[2024] UGHC 762

#### **THE REPUBLIC OF UGANDA**

#### **IN THE HIGH COURT OF UGANDA AT FORT PORTAL**

#### 3 **HCT – 01 – CV – CS – NO. 068 OF 2021**

#### **SEYALATA DANIEL :::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF**

#### **VERSUS**

# 6 **UGANDA REVENUE AUTHORITY ::::::::::::::::::::::::::::: DEFENDANT Corum: HON. JUSTICE VINCENT WAGONA**

**Delivered on: 20th/08/2024**

- 9 **Summary: Contract Law – Breach of contract** *Breach of contract arises where a party to contract fails to fulfil or perform a bargain imposed by the contract. A party who alleges breach must demonstrate that a party at fault had capacity to* - 12 *comply with the contractual term and there was no condition precedent to such performance either executable by the plaintiff or some other person or where such condition exists, that the plaintiff or some other person required to fulfil such* - 15 *condition performed his or her duty and the defendant had no justifiable excuse for failing to perform his or her bargain.*

## *\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_* 18 **JUDGMENT \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_**

#### **Introduction:**

21 The plaintiff's claim against the defendant is for breach of contract he entered into with the defendant where he seeks orders that (a) the defendant breached the contract dated 10th April 2019 by failing to issue the plaintiff with registration number plate


for the motorcycle sold, (b) an award of special damages of shs 4,200,000/=, general damages of shs 2,000,000/=, and costs of the suit.

#### 3 **The case of the Plaintiff:**

It is narrated by the plaintiff that on 10th April 2019, the defendant conducted a public auction at Fort portal where she disposed of motor cycles to which the plaintiff 6 bought a Haugin Red in Color Motor Cycle Chasis No. L2L12P104CHL60118 at a consideration of shs 1,200,000/=. That the defendant promised to issue him with the registration number plates within 14 days which expired on 24th April 2019. That the 9 defendant defaulted on the said obligations despite constant reminders. That the defendant acted fraudulently by failing to issue him the registration number plates within 14 days and by failure to respond to his written and verbal complaints.

- 12 That as a result of lack of the registration plates, police impounded his motorcycle and released it after extorting money from him. That he had acquired a loan to purchase the said motorcycle which had accrued interest of shs 3,000,000/= as a - 15 result of the defendant's negligence. He thus sought to recover special damages of shs 1,200,000/= being the cost of the motorcycle, shs 1,000,000/- as the cost of transfer, shs 3,000,000/= as accrued interest on the loan he secured from a Sacco - 18 totaling to shs 4,200,000/=. That the acts of the defendant caused him suffering, loss of money resulting from impounding his motorcycle, for which he sought to recover general damages of shs 2,000,000/= and costs.

#### 21 **The Case of the Defendant:**

The defendant denied the claims of the plaintiff. She contended the the plaintiff acquired the motor cycle in issue through purchase from a public auction conducted 24 by the defendant. That the plaintiff took possession of the same and started to use it


before it could be registered by the defendant. The registration of the said motorcycle required the plaintiff depositing the same with the defendant and appointing a 3 clearing agent to present it for registration.

The plaintiff did not appoint a clearing agent for purpose of registration until 21st July 2021. That upon appointing the agent, the agent declared the motorcycle vide

- UGNTO on 21st 6 July 2021 under the process for registration of newly imported vehicle which would require settlement of registration fees before allocation of the entry to a registration officer. That the clearing agent ought to have used an - 9 alternative process that does not require settlement of registration fees before the entry can be allocated for registration. That at all material times, the defendant was justified in her actions. The defendant asserted that the suit was misconceived and - 12 ought to be dismissed with costs.

## **Issues:**

At scheduling, two issues were framed for determination that is;

- 15 **1. Whether the defendant breached the contract of sale of the motor cycle to the plaintiff.** - **2. What remedies are available to the parties?**

# 18 **Legal Representation and Hearing:**

*Mr. Samuel Muhumuza* appeared for the plaintiff and *Katuutu Charlotte* appeared for the defendant. The plaintiff led only his own evidence as *PW1*while the 21 defendant relied on testimony of one witness that is *Kanyike Franc (DW1).* A

# **Burden of Proof and Standard of proof:**


It is a settled position of law that in civil cases the plaintiff bears the burden to prove his/her claim on the balance of probabilities. Section 101 of the Evidence Act is to

- 3 the effect that whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he or she asserts must prove that those facts exist. (See:*Kamo Enterprises Ltd Vs. Krytalline Salt Limited, SCCA No.* - 6 *8 of 2018*). The evidential burden per section 102 and 103 of the Evidence Act keeps shifting depending on facts as alleged by a given party to prove the existence of such facts. - 9

#### **Consideration of the issues:**

# *Issue No. 1: Whether the defendant breached the contract of sale of motor cycle* 12 *to the plaintiff.*

Section 10 (1) of the Contracts Act No. 7 of 2010 defines a [contract](https://ulii.org/akn/ug/act/2010/7/eng@2010-05-28#defn-term-contract) as an [agreement](https://ulii.org/akn/ug/act/2010/7/eng@2010-05-28#defn-term-agreement) made with the free [consent](https://ulii.org/akn/ug/act/2010/7/eng@2010-05-28#defn-term-consent) of parties with capacity to [contract,](https://ulii.org/akn/ug/act/2010/7/eng@2010-05-28#defn-term-contract) for a 15 lawful [consideration](https://ulii.org/akn/ug/act/2010/7/eng@2010-05-28#defn-term-consideration) and with a lawful object, with the intention to be legally bound. Section 10 (2) is to the further effect that a contract may be oral or written or partly oral and partly written on implied from the conduct of the parties. Section 10 (3)

- 18 adds that a [contract](https://ulii.org/akn/ug/act/2010/7/eng@2010-05-28#defn-term-contract) is in writing where it is—(a) in the form of a data message; (b) accessible in a manner usable for subsequent reference; and (c) otherwise in words. Therefore, a contract is deemed to be in writing if it falls within the definition under - 21 section 10 (3). Further section 10 (5) is to the effect that a contract whose subject matter exceeds twenty-five currency points shall be in writing.

