Court name
HC: Land Division (Uganda)
Case number
Civil Suit 765 of 2015
Judgment date
3 December 2019

Kaahwa David v Guaranty Trust Bank (Civil Suit 765 of 2015) [2019] UGHCLD 66 (03 December 2019);

Cite this case
[2019] UGHCLD 66
Coram
Kawesa, J

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

[LAND DIVISION]

CIVIL SUIT NO.765 OF 2015

DAVID KAAHWA::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::PLAINTIFF

VERSUS

GUARANTY TRUST BANK LTD:::::::::::::::::::::::::::::::::::::::DEFENDANT

 

BEFORE:      HON. MR. JUSTICE HENRY I. KAWESA

 

JUDGMENT

 

The Plaintiff brought this suit claiming for, inter alia for,

  1. An order of specific performance in respect of a land sale agreement, and in the alternative; a refund of Ushs. 235,000,000/- (two hundred thirty five million shillings only) being payment for purchase of land under foreclosure from the Defendant.

 

  1. Interest at a commercial rate.

 

  1. General damages, and;

 

  1. Costs of the suit.

The brief facts of the suit are that;

 the Defendant sold to the Plaintiff land comprised in Kyadondo Block 236 Plots 993,2139 and 2141 at Bweyogerere (hereinafter the suit land) at Ushs. 235,000,000/- (two hundred thirty five million shillings only) vide a sale agreement dated 8th September, 2015.  The suit land was formerly registered in the name of Dr. Charles Zziwa but now in the Plaintiff’s name.  The sale to the Plaintiff by the Defendant was through a foreclosure process conducted by the latter after Dr. Charles Zziwa allegedly defaulted on his loan obligations towards it.

At the time of sale, Dr. Charles Zziwa and St. Charles Medical Centre Company Ltd. were in actual possession of the suit land.  Before the Defendant could grant the Plaintiff vacant possession of the suit land, Dr. Charles Zziwa and St. Charles Medical Center Company Ltd. brought Civil Suit No.598 of 2015 at the Commercial Division High Court and obtained an interim order maintaining the status quo on the 17th of September, 2015.

The said order was later extended three times that is; to the 5th day of October, 2015, the 21st day of October, 2015, and finally until the disposal of the application for temporary injunction.  It is not clear whether the said application has been disposed of.

 

The Plaintiff now claims that the Defendant breached the sale agreement for failure and/or refusal to hand over vacant and undisputed possession of the suit land to him.  This allegation has been denied by the Defendant who asserts that it is willing to grant vacant possession of the suit land only that this has been restrained by the Court order which remains in effect to date.  That it is willing to give vacant possession once Civil Suit No.598 of 2015 is settled by Court.

At the scheduling, the following issues were agreed upon for determination by this Court;

  1. Whether the Defendant is in breach of the contract.

 

  1. Whether the Defendant has any defence in the circumstances.

 

  1. What remedies are available to the parties.

At the hearing, the Plaintiff gave evidence in support of his claim; and the Defendant called the evidence of Evelyn Ayano but she was not called for cross examination.  Consequently, her evidence in chief was expunged from the record leaving only the Plaintiff’s evidence on record.

Counsel for both parties filed written submissions which I shall consider accordingly.  In determining the issues above, I have chosen to merge issue 1 and 2 given their interrelation.

Determination

  1. Whether the Defendant is in breach of the contract
  2. Whether the Defendant has any defence in the circumstances

According to Section 101(1) and (2) of the Evidence Act Cap 6, whoever desires any Court to give judgment as to any legal right depend on the existence of facts which he or she asserts bears the burden to prove those facts.  The standard at which the said burden should be discharged is at balance of probabilities. See Kamore versus Kamore [2000] 1 EA 80.  Accordingly, the Plaintiff must adduce evidence to prove all the facts he alleges on a balance of probabilities.

It is clear from the brief facts above that the sale of the suit land is undisputed.  What appears to be to be disputed is whether the failure by the Defendant to grant vacant possession constituted a breach of the agreement.

According to paragraph 6 and 7 of the Plaintiff’s witness statement, he states that the Defendant told him that it had agreed with Dr. Charles Zziwa to look for someone to buy the suit land. That the Defendant called Dr. Charles Zziwa to allow him and the Auctioneers to go and examine the suit land.  That the brokers assured him that after the sale, the occupants would move away.  Further under paragraph 11, he states that the Defendant’s officials informed him that they would grant him vacant possession with 7 days, and that was by September, 15th 2015.

During cross examination about the above statements, he inconsistently stated that he was present with Mr. Asiimwe Zaddoch, when the Defendant called Dr. Charles Zziwa yet also stating that it is the Auctioneer who called Dr.Charles Zziwa not the Defendant. Further, that it is Asimwe Zaddoch who assured him that the occupants would leave on sale of the suit land.  That Asimwe Zaddoch is connected to the brokers.  That the Defendant’s officials did not give him any write up to confirm what they told him.

From the above testimony, one allegation is crucial at this point: that the Defendant’s officials committed to grant vacant possession within 7 days after the sale. Whether this is a term of the agreement is something vital to determine first.

