[2010] UGHC 242

## THE REPUBLIC OF UGANDA

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# PLAINTIFF IN THE HIGH COURT OF UGANDA AT KAMPALA HCCS NO. 143 OF 2008 ELIZABETH NAMUTEBI:::::::::::::::::::::::::: VERSUS

#### DEFENDANTS 1. THREEWAYS SHIPPING SERVICES (U) LTD] 2. THREEWAYS SHIPPING SERVICES (K) LTD:

# BEFORE: HON LADY M. S ARACH-AMOKO

## JUDGEMENT

The plaintiff sued the defendants jointly and severally for special and general damages for breach of contract of bailment and carriage of goods. The plaintiff claimed that she contracted the defendants to handle and transport her cargo of glass in two containers from Mombasa to Kampala in November 2OO7. The defendants took possession ofthe Cargo and the documents oftitle thereto, however the Cargo was allegedly destroyed in an accident at Naivasha on or about the 18th November 2007 while en route to Kampala. In the alternative, the plaintiffpleaded negligence on the part ofthe defendants in handling the cargo.

The defendants denied that a contract existed between then and the plaintiff as alleged and contended that the consignment in issue

Was c'eared by Dhl Global Forwarding (K) Ltd and was transported by Marshall Services (K) Ltd aboard its truck No KA2 789E. They are not therefore liable of the loss of the plaintiffs goods.

At the scheduling conference the agreed facts were:

- (1) That on or about the 17th November 2007, the plaintiffs Cargo of glass in container No. FCIU 2643813 and TSLU 621946 was damaged in a road accident along the Nairobi-Naivasha road in Kenya. - (2) That the 2nd Defendant commissioned a loss adjuster, (Cunnningham & Lindsey, who inspected the containers and assessed a total loss ofthe cargo.

The agreed issues were:

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- 1) Whether there was a contract of carriage or bailment between the plaintiff and the defendants. - 2) Whether the defendants were negligent. - 3) Remedies available to the parties.

**Issue No. ¹ Whether there was a contract of a carriage or bailment between the plaintiff and the defendants.**

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It is indeed an established law that the onus ofproofin such a case lies entirely with the person who alleges. That standard ofproofis on the balance of probabilities. In this case the plaintiff had to prove that case to the required standard. Has she done so?

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Learned counsel for the plaintiff submitted that there was a contract of bailment and carriage between the plaintiff and the defendants because:

That plaintiffs agent PW2 handed over the documents of title (Exhibits Pl to 4) to one Kavoyi of Threeways Kenya Shipping Services Ltd.

Threeways Shipping Services appear on the Delivery Appointment Booking Forms for the Port of Mombasa (exhibits P7 and P8) as the transporter who booked to remove and load the goods from the port with a view to transporting them to Kampala. The defendants did not controvert the evidence that they signed for the goods at Mombasa as transporters.

/There was no written contract but by conduct it is clear that *\* documents and goods were put into the defendant's possession for "purposes oftransportation.

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When the vehicle carrying the goods was involved in an accident, the defendants' sub- contractor, Marshland services (K) Ltd, wrote ^exhibit D2 to the 2nd Defendant informing then that the vehicle / *carrying your goods"* was involved in an accident. The 2nd defendants promptly commissioned a loss adjuster, Cunningham & *ⁱ* Lindsey, who inspected the containers and assessed a total loss of the Cargo. A stranger to the transaction would not have been informed about the accident; it would also not have taken the **\** \trouble and expense to investigate the accident.

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A contract ofbailment is defined by P. S Atiyah's Sale of Goods as "fl *transaction under which goods are delivered by one party (the bailor) to another (the bailee) on terms which normally required the bailee to hold to the goods and ultimately to redeliver them to the bailor in accordance with his directors..."* (see; **Sylvan Kakungu Tumwesigye-vs-Trans Sahara International General Trading L. L. C HCCS No 95 of 2005** per Justice Geoffrey Kiryabwire. The plaintiffhanded her goods through her agent PW2 to the defendants with instructions to transport and deliver them to Kampala. There was therefore a contract of bailment and carriage between the plaintiff and both defendants.

