Talugende v Akright Projects Limited and 2 Others (Civil Suit No. 2789 of 2016)

Observed later treatment

No later-treatment classification is recorded for this judgment.

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

Held that the plaintiff did not breach the sale agreement where the defendant accepted late payments without objection and acknowledged the plaintiff's ownership in writing, thereby varying the payment terms by conduct. The first defendant breached the agreement by using the certificate of title as loan collateral contrary to an express contractual prohibition. The caveat lodged by the second defendant on behalf of the third defendant was illegal as the sale agreement predated the loan agreement and the property was not available for encumbrances. Certificate of title ordered to be surrendered to the plaintiff, caveat vacated, and damages awarded.

Outcome

Certificate of title and transfer forms to be executed in favour of the plaintiff; caveat vacated; damages and costs awarded to plaintiff

Facts

On 1 June 2006, the plaintiff and first defendant entered into an agreement for the sale of land and developments on Block 395 Plot 1412, Busiro, Sekiwunga, Mengo for UGX 120,000,000. The plaintiff completed payment by April 2009, three years late, but the first defendant accepted all payments without objection and acknowledged the plaintiff's ownership in a letter dated 4 January 2008. The first defendant failed to deliver the certificate of title as agreed. On 24 February 2009, the first defendant entered into a loan agreement with the third defendant, using the suit property as collateral, contrary to Clause 10 of the sale agreement which prohibited transactions affecting the property. The second defendant, as director of the third defendant, lodged a caveat on the property on 15 September 2009. The plaintiff discovered these encumbrances when attempting to register himself on the title and lodged his own caveat. The second defendant demanded UGX 50,000,000 from the plaintiff in exchange for releasing the title, which the plaintiff rejected. The plaintiff incurred travel expenses from the United Kingdom on four occasions to pursue the matter. The defendants failed to appear at trial.

Issues

1. Whether the Plaintiff breached the agreement of sale?
2. Whether the 1st Defendant breached the agreement of sale?
3. Whether the 2nd and 3rd Defendants are bonafide third parties whose interest in the suit property is superior to the Plaintiff's claim?
4. What remedies are available to the parties?

Orders

• A declaration that the 1st Defendant breached the agreement of sale of the suit land and developments comprised in Block 395 Plot 1412, Busiro, Sekiwunga, Mengo.
• A declaration that the 2nd and 3rd Defendants have no interest whatsoever in the suit land.
• The caveat on the suit land is hereby vacated.
• An order for the Defendants to surrender the certificate of title to the Plaintiff.
• Special damages of GBP 1,920.
• General damages of UGX 30,000,000.
• Interest at 8% on special and general damages.
• Costs of the suit.

Rules and key headnotes

Legislation cited (7)

• Evidence Act Cap 6 s.114
• Contracts Act 2010 s.10
• Contracts Act 2010 s.33
• Contracts Act 2010 s.67
• Registration of Titles Act s.139
• Registration of Titles Act s.142
• Civil Procedure Rules Order 17 Rule 4

Cases cited (2)

• Yonasani Kanyomozi v Motor Mart (U) Ltd (Supreme Court Civil Appeal No. 15 of 1995)
• Nurdin Randali Vs Lombank Ltd (1963) EA 304

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