THE REPUBLIC OF UGANDA
IN THE HIGH COURT UGANDA AT KAMPALA
HIGH COURT CIVIL SUIT NO. 411 OF 1998
SHAZIM LIMITED:::::::::::::::::::::: PLAINTIFF
- NORATTAM BHATIA
- HEMANTINNI BHATIA::::::::::::::::::::::::::::::::::DEFENDANTS
( Through Nipun Bhasia as Administrator of Estate)
BEFORE HON. JUSTICE NYANZIYASIN
Back ground facts
- I have deemed this case to be one of those cases where the application of facts is very important. It is also explanation worthy for a case of 1998 is being decided in 2015 almost 17 years since it was instituted.
- The defendant are the registered proprietor of the land situated at and comprised in LRV 247 Folio 1 Plot 12 Buganda Road here in after I will refer to as the “ suit land”.
- On the 4th April 1994 the registered owner of the suit with M/S GALLERIA IN AFRICA LIMITED. The tenancy agreement was for a period of 2 years and 364 days. Pursuant to clause s.(a) of that tenancy agreement the tenant was given by the land lord on option to purchase the suit land on terms and conditions agreed on in the same clause.
- On the 8th April 1994 Gallaria in Africa Ltd assigned its rights under the tenancy agreement to the plaintiff on the 1st July 1995 the plaintiff exercised its right of option to purchase. With agreement of the defendant on agreement of sale for the suit land was entered into the agreed purchase price was USD 117,300. Of that amount the plaintiff paid USD 50,000 leaving an outstanding balance of USD 67,00 USD 50,000 was paid on 7th July and 10th july 1995 through cheques that were postdated.
- The balance of USD 67,300 was to be paid in accordance with clause 2 (b) of the agreement of sale. Clause2(b) gave the plaintiff 75 days within which to pay the balance else the suit land would revert to the vendor subject only to refunding the amount prior paid.
- On or about the 75th day the plaintiffs called Mr. Ebert Byanka the Advocate before whom the agreement of sale was executed the plaintiff called /rag Mr. Byankya from Canada through it Director who appeared as PW1. The purpose and contents of the plaintiff claimed its director called the Advocate from Canada to inquire what the defendant’s bank account was so that it could pay the balance.
- It is claimed in the pleading see paragraph 3(g) of the plaint that on the 13 sept 1995 when Mr. Azim Kassem talked to Mr. Mr. Byankya on phone for details of Byankya promised to called back the next day.
- On the next day it is alleged Mr. Byankya refused to give the bank details . instead on the 15th Sept 1995 M/s Byankya Kihika and company Advocates acting on the instructions of the defendants notified the plaintiff that the sale has lapse by reason of expiry of time.
- That the plaintiff efforts to pay in Uganda later by the 23.09.1995 frustrated by the same firm of Advocates refused to accept the payment. The defendant had then opted to refund the USD 50,000 Paid earlier as take over the property. the plaintiff refused the refund and sued for specific performance of the sale agreement on the 24.Oct 1995.
- The 24.Oct 1999 suit was brought against the attorney of the defendants but it was struck out for non disclosure of cause of action it was HCCS out on 14.04.1998. Under HCCS No. 411/1998 the plaintiff failed a fresh suit against the defendant.
- The case has since then had a disturbing procedural History. For the purpose of this judgment I will adopt the narration of the counsel for the plaintiff and not contested by the defence.
- After filing HCCS No. 411/1998 this court granted a temporary injunction to restrain the defendants from evicting plaintiff from the suit land until the determination of the suit. It means the injunction order has been in place for 17 years now.
- It appears nothing much was done on this file between 1998 to 2004 a period of 6 years but the defendant filed Misc Application No. 505 of 2994 under O.7r11 CPR on the grounds that the main suit was res Judicata and be rejected.
- On the 27th Sept 2005 Justice Opio Aweri( as then was)Struck out HCCS No. 411/1998 on the grounds that it was res Judicata in the view of the earlier decision by justice/ Mukanza (RIP) in HCCS No. cause of action).
- On the above ground alone the plaintiff appeal rides civil appeal No. 36 of 20087.
- On 8th Oct 2009 the court appeal ruled that the suit was not resjudicata.
- The defendants filed a notice to affirm the decision of the High court on the grounds that the plaint did not disclosed a cause of action.
- On 8th October 2009 the court of Appeal ruled that the suit was not resjudicata and that the plaint disclosed a cause of action. The Appeal was allowed with a order that the suit be heard on merit before another judge.
- Vide civil Appeal No. 16 of 2009 the defendants appealed to the supreme court against the decision of the court of Appeal above.
- On 1st August 2010 the Supreme Court decisions the Appeal and affirmed of the order of the court of appeal that the file be place before another judge for hearing. Hence this hearing.
- This file was heard by Justice Zerurikize to close to its and except one defence witness who was heard by myself justice V. Zehurikiza is now retired this being a court of first instance the above detailed account is necessary for the benefit of litigant and other courts in case need arises.
- At the trial the plaintiff was represented by learned counsel Nerima Nelson of Nambale & co. advocates while the defence case was conducted by learned counsel Mesembe Kanyerezi of MMAKS Advocates. I am thankful to the two for the relevant guidance they gave to this court.
- From the record and submission of both counsel the facts stated in paragraph 1 to 5 of this judgment are admitted facts .
- The following issues were agreed namely.
