A breach that frustrates the purpose of a land sale voids the contract and restores ownership to the vendor. Affirms the High Court at Kampala.

Waboga David
Oct 28
4 min read

Facts

On 15th November 2022, the Plaintiff, through her attorney, sold land comprised in Kyadondo Block 185, Plot 2150 at Namugongo, Mengo District, measuring 0.057 hectares, to the Defendant at a consideration of UGX 130,000,000. The sale agreement provided that:

The Plaintiff would hand over the certificate of title, signed transfer forms, and identification documents upon signing.
The Defendant would pay UGX 30,000,000 within four days after transfer and the balance of UGX 100,000,000 before 10th December 2022.
In case of default, the Defendant would return the certificate of title and duly signed transfer forms to the Plaintiff.

The Plaintiff complied with all her obligations, transferring the title to the Defendant on 22nd November 2022. However, the Defendant failed to make any payments and refused to return the title after notice of termination dated 20th December 2022.

The Plaintiff sued for declarations of ownership, cancellation of the Defendant’s registration, general damages, and costs.

The Defendant admitted executing the sale but alleged that payment was delayed because the Plaintiff had lodged a caveat, frustrating his plan to secure a loan against the title to fund the purchase. He claimed he was never served with the notice of termination. The Defendant and his counsel later ceased attendance, prompting the Court to proceed ex parte.

Issues for Determination

Whether the Defendant breached the terms of the land sale agreement dated 15th November 2022.
Whether the Defendant’s actions amounted to fraud.
Whether the Plaintiff is entitled to the remedies sought.

Submissions

For the Plaintiff:Counsel for the Plaintiff submitted that the Defendant’s failure to pay any part of the purchase price within the agreed timelines, coupled with his refusal to return the title and transfer instruments, constituted a fundamental breach of contract and fraudulent conduct. He relied on Sections 47, 53, and 60 of the Contracts Act, Cap 284, and Section 177 of the Registration of Titles Act (RTA) to support cancellation of the fraudulent transfer.

For the Defendant:

The Defendant did not file any submissions nor adduce evidence in support of his written statement of defence, having failed to appear during trial.

Court’s Findings

1. Breach of Contract

The Court found that the Plaintiff fully performed her obligations under the agreement, while the Defendant neither paid the UGX 30 million initial installment nor the UGX 100 million balance.

Citing United Building Services Ltd v Yates Muskarat t/a Quickset Builders & Co., HCCS No. 154 of 2005, the Court reaffirmed that a breach of contract occurs when one party fails to fulfill obligations under an agreement. Justice Nakiganda held:

“In consideration of the evidence and the law, I find that the Plaintiff has proved that the Defendant breached the terms of the land sale agreement dated 15th November 2022. Therefore, issue one is answered in the affirmative.”

2. Fraud

The Court referred to Fredrick Zaabwe v Orient Bank & Others, SCCA No. 4 of 2006, defining fraud as the “intentional perversion of the truth to induce another to part with property or surrender a legal right.”

The Court found that the Defendant procured registration of the title in his name without any intention to pay and refused to return it upon demand. The Court concluded:

“Evidently, the Defendant did not have any intention to fulfill his obligations under the sale agreement. He therefore procured the certificate of title of the suit land from the Plaintiff through fraud.”

Issue two was accordingly answered in the affirmative.

3. Remedies

The Court invoked its powers under Section 177 of the RTA and Section 98 of the Civil Procedure Act (CPA) to cancel the Defendant’s registration and restore ownership to the Plaintiff.

“The impact of breach of the land sale agreement by the Defendant returned the status quo of ownership of the suit land to that which existed before the sale agreement. Therefore, the Plaintiff is the rightful owner of the suit land.”

The Court further ordered the Commissioner Land Registration to cancel the Defendant’s name from the title and register the Plaintiff. Alternatively, the Commissioner was directed to create a new certificate of title in the Plaintiff’s name if the Defendant failed to surrender the original.

On general damages, the Court rejected the claim for “psychological torture” noting that such a claim must meet the threshold under the Prevention and Prohibition of Torture Act, Cap 130, stating:

“Psychological torture cannot be pleaded under general damages since it has to be specifically proven… the facts in this case do not meet the parameters of psychological torture.”

However, the Court recognized the Plaintiff’s inconvenience, loss of security of title, and financial strain, awarding general damages to restore her position prior to the breach.

Holding

The Defendant breached the land sale agreement dated 15th November 2022.
The Defendant’s conduct amounted to fraud within the meaning of Ugandan law.
The Plaintiff was declared the lawful owner of the land.
The Court ordered cancellation of the Defendant’s name from the title and registration of the Plaintiff as proprietor.
The Defendant was ordered to return the certificate of title and transfer documents, or alternatively, the Commissioner Land Registration to issue a new title.
The Plaintiff was awarded general damages and costs of the suit.

Key Takeaways

Vendors should ensure full or substantial payment before surrendering original titles and transfer instruments.
Fraudulent registration of land obtained without consideration can be canceled under Section 177 of the RTA.
A breach that frustrates the purpose of a land sale voids the contract and restores ownership to the vendor.
Even where a suit proceeds ex parte, the Plaintiff must prove the case on a balance of probabilities under Sections 101–103 of the Evidence Act.
psychological torture cannot be pleaded under general damages since it has to be specifically proven (Pg. 11).