[2002] UGCommC 35

# **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA COMMERCIAL COURT DIVISION CIVIL SUIT NO. 591 OF 2002 APOLLO KADDUMUKASA KIRONDE 2... PLAINTIFF VERSUS**


## **CAIRO INTERNATIONAL BANK LTD... DEFENDANT Before: The Hon. Mr. Justice E. S. Lugayizi**

#### **JUDGMENT**

The plaintiffsued the defendant for breach of contract and prayed for the following remedies:

(a) special damages in the sum ofshs. 6,321,600/=;


(b) general damages for breach of contract;

(c) interest on (a) and (b) at commercial bank lending rate from 24/8/2002 till payment in full;

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(d) costs ofthe suit;

(e) interest on (d) at court rate from the date ofjudgment till payment in full; and

(f) any other reliefCourt may deem fit to grant.

In its WSD the defendant denied the above claim. Instead, it alleged that the plaintiffwas in breach ofthe contract.

Briefly, the background to the suit was as follows. In the early part ofthe year 2002 the plaintiff and the defendant signed a contract whereby the former was to supply meals to the latter's members of staff. The contract was open ended, but either party could terminate it by giving the other a two months' notice. The plaintiff provided the meals. However, after sometime the defendant terminated the contract. The plaintiff felt aggrieved. Hence the suit that is the subject ofthis judgment.

During the scheduling conference the parties agreed not to dispute the following facts:

- 1. That there was a contract between the parties dated 10/5/2002 that commenced on 11/3/2002. - 2. That either party could terminate the contract by giving the other a two months' notice. - 3. That under the contract the plaintiff was to provide meals to the defendant's members ofstaff. - 4. That the Menu was as proposed under the plaintiffs document dated 20/8/2001. - 5. That the price for the meals was shs. 1500/= per plate. - 6. That the plaintiff employed two workers to cook and serve the meals. - 7. That the plaintiff provided the meals to the defendant's members of staffup to 23/8/2002 and the defendant paid for them.

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8. That on 24/8/2002 the defendant summarily terminated the contract.

The parties also agreed that Court would introduce a number of documents on the record as exhibits without formally proving them. Those documents are as follows: An agreement for the supply of meals (Exh. Pl); a letter terminating the contract (Exh. P2); a letter showing the proposed Menu (Exh. P3); a letter dated 9/7/2002 and complaining about the plaintiffs food (Exh. P4)); a Memo dated 20/8/2002 and complaining about the plaintiffs food (Exh. P5); another letter dated 21/8/2002 and complaining about the plaintiffs food (Exh. P6); cash payment vouchers showing the names of the defendant's members of staff who ate the plaintiffs food during the existence ofthe contract (Exh. P7).

The parties agreed that Court would try the suit under the following issues:

- 1. Whether the plaintiff complied with the terms and conditions of the contract by supplying and serving meals that were of the agreed standard. - 2. Whether the plaintiff contracted a third party on a long-standing basis for the purpose offulfilling the contract. - 3. Whether the plaintiff was entitled to notice before termination of the contract. - 4. The available remedies.

At the time of hearing the suit the plaintiff called two witnesses in support of his case, namely Messrs Apollo KadduMukasa Kironde 2 (PW1); and Edward Makaabugo (PW2). The defendant called one witness, namely Ms. Babu Marion Brown (DW1).

Court will, below, dispose ofthe agreed issues in turn taking into account the evidence on record and the relevant law.

**With regard to the first issue that is to say, whether the plaintiff complied with the terms and conditions of the contract by supplying and serving meals that were of the agreed standard,** Court has this to say. Firstly, it is important to establish the standard that the parties set, under the contract, for the meals to conform to. A perusal of Articles 5, 6, and 7 of the contract (Exh. Pl) and paragraph 4 of the proposed Menu (Exh. P3) clearly shows that the parties agreed that the meals would be made up of a variety of foods. Such meals were supposed to be well balanced, hygienic and not contaminated by any matter, noxious or otherwise. They were to be served when they were warm.

The next question to consider is whether the meals measured up to the standard referred to above. In his evidence KadduMukasa Kironde 2 insisted that the meals he served the defendant's members of staff measured up to the agreed standard and could not, in any way, be faulted. He explained that the defendant provided him with a microwave oven to keep the meals warm at all times and that he supervised his staff in preparing and serving the meals. That is why a big number of the defendant's members of staff always enjoyed them. He gave the average daily number of the defendant's members of staff who ate the meals as 51.6 persons. He added that the said average persisted from the beginning until the end.