1). whether the sale agreement between the parties dated 1stJuly1995 is specificallyenforceable by the plaintiff or whether it lapsed in accordance with clause 2 (b) of the sale agreement
2). of the sale enforceablewhether the plaintiff isentitled to the remedied prayed for in the plaint.
3). If on the other hand the sale agreement lapsed, whether the defendants are entitled to the remedies in the counterclaim.
a). an order of……
b). measure profile
c). general damages for trespass
d). costs of the counter claim
26. This court will ensure the issues in the order theywere presented in the scheduling by the parties.
27. whether the sale agreement between the parties dated 1stJuly 1995 is specificallyenforceable by the plaintiff or whether it lapsed in accordance with clause 2(b) of the sales agreement.
28. for reasons of clarity I havefound itimportant toreproduce clause 2(b) of exh p.2 in this judgment as it is directly in issue No wonder that both learned advocates reproduced it in their submission.
29. clause 2(b) reads as follows2 the consideration herein reservedshall be payable in the fillowing manner;
b) the balance of USD 67300( united states Dollars sixty seven thousandthree Hundred ) to be payable in within 75 days of thedate of execution provided the said payment shall carry interest of one and a half percent on a reducing balance permonth which shall be paid a long with the principle on the date of effecting the payment. For AVOIDANCE OF DOUBT if the payment is not effected within 78 days of the date of execution the sale shall be deemed to have lapsed and the property shall revert to the vendor who willhinder no obligationsave for effecting a fall refund of any payment made at the time of …….. The agreement
30. Issue number one is structured in such a way that the two sub issues refers to the same thing. In order to reach a conclusion at the agreement in EXH p.2 is specifically enforceable by the plaintiff it must first have to be decided whether the sale agreement had not lapse by reason of clause 2(b).
31. So the issued to decide here covering both issues isessence of time. Each side presented sprinted arguments on this point. Learned counsel Nalime for the plaintiff strongly urged that the agreementdid not lapse at timewas notessence. He gave the following reasons.
32. that the defendantsconduct showed that they were not stuck that time be adhered to executing the contractual obligation Mr, Nalime drew example from exh p.1 where the plaintiff predecessor in filehad the option to purchase the suit property within 12 months from commencement of the tenancy at USD 120,000 payable in one installment. He refered to clause 5 (c) of exh P.1 that the 12 monthsfor purchasing the property expired on 30. 06.1995 Butthe parties concluded the sale agreement the following day the 1stJuly1995 that DW1 in cross examination agreed that the relaxed the terms of payment fromUSD 117,300 payable in two installments . To the learned counsel that was evidence that the defendantnever required stuckedheverence to timr schedules the second examplethe cited wasdrawn from exh p.2, he argued that clause 2 (a) expressly required that USD 50,000 be paid at the execution of the agreement but 2(.. exh P.2 provided
2) theconsideration were in reservedstill be payable in the following manner
a). USD 50,000( United states Dollars FiftyThousand) be paid on execution of this agreement.
33 That contrary to the above provision the agreement was executed on 1/7/1995 and paymentwas by post dated cheque in uanda shillings …
1). cheques for shs 24,500,000 dated 7thJuly 1995
cheque for 24,500,000 dated10,july 1995
He concludedthat the above manner of payment was a devation form the stick terms of the agreement on payment
34. to support the plaintiff ‘s case andthus reasoning Mr. Mehime cited to this courtiscase ofOSMAN VS- MULANGIWA[1995-1998] E.A 275which I will request to later.
35. the second reason the plaintiff’s advocateadvanced was that exh p.2 did not ascertainany mode of payment that Pw1 toldcourt that the sales agreement didnot specify where how andthe mode of payment of the balance. That Pw1 knew ofno instruction on how he could pay the balance. Thathe didnot know of the where about of Mr.Bhatia who was to relieve the payment that was so because Mr. Bhatia was travelling betweenIndia and other parts of the world
36. counsel found theadmissions made by Mr. Bhatia Niphen DW1 in his evidence of cross examination relevant for provethis point . He stated that DW1 concluded that
1). The agreement does not state the place of payment of the price.
11) That he did not write or telephone instructing the plaintiff to pay through Byankya kiluke & co Advocates.
III) He went to India after the agreement but he did not communicate to the plaintiff
IV) That at the material time he was staying atfairway Hotel as a quest but di not communicates to the plaintiff
37. That in the circumstances that was reasonable to ask Mr. Byankya counsel for both parties to advis on the mode of remuting the balance. He asked PW1 to call the next day14.09.1995 . He PW1 called but told court he was not assisted.
To prove further that the agreement did not lapse Mr. Nelima attacked Mr. Byankya’s latter that res…….. the agreement on 15th Sept 1995 Mr. Byankya wrote to the plaintiff a letter exhibited is D.1 stating that the agreement had lapsed due to failure to pay the balance with 75 days.
38 Mr. Naline argued in first that Mr. Byankya had actedfor both parties in the cretion of exhibit p.2 that forthat reason was letter to oneof his client was in contravention of Rule 4 of the Advocates Professional conduct regulationS1 267-2 for the same reasons he termsthus learned friends latter on illegality that can not be conducted bycourt . in essence he appeared to say that the notice of termination was involved.
39. the last point argued was that the refundmade for USD 50,000 braeched clause 2(b) on provisions relating to refund . He gave two reasons.
That exhibit D1 noticeof termination merely offered to refund the money but less accrued rental and other obligations arising from the tenancy.
That vide exh D3 D4& D5 the defendant lawyers purportedto refund USD 35,000/= instead of USD50,000/= which he plaintiff rejected
He concluded this clause 2 (b) on refund provided for the full amountand nevercatered fordeductions.
