[2018] UGCommC 10
The court found that the Plaintiff, a business entity, was deprived of the use of its money due to the Defendant's delay, and that the Defendant had the benefit of those funds. Although there was no documentary evidence that the Plaintiff borrowed dollars at 10.5%, the court accepted that the Plaintiff would have...
Source-derived case information.
- Citation
- [2018] UGCommC 10
- Parties
- Plaintiff: Midland Emporium Limited; Defendant: Sugar and Allied Industries Limited
- Court
- Commercial Court of Uganda
- Jurisdiction
- Uganda
- Case Number
- HCCS 734 of 2017
- Procedural Posture
- Civil Suit / Ruling on Interest and Costs After Concession of Principal Claim
- Outcome
- Judgment for the Plaintiff for USD 109,430 with interest at 10.5% per annum from 30th July 2017 until payment in full; Defendant to pay costs.
- Legal Topics
- Interest Awards, Commercial Debt Recovery, Discretionary Powers, Special Damages
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
More case intelligence is available
Unlock the full research layer for this judgment.
Parties
Midland Emporium Limited
Plaintiff
Sugar and Allied Industries Limited
Defendant
Procedural Posture
Civil Suit / Ruling on Interest and Costs After Concession of Principal Claim
Legal Issues
- 1 Whether the Plaintiff is entitled to interest on the conceded sum of USD 109,430, and at what rate.
- 2 Whether the Defendant should pay the costs of the proceedings.
Ratio Decidendi
The court found that the Plaintiff, a business entity, was deprived of the use of its money due to the Defendant's delay, and that the Defendant had the benefit of those funds. Although there was no documentary evidence that the Plaintiff borrowed dollars at 10.5%, the court accepted that the Plaintiff would have incurred a cost to obtain the funds. The Plaintiff's concession to 10.5% per annum, the rate at which it claimed to have borrowed, was deemed reasonable. The court exercised its discretion to award interest at 10.5% per annum on the principal sum of USD 109,430, running from 30th July 2017 (the date the Defendant promised to pay) until payment in full. The Defendant was also...
Court Disposition
Judgment for the Plaintiff for USD 109,430 with interest at 10.5% per annum from 30th July 2017 until payment in full; Defendant to pay costs.
Orders
- The Defendant shall pay the Plaintiff USD 109,430.
- Interest at 10.5% per annum is awarded on the principal sum from 30th July 2017 until payment in full.
Full Case Text
Judgment text and source record
24 paragraphs
**THE REPUBLIC OF UGANDA**
**IN THE HIGH COURT OF UGANDA AT KAMPALA**
**(COMMERCIAL DIVISION)**
**HCCS NO. 734 OF 2017**
**MIDLAND EMPORIUM LIMITED:::::::::::::::::::::::::::::::::::::::::::::PLAINTIFF**
**VERSUS**
**SUGAR AND ALLIED INDUSTRIES LIMITED::::::::::::::::::::::::::DEFENDANT**
**BEFORE: THE HON. JUSTICE DAVID WANGUTUSI**
**R U L I N G:**
Midland Emporium Limited the Plaintiff in this case sued Sugar and Allied Industries Limited to recover USD 109,430, interest as a commercial rate from February 2014 till payment in full. When the Defendant was served, he filed an Application for leave to appear and defend. When the matter came up for hearing the Applicant/Defendant conceded to the claim of USD 109,430 as claimed. They however objected to interest being levied but gave no reasons.
Counsel for the Plaintiff/ Respondent submitted that they had borrowed United States Dollars at 10.5% per annum and they now wanted 12% per annum. The Applicant/ Defendant offered 5% per annum interest.
An award of interest is discretionary and the basis of this award is that the Defendant has kept the Plaintiff out of his money and the Defendant has had use of it himself; Harbutt’s Plasticine Ltd vs Wayne Tank & Pump Co. Ltd [1970] QB 447 in which Lord Denning said;
*“An award of interest is discretionary. It seems to me that the basis of an award of interest is that the Defendant has kept the Plaintiff out of his money, and the Defendant has had the use of it himself. So he ought to compensate the Plaintiff accordingly.”*
In awarding such interest, consideration be given to the type of business the Plaintiff does, the length of period he has been deprived of the use of his money.
In the instant case, after notice had been given to the Defendant, the Defendant undertook to refund the money by 30th July 2017. She also undertook to pay interest at a rate that the two would agree upon. This rate the parties have failed to agree and it is now upon the court to come up with a rate.
The Plaintiff submitted that they wanted 12% per annum but they conceded that they had borrowed the dollars at 10.5 %. Counsel for the Defendant submitted that 10.5% was high and in any case there was no evidence of having borrowed the dollar.
It is true that there is no written document indicating that the dollar was borrowed but the Plaintiff does not manufacture dollars and he must have got it at a cost.
In the instant case, the Defendant promised to make payments by 30th July 2017. It is just fair to conclude that being a business body the Defendant has benefitted from it and the Plaintiff has been deprived of the use of the money. These resources would probably have been multiplied by the Plaintiff.
In the course of negotiations, the Plaintiff moved from 12% back to the rate at which he said he had borrowed the money.
Taking into account the factors surrounding this case and especially the fact that the Plaintiff was a business body, I find 10.5% per annum justified and award it in respect of the special damages. Which rate runs from 30th July 2017 when payment was promised by the Defendant till payment in full.
The Defendant will also pay costs of these proceedings as taxed by the Taxing Officer.
**Dated at Kampala this 15th day of May 2018**
**HON. JUSTICE DAVID WANGUTUSI**
**JUDGE.**