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Brief Facts
Paul Kamunyu bought entered into a land sale agreement with Paul Wamala to
buy land comprised in Busiro Block 15 Plot 580 situate at Nabinoonya. The
agreed purchase price was 40,000,000/=. Paul paid 20,000,000/= and defaulted
on the balance. Jack Mugisha then proceeded to buy the land at 85,000,000/=.
He has erased the house of Paul Kamunyu to the ground.
Issue
(1) Whether Paul Kamunyu has any cause of action
(2) Whether there any remedies available to the parties
(3) Procedure and Documents
Law Applicable
Registration of Titles Act, Cap 230
Resolution
Issue
Section 92(1) RTA provides that a proprietor of land may transfer such land.
Under section 92(2), it is stated that upon the registration of the transfer, the
interest of the proprietor, shall pass to the transferee; and the transferee shall
thereupon become the proprietor thereof.
Section 64(1) RTA provides that the estate of registered proprietor is paramount
except in cases of fraud. In Robert Lusweswe v. Kasule & Anor. H.C.C.S No.
1010/83 Odoki J
“Therefore while the cardinal rule of registration of titles under the Act is that the
Register is everything, the court can go behind the fact of registration in cases of
actual fraud on the part of the transferee.”
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In the instant case, for Kamunyu to defeat the interest of Mugisha who is now the
registered proprietor, he has to prove fraud on his part. It is important to note,
that Kamunyu failed to pay within the required time. Megarry, in The Law of
Property, discusses in detail, stipulations as to time thus;
At common law time was of essence of the contract. If either party was late in
performance, he was in breach of the contract and could not enforce it. But
equity regarded time less strictly, and would grant specific performance to a party
who was out of time, provided that was not inequitable.
The position now is that stipulations in a contract as to time or otherwise, which
according to the rules of equity are not deemed to be or to have become of the
essence of the contract, are also construed and have effect at law in accordance
with the same rules. But time is of the essence even in equity—
(i) where the contract expressly says so
(ii) where the nature of the contract requires it eg on the sale of a wasting
asset;
(iii) where after one party has delayed unreasonably, the other gives him
notice requiring performance at a reasonable future date, Stickney Vs
Keeble, [1915] Ch. 174. However, where it is plain that the party in
default is not intending to proceed, no notice need be given; Re Stone
and Saville, Contract [1963] 1 WLR 163
(iv) where a contract is made conditional upon some act being done by a
fixed date, or within reasonable time, Aberfoyle Plantations Vs
Cheng [1960] AC 115
In the instant facts, the contract clearly provided that time of the essence,
therefore, by failing to pay the balance within the stipulated time, Kamunyu was
in breach of the contract.
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Therefore, Wamala had various options. He decided to exercise the option of
rescission. If either party breaks a term of the contract, which is a condition
precedent to the liability of the other, the other party may as an alternative to
suing for damages, rescind the contract, See Barber Vs Wolfe [1945] Ch. 187.
Rescission means cancelling the contract and restoring the parties to their
original position. At common law, rescission effects the discharge of the contract,
and any money paid under it could be recovered by an action in quasi contract.
Therefore, once, Wamala recinded the contract, the cause of action in respect of
specific performance was negated. As a result, the only cause of action available
to Kamunyu relate to the damages suffered during the eviction process.
Issue 2
Kamunyu has a cause of action against Wamala for return of the deposit and
against Mugisha for the damages he suffered during the eviction process. The
court will allow rescission only on condition of restituo integrum ie that is to say,
the restoration of each party to its original position. A purchaser lawfully
rescinding may therefore recover not only any deposit or part payment but also
his costs of investigating the title and the like, and for this money he has an
equitable lien on the land agreed to be sold. King Vs King (1833) 1 My & K 442
Similarly, a vendor lawfully rescinding on account of default by the purchaser
must return any part payment already received, for he cannot both cancel the
contract and keep the payment, Mayson Vs Clouet [1924] A.C 980
However, Wamala and Mugisha can argue that the deposit in the circumstances
should be retained. A deposit may sometimes be retained by the vendor who
rescinds, for unlike a mere part payment a deposit is intended to be security for
performance by the purchaser and to be forfeited if he makes default:
“ everybody knows what a deposit is.. it is a guarantee that the purchaser means
business. In the event of the contract being performed by the payer, it shall be
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brought into account but if the contract is not performed by the payer it shall
remain the property of the payee..”