40. Mr. Masimbe Kenyereza learned counsel for the defendants strongly argued that time in the present case was of essence like this court he reproduced clause 2 of exh p.2 at page 4 ofhis written submission after he hadserved three(3) sub issues out ofissues number one.
41.A The sub issues were ing….
(i), whether time was of essence in relation to Ehb P.2 execution
(ii). If so what are consequences ofthe plaintiff’s failure to pay in time.
(iii). Whether that failure was by reason of foult on the first of the defendant.
41B. learned counsel analYSED EXH P.2 Clause2(b) and submitted that the plaintiff was supposed to pay the balance of 67,300.USD with 75 days from he 1/7/1995 tha the 75 days were due to expire by the 14 september 1995 that by that time the plaintiff had not paid the balance interest as required under claus2(b)
42. from his point of view under Exh p.2 time was of essence in relation to the payment of thebalance of USD67,300,. He cited to this court Halsbary laws of England 4th Edition Vol a (1) paragraph 931 the gist of which may be paraphrased as below
931” time not generally of essence atcommon law stipulation as to time in contracts were as a general rule and particularly in less contracts for sale of land
Consider to be of essence of the contract even if they were not expressed to be so and were continued as condition precedent……………………………
However in the exercise of its jurisdiction to decree specific performance the court of chancery adopted the rule especially in the contracts for sale of land that stipulated as totime were not to be regarded as of essence ofcontract unless either they were made so by were made so by express terms or it après terms or it appears from the nature of contract as the surrounding circumstances that such were the intention of the parties……………………… unless there was an expressstipulation that…………………. Thattime should be of essence of the contract specific performance would be decred even though the plaintif failedto complete the contract
43. he sought to strengthen the above argued by citing the East African decision of SYEDNA& ORS VSJAM L.S ENG MEERING CO. 1973)E.A254 where the holding reflects the spirit of paraqgraph 931 Halbury lawsof England(supra) the subject contract in that case whicvh was supplemented to an ealier agreement this supplemental agreement provided for payment of the balance at a fixed dateof which the agreement would be ended and the sum ealier paidforfeined there was not payment in the time stipulad in the supplemental agreement though there wasan ealier deposit of shs 100,000 out of shs 250,000/=.
44.A The Court held that time was of essence to the contract that the plaintiff was to pay the balance on 15.march 1971 and he did not. Court also allowed that the deposit of shs 100,000 easier deposited be forfeited as the contract provided.
44.B. counsel then drew a way close and applicable relationship between that case and the present clause 2(b) of exh p.2(b) he was more interest in the ollowing gist if exh P.2 claus 2(b)
FOR AVOIDANCE OF DOOBY if payment is not effectd with 75 days of the date of execution, thus agreement shall be deemed to have lapsed and the property shall revest to the vendor……………………………………………………………………………..
45. by quoting all the above counselintended to show that unlike case where here is no express stipulation on time being of essence and the consequences therefore thepresent case invlause 2 (b) provided for both.
46. he argued thatthe situation in OSMAN-VS- MULANGWA (supra) was distinguishable for the present case and can not help it. That in that case although the dates of payment had been indicated in the agreement there was no express stipulation making time of payment to be of essence suchas providing for consequences in relation to the continuation of the contract in the event of failure to pay by the date stipulated.
47. on the consequences of failure to pay in time Mr. Mesebe argued that time within which to payexpired on the14, sept 1990 that by that time contrary to Claus 2(b) the plaintiff had not paid any interest that it was the plaintiff own admission in evidence. In evidence that it was on the 13th day of September 1995 at 15:14 hrs Ugandan time that its director Mr. Azim Kassam(PW1) made his first callto the plaintiff’s defendant’s lawyer allegedly to obtained the bank account details of the defendant to which payment should be made see page 13 typed proceedings on evidence of PW1)
48. THAT IN EVIDENCE Pw1 admitted that he was able to to pay USD 50,000 deposit without having had the bank account he furtheradmitted that there was nothing in the agreement that bared payment by cheques or bank draft drawn in the names of the both case he would notneed the account number that the same would be trial if he paid by cash.
49. counsel alsousing Mr. Byenkya evidence submitted that whenthe plaintiff called the advocate on 13.09,2005 the purpose of the call was notto aske for bank account details but for requestfor an extension of 2 months for payment of the balance. But Byenkya told him he had no instructions on the matter but would consu;lt his client NipunBhatia the next dy Byankya advised him that the extension would not be granted and he had to pay the balance by close of business oin accordance with the agreement.
50. he asked court to ignore PW1’S VERSION OF THE CONVERSION THAT Byanya washostile that court accept Byankya version on thequotatopn of validity of exhD.1 Byakya letter of termination of exh p.2 Mr. mesembe presented he argument below.
“ thefa not exhibits P.7(a) and(b) and p.8 (a) and(b) put forward by the plaintiff in laiming that Mr. Byankya had at onepoint been its lawyer were clerity explained by Mr. Byankya in his testimony as those fee notes were issued pursuant to clause it of the agreement which made thepurchaseliable for the fee forpreparationof the agreement this did not and does not constitute an advocates client relationship and in any event not one in the advocatecomes to learn of confidentialinformation which would be prejudicial to the client.
51. He prayed in conclusion that court funds that time was of essence to the performance of the obligation to pay the balance under exh p2 and that the failure o do so bythe plaintiff can not be visited on any conduct by the defendants.
