Court name
High Court of Uganda
Judgment date
22 September 2008

Westlink Uganda Ltd v Magezi Charles (HCT-00-CV-CS-2007/140) [2008] UGHC 138 (22 September 2008);

Cite this case
[2008] UGHC 138

THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

HCT-00-CV-CS-0140-2007




WESTLINK UGANDA LIMITED :::::::::
::::::::::::::::::::::PLAINTIFF

VERSUS


MAGEZI CHARLES :::::::::::::::::::::::::::::::::::::::::::::: DEFENDANT



BEFORE:
THE HONOURABLE MR. JUSTICE YOROKAMU BAMWINE



JUDGMENT
:


The Plaintiff’s claim against the Defendant is for a liquidated amount of Shs.19,200,000/= interest thereon and costs of the
suit. The suit is based on a loan agreement between the Plaintiff and the Defendant on which the Defendant defaulted.



Summons to file a defence were issued on 13th March, 2007. According to the affidavit of service of one Kikomeko J. Ssozi, a Process Server, he proceeded to the known address
of the Defendant at his home in Kyebando with purpose of serving plaint and summons. He did not find anybody at that home and the
information he received was that the Defendant had left the area.



From the records, following this failed service the same deponent received summons from court on 31/05/2007 to be served to the Defendant
through advertising in New Vision Newspaper and putting a copy on the High Court notice board. He did so and the advertisement appeared
in New Vision newspaper of 5th June, 2007 at p.49 thereof. On the strength of that advertisement and the Defendant’s failure to file a defence in the matter,
judgment in default of defence was entered against him by the Learned Registrar of this court on 11/07/2007. The matter was thereafter
before me for formal proof to assess damages.



As to whether there was a contract between the Plaintiff and the Defendant, there is evidence that there was. The loan agreement
dated 12/07/2003 is on record as Exhibit P3.



The loan amount was Shs.2,000,000/= repayable within one (1) month at the rate of 20% per month.



From the evidence of PW1 Jackson Mwesigye and PW2 Mwesigye Naome the Defendant failed to pay back the money and hence this suit.



It is now trite law that special damages must first be pleaded and then strictly proved. There is a long line of authorities to that
effect and if any were required, I would cite that of Kampala City Council vs Nakaye [1972] EA 446.



It has also time and again been held by the courts in this country that a claim for each particular type of special damage must be
pleaded. In Jivanji vs Sanyo Electrical Co. Ltd [2003] EA 98 at p. 103 the court observed:

“The character of the acts themselves which produce the damage, and the circumstances under which those acts are done, must
regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and
particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and
to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles.
To insist upon more would be the vainest pendantry.” The observation is extracted from Ratcliffe vs Evans [1892] QB 542, an English leading case on pleading and proof of damage. The principle applies to defended as well as undefended suits of the instant
nature.



Turning to the instant suit, the Plaintiff’s head prayer is for Shs.19,200,000/=, being the principal sum of Shs.2,000,000/=
and interest thereon at 20% to the date of filing the suit (13-03-2007). I have already noted that the fact of the loan advance in
the sum of Shs.2,000,000/= is well documented. In the absence of any evidence that the Defendant settled the whole of it or even
part thereof, court is inclined to the view that the Plaintiff is entitled to a refund of that amount.



Having said so, it is clear to me from the records that the loan transaction had a specific period within which to be paid with interest.
The parties agreed that for a period of one month the Defendant would pay interest on the loan amount at the rate of 20%. This in
practical terms means that one month after the loan transaction the Plaintiff was entitled to a refund to him of the Shs.2,000,000/=
with a profit of Shs.400,000/=. In those circumstances, the Plaintiff’s claim which includes purported interest beyond the
contractual period cannot be accepted as at the end of the contract period of one month the contract elapsed and the Plaintiff was
entitled to sue for breach of contract in respect of the loan amount. I stated in Lincoln Consultsam Ltd vs James Kiwanuka Walakira HCT-00-CC-CS-0414-2006 (un reported), and I don’t hesitate to re-state the same position herein that if the Plaintiff wants interest beyond the contractual
period, the solution lies in including a penalty clause in the loan agreement for delayed payments. It is otherwise the duty of the
Plaintiff to take reasonable steps to mitigate the loss he has sustained consequent upon the wrongful act in respect of which he
sues. He cannot claim as damages any sum which is due to his own neglect. The duty arises immediately a Plaintiff realizes that an
interest of his has been injured by a breach of a contract or tort. He is then bound to act as best he may, not only in his own interests
but also those of the Defendant.



See: African Highland Produce Ltd vs Kisorio [2001] 1 EA 1.



For the reasons stated above, in the absence of any such default clause in the loan agreement that would entitle the Plaintiff to
an award of interest for the period between 12/08/2003 to 13/03/2007, court is unable to allow its claim beyond the amount proved
herein of Shs.2,400,000/= as special damages. The difference between the claim (Shs.19,200,000/=), that is, Shs.16,800,000/= is therefore
disallowed.



As regards interest outside the contract period, this is of course discretionary. The time when the amount claimed is done is normally
the date from which interest should be awarded. And this should be the last time when the parties agreed on the total balance due: J. K. Patel vs Spear Motors Ltd SCCA No. 4 of 1991.



In the instant case, the presumed date as to when the parties agreed on the total balance due, in the absence of any evidence to
the contrary, shall be the date when the contract period ended, that is, 12/08/2003. Given that the Plaintiff was entitled to file
a suit at that point, interest shall be awarded to them on the special damages award at the rate of 25% per annum from the date of
breach till payment is full.



As regards the Plaintiff’s prayer for general damages for breach of contract, I think that the Plaintiff having been put in
its proper position through the award to them of interest for the contract period and beyond deserves no more than nominal damages.
I can do no better than awarding it nominal damages of Shs.500,000/= (Five hundred thousand only).



As regards the prayer for foreclosure on the property deposited as security, there is evidence that as security for the loan the
Defendant pledged with the Plaintiff property comprised in Kyadondo Block 210 Plot 1105 at Kyebando and deposited a title deed for
the said property together with a cheque, Exhibit P4. When presented for payment the cheque bounced.



Section 129 of the Registration of Titles Act enjoins an equitable mortgage to register a caveat on the mortgaged property. When
the Defendant deposited the certificate of Title with the Plaintiff, the Plaintiff became an equitable mortgagee enjoined to register
a caveat on the suit property failing while the equitable mortgage could not be enforced by foreclosure. From the records, a caveat
was lodged on the suit property on 14/10/2005 under Instrument No. KLA 282529. However, the Plaintiff has preferred a more elaborate
procedure of recovering the loan amount and damages by way of an ordinary suit as opposed to the less cumbersome procedure of seeking
foreclosure by way of an originating summons. I do not fault the choice of procedure adopted by the Plaintiff, more so since the
property can be used to realize the decretal and sum (………/………) costs herein. Accordingly, no
order of foreclosure is granted.



The Plaintiff shall have the costs of the suit.



In the result judgment shall be confirmed in favour of the Plaintiff against the Defendant on the following terms:
i).     
Special damages: Shs.2,400,000/= (Two million four hundred thousand only).

ii).    
General damages: Shs.500,000/= (Five hundred thousand only).

iii).   
Interest on (i) at the rate of 25% per annum from the date of breach
of contract, that is, 12/08/2003 till payment in full; and on the same rate per annum on (ii) from the date of judgment till payment
in full.

iv). Costs of the suit.



Orders accordingly.



Dated at Kampala this 22nd day of September, 2008.



Yorokamu Bamwine

JUDGE

22/09/2008