Nassimu Moses and Another v Mugambe Sam (Civil Suit No. 68 of 2023) [2025] UGHC 476 (27 June 2025)

THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT LUWERO CIVIL SUIT NO. 0068 OF 2023

1. NASSIMU MOSES

2. NANGERA TAUSI GRANIE ::::::::::::::::::::::::::::::::::::::::PLAINTIFFS

VERSUS

MUGAMBE SAM :::::::::::::::::::::::::::::::::::::::::::::::::::::::::DEFENDANT

JUDGMENT

Background

This suit was filed by the Plaintiffs against the Defendant seeking orders that the Defendant pays/refunds UGX.45,500,000, a declaration that the Defendant acted fraudulently, special damages of UGX. 6,000,000, interest at a rate of 24% per annum, general damages and costs of the suit.

This court granted an order for this matter to proceed exparte after the Defendant was served with summons to file a defence and failed to do so. In light of the above, the court will determine this suit exparte.

I will adopt the issues raised by the Plaintiffs which are stated below;

- 1. Whether the defendant breached the contract of sale of the suit land dated 4th November 2019. - 2. Whether the defendant committed fraud. - 3. What are the available remedies to the parties?

Representation

The Plaintiffs were represented by M/S GDE Advocates.

Determination of Suit


Issue 1:

Whether the defendant breached the contract of sale of the suit land dated 4th November 2019.

Submissions

Counsel for the Plaintiffs submitted that the Defendant breached the contract of sale of land dated 4th November 2019 which he entered into with the Plaintiffs as testified by PW1 and PW2. In the contract, the Defendant agreed to sell 10 acres to the Plaintiffs which were to be carved out of the land comprised in Block 66 Plot 34 at Bubengwa for a consideration of UGX. 65,000,000 (sixty-five million shillings.) Counsel further submitted that according to the terms of the contract, the Plaintiffs were required to pay an initial instalment of UGX. 32,500,000 (thirty-two million and five hundred thousand shillings) to the Defendant on the day of signing the agreement and that the balance would be paid within one year. The parties agreed that the Defendant would hand over possession of the suit land to the Plaintiffs upon full payment of the consideration. Counsel asserted that the Plaintiffs made the first payment instalment, as evidenced by the testimonies of PW1 and PW2. This was corroborated by PW3's testimony, who stated that he was present and witnessed the land sale agreement.

Counsel further submitted that PW1 and PW2 led evidence that on 15th August 2020, they paid another instalment of UGX. 13,000,000 (thirteen million shillings) to the Defendant as consideration for the said land leaving a balance of UGX. 19,500,000. (nineteen million and five hundred thousand shillings.) That sometime in October 2020, the Plaintiffs met the Defendant and informed him that they were ready to pay the remaining outstanding sum. However, the Plaintiffs later learnt through the neighbours to the suit land that the Defendant had sold the suit land to several other people who have instituted several cases against the Defendant in several police stations and that one of the complainants was in current possession of the suit land. The Plaintiffs met the Defendant at his home in Kikyusa, where he confirmed that he had made some mistakes in respect of the suit land but that he was going to rectify the mistake.


Counsel further submitted that PW1 and PW2 testified that the Defendant promised to refund the money that they had so far paid to him, totaling up to Ugx. 45,500,000 (fourty-five million shillings) but the Defendant has since refused to refund their money and no longer picks up their telephone calls. The Defendant also failed to hand over possession of the suit land to Plaintiffs. Counsel concluded by submitting that the defendant breached the contract of sale of land dated 4th November 2019 as per the definition of breach of contract in the case of Ronald Kasibante Vs Shell Uganda Ltd, H. C. C. S No. 542 of 2006.

Decision by the Court

I have taken into consideration the submissions made by Counsel for the Plaintiffs and noted that the central question before me revolves around whether there was a breach of contract in the instant case. Breach of contract is defined in Black's Law Dictionary, 5th Edition, on pg 171, as where one party to a contract fails to carry out a term. Further, in the case of Nakana Trading Co. Ltd Vs Coffee Marketing Board Civil Suit No. 137 of 1991, the court defined a breach of contract as one where one or both parties fail to fulfil the obligations imposed by the terms of the contract.

