Wakilii

Tumusiime v Idringi (Civil Suit No. 321 of 2018)

High Court · [2021] UGCOMMC 76 · 2021 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 and misrepresentation, heard ex parte after defendant failed to appear
Decision
Judgment entered in favour of the plaintiff with damages, interest, and costs

Observed later treatment

Cited — treatment unverified cited in 2 (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 2 times with no adverse treatment recorded; not yet tested on the merits. 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

A person who executes a tenancy agreement purporting to act as a director of a non-existent company is personally bound by the pre-incorporation contract under Companies Act s.54(1). The defendant misrepresented the existence of House of Laughter Bar and Grill Limited, signed the agreement as its director when the company never existed, and subsequently breached the tenancy by failing to pay rent, abandoning construction, and destroying the plaintiff's water well. The court held the defendant personally liable and awarded special damages of UGX 484,264,750 and general damages of UGX 30,000,000.

Outcome

Judgment entered in favour of the plaintiff with damages, interest, and costs

Facts

In March 2016 the defendant approached the plaintiff, a registered proprietor of land at Namugongo operating a bar and car wash, representing himself as carrying on business with David Greenhalgh in a company called House of Laughter Bar and Grill Limited. The parties signed a tenancy agreement on 09/04/2016 under which the defendant would pay UGX 4,500,000 monthly rent from June 2016, demolish existing structures, and construct new ones at his own cost. The defendant took possession in July 2016, demolished the plaintiff's structures including a shallow well, but abandoned construction in September 2016 and failed to pay rent. A company search on 15/05/2018 revealed House of Laughter Bar and Grill Limited had never existed. A different company, House of Laughter Limited, was incorporated on 16/06/2016 after the tenancy agreement was signed. The plaintiff terminated the tenancy by re-entry and sued the defendant personally for breach of contract and misrepresentation.

Issues

  1. Whether the defendant made any false representation to the plaintiff as to the existence of House of Laughter Bar and Grill Limited.
  2. Whether the defendant signed a tenancy agreement dated 09/04/2016 in respect of the plaintiff's property as a director of House of Laughter Bar and Grill Limited.
  3. Whether House of Laughter Bar and Grill Limited was in existence at the time of signing the said tenancy agreement.
  4. Whether the defendant is personally liable on the said agreement.
  5. Whether the defendant breached the terms of the said tenancy.
  6. Whether the plaintiff suffered any loss and damage.
  7. Whether the plaintiff is entitled to the reliefs sought.

Orders

  • Declaration that the defendant made a misrepresentation to plaintiff when he purported to act and sign the tenancy agreement as a director of a non-existent company (House of Laughter Bar and Grill Limited).
  • The defendant breached the terms of the tenancy agreement and is held personally liable for the breach and resultant loss and damage.
  • Special damages of UGX 484,264,750 awarded to the plaintiff.
  • Interest on special damages at the rate of 6% per annum from the date of filing the suit until payment in full.
  • General damages of UGX 30,000,000 awarded to the plaintiff.
  • Interest on general damages at the rate of 6% per annum from the date of judgment until payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Pre-incorporation Contracts — Personal Liability of Persons Acting for Non-Existent Companies
Under Companies Act s.54(1), a contract purporting to be made on behalf of a company before the company is formed has effect as one made with the person purporting to act for the company, and that person is personally liable on the contract.
Misrepresentation — False Representation as to Existence of Corporate Entity
A person who represents himself as a director of a company and signs an agreement on behalf of that company knowing the company does not exist makes a false misrepresentation calculated to deceive the other party and induce them to enter into the agreement.
Corporate Capacity — Non-Existent Entities Cannot Sue or Be Sued
A non-existent entity cannot sue or be sued and is incapable of maintaining a suit in court. Where a person purports to act as a director of such an entity, there is no corporate veil under which that person can take shelter.
Breach of Contract — Failure to Perform Contractual Obligations
A breach of contract occurs where a party fails to perform obligations laid upon him by the contract. The innocent party is entitled to a remedy and may treat the contract as discharged if the other party substantially fails to perform his promise.
Special Damages — Standard and Means of Proof
Special damages must be specifically pleaded and proved, but strictly proving does not mean proof must always be documentary. Special damages can be proved by direct evidence of a person who received or paid, or by testimonies of experts conversant with the matters.
Interest Awards — Rates and Principles in Absence of Agreement
Where interest was not agreed upon by the parties, court should award interest that is just and reasonable, taking into account inflation and currency depreciation. Interest awarded by court for an amount to be paid where there was no agreement for its payment should be simple interest, and the law prohibits award of interest that would amount to unjust enrichment.
General Damages — Compensatory Purpose in Breach of Contract
General damages in breach of contract are intended to put the plaintiff in the position he or she would have been in if the defendant had not breached the contract, making good as far as money can do the losses suffered as the natural result of the wrong done.

