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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF
UGANDA AT KAMPALA
(COMMERCIAL COURT
DIVISION)
HCT-00-CC-CS-0010 OF 2005
MICHAEL NYANGAN :::::::::::::::::::::::::::::::::
PLAINTIFF
VERSUS
1. COLONEL SAMUEL WASSWA
2. ROSE NALONGO WASSWA
t/a S.S.W TRANSPORTERS
3. ISAAC SEMUJJU
:::::::::::::: DEFENDANTS
4. PEACE NAKAZI
BEFORE:
THE HONOURABLE MR. JUSTICE YOROKAMU BAMWINE
J U D G M E
N T:
The Plaintiff brought this suit to recover Shs.55,200,000-
which he allegedly lent to the Defendants through the 1st Defendant.
It is his case that on 5/9/2000 he entered into an agreement with the
1st Defendant wherein he lent him Shs.19,200,000-. That the
1st Defendant failed to repay the said amount and instead asked for a
further loan of Shs.36,000,000- in May 2001. He has failed to
pay off both
debts. Hence the claim for Shs.55,200,000-. The other Defendants are said to
be co-directors with the 1st Defendant in a company known as S.S.W
Transporters.
In a written statement of defence covering all the
Defendants, the 1st Defendant admits borrowing money from the
Plaintiff in the sum of Shs.12,000,000- to finance the activities of a company
called Aquifer
Int. Agencies Co. Ltd where he is a Director and Shareholder and
executing a loan agreement of Shs.19,200,000- to include the interest
thereon.
The amount was repayable within 5 weeks from the date of execution of the loan
agreement. He denies getting from the Plaintiff
a further loan of Shs.36m but
admits issuing a cheque in the same amount.
The long and short of the
defence case is that the Plaintiff was paid all the sums due under the agreement
plus even extra sums.
At the scheduling conference which the
1st Defendant did not attend, the parties through their respective
counsel agreed that:
1. The Plaintiff lent to the 1st Defendant
Shs.19,200,000-.
2. The 1st Defendant issued a cheque of Shs.36m
to the Plaintiff and upon presentation it bounced.
Two issues were
framed for determination:
1. Whether the 1st Defendant is indebted
to the Plaintiff in the amount claimed in the plaint.
2. Whether the
Plaintiff is entitled to the reliefs
sought.
Representations:
Mr. Kavuma Geoffrey for the
Plaintiff.
Mr. Mbabazi Mohamed for the Defendant.
First, the burden of
proof.
In law a fact is said to be proved when Court is satisfied as to
its truth. The general rule is that the burden of proof rests on
the party who
asserts the affirmative of the issue or question in dispute. When the party
adduces evidence sufficient to raise a
presumption that what he asserts is true,
he is said to shift the burden of proof: that is, his allegation is presumed to
be true,
unless his opponent adduces evidence to rebut the presumption. In the
instant case, the Plaintiff has alleged in his plaint that
the Defendants owe
him Shs.55,200,000-. The Defendants deny it. The burden of proof lies on the
Plaintiff to prove that what he
is asserting against the Defendants is true.
The standard of proof is on a balance of probabilities. From the way the issues
were
framed, the case is basically between the Plaintiff and the 1st
Defendant. The other Defendants come into the picture simply because the
impugned cheque bore S.S.W Transporters as the drawer.
Other than that, there
is no evidence of any dealings between the Plaintiff and the company. The
presumption is that this was a
matter between individuals: the Plaintiff and the
1st Defendant.
As to whether the 1st Defendant is
indebted to the Plaintiff in the amount claimed in the plaint, I must observe
right from the word go that the evidence
offered by the Plaintiff on the matter
is not only inconsistent but at variance with the pleadings.
The
Plaintiff, the sole witness for his side, testified that he gave Shs.19.2m to
the 1st Defendant on 5/9/2000 and P. Exh. 1 was executed. That on
another occasion, he gave the same Defendant a sum of Shs.36m for which
he
issued to him a post dated cheque, P. Exh. 11, as security for repayment of that
loan. Contrary to his averment in the reply
to the Defendant’s WSD that
the Pick up Nissan Diesel referred to in para 8 (f) of the defence was purchased
by him from M/s
Aquifer International Agencies Ltd with his own money, the
Plaintiff stated in his testimony to Court that he was taken to one
Karugire’s
Chambers and given the vehicle towards settlement of the said
debt and that he later received from one Jovia Saleh cash amounting
to Shs.8.5m
in connection with the said debt. Thus at the hearing, without moving Court for
an amendment to his plaint, the Plaintiff
stated that the amount due and owing
to him at the time of filing the case was Shs.38,700,000- and not
Shs.55,200,000- as stated
in the plaint.