52. the above is how best each party’s case could be stated in the judgment however suffice to say that all the submissions were considered by this court. I will answer issueone theway Mr. Nelime for the plaintiff presented issues but Mr. Masule own framed issued but which I allowed forreasons of relevance will be answered. That issued is whether the failure to pay in time if court so funds was by reason of fault of the defendants.
54 Mr.Nelima’sargument for the plaintiff was time was not of essence for among other reasons that though the transaction between the parties time frame work and other terms were being relaxed in other word not strictly adhered to that has to be born outby evidence in my view.
55. clause 5 (c) of EXH p.1 provided as follows
“ it is agred that the tenant shall have the first option to purchase the property exercisable within twelve months of the commencement of the terms created herein at a price of USD 120,000( ONE Hundred and wenty Thousand USD) payable in one complete payment……………………………………………..”
56.Clause 1 of exh p.1 provided that the 1st of July 1994 was the commencement date of the tenancy . naturaly he 12 monthwa would expire on the 30.6.1995.
“ with reference to the above tenancy agreement dated April 7th 1994 . I hereby ive notice of our intention to purchase the property as per claus 5 (c) the full purchase price will be paid onor before the expiry of the iption period as optionperiod as per the formular detailed in clause 5(c)
58. he expiry of the option period that is theend of 12 months clause 5(c) gave occurred on the 30.06.1995 by that time no full payment had been made and option to purchase had been executed.
60. in Exh p.2 the terms and effect of 5(c) in exh p.1 were notifiable thre was no payment in full of USD 120,000 in payment before 5(c) of xpp.1 expired on 30/ june 1995 .
Under clause 5(c) of exh p.1 the defendant has thefull right to reject any transaction relating to the option to purchase after the 30.06.1995 . apparently from the record they did not decline to conclude the transaction in exh p.2 despitethe expiry of time. It is also notificeble toug it does not relate to time the parties also changed the purchase price from USD 120,000 TO 117,300 . however that difference could be explained by clause 5(c) ofexh p.1 it self the clause statedthat the payment was to be
“ less cost of renovation not yet off set against the tenancy”
62. when it comes to exh p.2 clause 2 (a) providd as below
2). The consideration herein reserved shall be payable in the following manners
a). USD 50,000(USD Fifty Thousand)
to be paid on execution of this agreement
63. I notice that the clause did notmention how that money would be paid on he execution of exh p.2whether the payment was to be bank draft cash or cheque or any other means it isnot mentioned how this moneywas paidin a marnerother than the provision of clause 2(c) is explained in the oral evidence of pw1 andeh p.4
64. on that point PW1 testified as below (see page 7 of typed proceedings.
“ the USD 50,000 was supposed to be paid on 1.07.1995 the date of execution of the agreement but it was paid in two equal insalment in Uganda shilling at the date of shs980 to 1 USD. Thsestwo instalments were datd 7.07.95 and 10.07 95 thiswas a special argument for the 50,00 USD were paid by cheque it was a cashcheque.
Mr. Nipun Bhatia accepted the cheques and signed on the receipt at the bottom……………………………….
These two cheques were written on 1.07.1995
Exh p.4 it is a small document thecontents of which can be reproduced in this judgment as below
“ I Nipun Bhatia hereby acknowledge receipt of the following payment from Azam kassam
- Cheque No. Payable to Amount
July,7 95 362619 Cash 24,540,000
The above payment is the initial amount of USD 50,000for the purchase of the property at plot 12 Buganda roadcomputed at an agreed rate of 980/= per USD Doller by boutique Shazam LTD REPRESENTED BY Galleria in Africa ltdthe cheques are to be deposited on two separate days
Relieved subject to realization
Sgn Mbhatia it appears the only condition Ms Nepun Bhatia pput before accepting the cheques wastheir relation by endorsing in were subject to realization but the wholly accepted them. In this evidence in cross examination as DW2 he told court the evidence reproduced below
“under the sales agreement the price was USD 117,3000 USD 50,000 was paid on the signing of the agreement the balance of 673000 USD was payable within 75 days of the date of execution of the sale agreement it from 1.07.95 the purchasr paid the deposit and issued a receipt 50,000 was paid in wo part one on 7.07.95 and theother on 10.07.95 we accepted these payment.
Now from the evidenceof both PW1 AND PW2 it is clear that while exh execution of USD 50,000 no such money was paid on that day. Instead postdated cheques o the date of 7th and 10th Jully 1995 were received by a special arrangement which DW1 accepted subject to onlyone condition that the cheques one realized.
Since the plaintiff’s case appear to bethat there was no strict adherence to time frame works I will consider dw2 evidence on the payment that fell due on 14.09 1995 belowis what DW2 said about that payment (pg 27)
“ as I said the balance was payable within 75 days from the date of execution of the agreement ie by 14.09.95 thebalance in a number of installments with 75 days that is from 1.07.95 to 14.09.1995………………………………………………….”
This was the first time in the transaction for the defendant to alk of deadlines and require the stick adherence to time I have noted earlier in his judgment that exhibit p.2 was concluded on the 1/07/95 where the time for exercising the option to purchase lapse.
72. I have also noted with serious concern hat though exh p.2 required payment on execution post dated cheques were accepted instead. None of the cheques was cashable on 1/7/96
The bills of exchange Act cap 68 explained the effect of such payment.
