[2014] UGCommC 231

## THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA **COMMERCIAL DIVISION CIVIL SUIT CS 365 OF 2010**

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# **KIRONDE ASHRAF APPLICANT VERSUS DON UGANDA LTD RESPONDENT BEFORE THE HON. MR. JUSTICE HENRY PETER ADONYO**

#### **JUDGMENT**

#### 1. Background

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> Kironde Ashraf, herein after referred to businessman dealing in the trade of fuel/lubricants. He contracted with the Defendant, Don Uganda Ltd to purchase/supply amounts of fuel/lubricants between the period of 8th February 2010 and 3rd may of 2010. During this period is said to have supplied various quantities of fuel/lubricants to the Defendant on credit and part payment basis. The Defendant paid as the Plaintiff is a


*tO*

off some of the money to the Plaintiff on delivery of some of the 142,935,100/ ⁼ . The plaintiff demanded for the money but failed and hence he subsequently instituted this suit for the recovery of the Ug. Shs. 142,935,100/ ⁼ , interest thereon at 25% per annum from the date of default until payment in full, special damages of Ug. Shs. 3,500,000/= and costs of the suit. fuel but failed to clear an outstanding balance of Ug. Shs.

In its defence, the Defendant denied liability on the ground that at all times it purchased fuel products from the Plaintiff; it made deposits in advance of the supply thereof and the Defendant by /q 92,800,000/= stated to be advance payments made with no fuel having been supplied and delivered. The basis of this is that the Defendant that during the period 8th February 2010 to 3rd May occasions and that at all material times, the understanding was that the Defendant would deposit the money worth the amount of the fuel ordered on the Plaintiffs bank account prior to any the Defendant ordered fuel worth Ug. Shs. supply. That this arrangement went on until 3rd May 2010 when 92,800,000/= and gt© way of counter claim, made claim for a sum of Ug. Shs. 2010, purchased fuel products from the Plaintiff on a number of

made an interbank transfer of the money to the Plaintiffs account which was however not honored by the Plaintiff as no supply of supply fuel was delivered. The Defendant therefore sought in counterclaim for Ug. Shs. 92,800,000/= with interest thereon at damages, interest thereon at court rate from date of judgment until payment in full, and costs. general -S 24% per annum from 3/5/10 till payment in full,

### 2. Issues

The issues for determination by this court, as agreed by both parties are: *10*

- 1. Whether the Defendant/Counter claimant is liable to the claimed in the plaint? Plaintiff/Counter defendant in the sums - **2.** Whether the Plaintiff/ Counter claimant is liable to the claimed in the counter claim? Defendant/ Counter claimant in the sum - 3. Whether the Defendant/ Counter claimant was depositing **11** the money for the fuel ordered for on the Plaintiffs account,/

No 06010420005 in Bank of Africa, Ncleeba Branch in advance prior to supply of fuel ordered for?

**4**

- 4, Whether the Plaintiff/ Counter Defendant was supplying the basis of cash payments prior to the supply of certain amounts of fuel, on credit for certain amounts and on part payment with balances on certain amounts of fuel? the sued upon fuel to the Defendant/ Counter claimant on - 5. What remedies are available to the parties? - **3. Issue 3 of whether the Defendant/ Counter claimant was depositing the money for the fuel ordered for on the /o Plaintiff's account No 06010420005 in Bank of Africa, Ndeeba Branch in advance prior to supply of fuel ordered for?** and Issue **4 of** whether the Plaintiff/ **Counter ued upon fuel to the Defendant/ Counter claimant :n the basis of cash payments prior to the supply o ertain amounts of fuel,** on credit for **certain amounts balances on certain amounts** of **1? Sr on part payment with Defendant was supplying the**

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On perusal of this matter, ^I found it proper to deal with issues number 3 and 4 to project a proper flow of sequence of events since ^I feel that they are the core f this matter. They regard the the Plaintiffs account prior to supply of fuel. The Plaintiff testified credit and part payment received with balances due even when he continued to supply fuel to the Defendant as they cleared their obligations there remained an outstanding balance of Ug. Shs *¹⁰* 142,935,100/ = . be easier to ascertain if the Defendant was depositing money on that on various occasions he supplied fuel to the Defendant on issue of mode of payment and after determining them, then it will

It is apparent that there was no documented contract between the relationship between the two informal. This informality however did not deter the two from transacting in the business in question ^| and both agree that they had dealings together with each other. To to the root of this matter both parties appointed Ms. KSK Associates Certified Public Accountants, herein after referred to as court on the samfc'X) to delve into their transactions and report to court. This **X** "KSK report dated 4th April 2014 was duly filed ^I n go parties. The contract appears to have been oral and the

date. It audited books of accounts of both parties. This report has commissioned the audit firm. the effect of binding both parties since they jointly and willingly

The KSK audit report clearly shows that the Defendant had deposited Plaintiff's Bank of Africa Account towards its obligations. This position is a synch with the evidence of the Procurement and Sales Manager of the defendant (DW1) who stated that it was his duty to make orders for fuel on behalf of the Defendant via phone calls to the Plaintiff whereupon the products price would be **(0** agreed on and funds deposited on the Plaintiffs account before the fuel was delivered. This fact is also accepted by corroborated by the evidence of PW1. This mutual acceptance of how the business credit facilities were availed to the defendant and ^I am inclined to find so that fuel was was conducted clearly shows that no a sum total of Ug. Shs.l, 739,421,100/= on the supplied upon deposit of money on the account of the plaintiff to the amount indicated by the audit report. ## **4. Issue No. ^I of whether the Defendant/Counter claimant is liable to the Plaintiff/Counter defendant in the sums claimed in the plaint?**