Asked why he was now changing
his story, the Plaintiff confessed that he sued for that much in the plaint
first, because he was annoyed
with the 1st Defendant, and secondly,
because he knew that there was no written evidence that the 1st
Defendant had paid him anything. He said:
“Later, I realised it was bad to cheat anybody. So I presented to Court evidence of payment of Shs.6m by cheque from Col. Wasswa and evidence of sale of the vehicle (agreement) which was valued at Shs.8m. I also disclosed payment to me of cash Shs.2m by Col. Wasswa plus Shs.500,000-.”
As the saying goes, confession is
only good for the soul. It does not take away the sin. Whether he is sorry
about it or not, the
lies have undermined his credibility not only as a claimant
but also as a witness for his side. While a witness who has been untruthful
in
some parts and truthful in other parts could be believed in those parts where he
has been truthful, and it is the duty of the
Court to separate the truth from
the lies, it is a well known principle of law and practice that a man who swears
the contrary of
that which he stated on a previous occasion is not worthy of
belief: M. Kabenge –Vs- James K. Mpalanyi Civil Appeal No. B 56 of
1962, M.B. 84/64.
The 1st Defendant has of course not
helped Court in ascertaining the truth in this case. He never appeared in Court
at all throughout the
hearing. After failing to appear in Court as directed,
Court closed the hearing in accordance with 0.15 r 4 of the Civil Procedure
Rules. He therefore did not appear as a witness to substantiate his claim that
he paid back all the money. It is an admitted fact
that the Plaintiff lent to
the 1st Defendant Shs.19,200,000-. I believe he did. It is
contended by the Plaintiff and denied by the defence that the Plaintiff extended
a further loan of Shs.36m.
It is argued for the defence that it is
inconceivable that a person who had been advanced Shs.19.2m and had defaulted in
the payment
could be advanced another Shs.36m without executing another loan
agreement or memorandum of understanding to evidence the amount.
I have
been persuaded by this argument.
This is a person who had not been paid
the entire Shs.19.2m in time or at all. How would he entrust him with another
Shs.36m, unsecured?
And since the amount had now increased to Shs.55,200,000-,
why wasn’t the post dated cheque made in such away as to reflect
the total
indebtedness as at that date?
Moreover, the first debt had been reduced
into writing. It was for a sum of Shs.19.2m. Why wasn’t this one, almost
twice as
much, equally reduced into writing and witnessed by other people, just
like the first one? I could go on and on. These unanswered
questions have
raised a doubt in the mind of Court. Coupled with the fact of the
Plaintiff’s confessed dishonesty in this
case, Court has come to the
conclusion that the fact of the alleged lending of Shs.36m to the 1st
Defendant has not been proved.
I would answer the first issue in the
negative and I do so.
As to whether the Plaintiff is entitled to the
reliefs sought, his first claim is for Shs.19,200,000- as money borrowed and not
repaid
by the 1st Defendant.
From his own evidence, he
received from the 1st Defendant or other people paying on his behalf
cash amounting to Shs.8.5m and a pick – up vehicle estimated at Shs.8m all
totaling
to Shs.16,500,000-. These were payments towards the settlement of the
debt. In view of this evidence, the assertion that the entire
debt of Shs.19.2m
is still due and owing cannot succeed. It fails in part as I will show
later.
From the evidence, the Plaintiff may have been dishonest in
claiming that he had not been paid any money under the agreement of 5/9/2000.
On account of this dishonesty, I have been asked to dismiss the entire claim.
From the evidence as presented to Court and the submissions
of both counsel,
I’m unable to grant that prayer.
This is because from the evidence,
the 1st Defendant borrowed Shs.19.2m from the Plaintiff. After
harangues from the Plaintiff, a total of Shs.16,500,000- has been admitted
as
paid by the Defendants.