73 s. 12 of the Act deals with antedating and postdating of a bill it states
s.12 1) where a bill…………………… is dated , te date shallunless the contrary is proved deemed o be the true of the drawing a acceptance or endorsement,
74.S. deals wit computation of time of payment relevant, relvant to post dated cheques I will refer to s. 13 (a) it states.13 where the bill is not payable on deemed the date on which it falls due is determined as follows
(a) three days called days of grace where the bill itself does not otherwise provide, added to the ime of payment as fixed by the bill and the bill is due and payable on the lastday of gace
75. s. 12 and 13 of the bills of exchange Act read together would mean thateven the cheques dated 7thand 10th would not be realized onthose datesrealization th conditiond under which thy wee received would be as calculatedunder S. 13 by adding 3 days of race. Assuming therefore the cheques o 7.09.5 was bankedon that day itwould befound aid on 10th .07 95 as the last day of grace subjected o the provisions of s. 13(c) (I) (ii) of e act
(3) where the bill is not payable on demand presentment must be on the it falls due.
77 The above means that DW2 ad to stay wit the bils (cheques) issued o him on 1/7/95 untill 7th and 10thJuly 95 in order to present them. At means ha there was no payment upon execution of exhp.2 in the ayes of the actgoverning bills of exchange and since the cheques were received onlysubject to realization , the effect of ament would be realized on the last dayof grace as S. 13 (a) rovides appling thelaw to the facts of this case Ihold the view that the parties changed the strick nature and mode of payment exh p.2 provided for toa relaxed one. That was so both in terms time and currency as far as the payment of USD 50,000 was concened. As to that effect this… on the paymentof USD 67,300 as balance will be ensured after consideration of all the sub issues under thecurrent issue.
78. te next issueto ensure is where there were ascertained mode of payment of the balance of USD 67,300 it is not in dispute that eh p.2 did not issued itself provide for how the balance would be paid . What wasto be considered here is PW’SDW1 and DW2 evidence on recorda sub matter 1. In so doing this court & seeks to decide whether there were genuine attempts by the plaintiff to paythat wee failed by the defendants as claims.
79 he evidence of PW1 and DW1 show two extreme posections PW1 tesified that:-
“ towards the end of August I travelled to Canada with my family while in Canada on 13.09 95 I called Ebert Byankya of Byenkya & co Advocates who was a lawyer to both parties to give me instructions as to where how and whatmode the payment should be made.
He told me to call on 14. 09 95 and give me the booking and any other detailson the 14.09.5 I called him……………………….”
80 PW1Icontinued evidence on the recordshows that hedid not get the answer from Mr. Byenkya and accused him ofturning hostile . on the same point PW1 stated
“ I called Byankyabecause he was the lawywer for bot arties and in a position to give the requiredinformationand details on every ting also I did not know tathe was traveling back and fromIndia and other places’
……………………………………….within 75 days they could have made a cashpayment or sent a cheque in fact the initia payments were by cheques tey would have madebank drafts and sent it to the defendants. If you send a chequedyou need not know the details of bank account if you want to send it by money transfer then youneed bank detailes……………………………………
I recall ecieving a telephone calls from PW1 at around 13.09.96he indicaed to mehe was calling rom Canada he also indicated thathe was unable to meet thedeadline to pay the balance.
He asked me if I could intercede with Bhatiafirstextensionof time……………………………………………………………………………………..
He wanted about two month I told him I would talk to Bhatia and communicated hefollowing days. I contracted the defendants on phone he saidno . I communicated thatto the plaintiff when he called me back the following day in the afternoon I askedhim to pay on that very day of 14.09.95………………….”
82 DW2 also gave some evidence that is relevant in the consideration of this issuesrelevantly in my view DW2 stated
‘ in 1995 I was staying in India andpartly in Uganda and thatistrue even now I was in Ugandaby 14.09.95 and I wasavailable . I had come for the payment Idid not have to contact them because it was not my obligation. They knew I had an office at Bhatia Building plot 8 Wilson Road i am in real estate business they had myphone numberland line . Mr. Byankya rang me. He did not ask me for my bank accountbecause all they wanted was extension to paythe balance.
If they wanted to pay the money in our account theywould have asked for the detailswhen paying the first deposit theywould have asked or our account at the earliest according to them theyasked for the bank account on the 7th dayi.e 13.09.96 at 3:00 pm . accordingto them they asked Byankya but he does not have my account details and would not be details to have no be expectedto have my account details”
83 should the true position bethat on the 13th 09.95 PW1 asked DW1 for extension of time beyond 14.09.95 it meansI was not lies intention to honour the agreements if it is the otherwisehe says that he wanted the account number so tat he could pay thameans he was doing what ever possible to Honour his con…… obligation . hen court hasto making a finding according to the evidence as presented itis what happened.
84. I must say that the above extreme position of PW1 . DW1 and DW2given in their oral evidence was not enough to quide this court in resolving the issue I decided to trace the proble form the pleading and other placesof amended plaint he plaintiff pleaded as follows.
The plaintiff’s action arose out of breach of contract the facys of whichare as follows
g) on the 13th Sept 1995 Mr. AZZIM Kassem who was at th tie in Canada calledon hone Ebert Byenkya inKampala to ascertain for im te bank account number of the defendants in order to remit moneyto same as the plaintiff did not have the details as Mr. Byankyadid not have the details himelf and asked AZIM Kassem to call back the nexy daywhen Mr. Azim Kasim called Mr.Ebert Byankya the next day 14.09 5 Mr. Byankya refused to give him the details…………………”
85 apart from h addition tha a copy of the telephone bill annexture”F” shall be relied on this paragraph remained the same in accordingin both the oriional and the amended plaintiff.
