Court name
Commercial Court of Uganda
Judgment date
22 February 2013

Transtrac Ltd v Damco Logistics Ltd (Miscellaneous Application-2012/348) [2013] UGCommC 36 (22 February 2013);

Cite this case
[2013] UGCommC 36

THE REPUBLIC OF UGANDA,

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MA NO 348 OF 2012

(ARISING FROM CIVIL SUIT NO 161 OF 2012)

TRANSTRAC LIMITED}................................................................. APPLICANT

VERSUS

DAMCO LOGISTICS LTD} …………………………………………………………… RESPONDENT

 

BEFORE: HON. JUSTICE CHRISTOPHER MADRAMA IZAMA

RULING

The Applicants application is made under section 99 of the Civil Procedure Act and the enabling rules of the Civil Procedure Rules for orders that the second line of the judgment in the main suit namely civil suit number 161 of 2012 is corrected by inserting the figures US$303,330 between the word "Party" and the full stop. Secondly it is for orders that the decree in civil suit number 161 of 2010 is corrected by inserting US$303,330 at the end of paragraph 3 thereof and for costs of the application to be provided for.

The grounds of the application are that the applicant is the third-party in civil suit number 161 of 2010 and was found liable in the judgment to indemnify the respondent who was the defendant in the same suit where judgment was delivered on 17 February 2012. The quantum of indemnity was found to be the full replacement value of any goods or containers lost while in the custody of the third-party and which was found to be US$303,330. Consequently the applicant's case is that the court omitted to insert the correct amount as the replacement value of the lost goods at page 55 of the judgment. The decree omitted to insert the amount of US$303,330 as the replacement value of the lost goods in clause 5 of the decree. Pursuant to the above matters the parties to the application have disagreed on the correct interpretation of the "full replacement value of the goods lost" under clause 5 of the decree. The application was meant to give effect to the intention of the court at the time when judgment was delivered. Therefore the court should grant the order in the application to avoid uncertainty about the meaning of "full replacement value of the goods lost".

The application is supported by the affidavit of Oscar R. Busingye Baitwa a director of the applicant. The affidavit repeats the grounds in the notice of motion. At the hearing of the application counsel Dan Wegulo represented the applicant while Counsel Barnabas Tumusingize represented the respondent.

Counsel for the applicant submitted that the judgment of the court was that the quantum of indemnity was the full replacement value of any goods or containers lost while in the custody of the third-party. He contended that the full replacement value was held by the court to be US$303,330 but the honourable court omitted to state this amount as the full replacement value of the goods lost at page 55 of the judgment. Consequently the decree issued by the court did not include the value of the "full replacement value of the goods lost". Subsequently the respondents demanded US$405,375 as the full replacement value of the goods lost and a sum of 18 million Uganda shillings as costs. Counsel submitted that it can be deduced from the judgment that the full replacement value of the lost goods was US$303,330 while costs were to be borne by the defendant and the third-party on a 50 by 50% basis.

Counsel submitted that considerations for the grant of such an application can be found in the case of Orient Bank Ltd versus Zaabwe and Another Supreme Court civil appeal number 17 of 2007 which quotes with approval the case of Lakhamashi brothers Ltd versus R. Raja and Sons [1966] EA 313 at page 314. It was held that the court would apply this slip rule where it is satisfied that it is giving effect to the intention of the court at the time when judgment was delivered. Quoting from Mulla on the Code of Civil Procedure, Vol 1 17th Edition at page 1631 on “Accidental Slip”:

"The test to determine whether the slip or omission is accidental or not, can be gathered from the intention of the judge in preparing the judgment or order. If on a cursory reading of the judgment, one finds that the grant of a specific relief is writ large, the omission thereof in the decree sheet would obviously be an accidental omission falling within the four corners of section 152. An error in the sense of mistaken identity of the property and not a mere mis-description thereof, is not an accidental slip and cannot be corrected under this section. The test is 'does the decree as drafted to represent the intentions of the judge?' The award 'accidental' qualifies omission also, so that the section can only be resorted to rectify or omissions which are accidental."

