Wakilii

Wanendeya & Anor v Group Procurement Ltd (High Court Civil Suit No.1017 of 1997)

High Court · [2003] UGHCCD 3 · 2003 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
Decision
Judgment entered in favour of the plaintiffs with awards of special damages, general damages, interest, and an order for return of certificate of title or payment of property value

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A contract whereby landowners made their certificate of title available to a company as security for credit facilities, in return for monthly rental payments, was valid and enforceable. The defendant's failure to pay the agreed rental and return the certificate constituted breach of contract. The plaintiffs were awarded special damages for arrears of rental, general damages, interest at commercial rate, and an order requiring the defendant to cause release of the title or pay the property's current value.

Outcome

Judgment entered in favour of the plaintiffs with awards of special damages, general damages, interest, and an order for return of certificate of title or payment of property value

Facts

In April 1994, the plaintiffs William Wanendeya and Ida Wanendeya entered into an agreement with the defendant Group Procurement Ltd. Under the agreement, the plaintiffs made their special certificate of title for Plot 122, Sixth Street, Industrial Area, Kampala available to the defendant to use as security for obtaining credit facilities from a bank. In return, the defendant was to pay the plaintiffs rental of shs. 1,350,000/= per month for 12 months and return the certificate free from encumbrance at the end of that period. The plaintiffs executed a power of attorney to facilitate this arrangement. The defendant took possession of both the certificate of title and the power of attorney and used the certificate to secure a loan of €250,000 from the East African Development Bank. However, the defendant failed to pay the agreed rental and did not return the certificate of title. The defendant claimed it was unable to use the title because the Ministry of Land cancelled it due to the existence of two certificates for the same property and a caveat registered by Uganda Commercial Bank. The plaintiffs sued for breach of contract after the defendant failed to honor its obligations for 32 months.

Issues

  1. Whether the power of attorney and the agreement in question were issued or entered into by the plaintiffs in good faith.
  2. Whether the agreement is enforceable.
  3. What remedies are available to the plaintiffs.

Orders

  • The defendant shall pay the plaintiffs a sum of shs. 43,200,000/= as special damages.
  • The defendant shall pay interest on the above sum at the ruling commercial bank rate at the time of filing the suit until payment in full.
  • The defendant shall pay the plaintiffs a sum of shs. 10,000,000/= as general damages for breach of the agreement.
  • The defendant shall cause the Co-operative Bank to release the plaintiffs' title within three months of this judgment or in default thereof the defendant shall pay the plaintiffs the current commercial value of the property on Plot 122, Sixth Street, Industrial Area.
  • The defendant shall bear the costs of the suit.

Rules and key headnotes

Contract Law — Formation and Validity — Essential Elements — Good Faith
A contract entered into with a pure motive and with honesty, where the parties intended to conduct legitimate business, is entered into in good faith even if subsequent practical difficulties arise in its performance.
Contract Law — Enforceability — Valid Contract — Essential Elements
An agreement is valid and enforceable where it is properly reduced in writing by advocates, embodies the vital elements of a contract (offer, acceptance, consideration), expresses the intentions of all parties clearly, is properly witnessed, and has a lawful purpose.
Contract Law — Breach of Contract — Remedies — Special Damages
Where a party fails to pay agreed rental under a contract for use of land title as security, the aggrieved party is entitled to special damages in the form of arrears of rental calculated at the agreed monthly rate for the period of breach.
Contract Law — Breach of Contract — Remedies — Interest
In commercial arrangements, where a party is awarded special damages for breach of contract, interest is properly awarded at the commercial bank rate prevailing at the time of filing the suit until payment in full.
Contract Law — Breach of Contract — Remedies — General Damages
General damages are recoverable for inconvenience and anguish suffered by a party as a result of the other party's failure to honor the terms of an agreement over a prolonged period.
Land & Property — Certificate of Title — Return or Compensation
Where a party has failed to return a certificate of title as agreed and the title is no longer in that party's possession, the court may order the party to cause the entity holding the title to release it within a specified time or, in default, to pay the current commercial value of the property.

Full judgment

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

Wanendeya & Anor v Group Procurement Ltd (High Court Civil Suit No.1017 of 1997) [2003] UGHCCD 3 (3 January 2003)
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.