The High Court has overturned a lower court decision in a bitter motor vehicle dispute between businessman Francis Egessa and Sheraz Anwar Investments, ruling that the car dealer breached the contract and must refund more than Shs 30 million to the buyer.
In her ruling, Justice Patience Rubagumya faulted Sheraz Anwar Investments for unlawfully repossessing a truck it had already sold to Egessa and ordered the company to refund the buyer’s deposit and pay damages for inconvenience.
The dispute began on October 22, 2021, when Egessa entered into a written sale agreement with Sheraz Anwar Investments to buy an Isuzu Elf truck, registration number UBK 981D, for Shs 51.8 million.
Under the agreement, Egessa paid a deposit of Shs 25.8 million and was allowed to take possession of the truck. The balance of Shs 25.9 million was to be paid later, partly through instalments after Egessa secured a bank loan.
Justice Rubagumya noted that it was not disputed that Egessa paid the deposit and took possession of the vehicle.
Problems arose when Egessa discovered that the same truck had been sold earlier to another buyer, David Ddamulira, who had failed to make the payment. Sheraz Anwar Investments later sued Ddamulira and obtained a court order to attach the truck before judgment.
That attachment order was executed in May 2023. Court bailiffs impounded the truck from Egessa, even though he was not a party to the case against Ddamulira.
Egessa sued Sheraz Anwar Investments at Nakawa Chief Magistrate’s Court, accusing the company of breach of contract and fraud. He requested a refund of his money, as well as damages and costs.
Sheraz Anwar Investments denied wrongdoing. In its defence, the company argued that Egessa had failed to pay the balance of the purchase price and was therefore the one in breach. The company asked the court to compel Egessa to complete payment or declare it the lawful owner of the truck.
In August 2024, the Chief Magistrate Christine Nantege ruled in favour of Sheraz Anwar Investments. Egessa was ordered to pay the outstanding Shs 25.9 million, after which the truck would be returned to him. The magistrate also awarded Shs 3 million in general damages to the company.
Egessa appealed to the High Court.
His lawyers from KSMO Advocates argued that the magistrate had ignored a key fact, that Sheraz Anwar Investments repossessed the truck using a court order obtained in a case where Egessa was not a party.
They argued that this amounted to a fundamental breach of the sale agreement. “The illegal impounding and repossession of the suit motor vehicle by the Respondent was a fundamental breach of contract,” Egessa’s lawyers submitted.
They also argued that once the truck was taken away, Egessa was frustrated from completing payment and was entitled to a refund instead of being forced to pay the balance.
The lawyers for Sheraz Anwar Investments, from Matovu, Kateregga, and Co Advocates, disagreed. They told the court that Egessa failed to secure a loan, failed to pay the balance, and therefore breached the agreement.
They also argued that the impounding of the truck was lawful because it was done under a valid court order.
In the end, Justice Rubagumya rejected that argument.
After re-evaluating the evidence, the judge found that although Egessa had not finished paying, Sheraz Anwar Investments acted unlawfully by repossessing the vehicle from him.
“Considering that the Respondent [Sheraz] had sold and handed over possession of the motor vehicle to the Appellant [Egessa], I find that it breached the agreement… when it impounded and repossessed the same under a warrant of attachment before judgment that the Appellant was not party to,” she ruled.
She added that the company’s actions made it impossible for Egessa to complete payment as agreed.
On damages, the High Court also faulted the magistrate for awarding money to Sheraz Anwar Investments.
“Since it was the Respondent [Sheraz] that breached the contract, then the Appellant [Egessa] ought to be compensated for the inconvenience suffered,” the judge held.
The court set aside the entire lower court judgment and made new orders.
Sheraz Anwar Investments was directed to refund Egessa Shs 25.8 million, being the money he had paid as a deposit. The court also awarded Egessa Shs 5 million in general damages.
In total, the company must pay Egessa Shs 30.8 million, in addition to half the costs of the case in both the High Court and the lower court.
“The judgment and orders of the learned trial Chief Magistrate… are hereby set aside,” Justice Rubagumya ruled.