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Where two sister companies have an internal intricate relationship as ¹¹¹ this case, a cause of action can be maintained against both, **(see: Swaibu Katongole-Vs-Spear Tourism and Cargo (U) Ltd HCCS No. 225 of 2006)**

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**Ji** In that case, the plaintiff contracted the defendant'^s director to assist him to ship goods from Dubai to Kampala. The defendant's director referred him to his brother in Dubai where he was trading as Spear Tourism and Cargo L. L. C. He travelled to Dubai and met the said brother of the defendant. They agreed on freight charges. However the goods were stolen and never reached Kampala. When the plaintiff sued the defendant, the defendant denied liability, contending that the contract was with the Dubai Company. It was held that the company in Uganda and that in Dubai worked as one economic unity and therefore the plaintiff had a cause of action against the defendant.

> In this case, in view ofthe admitted working relationship between the defendant companies and commonality of shareholders/directors, the plaintiff can maintain an action against both ofthem.

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Learned counsel for the defendant submitted the opposite. He summarized the evidence and concluded that there was no contract °f carriage between the plaintiff and the defendants for the reasons that:

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The plaintiff neither dealt with any of the directors of the companies nor with any authorized officer.

In the alternative, the evidence shows that ifthere was a contract of carriage, it was between the plaintiff and the second defendant as the evidence shows that all the dealings were in Mombasa with the 2nd Defendant to the exclusion of the 1st Defendant and as such there would be no cause of action against the 1st Defendant.

The case of **Swaibu Katongole -vs- Spear Tourism And Cargo (U) Ltd** is distinguishable on the basis that the plaintiffin that case dealt with a director of the company and was even issued with a receipt and directed to the associate company in Uganda. There was a valid contract in the first instance, which is not the case here. The circumstances which informed the decision of the court in lifting the veil in the said case do not exist in this particular case. In this case the plaintiff had the option of dealing with the 1st Defendant directly at its office if such was the intention where all

the terms of the contract would have been discussed and accident and attendant loss considered.

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There was no consideration of whatever kind flowing from the plaintiffto any ofthe defendants. The plaintiff didn t even know how much she was going to pay .

Was there ^Ja contract of bailment and transportation between the two parties? These are my findings and conclusions.

There was no written contract between the parties. The alleged contract is based purely on the conduct ofthe parties.

The plaintiff imported the goods in question from China through Mombasa Port. When she received the shipping documents, she gave them to PW2 to find someone to clear and to transport them to Kampala. (Exhbit P1-P4).

Pw 2 is in the business ofreceiving shipping documents, going to Mombasa and getting clearing agents who clear the goods and transporters who transport the goods to Uganda. She is not a clearing agent. At Mombasa, PW2 got the clearing agents called Dhl Global Forwarding (Kenya) Limited who cleared the goods


**w** and issued with invoices Exhibits P 9 and lO. Dhl also gave her documents entitled *"KENYA PORTS AUTHORITY PORT OF MOMBASA Delivery Appointment Booking.*

PW2 is the one who delivered the documents to Mr. Kavuyo in the 2nd Defendant's offices in Mombasa on the instructions of the Plaintiff. When the 2nd Defendant got the shipping documents from PW2 they , made the booking using exhibits P7 and 8. They agreed on US \$ 3500 per container. They agreed that the goods be transported first to Kampala and then they would be paid.

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From "Exhibit P7 and 8) the transporter indicated under the **"Transporters Declarations" is** *"Threeways Shipping Services Ltd MSA".* The stamp also appears there under. The authorizing officer is indicated as John Ngala. The date is 15/11/2007. That document, states that the authorized clearing agents, namely Dhl Global Forwarding **"Authorised the above named transporter to effect delivery of the containers in the above M. P. R. O from the Port."**

There is a company called Threeways Shipping Services (Group) Ltd which was incorporated in Uganda on the 29th January 1996,(see Exh D3). The shareholders are Geofrey Baitwa and his

**75s** brother Oscar Baitwa. Their Kampala offices are at Plot87, Jinja Road opposite Jinja Road Police Station. This is the same of where the plaintiff and the husband went to lodge their compla' about the lost cargo.