Soper Vs Arnold (1889) 14 App. Cas 429 at 435 by Lord
Macnaghten
Therefore, in the circumstances, Kamunyu can argue for the return of the
deposit.
Issue 3:
The procedure would be to bring a suit by way of plaint
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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
CIVIL SUIT NO. 001 OF 2007
Paul Kamunyu………………………………………..………………….. PLAINTIFF
VERSUS
1. Jack Mugisha
2. Paul Wamala…………………………………………………..DEFENDANTS
PLAINT
1. The plaintiff is an adult male of sound mind resident in Kampala and
whose address service for purposes of this suit is C/o M/s. Firm..P.O Box
7117, Kampala.
2. The 1st defendant is a male adult of sound mind and the plaintiff’s
Advocates undertake to effect service of process upon him.
3. The 2nd defendant is a male adult of sound mind and the plaintiff’s
Advocates undertake to effect service of process upon him.
4. The Plaintiff brings this suit for an order of return of deposit, general
interest and inconvenience and costs of this suit.
5. The facts constituting the cause of action are as follow;
(A) By an agreement entered into in February, 2005, the 1st
Defendant agreed to sell to the plaintiff land comprised in
Busiro Block 15 Plot 580
(B) That pursuant thereto the Plaintiff duly paid for the said land
and obtained an acknowledgement thereof as expressed in
the agreement.
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(C) That subsequent and upon the plaintiff losing his job, the 1st
Defendant refused to extend the period of completion of
payment.
(D) That the 1 st defendant unliterary rescinded the contract and
entered into the contract with the 2nd defendant without the
knowledge of the plaintiff.
(E) The 2 nd Defendant without giving notice to the plaintiff erased
his house and damaged his household property.
6. The plaintiff has as a result of the above actions of the Defendants
suffered considerable inconvenience, damage and harm for which the
Defendants are jointly and severally liable.
7. Notice of intention to sue was served upon the defendants.
8. The cause of action arose within the Jurisdiction of this Honourable Court.
WHEREFORE the plaintiff prays for judgment against the defendants in the
following terms.
(a) Damages
(b) General interest;
(c) Interest on the above at the rate of 20% pa. from the date of judgment till
full payment; and
(d) Costs of the suit.
DATED at Kampala this day of 2007.
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COUNSEL FOR THE PLAINTIFF
Drawn & Filed by:
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M/s. Firm..
Advocates,
P.O. Box 7117
KAMPALA
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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
CIVIL SUIT NO. 001 OF 2007
Paul Kamunyu………………………………………..………………….. PLAINTIFF
VERSUS
1. Jack Mugisha
2. Paul Wamala…………………………………………………..DEFENDANTS
SUMMARY OF EVIDENCE
The plaintiff shall adduce evidence to show that he was the 1st Defendant
unliterary rescinded the sale of land agreement. The 2nd Defendant bought the
land without the knowledge of the plaintiff and evicted him without notice causing
him enormous harm.
LIST OF WITNESSES
1. Plaintiff
2. Others with leave of court
LIST OF DOCUMENTS:
1. Title
LIST OF AUTHORITIES
1. The Civil Procedure Act
2. The Civil Procedure Rules
3. Registration of Title Act
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4. Any other authority with leave
DATED at Kampala this day of 2007.
--------------------------------------------------------------
COUNSEL FOR THE PLAINTIFF
Drawn & Filed by:
M/s. Firm..,
P.O. Box 7117
KAMPALA.
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