It is also admitted that the 1st
Defendant issued to the Plaintiff a cheque in the sum of Shs.36m. No evidence
has been presented to Court that he was coerced into
doing so. However, from
the evidence, following the 1st Defendant’s failure to pay, the
parties disagreed on the amounts due on the loan agreement. Court is of the
view that the
issue of interest took centre stage. The 1st Defendant
agreed to pay Shs.36m but renaged on that one as well.
It is claimed by
the defence that on 5/9/2001, Shs.10m was paid to the Plaintiff on cheque No.
542259 drawn on Allied Bank. However,
documents presented to Court show that
this cheque also bounced. Plaintiff’s evidence on that point has not been
challenged.
It is also claimed by the defence that on 26/4/2002, Shs.2m
was paid to the Plaintiff. The defence has produced documents indicating
acknowledgment of payments by the Plaintiff. No document has been produced to
indicate acknowledgment of payment to him on 26/4/2002.
From the
evidence, therefore, proved payments to the Plaintiff amount to Shs.16,500,000-.
The loan agreement of 5/9/2000 made no provision
for payment of interest. This
would leave a balance of Shs.2,700,000- on the loan agreement.
It would
appear to me that the Plaintiff has been insisting on payment of interest to him
when it was not part of the contract terms.
The general rule is that interest
can only be claimed if the claim is based on an agreement for it in the document
sued on or by
statute. In the instant case, the document being sued on is
silent on the issue of interest on the principal sum of Shs.19,200,000-.
Therefore, none was payable as of right.
There was, it would appear, an
attempt to quantify interest upon the breach. Hence counsel’s evidence
from the Bar that the
amount due to the Plaintiff was Shs.7,500,000. Given that
the Plaintiff had falsified his claim, Court is not sure that the computation
was based on correct legal principles or at all. Accordingly, interest can only
be paid herein as a discretionary remedy.
In para 9 (d) of the plaint,
the Plaintiff has prayed for interest on the principal sums at commercial rate
from the date of the breach
till full payment. In my Judgment, this would mean
interest on the proved unpaid sum of Shs.2,700,000-.
The principle of
interest as a discretionary remedy was laid down by Lord Denning in Harbutts
Plasticide Ltd –Vs- Wyne Tank & Pump Co. Ltd [1970] 1 QB 447. He
said:
“An award of interest is discretionary. It seems to me that the basis of an award of interest is that the Defendant has kept the Plaintiff out of his money; and the Defendant has had the use of it himself. So he ought to compensate the Plaintiff accordingly”.
In the
instant case, money was advanced to the 1st Defendant on 5/9/2000.
It was to be refunded within 5 weeks but this was never done.
The principle
which emerges from decided cases, including Sietco –Vs- Noble Builders (U)
Ltd SCCA No. 31/95 is that where a
person is entitled to a liquidated amount and
has been deprived of it through the wrongful act of another person, he should be
awarded
interest from the date of filing the suit. In the instant case, the
suit was not filed immediately upon the breach. The Plaintiff
filed one and he
was told he had filed it against a wrong party. He then filed the instant one
on 7/1/2005. I have addressed my
mind to a letter dated 21/2/2003 from the
Plaintiff himself. It is D. Exh. V. In that letter, the Plaintiff wrote:
“M/S Kiryowa & Karugire Co. Advocates KAMPALA.
Re: Agreement executed with M/S Aquifer International Agencies Ltd
I refer to an agreement executed in your chambers sometime in or about November 2001 in which the said company acknowledged being indebted to me in the sum of Shs.24,000,000-. I wish to confirm that I have to date received the equivalent of the sum of Shs.16,500,000- leaving a balance of Shs.7,500,000- which I now demand. You should therefore ignore the matter written by my lawyer in terms contrary to the above.”
The
Plaintiff’s lawyer had earlier on written to the said firm of Advocates
putting the Plaintiff’s claim at Shs.20,000,000-.
The Plaintiff did
not object to this document being put in evidence as an exhibit. The defence
itself relies on it, implying that
it was satisfied with the Plaintiff’s
stand on the matter as at that date.
