Kisanga, J.A., delivered the following considered judgment of the court:
The appellant and the respondent entered into an oral agreement for an exchange of residential G premises. The appellant offered the respondent a house in Nyakato area in exchange for a flat occupied by the respondent in the centre of the Municipality of Mwanza. The appellant, in addition gave Shs 200,000/= to the respondent as disturbance allowance upon her vacating the flat.
Pursuant to the agreement the respondent's landlord, the Registrar of Buildings, upon the H respondent's request, acceded to the parties' wishes and duly allocated the flat to the appellant, following which the appellant went into occupation and made substantial renovations to the premises amounting to about Shs 2,000,000/=. Subsequently, however, the respondent changed her mind and I sought to dishonour or rescind the agreement. The landlord, the
A Registrar of Buildings, acting under orders of the Housing Allocation Committee, reinstated the tenancy to the respondent. Whereupon the appellant filed a claim in the District Court for specific performance of the agreement and general damages for breach of contract. The Court allowed the claim for specific performance and further directed the return of the Shs 200,000/= to the appellant, B as it appeared that the respondent was denying ownership thereof.
The respondent appealed to the High Court which set aside the order for specific performance. In so doing the High Court found that the respondent was justified to rescind the contract because she C was made to conclude that contract by undue influence exercised on her by the appellant and possibly by her own husband. It is from that decision that this appeal now arises.
Before us the appellant was represented by Mr Magongo, learned advocate, while the respondent conducted the appeal in person.
D Mr Magongo filed four grounds of appeal which essentially raised two issues, namely,
(a) Whether on the evidence there was any undue influence, and
(b) Whether it was open to the learned Judge to make a finding on that issue which was not E raised on the pleadings.
We propose to consider ground (b) first. Mr Magongo rightly observed that the issue of undue F influence was never raised on the pleadings. The crux of the respondent's defence was couched in paras 4 and 5 of her written statement of defence in the following terms:
`4. That it is not true that both the defendant/plaintiff are tenants of the Registrar of Buildings at Plot No 10 Block G `R'. Defendant aver (sic.) that she does not known the plaintiff in any way.
5. That contents of para 4 and 5 are a total lie as the defendant has never seen the plaintiff before and hence no agreement could have been entered into between them. The alleged contract, is purely a fraud and the H defendant would prove it.'
The respondent was clearly asserting that the appellant was a stranger and that she could not have entered into an agreement with such a stranger. She does not allege undue influence. Nor was I undue influence one of the issues framed. The issues as framed at the trial were:
`ISSUES AGREED UPON AS FOLLOWS: A
1. Whether or not there was an oral agreement between the parties for exchange of services.
2. Reliefs, if any, to which the parties are entitled.'
The learned Judge, however, found that the respondent in the course of her evidence at the trial did B raise the issue of undue influence, and he criticised the Trial Magistrate for failing to consider it. This is what he said:
As already said, the Trial Court did not touch on this issue i.e. undue influence. It concerned itself only with the issue C of offer and acceptance. But the appellant otherwise in my view clearly raised this issue in her testimony in defence.
In order to remedy the omission, therefore the learned Judge proceeded to consider the issue and accordingly made a finding of it as shown above. D
Mr Magongo submitted that in considering and making a finding on that issue the learned Judge erred for two reasons: First, he relied for his decision of the appeal on a ground which was not raised in the memorandum of appeal or which was not raised with the leave of the Court during the hearing E of the appeal. Secondly he did not afford the appellant the opportunity to be heard on the issue. He relied for this submission on the provisions of Order 39 rule 2 which provide that:
`2. The appellant shall not, except by leave of the Court, urge or be heard in support of any ground of objection F not set forth in the memorandum of appeal: but the Court, in deciding the appeal, shall not be confined to the grounds of objection set forth in the memorandum of appeal or taken by leave of the court under this rule: G
Provided that the Court shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of contesting the case on that ground.' H
The first leg of Mr Magongo's complaint is wholly justified. The respondent's memorandum of appeal to the High Court makes no reference whatever to the issue of undue influence, and there is no indication in the record that the respondent obtained or sought leave to take that ground at the I hearing. The second leg of Mr Magongo's complaint is equally justified. If the learned Judge was
A of the view that the ground of undue influence was, on the evidence, disclosed but was not set forth in the memorandum of appeal, we think that rule 2 of Order 39 empowered him to raise it suo motu. However, under the provisio to that rule he was enjoined to give the appellant the opportunity to contest the issue before resting his decision on it as he did. Mr Magongo who had also represented B the present appellant in the High Court says that no such opportunity was afforded to his client. Indeed according to him, he was taken by surprise when he read the High Court judgment and for the first time noticed that the Judge had raised and dealt with that issue there. In all this the learned C Counsel is supported by the record. Thus to the extent that the learned Judge failed to afford the appellant the opportunity to be heard on the issue, he was, with due respect, clearly in error.
Our understanding of rule 2 of Order 39 is that its provisions are mandatory and the infringement D thereof is fatal. In the context of the present case this means that the finding on the issue of undue influence is invalid and ought to be set aside.
On the remaining ground Mr Magongo submitted in effect that on the evidence no undue influence E was disclosed. However, having held that the finding on that issue was invalid, it would serve no practical purpose now to go further into the matter. And since the decision of the learned Judge in this appeal was rested solely on the issue of undue influence, the view we have taken on that issue also disposes of the appeal itself.
F In the result the appeal is allowed. The decision of the High Court is set aside and that of the District Court is restored.
As stated before, the Trial Magistrate ordered the return of the Shs 200,000/= to the appellant because the respondent appeared to deny ownership of it. This was somewhat strange because the G money which was put in a fixed deposit at the bank was in her own name and she was keeping the fixed deposit certificate. However at the hearing of this appeal she assured us that she has been renewing the deposit every year, which clearly shows that she acknowledges the money to be hers. On that account we reverse the order of the District Court in this regard and order that the sum of H Shs 200,000/= be restored to the respondent.
The appellant is to have his costs of this appeal.