Threeways Shipping Services (Kenya) Ltd was incorporated in Kenya . It's shareholders are Geoffrey Baitwa, Oscar Baitwa and a company called Transtrac (U) Ltd.lt has an office in Mombasa.

The two companies have a working relationship where the Kenya company handles on behalf of its Uganda Counterpart, all consignments coming to Kampala ie Threeways Shipping Services (Kenya) Ltd are the exclusive agents of Threeways Shipping Services (Group) Ltd to handle all goods at the Mombasa Port.

The plaintiff dealt with Threeways Shipping Services (Kenya) Ltd. They are the ones who sub-contracted Marshland Services (K) Limited to transport the plaintiffs goods to Kampala. That is why Marshland's Managing director wrote to them exhibit D2 on 20th November 2007. The letter is reproduced verbatim for its import. It reads:

*"2(f^h November 2007*

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*The Managing Director. Threeways Shipping Services (K) Ltd. P. O Box 84137. MOMBASA*

*Dear Sir,*

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*RE: ACCIDENT INVOLVING TRUCK NUMBER KAZ789Et ZC6920*

*We are very sorry to inform you that the above reference vehicle, belonging to us and carrying your goods in two containers destined to Kampala Uganda was involved in a fatal accident at around 5.00 am On 18/11/2007.*

*The accident occurred at the View Point section ofthe Nairobi-Maimabia-Naivasha Road.*

*We informed the Kenya Police and the insurance company promptly. We have also stationed some guards at the accident site to take care of the wreckage as we make plans for any possible recovery.*

*We remain,*

*Hoping to continue doing business with you.*

*Yoursfaithfully, MarshlandService (K) Ltd*

*Ayub Ocieng Olal*

*Managing Director",* (underlining is for emphasis).

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That is why Threeways Shipping Services (K) Ltd as the contractor felt obliged and indeed instructed Cunningham and Lindsey to inspect the condition of the said containers after the road accident. The Report Exhibit P6 dated 20th December 2007, gives details of the supplier, consignee, vessels transit, Cargo details including the Bill ofLading number and container contents.

The company could not have invested money in investigations which did not concern them or have their interest at heart. Marshal Services (K) Ltd was transporting the goods as agents of the 2nd defendant.

From the foregoing it is clear that a contract existed between the plaintiff but with the 2nd Defendant for the carriage and transportation of the goods. The evidence adduced by the Plaintiff does not unfortunately establish the existence of a contract between the Plaintiff and the First Defendant. First of all, the description ofthe 1st Defendant in the plaint was disowned by Mr Geoffrey Baitwa (DW1) who told court that the company in Uganda whose head office is on Plot No. 87 Jinja Road is known as Threeways Shipping Services Group Limited. He also tendered a copy of the Certificate of incorporation as proof. That is a

different legal entity from the 1st plaintiff. The plaintiffs Counsel had the opportunity to apply for leave to amend the plaint to reflect this correct description, but did not do so. Besides, there are even no receipts or correspondences on record to connect the 1st defendant to the contract, unlike the case cited by the plaintiffs counsel.

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The answer to issue No. ¹ is in the affirmative but only in respect ofthe 2nd defendant.

# Issue No 2: Whether the defendants breached the contract.

The 2nd defendant, a common carrier was contracted to transport the plaintiffs goods from Mombasa to Kampala. It subcontracted Marshlands (K) Ltd instead. The truck belonging to the said Marshlands (K) Ltd was involved in an accident in transit and all the goods destroyed. The goods never reached their destination. The second defendant did not perform its obligation under the contract. It breached it. The answer to this issue is in the affirmative.

Issue No. 3. Whether the defendants were negligent.

**/SO'**

No evidence negligence was adduced to this effect. No particulars of were also pleaded. The answer is negative.