The defendant's witness Brown was of a different opinion. She testified that the meals in question were sub-standard. They were often recycled and therefore unhygienic. They were cold and tasteless; and that is why the defendant's members of staff, who had no choice but to eat them at the time, eventually wrote letters complaining about them.

Court thinks that it would have been easier to answer the above question *(i.e.whether the meals measured up to the agreed standard)* ifthe parties hereto had involved an expert. However, since they did not do so, Court will simply answer the question by considering the credibility of witnesses. In other words, which of the two witnesses the parties put up was more credible in respect ofthe above question? Was it the plaintiffs witness, KadduMukasa Kironde 2, or was it the defendant's witness, Brown? After carefully considering the testimony of the above two witnesses, Court thinks that the plaintiffs witness, KadduMukasa Kironde 2, was more credible than the defendant's witness, Brown, in

respect of the above question. In fact, Exh. P7 confirms the reliability of KadduMukasa Kironde 2's testimony in the area. Under that set of documents it is apparent that roughly the same number of persons ate the plaintiffs food, on a daily basis, during the existence of the contract. KadduMukasa Kironde 2 fixed the number at an average of 51.6 persons per day. Brown did not dispute the said average; and Court cannot take her comment that the defendant's members of staff had no choice but to eat the said meals seriously. Indeed, the defendant's members ofstaff had a choice in the matter in that they could have refused to eat the meals if they were bad and unhygienic. However, the fact that they did not exercise that option and instead, they went ahead and ate the meals, as usual, strongly suggests that there was nothing wrong with the meals. Most likely they measured up to the agreed standard.

All in all, Court is of the opinion that the plaintiff succeeded in proving, on a balance of probabilities, that he complied with the terms and conditions ofthe contract by supplying and serving meals that were ofthe agreed standard.

**With regard to the second issue that is to say, whether the plaintiff had contracted a third party on a long-standing basis for the purposes of fulfilling the contract** the plaintiffs witnesses namely, KadduMukasa Kironde 2 and Makaabugo testified as follows. On 12/3/2002 the two (i.e. KadduMukasa Kironde 2 and Makaabugo) signed a contract (Exh. P8) whereby they agreed that Makaabugo was to supply KadduMukasa Kironde 2 with a variety of foodstuffs. The contract was open ended, but either party could terminate it by giving the other a two months' notice. KadduMukasa Kironde 2 further added that he entered the above contract so that he could easily fulfil the obligations he had towards the defendant under another contract (i.e. Exh. Pl).

The defendant did not shake or contradict the above evidence. Therefore, Court is of the opinion that the plaintiff succeeded in proving, on a balance of probabilities, that he contracted a third party on a longstanding basis for the purpose offulfilling the contract in question.

**With regard to the third issue, that is to say whether the plaintiff was entitled to notice before termination,** it was not disputed that the defendant summarily terminated the contract in question. The only problem was whether the defendant was justified in doing so? It should be remembered that Court decided the first issue in favour ofthe plaintiff, which means that the plaintiff fulfilled his obligations under the contract. For that reason, under clause 9 of the contract the defendant could have only lawfully terminated the contract if hfe had given the plaintiff a two months' notice. As we all know the defendant did not do so. Instead, it summarily terminated the contract. In the circumstances, the defendant was not justified in summarily ending the contract.

All in all, Court is of the opinion that the plaintiff succeeded in proving, on a balance of probabilities, that he was entitled to notice before termination.

**With regard to the fourth issue that is to say, the available remedies** since all the first three issues have been resolved in favour ofthe plaintiff it means he must obtain some remedies. Indeed, the remedies the plaintiff is seeking from Court were outlined at the beginning of this judgment. Court will now go through them in turn with a view to finding out whether it may grant them to the plaintiff.

