejected the late payment on the basis the contract had lapsed and tendered a refund of the deposit, which the respondent rejected. The respondent sued for specific performance. After protracted litigation, the High Court entered judgment for the respondent, finding time was not of the essence and granting specific performance, transferring title to the respondent and dismissing the appellants' counterclaim. The appellants appealed.

Issues

1. Whether the trial court erred in treating the question of whether time was of the essence as an issue when it was not raised in the pleadings.
2. Whether the appellants were to blame for the respondent's failure to pay the balance of the purchase price by failing to supply payment details.
3. Whether the trial court erred in granting specific performance in favour of a purchaser who was in breach of a lapsed contract.
4. Whether the respondent became a trespasser upon lapse of the sale agreement, entitling the appellants to mesne profits.

Orders

• The Judgment of the High Court is set aside.
• Mesne profits are granted to the appellant to be paid by the respondent in the sum of US$ 327,356.00 for use and occupation of the premises for the period 1st January 1998 to 30 October 2010, and thereafter at a rate of US$ 3,000 per month until vacant possession of the property is delivered to the appellant.
• Costs of the suit are awarded to the appellants in this Court and in the High Court.

Rules and key headnotes

Legislation cited (13)

• Contracts Act cap 73 s.64
• Contracts Act cap 73 s.64(2)(b)
• Contracts Act cap 73 s.64(2)(e)
• Contracts Act cap 73 s.47
• Evidence Act cap 6 s.91
• Evidence Act cap 6 s.79
• Judicature Act s.14(3)
• Judicature Act s.14(4)
• Civil Procedure Rules Order 15 rule 1(1)
• Civil Procedure Rules Order 15 rule 1(2)
• Civil Procedure Rules Order 15 rule 1(5)
• Judicature (Court of Appeal Rules) Directions rule 30(1)
• Bills of Exchange Act cap 68

Cases cited (14)

• Interfreight Forwarders Ltd v East African Development Bank (Civil Appeal No. 33 of 1992)
• Fang Min v Belex Tours & Travel Ltd (Civil Appeal No. 6 of 2013)
• Julius Rwabinumi v Hope Bahimbisomwe (Civil Appeal No. 10 of 2009)
• Osman V Mulangwa reported in 1995-1998 2 EA 275
• Jiwaji V Jiwaji [1968] EA 547
• Oriental Insurance Brokers Ltd v Transocean (U) Ltd (Civil Appeal No. 55 of 1995)
• Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 All ER 737
• Steedman V Drinkle & Another [1914-15] ALL ER 298
• Singh V Parmar [1971] EA 210
• Sharif Osman v Haji Haruna Mulangwa (Civil Appeal No. 38 of 1995)
• Manzoor V Baram [2003] 2 EA 580
• Lamure V Dixon L.R.6 HL 414
• Fr. Narsensio Begumisa and 3 Others v Eric Tibebaga (Civil Appeal No. 17 of 2002)
• Odd Jobs V Mubia [1970] EA 476

Cases citing this judgment (4)

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.

• Asiimwe Dickson v Crown Beverages Limited and Another (Miscellaneous Application 2157 of 2024)
• Sal Oil Limited v Kiritkumar Bhikhulal Shah and Others (Civil Suit No. 52 of 2022)
• Bhatia and Another v Boutique Shazim Ltd and 4 Others (Miscellaneous Application 123 of 2023)
• Boutique Shazim Limited v Bhatia & Another (Civil Appeal 4 of 2020)

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