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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT
KAMPALA
(COMMERCIAL COURT DIVISION)
HCT-00-CC-CS-0154 OF
2005
UNITED BUILDING SERVICES
LTD========PLAINTIFF
VERSUS
YAFESI MUZIRA T/A QUICKSET BUILDERS & CO.====DEFENDANT
BEFORE: HON. JUSTICE LAMECK N. MUKASA
JUDGMENT
The Plaintiff M/s United Building Services Ltd, a limited liability
company incorporated and carrying on business in Uganda brought
this suit
against the Defendant Yafesi Muzira t/a Quickset Builders & company arising
out of a breach of contract for which the
Plaintiff seeks the following reliefs:
-
(a) Ug. Shs. 8,000,000/= special damages;
(b) General damages for breach of contract, loss and inconvenience.
(c) Interest at 25% p.a from 06/07/2004 until payment in full;
(d) Costs of the suit; and
(e) Any further/alternative relief the Honourable Court may deem fit to grant.
The summons to file a defence were, by
this Court’s Order for substituted service issued on 10th
October 2005, advertised for service on the Defendant in the Monitor Newspaper
of 17th May 2005. There was no written statement of defence filed
and the Deputy Registrar entered an Introductory Judgment against the
Defendant
on 4th November 2005 under Order 9 rules 6 of the Civil Procedure
Rules and the Suit was set down for formal hearing.
The evidence to prove
the Plaintiffs claim was given by its Managing Director Ms Scovia Apolot. She
testified that sometime in May
2004, at the premises of the Plaintiff located at
Kasana Luwero, the Defendant Yafesi Muzira was introduced to her by a Commission
Agent one Stanley Asaba, as a person who wanted to hire the Plaintiff’s
equipment to perform the Defendant’s work he
had contracted in Jinja. The
Defendant wanted a Grader, a Roller and a Water Browser.
Following
discussions between the witness and the Defendant an oral agreement was
concluded whereby the Plaintiff Company agreed to
hire out the three equipment
together with the equipment’s respective operators to the Defendant for a
period of two months
at a total sum of Shs. 8,000,000/=. Payment was to be
made after the use of the equipment. The equipment and its operators was
released to the Defendant and driver by the operators to the Defendants work
site at Jinja. The Defendant to effect payment issued
to the Plaintiff cheque
No. 000070 in the total sum of Shs. 8,000,000/= dated 6th July 2004
drawn on Centenary Rural Development Bank Ltd, Namirembe Road Branch.
The
witness further testified that prior to the due date for payment of the said
cheque, the Defendant rang her and requested her
not to bank the cheque because
his employers had delayed payment to him. He asked for a three weeks period of
grace. After the
expiry of the grace period the witness banked the cheque on
the Plaintiffs account. The cheque was returned unpaid and marked with
the
words “Refer to drawer”. The witness tried to ring the Defendant to
inform him of the dishonour of the cheque but
his phone was off. The Defendant
could not be located at the site in Jinja because by then the work had been
completed and the equipment
returned to the Plaintiff. The witness’
efforts to contact the Defendant through the commission agent were also in vain.
Having
failed to locate the Defendant the Plaintiff filed this suit.
The
following issues were framed for court’s determination: -
1. Whether or not there was a contract of hire of the construction equipment between the parties. 2. If so, whether there was a breach of the said contract by the Defendant? 3. What are the remedies?
Issue No: 1 whether or
not there was a contract of hire of construction equipment between the
parties? In Civil Cases, like the instant case, the Plaintiff has a
burden to Pove his case on a balance of probabilities. (See Sebuliba Vs.
Co-operative Bank Ltd [1982] H.C.B 129.) The standard of proof is on a
reasonable degree of probability but is not as high as in Criminal Cases.
See Miller Vs. Ministry of Pensions [1974] 2 All. ER 372. To
discharge this burden the Plaintiff must show that a contract existed between
the parties by showing that there was an offer
by one party, an acceptance of
such offer by the other party and an existence of consideration for the
performance of the contract.
Court has to consider the documents tendered, the
parties oral testimony and the parties conduct in determining whether there was
a valid enforceable contract. See: J.K Patel Vs. Spear Motors Ltd S.C.C.A
No. 4 of 1991 [1993] VI KALR 85).
In the instant case the
Plaintiff’s witness testified that in May 2004 the Defendant offered to
hire the Plaintiffs three equipments
and the Plaintiff accepted to hire them out
to the Defendant for a period of two months at a consideration of Ug. Shs.
8,000,000/=.
The above evidence was un contradicted as no defence was filed and
hearing proceeded exparte. It is trite that failure to file
a defence raises a
presumption or constructive admission of the claim made in the plaint and the
Plaintiffs story must be accepted
as the truth. See: Francis Babuzabirwa
Vs. Faud Ali t/a Muhamed’s Garage H.C.C.S No. 623 of 1992 unreported);
Agadi Didi Vs. James Namakajo H.C.C.
No. 1230 of 1998 (unreported). The
above un-contradicted evidence of the Plaintiff’s witness shows that a
contract of hire of the equipment
existed between the parties. The first issue
is accordingly decided in the affirmative.