At the scheduling conference,
counsel for the Defendants, while summarizing the defence case, stated that it
was true that the Defendant
borrowed money from the Plaintiff as per the
agreement of 5/9/2000. That the money was repayable within a given period, that
is,
by 31/10/2000. That there was interest being calculated and that this
resulted into the Defendant issuing a cheque for Shs.36m.
That this was meant
to cover the Shs.19,200,000- and the accumulated interest. Counsel
continued:
“Later, there were negotiations with a certain company called Aquifer. These negotiations were between Aquifer, 1st Defendant and the Plaintiff. So Aquifer on behalf of 1st Defendant paid Shs.28,500,000-. This left a balance of Shs.7,500,000-. This amount is acknowledged as due and owing.”
No witness has
appeared on behalf of the 1st Defendant to contradict the above
position. The presumption is that counsel was instructed to state so. In these
circumstances,
Court takes the view that whether the balance was calculated from
the Shs.36m previously bounced cheque or the re-negotiated amount
of Shs.24m as
per D. Exh. V, the truth is that the balance acknowledged by both parties was
Shs.7,500,000-. Court is therefore satisfied
that by further agreement of the
parties, the balance still due and owing, including the Shs.2,700,000-
originally outstanding on
the loan advanced to the Defendant on 5/9/2000 was as
at 21/2/2003 Shs.7,500,000-. It is awarded to the Plaintiff under “any
other relief this Court may consider just.” I allow interest on it at the
commercial rate of 23% per annum from the date of
filing the suit (7/1/2005)
till full payment.
In para 9 (b) of the plaint, the Plaintiff’s
claim is for Shs.36m being money borrowed and not repaid by the Defendants. I
have already pronounced myself on that claim. It is disallowed.
In para
9 (c) of the plaint, he prays for general damages for breach of
contract.
From the evidence, the parties had agreed that the loan of
Shs.19.2m be paid back on or before 31/10/2000 without fail or exercise.
The
1st Defendant breached that part of the contract. The payments first
denied but later accepted by the Plaintiff were effected much later,
after the
Plaintiff had lost his cool and sought extra-Judicial remedies against the
1st Defendant from the powers that be.
The law is that when a
party fails to do what he/she agreed to do or does not do it properly, he/she is
said to be in breach of the
contract. He/she will be liable to pay damages to
the aggrieved party to compensate him for any loss occasioned.
The
damages which the other party ought to receive in respect of such a breach
should be such as may fairly and reasonably be considered
as either arising
naturally, that is, according to the usual course of things, from such a breach
itself or such as may reasonably
be supposed to have been in contemplation of
the parties at the time they made the contract as a probable result of its
breach.
Counsel has invited Court to consider the fact that the Plaintiff
was a successful businessman whose businesses have now been paralysed
by the
1st Defendant’s act of refusing to pay him. Court accepts that
being denied use of his money has occasioned him loss and
inconvenience.
Counsel did not suggest to Court any figure he would
consider to be appropriate for the loss suffered by the Plaintiff. This Court
is of course cutely aware that damages are intended as compensation for the
Plaintiff’s loss and not a punishment to the Defendant.
Taking into
account all the circumstances of the case and doing the best I can, I deem a sum
of Shs.2,500,000- (two million five
hundred thousand only) adequate compensation
for the said breach. It is awarded to him.
As regards costs, the usual
result is that the loser pays the winner’s costs. However, this practice
is discretionary so that
a winner may not be awarded his costs, depending on the
circumstances of the case.
In the instant case, in view of the
Plaintiff’s partial success and the self confessed attempt to cheat the
Defendant, Court
is inclined not to award him full costs of litigation. He is
therefore decreed half the taxed costs of the suit.
The other Defendants
did not participate in the proceedings. No issue was framed to cover them and
counsel’s submissions are
silent on them. I would in these circumstances
dismiss the case against them and order them to meet their own costs, if any. I
order so.
In the result, Judgment is entered for the Plaintiff against
the 1st Defendant. The following orders are made against
him:
i. Special damages: Shs.7,500,000- (Seven million five hundred thousand
only).
ii. General damages: Shs.2,500,000- (Two million five hundred thousand
only).
iii. Interest on (i) at the prayed commercial rate of 23% per annum
from the date of filing the suit till payment in full.
iv. Half the taxed
costs of the suit.
(signed)
Yorokamu Bamwine
J U D
G E
1/2/2006
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.RTF of original document