Nakagwa v Tulsa Investments Limited (Civil Suit 978 of 2022) [2023] UGCommC 274 (13 December 2023)

THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL DIVISION)

CIVIL SUIT NO. 978 OF 2022

NAKAGWA LYDIA:::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF

VERSUS

TULSA INVESTMENTS LIMITED:::::::::::::::::::::::::::::::DEFENDANT

Before: Hon. Lady Justice Cornelia Kakooza Sabiiti

JUDGMENT

Introduction

1. The Plaintiff brought this suit against the Defendant for recovery of UGX 120,000,000 (One hundred and twenty million shillings), interest, general damages and costs of the suit.

2. The Plaintiffs’ case is that the she approached the defendant and entered into a contract to be supplied with Adseter Stickers a paper product, the plaintiff as a result of the said contract forwarded monies on various dates amounting to 120,000,000/=, which had been agreed upon for the supply of the Adseter Stickers to the plaintiff. That the defendant failed to adhere to their contractual duty of supplying the same onto the plaintiff hence this civil suit.

3. The Defendant did not file a Written Statement of Defence despite having been served by substituted service in the Daily Monitor of 1^st August 2023 as per the Affidavit of Service on the court record. An interlocutory Judgment was entered against the Defendant for their failure to file a defence and the matter was set down for formal proof.

Representation

4. The Plaintiff was represented by M/s Matovu, Kateregga & Co Advocates.

Hearing

5. The matter proceeded exparte against the Defendant in accordance with Order 9 Rule 20 (1) (a) of the Civil Procedure Rules. The burden of proof remains on the plaintiff to prove the case on the balance of probabilities as held in case of Yoswa Kityo vs Eriya Kaddu [1982] HCB 58. At the hearing the Plaintiff led one witness, namely Nakagwa Lydia, the Plaintiff as PWI who gave evidence by witness statement and referred to the Exhibits PEX.1 to PEX.5 in the Plaintiff’s Trial Bundle.

Issues

6. The Court adopted the following issues under the Plaintiff’s Scheduling Memorandum:

1. Whether there was a breach of contract to supply and or deliver goods to the plaintiff by the defendant?

2. What remedies are available to the parties?

RESOLUTION

Issue No. 1: Whether there was a breach of contract to supply and or deliver goods to the plaintiff by the Defendant?

7. From the testimony and evidence adduced on record by PW1, the Plaintiff on various dates from 17^th, 20^th, 21^st, 22^nd of September 2021, 20^th October 2021 as well as 11^th November 2021 she made payments totaling to UGX 120,000,000 to the Defendant towards the supply of the Adseter Sticker a paper product. The evidence of payment to the Defendant were the five receipts in the Plaintiff’s Trial Bundle marked as Exhibits PEX.1 to PEX.5.

8. A contract is defined under Section 10 of the Contracts Act 2010 as an agreement made with the free consent of parties with capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally bound. From the evidence adduced on record, over the period 17^th October 2021 to November 2021 the Plaintiff and Defendant entered into a contractual relationship for the supply of the Adseter Sticker a paper product.

9. A breach of contract occurs when a party neglects, refuses or fails to perform any party of its bargain or any term of the contract, written or oral, without a legitimate legal excuse. This was held in the case of United Building Services Ltd Vs Yafesi Muzira T/A Quickest Builders and Co. [2006] UG Comm 15 where court held that;

“A breach of the contract occurs when one or both parties fail to fulfill the obligations imposed by the terms of the contract.”

10. A summary of the information from examination of the five receipt is as follows:

No	Date	Receipt No	Issued to	Item Purchased	Amount paid	Comment
1	17/09/2021	091	Lydia Nakagwa/Mbazira	Adseter Sticker	10,000,000	Not taken
2	21/09/2021	092	Lydia Nakagwa/Mbazira	Adseter Sticker	20,000,000	Not taken
3	22/09/2021	093	Lydia Nakagwa/Mbazira	Adseter Sticker	20,000,000	Not taken
4	20/10/2021	099	Lydia Nakagwa/Mbazira	Adseter Sticker	50,000,000	Not taken
5	11/11/2021	001	Lydia Nakagwa/Mbazira	Adseter Sticker	20,000,000	Not taken
	TOTAL				120,000,000

11. From the evidence above I find that the defendant breached their contractual obligation to supply the plaintiff with the Adseter Sticker she had duly paid for and did not refund the consideration paid. Based on the evidence adduced I find that the Defendant breached the contract and is indebted to the Plaintiff.

Issue No. 1 is answered in the affirmative.

Issue No. 2: Whether the Plaintiff is entitled to the remedies sought?

12. Section 61 of the Contracts Act 2010 provides for Compensation for loss caused by breach of contract to the party that suffers the breach. In the case of Akware Caroline Osilo Vs Gaaga Enterprises Ltd, HCCS No. 271 of 2011, it was held that a plaintiff who suffers damage due to a wrongful act of the defendant must be put in the position, he would have been had he not suffered the wrong.

13. Under the Plaint, the Plaintiff sought for recovery of UGX 120,000,000 (One hundred and twenty million shillings), interest, general damages and costs of the suit. From the evidence adduced, the five receipts PEX.1 to PEX.5 indicates that Plaintiff paid a total of UGX 120,000,000. I find that the Plaintiff is entitled to recover amount reflected in the five receipts.

14. With regards the interest prayed for on the sum of UGX 120,000,000, under Section 26 (1), the Civil Procedure Act Cap 71, it is a settled position of law that the interest is awarded at the discretion of court and it must be exercised judiciously considering all circumstances of the case as held in the case of Uganda Revenue Authority vs Stephen Mabosi SCCA No. 1 of 1996. Since the Defendant has kept the plaintiff’s money for more than two years and this was a commercial arrangement, I award interest of 18% per annum from the time of filing the suit till full payment.

15. With regard to the general damages, the plaintiffs averred that the actions of the Defendant have caused the Plaintiff to suffer inconvenience mental and psychological anguish. The general principle underlying the award of general damages in contract is that the claimant is entitled to full compensation for his losses; i.e. the principle of “restitutio in integrum.” In the case of Uganda Commercial Bank Vs Kigozi [2002] 1 EA 305 court held that;

“In assessment of the quantum of damages, courts are mainly guided by the value of the subject matter, the economic inconvenience that a party may have been put through and the nature and extent of the breach or injury suffered”.

16. Damages are designed to compensate for an established loss and not to enrich an aggrieved party. Accordingly, I find that UGX 5,000,000 is sufficient as general damages and it is awarded.

17. With regard to the costs of the suit, it is the established principle of law under Section 27 (2) of the Civil Procedure Act that costs of any action, cause or matter shall follow the event unless court for good cause orders otherwise. The Plaintiff being the successful party in this case is entitled to costs of the suit.

18. In the final result, judgment is entered for the Plaintiff against the Defendant with the following orders-

1. The Defendant to pay the Plaintiff the contractual amount of UGX 120,000,000.

2. Interest is awarded on the above amount at 18% per annum from the date of filing this suit till payment in full.

3. The Defendant is to pay the Plaintiffs UGX 5,000,000 as general damages.

4. Costs of the suit to the Plaintiff.

It is so ordered.

CORNELIA KAKOOZA SABIITI

JUDGE

Date: 13^th December 2023