Legislation cited (5)

Cases cited (29)

  • Kityo Vs Eria Kaddu M9821 HCB 58
  • Kiwalabye Stephen v Kifamba John Musoke (High Court Civil Suit No. 458 of 2012)
  • Zaabwe v Orient Bank Limited (Civil Appeal No. 4 of 2006)
  • AZK Services Limited v Crane Bank Limited (High Court Civil Suit No. 334 of 2016)
  • Wasswa Primo v Moulders (U) Ltd (Miscellaneous Application No. 685 of 2017)
  • Kelner v Baxter (1866) LR 2 CP 174
  • MaatschappiqVonck BVBP v Andreas Lybaert & Another (High Court Civil Suit No. 295 of 2008)
  • Kasozi v DFCU Bank Limited (High Court Civil Suit No. 1326 of 2000)
  • Kvoyeta v Mutebi (Civil Suit No. 781 of 2014)
  • Kyarimpa Sarah v Harreit Nassozi Hewet (High Court Civil Suit No. 793 of 2016)
  • Kasibante v Shell (U) Ltd (High Court Civil Suit No. 542 of 2006)
  • Gapco (U) Ltd v A.S Transporters (U) Ltd (Court of Appeal Civil Appeal No. 18 of 2004)
  • Uganda Telcom v Tanzanite Corporation [2005] 1 EA 351
  • Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Uganda Commercial Bank v Kigozi [2002] 1 EA 305
  • Acire v Myaana Enqola (High Court Civil Suit No. 143 of 1993)
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Hadley v Baxendale (1854) 9 Exch 341
  • Ssali v Attorney General & Others (High Court Civil Suit No. 86 of 2010)
  • Southern Engineering Company Vs Mutia M9851 KLR 730
  • Thunderbolt Technical Services Ltd v Apedu & Another (High Court Civil Suit No. 340 of 2009)
  • Okello James v Attorney General (High Court Civil Suit No. 574 of 2003)
  • Radia v Warid Telecom Ltd (High Court Civil Suit No. 234 of 2011)
  • Kinyera v The Management Committee of Laroo Boarding Primary School (High Court Civil Suit No. 99 of 2013)
  • Bhatia v Crane Bank Ltd (Court of Appeal Civil Appeal No. 75 of 2006)
  • Stanbic Bank Uganda Ltd v Sekaleqa T/A Sekalega Enterprises (High Court Civil Suit No. 185 of 2009)
  • Star Supermarket (U) Ltd v Attorney General (Court of Appeal Civil Appeal No. 34 of 2000)
  • National Pharmacy Ltd Vs Kampala City Council M9791 HCB 25
  • Rwanvindo Aurelia & Another v School Outfitters (U) Ltd (Court of Appeal Civil Appeal No. 53 of 1999)

Cases citing this judgment (2)

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

↓ Download PDF

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

Tumusiime v Idringi (Civil Suit No. 321 of 2018) [2021] UGCommC 76 (19 August 2021)
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.