86. Thedefendant in reply in her written statementof defence particularly to paragrapg 3(g) leaded in paragraph6 pf the defence as below
6. paragraph3(g) is deemed in toto ans the defendant sha ll beput to strictproof thereof the trial that the times fully awere ofits obligation under the agreement to effect pament of the record installment at a specific time and alleged relevance at all in right of the clear terms of the agreement.
87. Additionally paragraph 10 of the WDS is a relevant reply to paragraph3(g) it states.
10) paragraph 4 of the plaint is deemed in total the defendants were never under any contractual obligation to provide details of its account for anyof theinstallment it was notdifficult for any body reading clause 3(g) of the plaintto notice the agreement of seriousness withwhich the claim thatPw1 called Mr. Byankya for bank account details was made
89. of paragraph 6 of the WSD were toadequately reply to the allegations in 3 (g) of the plaint it would have averred in additionhe version DW1 gave in is evidence it would in my view have demed te Pws’ version and added what the defendants though their advocates knew whatto be thetrueversion. Tat was the bestand earliest opportunity for the defendants to plead that Pw1 never asked for bank detailes but for time called Mr. Byankya to asked Mr. Bhatia o extend the time which Mr. Bhatia categorically refuise till evidence timefor his matte to be brought to ligt
70. I amfoced to believed that if this claime by DW1 and DW2 was to be true it would have been reflected in thir written statement of defence the WSD was files on 8TH June 198 by the same firm ofAdvocats were DW1 worked and they were awere of those events.
71. turning to the events that followied the 13thand 1t sept 5 telehone talked between PW1 and DW1 one is guided to make a probable conclusion as to what happened I will start wit the communication in exh D.1 Exhibit D1 was written on 15th Sept 95 that is he day that followed the talk between PW1 AND DW1.
89 I have made the above inference based on the provision of S.113 of the vidence act the section providd as follows S.113
The court may resure theexistence of any facts which itthinkslikely to have happened regard being had to the common cours of natural events human conduct and ublic andprivate business in teir relation to the facts of the particulars case.
90. it Mr. Byankye and Alim Cassim had a day before talked about a request to Mr.Bhatia to extend he ime of payment of the balance and it is Mr. Byankyas evidence that he promised the plaintiff to talk to Bhatila about itbynature of the above provided (s113) I wouldhave expected Mr. Byankya to communicated his failure on extensionoftime exh D1 if it existed.
91. there twoother places of evidence that are very important to review on this matter that is exh p.5 dated6.oct. 95 from James Matsiko Advocates on behalf of the plaintiff to Bhatia of the defendant this letter was eplied tobyM/S Byelyese Khika & co. advocates in exh D4 dated 19 Oct 95 92 in exh p.2 p.5 on behalf of the plaintiff the advocates wrote (see paragraph 4) as bellow……………………………………………………………………….
Mr. Kassem wile in Canada……………………… attempted to obtain the particulars of your bank accountso that he could remit the balance to you but in vein you can not turn around and blame our client for the delay in payment.
93. since the defence case and evidence is that the plaintiff never asked for bank details one would have expected any reply from them ortheir advocates to states that such a request has never been made . however is exh D4 particullalyParagraph3 the defendants advocates replied as below.
“ there was no requirement the consideration be paid into a bank accountsothe claim thathe was tring to ascertain our clients account number is of no relevance tothis matter”
94 in my view th above is a veryin adequate reply the serious alligationswxh p.5 if it is ime as it claimed that Pw1 asked for time extensionthe advocates in exh D4 would have categorically denied hat Azim Kassimever asked for bank details whicle in Canada hat instead he wanted imewithin which their clien refused .
95.The answer given in paragraph4 of eh D4 simply means tat the bank account details were never given because the same was not relevant to the matter as he learned advocates so wrote.
96. Using oherparties of evidence other then the oral ebidence of PW1 and DW1ave come to the conclusionthat it is……… that Pw1 while talkingo Mr. Byankya on 13.09,9 sked himforbank details in order to pay them that he Pw1 asked for extensionof ime. Such conclussuionis nor supportedbyeiher the pleadingdsor the serious security of the evidence exhD1 p.5 nd.D4 and the effect of the provision of S.113 of the evidence Act.
97. mr. Nalima argued and wanted this vcourt to decidethe validity on thelapse notice letter eh D1. The latter is dated 15.09.95 I do not agree this matter should be on issued just like Mr. Masembe argued the lapse it is of no effect itself .
98 secondly exhP.2 the agreement of sale under clause 2 (a)or (b) never provided that notice of clause 2(b) made the lapse automatically and never refered to the issuance of notice………..
99. it would have been diferenet if te notice time expired say like on anydate earlier ten 15.09.95 but having been issued after expiry of time the notice is of no legalconsequences
It does not matter whether it come from lawyers who acte for one sides or advocates who can be aid to be in conflict of interest.
100. However I may only mention that if cases like
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It wouldthenhave been up to pw1 to decide how to use the information of the details of bank account . It absence of the information left a big possible that he wouldhave paid before time elapsed . it is more pro…..to sayhe would pay them saying he would not..
It would not be difficult to conclude that on advocates who acts to a none contentious matter owing or cretes a ….. Relationship between himself and both her `parties he act and would not be allowed to act against the interest of nay one of them.