To determine if there was a breach of a term of a contract, the Court has to satisfy itself that there was a valid contract in place. Section 10(1) of the Contracts Act, defines a contract as:

*"A contract is an agreement made with the free consent of parties with capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally bound".*

In the case of *Greenboat Entertainment Ltd Vs City Council of Kampala C. S No. 0580 of 2003* a contract was defined as;-

"*In law, when we talk of a contract, we mean an agreement enforceable at law. For a contract to be valid and legally enforceable there must be: capacity to contract; intention to contract; consensus and idem; valuable consideration; legality of purpose; and sufficient certainty of terms. If in a given transaction*


*any of them is missing, it could as well be called something other than a contract".*

From the evidence on record, PW1, PW2 and PW3 testified that on the 4th day of November 2019, the Plaintiffs entered into a contract of sale of land with the Defendant wherein the Defendant agreed to sell 10 acres out of the land which forms part of the land comprised in Block 66 Plot 34 land at Bubengwa to them at a consideration of UGX. 65,000,000 (sixty- five million shillings). I have had the opportunity to examine the said contract, which is marked as PEX1. The said contract was entered on the 4th day of November 2019 between Sam Mugambe (Defendant) and Nassimu Moses and Nangera Tausi Granies (the Plaintiffs). The said agreement was witnessed by Semakula Grace, Sowedi Mukabire, Kayongo Issa and Kalembe Wilson.

In the said agreement, the Defendant who was the vendor of the land, sold 10 acres of the land comprised in Block 66 Plot 34 at Bubegwa to the Plaintiffs who were the purchasers, at a purchase price of UGX 65,000,000. One of the terms of the agreement was that the purchasers had paid UGX 32,500,000 on the day of execution of the agreement and the outstanding UGX 32,500,000 was to be paid within one year from the date of the execution of the agreement. I am, therefore, convinced that there was a valid contract between the Plaintiffs and the Defendant in the instant case.

Having established that there was a valid contract, I shall now move on to determine if there was a breach of the terms of the said contract. A breach of contract is a violation of any of the agreed-upon terms and conditions of a binding contract, and this includes circumstances where an obligation that is stated in the contract is not completed on time. It is a failure, without legal excuse, to perform any promise that forms all or part of the contract. See Meridiana Africa Airlines (U) Ltd Vs Avmax Spares (EA) Limited Civil Suit No. 111 of 2017.

At this moment, it has been established that there was a land sale agreement between the Defendants and the Plaintiffs, whereby the Plaintiffs had paid half of the purchase price, and the remaining half was to be paid within one year from the date of the

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contract's execution. According to the evidence on record, PW1 and PW2 testified that on 15th of August 2020, the Plaintiffs made an additional instalment payment of UGX 13,000,000 towards settling the outstanding purchase price of UGX 32,500,000. The Defendant acknowledged this payment, as evidenced in PEX2. Consequently, this reduced the outstanding purchase price to UGX 19,500,000. PW2 and PW1 also provided evidence that sometime in October 2020, they contacted the Defendant to inform him that they were prepared to settle the remaining purchase price of UGX 19,500,000 in the presence of the Chairperson LC1 so that the Defendant could hand over the suit land to the Plaintiffs. PW3, the Chairperson LC1, also testified that he was contacted by the Plaintiffs, who expressed their intent to make the final payment of the outstanding purchase price to the Defendant.

Whereas the Plaintiffs made an effort to fulfil their obligations under the agreement, the Defendant, on the other hand, started frustrating the agreement. PW1 and PW2 testified that after contacting the Defendant and informing him about their intention to pay the outstanding purchase price, they got to learn that the Defendant had sold the suit land to several people. When the Plaintiffs reported the case to Bubengwa Police Station, they were informed by the Police Officers that the Defendant had defrauded several people using that piece of land and several cases had been reported to the police. This fact is corroborated by the testimony of PW3.

It is my understanding that the actions of the Defendant amount to a breach of the terms of the contract he entered with the Plaintiffs. The Defendant agreed to sell the suit land to the Plaintiffs, received part payment of UGX 45,500,000 and agreed to receive the remaining sum at a later stage in accordance with the contract. The Defendant could not turn around and choose to sell the suit land to other interested purchasers, yet he already had a binding contract in force with the Plaintiffs. Doing so amounted to a breach of a crucial term of the contract. I therefore agree with Counsel for the Plaintiffs that the conduct of the Defendant in selling the suit land to other people during the existence of this contract amounted to a breach of contract.

This issue is resolved in the affirmative.

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Issue 2: whether the Defendant committed fraud

Submissions

Counsel for the Plaintiffs submitted that there was fraud committed by the Defendant against the Plaintiffs. He submitted that PW1 and PW2 proved that the Defendant willfully hid the truth from them that the suit was subject to several third party claims, police cases and that he was not in possession of the same. That the Defendant conducted himself in this manner in order to induce PW1 and PW2 into entering into the contract of sale of land dated 4th November 2019 wherein PW1 and PW2 paid him a total sum of Ugx. 45,500,000 which has since refused to refund to them which conduct amounts to fraud. He relied on the case of Fredrick Zaabwe Vs Orient Bank & Others SCCA No. 04 of 2006.