The first guideline is that the acts of the court should not prejudice any party and courts have the duty to see that records are true and represent the correct state of affairs. An arithmetical mistake is a mistake in calculation while a clerical mistake is a mistake arising from a typing error or an accidental slip or omission/error made unintentionally. However, any matter requiring arguments on questions of fact or law cannot be categorised as an error. It is the duty of the court to give the order the express meaning intended. The intention of court which is contained in the judgment was to establish whether the third-party was liable. Secondly, it was for purposes of quantifying the liability of the third-party to indemnify the defendant. This was brought out at page 36 of the judgment. The court held that that liability of the third party was contractual and relied on clause 6.1 to find the third-party liable to indemnify the defendant for loss of the goods. The quantum of indemnity is provided for under clause 6.5 which gives the quantum as the full replacement value of any goods or containers while in the custody of the third-party. The court established that the value of the cargo was US$303,330. Freight charges had not been paid and the court awarded special damages for the value of the cargo as specified. The court also awarded general damages against the defendant as if the property had been delivered at the place of contractual delivery of the goods. The basis of the third parties liability to indemnify the defendant is however different. The order is that the defendant pays the plaintiff US$303,330 as special damages and a sum of US$45,500 as general damages. Special damages attracted interest at 8% per annum from May 2010 until the date of the judgment. Thereafter the defendant was ordered the interest at 6% per annum on the aggregate sum awarded from the date of judgment till payment in full.

The applicants counsel submitted that the intention of the court was to give effect to the contractual liability of the third-party. The only matter which the court missed out on which it would have considered had it been brought to its attention was the amount of money to be paid by the third-party as indemnity to the defendant. Counsel submitted that the correct amount for the replacement value of the containers lost while in the custody of the third-party was US$303,330 awarded by the court as special damages against the defendant.

In reply the respondents counsel submitted that save for the question of costs which was to be shared on a 50 x 50% basis, the third-party was liable to indemnify the defendant for the award in the judgment. He submitted that the crux of the matter between the parties is the issue of replacement value. The evaluation of an existing property may be different from the replacement value of the property. Clause 6.5 of the agreement between the defendant and the third-party provides for the replacement value of the goods while in the custody of the third-party. He submitted that it is not the value of the goods in the custody of the third-party but the replacement value of the goods which should be considered. He submitted that clause 6.1 should be read in conjunction with clause 6.5. The crux of clause 6.1 was that the carrier shall hold harmless and indemnify the defendant and any customer for any and all responsibility and liability arising out of any such loss or damage or delays described in clause 6.1. Clause 6.5 on the other hand provides for the quantum of indemnity as the full replacement value. He submitted that the proper indemnification of the defendant is the amount awarded against the defendant by the court. This amount fully replaces the goods of the plaintiff that had been lost. Though the court did not specify the amount of indemnity, it held that it is provided for under clause 6.5 as the full replacement value.

He submitted that it was wrong for the applicants counsel to argue that the full replacement value is US$303,330. Though the full replacement value was not indicated in precise terms, the amount of money that the respondent paid to the plaintiff is the amount the respondent used to replace the goods of the plaintiff. In summary counsel submitted that the applicants counsel was in effect asking the court to amend the judgment. To provide for the value of the goods would be contrary to the provisions of the contract whose basis is the indemnity of the defendant by paying the full replacement value of the goods and not the container. He concluded that the full replacement value can only be the amount of money that the respondent had to pay to the plaintiff company. Valuation is at the point where the goods are in the custody of the third party.

In rejoinder the applicants counsel reiterated arguments in support of the application that the judgment itself contains the value of the goods and is US$303,330. He agreed that the quantum of indemnity is provided for under clause 6.5 which is the full replacement value of the goods or containers while in the custody of the third-party. This did not include general damages and interest.

Ruling

I have duly considered the applicants application, the arguments of counsel and the applicable law. The application was brought under section 99 of the Civil Procedure Act and there is no controversy about the interpretation of section 99.

Section 99 of the Civil Procedure Act is set out here in below:

            "99. Amendment of judgments decrees or orders

Clerical or mathematical mistakes in judgments, decrees or orders, or errors arising in them from any accidental slip or omission may at any time be corrected by the court either of its own motion or on the application of any of the parties."