#### **1. Special damages:**

The law on special damages is that they must be specifically pleaded and strictly proved. **(See Estate^of. JKuriLKarsan v Maganlal Bhatt and tfk, another Civil Appeal No. 25 of 1964 (1965) E. A. 789 at page 796).** In paragraph 6 of the plaint the plaintiff broke down this head of special damages as follows:

*(a) Wagesfor two cooks at shs. 200,000/= @ month -shs. 800,000/=;*

In cross-examination KadduMukasa Kironde 2 admitted that he did not have a contract with his two workers stipulating that he would pay them for two months in case the defendant discontinued the contract. He further conceded that he made the above payment *ex gratia.* In the circumstances, Court thinks it would be wrong to require the defendant to pay money under this sub-head when the plaintiff had no legal obligation

to spend it on his workers. Therefore, Court will not order the defendant to pay anything under this sub-head.

#### *(b) Costs of foodstuffs, which had been ordered and paid for on 21/8/2002- shs. 1,057,600/=;*

In his evidence KadduMukasa Kironde 2 testified that under the contract he had with Makaabugo he would pay Makaabugo in advance for the supplies every 21st day of the month. Makaabugo, in turn, delivered the foodstuffs in advance. This would ensure that the plaintiff did not fail in respect of his contract with the defendant. Therefore, on 21/8/2002 KadduMukasa Kironde 2 paid Makaabugo a sum of shs. 1,057,600/= for the supply of foodstuffs to cover the month ahead. Makaabugo acknowledged receipt ofthe money under Exh. P8. Later on Makaabugo delivered to the plaintiff 45% of the foodstuffs, (i.e. dry rations and perishables) representing the above payment. When the defendant terminated the contract on 24/8/2002 the plaintiff consumed the foodstuffs. Makaabugo did not deliver to the plaintiff the balance of the foodstuffs nor did he return their money's worth.

In Court's opinion the plaintiff cannot successfully claim against the defendant for the foodstuffs he received from Makaabugo and finally consumed. It is obvious that he did not incur any loss in respect of the foodstuffs he consumed; and he cannot be heard to say that he should recover anything in respect thereof. That aside, Makaabugo and not the defendant should provide the plaintiff with a remedy for the undelivered foodstuffs or their money's worth. For those reasons, Court will not allow the plaintiffto recover anything under this sub-head.

### *(c) Amount duefrom the defendantfor two months- shs.3,888,000/=;*

According to the evidence on record, if the defendant had lawfully terminated the contract, the plaintiff could have served the defendant's members of staff with meals for two more months. In that case the plaintiff could have been entitled to further earnings under the contract. Therefore, taking the average daily consumption of the plaintiffs meals (i.e. 51.6 persons) x shs. 1500/= @ plate of food x 5 days @ week x 4 weeks x 2 months, the total amount of money that the plaintiff should

have earned is shs. 3,096,000/=. Court will enable the plaintiffto recover that sum ofmoney.

#### *(d) Amount that was to be earned from soda for two months-shs.576, 000/=.*

Although the plaintiff claimed the above sum of money, he did not lead any evidence to prove that he was in a position to earn it. Consequently, Court cannot allow him to recover anything under this sub- head.

All in all, out of the grand total of shs. 6,321,600/= the plaintiff claimed under the head of special damages Court will enable him to recover only shs. 3,096,000/=.

#### **General damages:**

Since the defendant abruptly ended its contract with the plaintiff, it is likely that the plaintiff suffered inconvenience. Therefore, Court thinks that a sum of shs. lm/= is sufficient compensation to the plaintiff as general damages for breach of contract.


#### **Interest:**

Since the subject matter of the suit was a transaction of a commercial nature, Court will award the plaintiff interest at the commercial bank rate as follows:

(a) on special damages- from 24/8/2002 till payment in full;

(b) on general damages- from today till payment in full.

**Costs:**

The law is that costs follow the event. Therefore, since the plaintiffs suit succeeded, Court will award him the costs of the suit. The costs will also bear interest at Court rate from today until they are fully paid.

In conclusion, Court hereby enters judgment in favour of the plaintiff in the following terms:

- 1. The defendant shall pay the plaintiff a sum of shs. 3,0960,000/= as special damages. - 2. The defendant shall further pay the plaintiff a sum of shs. lm/= as general damages for breach of contract. - 3. The amounts in ¹ and 2 above shall bear interest at Commercial bank rate as follows: - amount in 1, from 24/8/2002 till payment in full. - amount in 2, from today till payment in full. - 4. The defendant shall pay the costs ofthe suit which shall also bear interest at Court rate from today till payment in full.

**Read before:** At 11.20 a.m. The plaintiff Mr. Paul By Mr. Okuni c/cler ffor the plaintiff


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