101. In conclusion on issue one I find that the defendant’s conduct was such that they never required strict audience to time schedules by the plaintiff as evidence has shown from accepting to enter into an agreement to sell thethe land after 30 .1. 95 to accepting payment other then in conforminty wit S clause 2 (a)102 I alsofundthat from the pleadings and evidence it is not true to say
104. the plaintf deserve te assistance of the defendant in order to pay for among other reasons
- tha exh p.2 never provided for how the USD 67,300 would be paid where to who was not clear,in his evidence DW1 made the edmission Mr. Nalums identified at page 5 of his written submission
105. It is also important to note tha DW1 also admitted at page20 oftyped proceedings that if the plaintiff wanted to make a moneybank detailes I do not share the view that calling on 74th day meant anything all that DW1 had o do wasto give the informationthat pw1 wanted ( next) that the plaintiff asked for extension of timeto paythe balance but neverprobable true to say that plaintiff asked for bank account details which were never given to him and no reason was stated or given to court I therefore hold that the plaintiff’s failure to pay was mere at the fault of the defendants ten the plaintiff’s conduct see opposite p.7 to P.63.
106 however the above finding does not in itself make the need to answer the subissued under issue one it is easier combine the two issue that the sub issue and number wo thatto say whether he agreement lapsed under clause 2(b) and if not whether the contract is enforceable by the plaintiff he two can be conveniently answered together
107 in resolving that issue Mr. M,alima asked this court to apply principles of equity . he refered this court to S 14(2) (b)(1) during the oral clarification on written submission.
s. 14.(2) (1) OF THE Judicature Act provides
2) subject to the consriutionand this Actthe jurisdiction of the high court shall be exercised
b) subject to anywritten law and in sofar as the written does not apply in conformity wit
ii) the common law and the…of equity
108 the plaintiff’s case was supporte by the decision in OSMAN v MULANGWA 1995-98 2 EA 272 CU as cited by Mr. MALIMA ON THE OTHER HAND THE DEFENCE CASE RELIED ON Hulsbury Law of Englend?(supra) paragraph 93 and the case of SYEDNE & OTHERS VS- JAMIL’S ENGINEERING CO 1973 EA 254 the authorities cited all related to the situations which are morels similar to the present facts it is now incumbent upon this court to decide which situation is applicable here
109 in both cases it is very important to appreciate the facts in OSMAN VS- Mulangwathe appellant to the supreme court was the registered proprietor of s building and land comprised in Kibuga block 12 plot 472 situated in kampla on 5th January 1990 the appellant and the respondent entered into a sale agreement by which the appellate sold to the respondent the land and building at an agreed price of USD 12,000 priorto the execution of the agreement therespondent had paid USD 300 which was stated as the first installments towards the purchase price
110. the agreement stipulated tha the respondent was to pay US & 5000OR BEFROE8THJan 1990 and the balance of US& 4000 be paidon or before 15thAprill 1990.
111. The respondent paid USD 5000 in two installments. He paid further Us & 2000 on a date of or before 20 April 1990.The balance of USD 2000 was not paid withinthe simulated period although evidence at thetrialshowed that respondent had tried on several occasion totender e same to the appellant but the appellant declined to accept. The appellant refused to vacate he house and attempted to sell atanother purchase before the respondent lodged clevet on… and served the appellant the trial court fund in favors of the respondent andordered specific performance hence the appeal to the supreme court.
112. my lords the justice of the supreme court discussed in detailed the decisions in Phillips –vs- Silvester and Lyaght –VS- Edward. They actually considered the facts in later case to be similar to
‘ according to the principleof equity the right to the property passes to thepurchaseand the right to the vendor is turned into a moneyright to receive the purchase money……………………….. The vendor become a trustee for the 114.purchaser of particular interest the learned justicereasoned as below
“ it should here be observed that the agreement between the vendor and the purchaser in the case to which I have just refered provided for payment just refered provided for pa yment of interest if the balance of the purchaser money remained out standing beyond 25/03/1886 the date on which thepurchaser shouldhave taken possession . itis clear from the passage I have refered to above that even if ere remained unpaid balance the property in the lands passedto the purchaser when a deposit was made
115. they then concuded atpage on the effect of contract of that nature by quoting Jessel M.R in LYAGT’S case . the matter of Rolls statedafter posting posing the question what is the effect of the contract
“ it is that the moment you have a valiedcontract for sale the vender becomes in equity a trustee for the purchase of the Estate sold and beneficialownership passes the purchaser the vendorhaving a right to the purchaser money or a lien on the estate for the security of the purchaser money and right to retained possession until the purchaser money is paid…………………
116. Mr. Masembe for the defendant did not agreewith the law in the case above is applicable howere to him the was distiqishable he went further to cite SYEDNA/& ORS VS JAMILS ENGINEEARING CO. the summarized facts of the case are noted in the paragraphfollowing
117” The second and third plaintiff agreed to buy certain land from the defendants byan agreement that provided for e payment of a deposit and a fixed dated for the completion
The purchase price could not be aid at the date of completion and afurher agreement was entered into which provided for a further payment by the plaintiff for possession to be givento the plaintiff andfor payment of the balance of the fixed date with a further provisionthat if payment were not madethe agreement would be ended and the sumspaid beforforted. The plaintiff was unable to pay the balance of the purchase price until the day after the fixed date when the defendant declined to receive it.
The plaintiff sued for specific performance or the return of je money paid contending that time was notof essences that relief be given against for future and that the payment was a parentally that should be enforced.