The provision clearly deals with clerical or mathematical mistakes. Secondly it deals with any errors in judgment arising from any accidental slip or omission. The applicants counsel referred to the case of Orient Bank Ltd versus Frederick Zaabwe and Mars Trading Ltd Supreme Court Civil Application Number 17 of 2007 in which the Supreme Court interpreted rule 35 (1) of the Supreme Court rules. The Supreme Court rules are similar to section 99 of the Civil Procedure Act and provide that:

"A clerical or arithmetical mistake in any judgment of the court or any error arising in it from an accidental slip or omission may, at any time, whether before or after the judgment has been embodied in an order, be corrected by the court, either of its own motion or on the application of any interested person so as to give effect to what was the intention of the court when judgment was given."

It is similar to section 99 of the CPA because it makes reference to clerical or arithmetical mistakes in any judgment or order. Secondly it makes reference to errors arising in the judgment or order from an accidental slip or omission. Thirdly an application for correction may be made by an interested person or the court may on its own motion make the correction. The Supreme Court rule is wider in that it provides that any interested person may apply whereas section 99 of the Civil Procedure Act provides for an application by any of the parties. The Supreme Court rules also has an addition in that it gives the intention of the rule as to give effect to what the intention of the court was when judgment was given. The Civil Procedure Act section 99 thereof however does not have this latter part of the rule. The court held that subject to the inherent powers of the court and the slip rule, the decision of a court in every proceeding is final. The court made reference to the case of Lakhamshi Brothers Ltd versus R. Raja And Sons (1966) EA 313 at 314 for the proposition of law that the court will only apply the slip rule were it is satisfied that it is giving effect to the intention of the court at the time when judgment was given or, in the case of the matter which was overlooked, where it is satisfied, beyond doubt, as to the order which it would have made had the matter been brought to its attention. The Supreme Court held that the above decision has been preserved under rule 35 (1) of its rules quoted above. Consequently the decision of the court in every proceeding is final. The slip rule under which the applicant applied refers to a clerical or mathematical mistake. This aspect of the section is inapplicable to the applicant’s application because there was no clerical or mathematical mistake. The applicant moved under the ground of errors arising from any accidental slip or omission.

Both counsels agree that the court did not award any quantum for indemnity of the defendant by the third-party. As far as the applicants counsel is concerned, it was an error for the court not to insert the sum of US$303,330 as the replacement value of the lost goods at page 55 of its judgment. On the other hand the respondents counsel submitted that the quantum for indemnity under clause 6.5 of the contract was the replacement value of the goods. He contended that the replacement value of the goods was what the court awarded the plaintiff which the defendant has paid.

The question for determination is whether there was any error made by the court by accidental slip or omission not to mention the quantum for indemnity of the defendant under clause 6.5 of the contract which was also the basis of the liability of the third-party in the judgment.

I have carefully reviewed the judgment of the court on the question of liability of the third-party. At page 52 of the judgment second last paragraph, the judgment of the court is as follows:

"In view of my finding that the loss of the plaintiffs cargo is a loss envisaged by clause 6.1 of exhibit D1 it follows that the carrier who is the third-party is responsible to both Maersk Logistics and any customer for the loss."

The judgment is that the third-party was responsible to the defendant and any customer for the loss. It is explicit as contained in the judgment that the third party was liable to the customer as well. In this case the customer is the plaintiff. At page 53 paragraph 1 of the judgment the court held as follows:

"As far as the submission limiting liability of the third-party to a sum of United States dollars 55,000 is concerned, this submission is inconsistent with clause 6.5 of exhibit D1. 6.5 expressly provide that the carrier is liable to reimburse Maersk Logistics or any customer the "full replacement value of any goods and/or container which are lost or damaged whilst in its custody or control."