It suffices to say that PEXH1, the sale agreement, is silent as to when vacant possession was agreed to be granted to the Plaintiff. According to the four corner rule, if a document appears on the face of it complete, no extrinsic evidence may be used to contradict, vary or add to it. This rule is contained under Section 92 of the Evidence Act Cap 6, which also provides for exceptional circumstances to it.  It thus provides that;

“When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to section 91, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to or subtracting from its terms but—

(a)…

(b) the existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this paragraph applies, the Court shall have regard to the degree of formality of the document;

(b)…

(d) the existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property may be proved, except in cases in which that contract, grant or disposition of property is by law required to be in writing or has been registered according to the law in force for the time being as to the registration of documents…”

PEXH1 being silent as to the time of granting vacant possession by the Defendant as the Plaintiff alleges, the 7 days alleged the latter cannot be implied into it; save-- where he shows that this was an agreed oral term as envisaged under Section 92(b), or (d) of the Evidence Act, above.  However, per the evidence on record, I am not convinced that the Defendant orally agreed to this alleged term.  As such, it cannot be said that it is in breach of the same.

This being settled, it can now be interpreted that the time within which vacant possession was to be granted to the Plaintiff as per PEXH1 was never agreed upon.  As I understand, where parties to a contract do not agree on the time within which a particular act must be done, it is interpreted that such act must be done within a reasonable time.  See Section 42(1) of the Contracts Act, 2010. Can it now be said that the Defendant failed to hand over vacant possession of the suit land to the Plaintiff within a reasonable time?

According to the evidence, PEXH1 was signed on the 8th September, 2015.  Eventually, as PEX5 shows, a copy of a notice to vacate, the Defendant wrote to Dr. Charles Zziwa on the 10th of September, 2015 intimating its intention to take vacant possession of the suit land within 5 working days from service of the notice.  It was be inferred from the notice that the Defendant’s end purpose was to get vacant possession for the Plaintiff.  It is not clear when the notice was served onto the Dr. Zziwa and the Company; but assuming that it was served on the 10th September, 2015, the calendar shows that this was a Tuesday.

Calculating therefrom, the five working days would have expired on the 17th day of September, 2015, the next Tuesday. Unfortunately, before the Defendant could even obtain possession from Dr. Charles Zziwa, an interim order was granted against it and the Plaintiff on the 17th of September, 2015, the last day of the count down. See DEXH3, copies of the interim orders (also attached to the written statement of defence).  Until now, the said Court order is still in force with an effect of restraining the Defendant and the Plaintiff from taking any action against the occupants in respect of the suit land.

In view of the above, can the Defendant be faulted for failing to grant the Plaintiff vacant possession of the suit land, within a reasonable time?  In answering this, I am still mindful that the Defendant at some point intimated a will to yield vacant possession to the Plaintiff.  For that reason therefore, I am constrained to find in the negative to avoid, be condemning the Defendant for being legally compliant.  It is not a guess to say that the Defendant would be in contempt of a Court order had it gone ahead with its purpose of yielding vacant possession of the suit land to the Plaintiff.

The above answer leaves me only with sympathy for the Plaintiff who appears to be left with one severe option before he can fault the Defendant: waiting for the completion of Civil Suit No.598 of 2015.  Much as I sympathize with him, I am comfortable with my peace for he is partly to fault for this misfortune on him; for the reasons I shall give in the third last paragraph herein.  

Both Counsel intimated to Court in their submissions that the sale agreement was frustrated owing to the Court order.  In particular, Counsel for the Defendant relied on Section 66 of the Contracts Act, 2010 and Taylor versus Caldwell (1863) 3 B.S 825, to state that the Court order effectually discharged the Defendant from performing its obligations under PEXH1.  Taking their view, it then means that the contract between the parties herein is void given that frustration comes with such an effect.  Having addressed myself to the law on frustration, I rejected this narrow view for the reasons hereinafter.

Firstly, it cannot be said that the performance of the sale agreement by the Defendant has been rendered legally impossible. Given my answer above, my view is that performance has just been delayed than was expected.  This would of course be different had had the parties agreed upon the time within which vacant possession was to be given. I have already indicated above that it was not the case in this case.  As such, I am inclined to agree with the Defendant Counsel’s later submission that the Defendant is willing to, and will, perform its part once Civil Suit No.598 of 2015 is settled; which in fact contradicts his earlier assertion that the sale was frustrated.

In addition to the first reason, and crucial to the case; is my conviction that both parties, especially the Plaintiff, are at fault for what they could have foreseen yet ignored: Dr. Charles Zziwa and the Company’s disputation of the sale transaction. Over a time, Courts have emphasised the need for a thorough due diligence before entering any land transaction.  The purpose of this is to ensure that the buyer gets enough information about the land so as to make the smartest buying decision possible, and avoid making a bad purchase.

 

From my observations, the Plaintiff never conducted a due diligence prior purchasing the suit land as it is clear from his testimony that he wholesomely relied on the Defendant’s officials and the auctioneers; without himself doing an independent inquiry.   Had he bothered to personally do so, in particular, from Dr. Charles Zziwa, I have a strong belief that he would have discovered that the latter was conflicted with the sale, and avoided making a bad purchase from the Defendant.  

 

Having not done so, it is not unreasonable to suppose that he chose to assume the consequences that arose after the sale.   As such, he cannot now be allowed to assert otherwise yet what he is now aggrieved with was within his reach had he exercise reasonable diligence.

Basing on the reasons above, I find the first issue in the negative and issue two in the affirmative.  This undoubtedly disposes of the third issue.

Ultimately, the suit is hereby dismissed with costs to the Defendant.

I so order.

.....................................

Henry I. Kawesa

JUDGE

3/12/2019

 

 

3/12/2019:

Ahmed Mayanja for the Plaintiff.

Plaintiff absent.

Defendant absent.

Agripin; Clerk.

 

Counsel:

Matter for judgment, we are ready to receive it.

 

Court:

Judgment delivered in chambers in the presence of Counsel.

 

 

.....................................

Henry I. Kawesa

JUDGE

3/12/2019