Decision

Fraud was well defined and settled by the Supreme Court of Uganda in Fredrick J. K. Zaabwe Vs Orient Bank Ltd. and Others. Civil Appeal No. 04 of 2006 where Hon. Justice Bart Katureebe quoted the definition of fraud in Black's Law Dictionary 6 th Edition, Pg. 660 as:-

*"Intentional perversion of truth for the purposes of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. A false representation of a matter of fact, whether by words or by conduct, by false or misleading allegations, or by concealment of that which deceives and is intended to deceive another so that he shall act upon it to his legal injury. Anything calculated to deceive, whether by a single act or combination, or by suppression of truth, or suggestion of what is false... A generic term, embracing all multifarious, means which human ingenuity can devise, and which are resorted to by one individual to get advantage over another by false suggestions or by suppression of truth..."*

The above definition of fraud adequately covers the elements of fraud in the instant case. It is settled law that in a contract of sale of land, including one such as this,


where only part payment has been effected, until legal title has passed onto the purchaser, both the vendor and the purchaser have their own title to the land sold; the one legal, while the other equitable. The two titles exist alongside and independently of each other. This position has been held in the case of *Ismail Jaffer Allibhai & 2 Others vs. Nandlal Harjivan Karia & Another, S. C. Civ. Appeal No.53 of 1995* at p. 13, Oder J. S. C stated that:

*"… on completion of a contract of sale of immovable property, property passes to the purchaser, and the vendor holds it as a trustee for the purchaser. The legal title, on the other hand, remains with the vendor until transfer is effected. The equitable title which passes to the purchaser is considered to be superior to the vendor's legal title, which is extinguished on payment of the purchase price by the purchaser."*

*Also see John Katarikawe vs. William Katwiremu & Anor., [1977] H. C. B 187*

The rationale behind the passing of the equitable title to the purchaser is that it serves as an insurance or safeguard against any potential mischief by the vendor. It is for this that the purchaser's equitable title is, in the eye of the law, superior to the vendor's legal title, as a right in personam (as between the two persons).

The Plaintiffs in the instant case acquired an equitable title to the suit land when they entered into an agreement with the Defendant. Since they had not taken possession of the suit land, the vendor (Defendant) was holding the suit property in trust for the Plaintiffs pending the completion of the purchase price and the execution of the instrument of transfer (the final agreement).

The deliberate selling of the suit land by the Defendant to third parties amounts to fraud because the Defendant is trying to deliberately deprive the Plaintiffs who are the purchasers value in occupation of the land. The court pronounced itself on this position is Katarikawe Vs Katwiremu supra when it held;

*"Fraud, though not defined under the Registration of Titles Act, covers dishonest dealings in land such as depriving a purchaser for value in occupation of the land of his unregistered interest."*

In conclusion, I find that the Defendant acted fraudulently when he sold the suit land to third parties well knowing that he was depriving the Plaintiffs their equitable interest in the suit land.

This issue is resolved in the affirmative.

Issue 3: What remedies are available to the Plaintiffs?

Counsel prayed that the court orders the Defendant to refund Ugx. 45,500,000 that the Plaintiffs had paid to him as consideration for the suit land. Furthermore, counsel prayed that the court awards special damages to the tune of 6,000,000, General damages of Ugx. 40,000,000 and the costs of the suit to the Plaintiffs. I must say that I am constrained to award the Defendant the special damages sought for because the Plaintiffs have not adduced evidence before me to substantiate their claim for special damages.

Nonetheless, having found that there was a breach of contract and fraud on the part of the Defendant, the court hereby enters judgment in favour of the Plaintiffs and orders and/or declares as follows;

- 1. The Defendant acted fraudulently when he sold the suit land to third parties after he had entered into a land sale agreement with the Plaintiffs and received part payment of UGX. 45,500,000 (fourty-five million five hundred thousand shillings) pursuant to that agreement. - 2. The Defendant breached the land sale agreement he entered into with the Plaintiffs when he went ahead and sold the suit land which was subject of the agreement to the third parties. - 3. The Defendant shall pay to the Plaintiffs;


- a. UGX. 45,500,000 (fourty-five million five hundred thousand shillings) being the refund of the money that had been paid to the Defendant by the Plaintiffs as consideration for the suit land. - b. UGX. 20,000,000 (Twenty million shillings) as general damages. - c. Costs of the suit are awarded to the Plaintiffs.

I so order

…………………………………………………………………………..

FARIDAH SHAMILAH BUKIRWA NTAMBI

AG. JUDGE

Delivered this 27 th day of June 2025 via ECCMIS