118 The learndtrila judge held that the circumstances of the second agreement indicated that time was of essence he explained as below
“ the circumstances in whivch the suppliementary agreement was made and its provisions which added so greatlyto those of the first agreement indicate that theparties intended exact compeliance by the plaintiff of thedate of payment of thebalance of te purchase price Viz 15 March 1971
119 Mr. Masembe found the bave situation and decision very comparable to 2(b) in exh p.2 especiallythelast part of th clause stating that
120. Mr. Musambe argued that principle of equity do not apply o express provisions like clause 2(b) to eXpress provisions like clause 2(b) af exh p.2 he cited 3 paragraph 93 of Helbury laws of Egnland (SUPRA) which states tat time is generally by express erms that in exh p.2 parties made under that clause 2(b) time to be of essence and consequently the decision in syden as case was applicable here.
121. I have taken the trouble it needs to consider the arguments of both sides I must say I am more persuaded to agree with the plaintiff’s thedefendants case the followingare my reasons for tha conclusion
122.with respect it is nottru to arque or learned counsel Masembe didthat OSMAN –VS- MULANGWES caseis distiquishable andnot applicable hhere I notice on te facts thatbalance of 9000UDS was to be paid at specific period in time it was not so paid. At the trial before the high court at page 278 of the lawreport itis indicated that issue number 3 was whether time was of esance of the contract.
123. the record shows that the trial courtfiled in the favor of the plaintiff and ordered specific performance on appeal there is no finding to the contrary or the issue framed
125. even if the decision in Sydened were to be of an appellant court( which it is not) by reason of time I would notfollow itagent Osmon it was pronounced in 073 whicle Osman is a recent decision of 1996 the judgment was delivered on 31.0ct 1996 the doctrine ofprecedence alooews the law to flow through judicial decision 75B76c
126 having considered all the evidence relevant to the issue and the law applicable this court has come to following conclusion
- Although clause 2(b) of ex p.2 indicated that time was of essence in the payment obligation by the plaintiff the earlier
- conduct by the defendant a sale fate lapse of time for exercising the option for purchase
127. lastly and independent of the above reasonslearnedcounsel Nalime referedme to s.14 of the judicature act and asked to have it in consideration as matter is being decided
128. in positionMr. MASEMBE argued that principle of equity would not apply to cases where thy are express provisions like in Sydens case (supra). I have not been able to follow the persuasive decision in Sydene’s case here because it never considered S. 14 ( 2) (b)(1) and s.`14 (4) that is so forthe simple reasons hat the judicial Act cap 13 was enected in 2002 and itrefered to te 1995constitution under S 14(2) Sydaness case was decided in 1973 where the two …. Above were not in existence yet very are more imposingon me.
129. MR. s. 14(4) OF THE Judicature act the gist of whichis that commonand equity rules are administer concurrently and if the two conflict equity shall prevails would still prevent this court from applying the decision in Sydenes’ case whichignored principle of equity as applied by the trial court in Osman –vs- Mulagwas case when despite the facts which showed tat parties agreed that time be of essence of their contract as it related o payment and an issues was framedto that effectit went ahead to find a favour of the plaintiff andgranted the order according to the supreme courtthe decisionof Osman was based on principle of Equity alone
- The acceptance of payment postdatedcontrary to payment upon execution of the agreement it was shown that the defendant was by conduct not all that amendful about strick advance to time by the parties court got so much concerned that exh p.2 itself was out of time.
(2) it is this court finding that the plaintiffthrough PW1 attempted to pay a day before the agreement laspsed by asking for a bank account of the defendant but the same was not availed.
3) looking at the pleadings and evidence i find that the defendant wasmore to be blame for the plaintiff’s failureto pay more so hat exh p.2 never provided for lhow USD 67,000 could be paid
4) that in the above circumstances it can not be said that he agreement for sale of 12 Buganda Roadlapse as clause 2(b) provided
130. finally I would make the same findingas the S.C findingin MANZOOR –VS- BRAM 2 EA 580 where Mulango ISC rip said
After taking in consideration the equities of this case I am satisfied that the discretion ought to be exercised in favour of the appellant. I wouldhold that he appellant are entitled to specific performance”
I find the passage applicable here exh .2 was a valid contract for sale of land upon which a deposit was made and accepted the remaining interest the defendant havein it the land sold is the purchase pricebalance not at least not in equity Iaccordingly performance in favour of the plaintiff.
131. the plaintiff prayed for several damages of shs 50,000,000 that theywere unable to develop the plot due to the dispute I am not persuaded to makethat award the plaintiff did not ender in evidence approved building plans to develop the plot but frustrated by the despute .
132 secondly they have been in occupation file this is despute stated and thirdly it is then who got a injucion fisrst the defendant to say in possession I find no case was made for an award of general damages
133 the consequences of any findings as tat the counterclaim fails and the same is determined .i award costs of he suit and of the counter claim to the plaintiff I so orders
Forplaintiff ‘s diretore Azim Kassim present
Mr. Anerst Sembyata kagoza holding brief for anautuse lmyerezi for defendant
Court judgment deliverd in chambers in the present of the above
Mr. Kaggwa sembatya
We seek for temporary stay of order of this court providing te file offormal application
- See Lawrence nusitwe Lyazze –vs- uruse Basigye scc application 18/1990
- court held that a temporary stay can be made informally to judge
whene judgment delivered the judge directs a formal application be filed . I need 14 days
I undertake not for execute with the re… time pady the finally of the application
I have no rejoinder
Court I will follow the law cited to me in order that the order of my court be stayed until after 21 days when the defendants will have filed and termed the plaintiff with a formal order to stay execution cost to be in the claims