Issue No 4: Remedies

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The plaintiffprayed for:

(1) Special damages particularized as: (a) US\$15,063.35 being the value ofthe Cargo.

The evidence is contained in the invoices and the Survey Report (exh. P6). There were two containers whose details were as follows:

- 1. FCIU 264381-3-containing 23,500kgs of Cargo valued at US\$ 7113.06 as per suppliers invoices No. 07G BLUKYA 008 dated 25th September 2007. - 2. TSLU 621194-6- containing 20,500kgs ofCargo valued at US\$ 7950.29 as per invoice No. 07GBLU KYA 007 dated 22nd August 2007.

The total is US\$ 15,063.35 This is awarded to the plaintiff.

(b) She claimed UGS 18 million being lost profit. No evidence such as books of accounts or receipts demonstrating how the business was performing and the effect ofthe loss ofthe goods in question on the overall performance of the

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plaintiffs business was availed to Court. This was not proved. It is disallowed.

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- (c) She claimed U\$1000 as expenses incurred by her agents in traveling to Kenya to investigate the matter. PW3, her husband testified that he did travel to Kenya to follow up the issue. His testimony was not controverted defendant . The US\$ 1,000 circumstances. It is allowed. by the is reasonable in the - (d) She claimed USS 1,545 being charges for clearance removal, surcharge and storage charges. These charges were proved by exhibits P9 and PIO. - (e) She claimed ,for Kenya shillings 4,520 as shipping agency charges was proved by exhibit Pl4. - (f) The K shs 32,203.15 being payment for Kenya Ports Authority was proved by exhibit P.12. - (g) US\$170 being Emirates Shipping charges was proved by exhibit Pl3.

In summary, apart from the prayer for lost profit all the items under special damages are awarded to the plaintiff.

The plaintiff further prayed for general damages for breach of contract. According to the plaintiffs counsel, the lost profit of shs

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18 million could be awarded under general damages. I have already held that I have no material such as record of accounts or annual returns ofthe plaintiffs business to assist me in making this award. It is disallowed.

In conclusion, I enter judgment in favour of the plaintiff against the 2nd defendant as follows:

a) USS 15,063.35.

b) US\$ 1,000.

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c) USS 1,545.

d) Kenya shillings 4,550.

e) Kenya shillings 32,203.15

f) US\$170.

g) Interest on (a) to (f) at 20% p.a from the 15th November 2007 till payment in full.

h) Costs ofthe suit.

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M. S Arach-Amoko

**Judge**

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### THE REPUBLIC OF UGANDA

## IN THE HIGH COURT OF UGANDA AT KAMPALA

# **I** [CIVIL DIVISION]

### CIVIL SUIT N. 143 OF 2008

ELIZABETH NAMUTEBI PLAINTIFF

VERSUS

*I* DEFENDANTS 1. THREEWAYS SHIPPING SERVICES ( U) LTD

### 2. THREEWAS SHIPPING SERVICES (k) LTD

#### DECREE

This suit coming up for final disposal, this 7th day of July 2010, before tire Honourable Lady Justice M. S Arach-Amoko, in the presence of Mr. Nelson Nerima, counsel for the plaintiff and Mr. Dan Wegulo, counsel for the defendants, it is hereby decreed and ordered that judgement be and is hereby entered for the plaintiff against the 2nd defendant as follows;

1. US \$ 17,778.35.

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- 2. Kenya Shillings 36,753.15 - 3. Interest at 20% p.a from the 15th November 2007 till payment in full - 4. Costs of the suit.

Kampala We approve; Extractedby Nambale ,Nerima & Co. Advocates & Legal Consultants 22nd Floor, Conrad Plaza Plot 22, Entebbe Road, P. O. Box 7217 iuW this 7l^h day ^o'¹ *16\*1* **C' n- W** Iuly/)28,2010 For ; Wegulo, Wandefa & Co Advocates Counsel for the Defandants Given under my hand and seal of the'Cat DYREGlSRAR