Issue No. 2 Whether
there was any breach of the contract? A breach of the contract occurs
when one or both parties fail to fulfil the obligations imposed by the terms of
the contract. See:
Nakawa Trading Co. Ltd Vs. Coffee Marketing Board HCCS
No. 137 of 1991 [1994] 11 KALR 15. The Plaintiffs evidence is that the
contract was oral. The terms were that the Plaintiff was to hire the three
equipments to the
Defendant together with their operators to carry out the
Defendants contract at Jinja for a period of two months. The equipment
was with
its operators handed over to the Defendant and taken to the Defendants work
site. That the equipment was after the agreed
period returned to the Plaintiff.
On the evidence above I find that the Plaintiff executed its part of the
contract.
The Plaintiff’s evidence is that payment was to be made
by the Defendant after the use of the equipment. The Defendant on being
handed
over the equipment issued to the Plaintiff a cheque (exhibit P1 (a)) in the
agreed sum of Shs. 8,000,000/= posted dated to
6th July 2004, the
date when the equipment was to be returned. Prior to the value date the
Defendant requested for a grace period of
three weeks after which the Plaintiff
was to present the cheque. On the expiry of the grace period the Plaintiff
banked the cheque
on its account with Stanbic Bank Uganda Limited at Plot 45
Kampala Road on 10th August 2004. On 11th August 2004,
the cheque was dishonoured by the Bank with remarks – “Refer to
drawer”. Mr. Jogo Tabu submitted
and I agree with him, that the
Defendants failure to make funds available on his account to enable the cheque
to be paid constituted
a breach of the terms of the contract relating to
payment. I accordingly answer the second issue in affirmative too.
This
now takes me to the third issue, the remedies available to the Plaintiff.
The Plaintiff claimed for Shs. 8,000,000/= as special damages. It is trite that
special damages must be specifically pleaded and
strictly proved. See:
Kyambadde Vs. Mpigi District Administration [1983] HCB 44 Impresterling (U) Ltd
Vs. Karim Lugemwa [1994] Vs. KALR 163, Dr Serafino
Adibaku t/a Family Resort
Clinic Vs. Empire Insurance Group Ltd HCCS No. 74 of 2000 (unreported).
The Plaintiffs evidence is that the cheque Exhibit P1 in the sum of Shs.
8,000,000/= was issued in payment of the agreed consideration.
The cheque was
when presented for payment returned dishonoured and marked “Refer to
Drawer”. Notice of the dishonour
could not be brought to the notice of
the Defendant because all efforts to trace the Defendant have been in vain. The
money is till
unpaid and owing from the Defendant to the Plaintiff. On the
pleading and evidence above I find that the claim for special damages
was
specifically pleaded and has been proved to the required standard. The
Plaintiff is therefore awarded special damages in the
sum of Ug. Shs.
8,000,000/=.
The Plaintiff also prays for general damages for breach of
contract. The Plaintiff’s witness testified that the Defendant’s
failure to pay has caused the Plaintiff Company loss in that it has been denied
the opportunity to re-invest, the money and develop
its business. Mr. Jogo Tabu
submitted that general damages are at the discretion of court. He prayed for an
award of Shs. 10,000,000/=.
For guidance counsel cited Nakawa Trading Co.
Ltd. Vs. CMB (supra) where Shs. 5,000,000/= was awarded in 1994 as
general damages for breach of contract. He argued that considering the ever
falling value of the shillings due to inflation an award if Shs. 10,000,000/= to
day would be appropriate. As observed by Justice A. Kania in Dr. Serafino
Adibaku Vs. Empire Insurance Group Ltd (supra) The general principal
behind an award of this nature is try to place an injured party in as good a
position in money terms as he would
have been had the wrong complained of not
occurred. The Plaintiff is a business entity, which must be using the monies
that it
earns to pay its operational costs and to re-invest in its business.
Due to non-payment the Plaintiff was denied its expected income
and its how
utilisation. The breach of the agreement to pay by the Defendant must have
caused inconvenience to the Plaintiff. I
consider an award of four million
shilling adequate compensation for the breach in the circumstances of this
case.
The Plaintiff prayed for interest at 25% per annum from
6th July 2004 until payment in full. The issue is whether court can
award interest prior to a decree. Counsel referred to Yousuf Abdulla
Galan Hussein vs. the French Somaliland Shipping Co. Ltd [1959] EA 25
(CA) where the issue was considered. It was held that under section 32
of the Civil Courts Ordinance, equivalent to our section 26 (2)
of the Civil
Procedure Act, the Court has discretion to make the order asked for. The cheque
was due for presentation for payment
on 6th July 2004. However the
Plaintiffs evidence is that it granted the Defendant a grace period of three
weeks and accordingly presented
the cheque on 10th August 2004 as
evidenced by Exhibit P1 (b). The cheque was dishonoured on 11th
August 2004. Therefore the default arose on 11th August 2004. The
Plaintiff is therefore awarded interest on the special damages at the rate of
25% per annum from the 11th August 2004 until payment in full. The
Plaintiff is also awarded interest on the general damages at the court rate from
the date
of this judgment. The Plaintiff is also awarded costs of this
suit.
In the final result judgment is entered in favour of the Plaintiff
in the following terms: -
(a) Special damages in the sum of Ug. Shs. 8,000,000/=. (b) Interest on the above sum at the rate of 25% p.a from 11th August 2004 until payment in full. (c) General damages in the sum of Shs. 4,000,000/=. (d) Interest on the general damages at the court rate from the date of judgment until payment in full. (e) Costs of this suit.
Lameck N. Mukasa
JUDGE
5/5/06
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