In making this pronouncement the court did not indicate the quantum of the full replacement value of any goods which are lost as indicated in the judgment. The conclusion of the court is at page 55 of the judgment and it is necessary to quote it in full:

"In the premises, it is the judgment of this court that the third-party is liable under exhibit D1 to indemnify the defendant for the loss of goods under clause 6.1. The quantum of indemnity is provided for under clause 6.5 which is the full replacement value of any goods or containers lost while in the custody of the third-party. The costs of the suit are awarded to the plaintiff and shall be borne equally by the defendant and the third-party on a 50% to 50% basis."

I have carefully considered the arguments of both parties. The fact that there is a controversy between the parties as to the quantum of the full replacement value of the goods lost while in the custody of the third-party, demonstrates without the need for further argument that the court had omitted to pronounce the quantum of the full replacement value of the goods. The applicant’s application therefore has merit because counsel for the applicant submits that the quantum for the replacement value is US$303,330 while the respondent maintains that the replacement value includes whatever it paid to the plaintiff under the judgment of the court. I do not agree with the applicant that the interpretation of the judgment is that the replacement value of the goods is US$303,330. It is clearly reflected in the judgment that the third-party is liable to indemnify the defendant under clause 6.1 of the contract exhibit D1. The court indicates quite clearly that the third-party is liable to the customer of the defendant as well under clause 6.1 quoted above. This is contained in the 52 of the judgment which I have quoted above. For emphasis the court held that the third-party is responsible to the defendant and any customer.

In this case the customer is the plaintiff, the owner of the goods which got lost. I have carefully considered the issue between the plaintiff and the defendant. The court determined the quantum of loss suffered by the plaintiff. The issue which was submitted on by the parties as between the plaintiff and the defendant is as follows "What is the amount of loss suffered by the plaintiff?" The court held that the doctrine that the courts have used in awarding damages is the principle of restitutio in integrum which is that the plaintiff should be restored as nearly as possible to a position he or she would have been had the injury complained of not occurred. The court applied the principles upon which awards are made for loss of cargo following McGregor on Damages 15th edition page 681 paragraph 1101 that the normal measure of damages for non-delivery is the market value of the goods at the time and place at which they should have been delivered less the amount it would have cost to get them into the place of delivery. At page 36 the court held that the place of delivery was Vietnam and the market value to be taken is the contract place of delivery by the carrier and not the place where the goods were delivered to the carrier. The court was explicit that the plaintiff was entitled to 15% above the price of purchase of the goods which was US$303,330. If the question had been asked as to how much the third-party would have indemnified the plaintiff, the answer would be as much as what has been awarded against the defendant. That is because the 3rd party is liable to the defendant’s customer as well. This flows from the interpretation of clause 6.1 of the contract coupled with 6.5. Following the judgment of the court at pages 36 and 37 it is clearly the case that the court decided that the replacement value of the goods is at the place of contractual delivery of the goods and at the market value. The market value included the 15% additional to the price of purchase of the goods. For emphasis clause 6.1 as far as is relevant to the question of liability of the third-party to the plaintiff or the defendant provides as follows:

 "indemnify Maersk Logistics and any customer for any and all responsibility and liability arising out of such loss, damage or delay." In other words under clause 6.1 the third-party had all responsibility and liability arising out of such loss, damage or delay. The words "full replacement value of any goods" should be read to mean the replacement of the goods of the plaintiff. The goods did not belong to the defendant in the first place. The defendant was contracted to convey the goods to Vietnam which is the place of contractual delivery of the goods. The goods could only be replaced for the benefit of the plaintiff. It therefore follows that the full replacement value of the goods was ordered against the defendant by way of a judgment is that the plaintiff had to be restored as nearly as possible to a position it would have been in had the loss not occurred.

In the premises, the applicant’s application succeeds in part and as contained in the above ruling. However, because the interpretation of the court of the judgment is adverse to the applicant, each party shall bear its own costs of the application.

Ruling delivered in open court this 22nd day of February 2013

 

Christopher Madrama Izama

Judge

Ruling delivered in the presence of:

Wandera Michael holding brief for Dan Wegulo, Counsel for the Applicant

Respondents are represented by Sebalu and Lule Advocates who are absent.

None of the Parties are in Court,

Charles Okuni: Court Clerk

 

Christopher Madrama Izama

Judge