According to the KSK audit Report, it is confirmed that the Defendant ordered for 893,000 litres of fuel and the Plaintiff indebted to the Plaintiff to a tune of Ug. Shs. 110,098,900/ = . The final report made by a court appointed expert whom parties did agree to enable them resolve the dispute is believable and I would not want to interfere with it since the rules of natural justice were observed in the making of it and each party openly cooperated open. This would satisfy the **Tight** Security Ltd **versus Goldstar Insurance Com? any HCCS 655/2002** parties agreed to be bound >y the findings of that report; ^I would accordingly award this amoi nt to the Plaintiff. with the audit process by being requirements in the holding in since both delivered 873,000 litres. The report found the Defendant was

The plaintiff seeks extra L Shs. 32,836,200/= . This amount ought to be determined. Ac ording to the Plaintiff, he states that on the 3rd of may 2010, he supplied fuel to the volume of 30,000^

litres as shown by the delivery note and tax invoice number 31163. That the said fuel was collected by the Defendant from Kobil (U) Ltd in that the Plaintiff ordered for 30,000 litres of fuel from Kobil (U) Ltd vehicle UAG 544J. Despite the Defendant's denial of receipt of the fuel, the Report established that an enquiry at Uganda Revenue Authority revealed that at the time, the motor vehicle belonged to *fO* which was working in partnership with the Defendant. ^I would evidence to support the Plaintiffs claim of having supplied the Defendant fuel on said date claimed. conclude that there is overwhelming on the said date and the fuel was dispatched through motor a vehicle UAG 544J and escorted by the invoice. The KSK Report corroborated this position. It established Defendant's Representative who acknowledged receipt on the KM Multiple Investments Limited, a transportation company and ^I accordingly find that the Plaintiff is entitled to the sums

**5. Issue 2: Whether the Plaintiff/ Counter claimant is liable in the counter claim?** to **the Defendant/ Counter cia mant in the sum claimed** \r

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As to the issue of whether the Plaintiff is liable to the Defendant for the sum claimed in the Counter claim for undelivered fuel, accordingly received by representatives of the Defendant company, ^I would find that the counter claim fail and the Plaintiff cannot be made liable in it as clearly the audit report together with the evidence of delivery clearly showed that the defendant received fuel which he did not pay for. having found that the Plaintiff did supply the fuel which was

**6. Issue 5: What remedies are available to the parties?** As to the issue of remedies the Plaintiff prayed for the recovery of *ic* 142,935,100 and ^I would accordingly award that since this has been overwhelmingly proved.

On the issue of interest, the guiding principle is that interest is awarded at the discretion of court as was held in the case of *Uganda Revenue Authority ersus Stephen Mabosi SCCA 16 of* **it** j udiciously tak ig nto account all circumstances of the case. *1995* but like in all other di iretions, the court ought to exercise

**V/**

**9**

*Pharmacy Ltd v. KCC [1979] HCB 256; Superior Construction & Engineering Ltd versus Notay Engineering Ltd. HCCS No. 24 of 1992.* See: *Liska Ltd. versus DeAngelis [1969] E. A 6; National*

Further, *Section 26 Civil Procedure Act* is to the effect that where interest was not prior agreed as between the parties the court could award interest that is just and reasonable.

*v. M/s Nalongo Orphanage, H. C. C. S No. 04 of 1996.* See: *Mark Extraction Enterprises Ltd.*

^A just and reasonable interest rate, in my view, is one that would *IO* keep the awarded amount cushioned against the ever rising inflation and drastic depreciation of the local currency and indeed take into account such the prevailing economic value of money, but at the same time one which would insulate him or her against **Z6** the any economic vagaries and the inflation and depreciation of the currency in the event that the money awarded is not promptly paid when it falls due. commercial rate of interest of 23% per annum to be just and fair. It shall be applicable to it. In that regard ^I would consider a a plaintiff ought to be entitled to such a rate of interest as would

receipt. Special damages must be specifically pleaded and strictly proved. money spent on legal fees/instruction fees and merely attached a The Plaintiff sought special damages of Ug. Shs. 3,500,000/= as

*Godwin Turyasingura versus Wheels of Africa HCCS 485/1995.* I find that in the instant case this has not been the case and since it has not been proved, ^I would disregard it. On the issue of costs, it is trite law as provided, under *Section 27(2) Civil Procedure Act (supra)* that costs are awarded at the **(0** discretion of court and always follow the event unless for some good reasons the court directs otherwise. See: *Stroms versus Hutchinson (1905) AC 515* and *Dr.* .£

See: *Jennifer Rwanyindo Aurelia & Anor versus School of 1999 and National Pharmacy Ltd. versus Kampala City Council [1979] HCB 25. IS* In the instant case, the Plaintiff has succeeded on most of the issues and there is no compelling and justifiable reason to deny him costs of the suit. ^I would accordingly award him the costs. *Outfitters (U) Ltd., C. A. CA No.53*

7. Orders

**I**

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Accordingly, it hereby ordered as follows;

- 1. The Defendant pays to the Plaintiff Shs. 142,935,100/ ⁼ - 2. Interest thereon at 23% per annum date of default until payment in full, - 3. Costs of the suit

## **Henry Peter Adonyo**

**Judge**

**11th July 2014**