In the present case, it was not denied by the defendant that there was a contract for 24 sale of Haugin Red in Color Motor Cycle Chasis No. L2L12P104CHL60118. The


plaintiff testified that he bought the motorcycle from the defendant at shs 1,200,000/= and attached receipts of payment which were exhibited as PE1, PE2.

- 3 DW1 also stated that the plaintiff bought the suit motorcycle in April in a public auction conducted by the defendant. Therefore, it is not in dispute that a contract existed between the plaintiff and the defendant regarding the motor cycle in issue. - 6 The point of contestation is whether there was breach of the said contract. The term breach of contract was considered in *Ssempa v Kambagambire (Civil Suit No. 408 of 2014) [2017] UGCommC 133 (3 July 2017)* where court made reference to the

9 *Black's Law Dictionary 5th Edition pg 171* where breach of contract was defined as where one party to a contract fails to carry out a term. In *Nakana Trading Co. Ltd Vs Coffee Marketing Board Civil Suit No. 137 of 1991* court defined breach of

- 12 contract as where one or both parties fails to fulfil the obligations imposed by the terms of contract. Therefore, breach of contract arises where a party to contract fails to fulfil or perform a bargain imposed by the contract. I however emphasize, that a - 15 party who alleges breach must demonstrate that the defendant had capacity to comply with the contractual term and there was no condition precedent to such performance to be executed by the plaintiff or some other person or where such - 18 condition exists, that the plaintiff or some other person required to fulfil such condition performed his duty and the defendant had no justifiable excuse for failing to perform his or her bargain. (See: *[Kabaco Uganda Limited v Turyahikayo \(Civil](https://ulii.org/akn/ug/judgment/ughccd/2023/316/eng@2023-10-13)* - 21 *[Suit 14 of 2021\) \[2023\] UGHCCD 316 \(13 October 2023\)](https://ulii.org/akn/ug/judgment/ughccd/2023/316/eng@2023-10-13)*.

In the present suit, PW1 testified that he bought Haugin Red in Color Motorcycle

- 24 Chasis No. L2L12P104CHL60118 through auction organized by the defendant at Fortportal. That he fully paid the agreed consideration of shs1,200,000/- where the defendant promised to issue him with a registration/license plate within 14 days and - 27 defaulted (PE1, PE2). That he paid the required registration fees (PE3) and the defendant defaulted on performance of the bargain when she failed to issue the plaintiff with the registration plates. In cross examination he stated that he paid a - 30 clearing agent to register his motorcycle; after paying the clearing agent and the


registration fees, he did not get his registration plate. That it was not true that he refused to receive them saying he would receive them from court. The motorcycle 3 was presently in his house. In re-examination he stated that he kept the motorcycle

- because he did not get the logbook and the number plates. In clarification sought by court he stated that his clearing agent was the one handling the clearance. That he 6 blames URA not his agent. - *DW1 (Kanyike Franc)* on the other hand stated that the plaintiff bought the motorcycle in issue through an auction conducted by the defendant in April 9 2019.(*DE1, DE2 and DE3*). That for purposes of Registration, the plaintiff was to appoint a clearing agent. That the plaintiff did not appoint such agent until 21st July

2021 who declared the motorcycle as UNGTO on 21/07/2021 a process that required

- 12 settlement registration before allocation to of the entry to the Registration officer (*DE5, DE5*). That in May 2022, the plaintiff paid the clearing agent and the agency fees who proceeded with registration and registration book and plates were prepared - 15 by the defendant. That the plaintiff refused to pick his registration plate and book because of the pending case. That the number plates and registration book were at the defendant's customs office at Fort Portal (*DE7 and DE8*). - 18 In cross examination he stated that the registration number and logbook were issued to the clearing agent. URA deals with agents not consignees. In re-examination he stated that that they engaged the client to appoint an agent who was given the - 21 customs procedure code for capturing a new entry without extra payments. That the agent delayed to capture the entry in the system. That the alert came of a pending entry and the client was notified and referred them back to the agent. That the agent - 24 had failed to act on the entry. In answer to a question from court he stated that the agent was for the plaintiff. He was a clearing agent.


#### **Analysis of the Evidence:**

The facts before me raise a concrete position that performance by the defendant was 3 a conditional one. The URA could only perform part of their bargain upon the plaintiff appointing a clearing agent to initiate the process. In PE1, there is space for the clearing agent who per the explanation of DW1 would initiate the registration 6 process. PW1 admitted he appointed an agent for purpose of handling the registration. DW1 went ahead and explained that the agent was appointed on 21st July 2021 and that is when he lodged the documents for registration. That the process 9 adopted at first by the agent was not applicable for purposes of securing the registration plate for the vehicle in issue. That when the agent used the proper procedure, the defendant performed her bargain and issued the registration plates 12 and the logbook. Therefore, the performance within the 14 days was conditional and the plaintiff did not fulfill the agreed condition of appointing a clearing agent who was expected to follow the right procedure, failure of which, the defendant could not 15 perform her bargain within the 14 days.

In DE5, the plaintiff appointed the agent on 9th June 2021, after two years and two months. In DE6, he agreed to withdraw the complaint against the defendant and to 18 proceed and process the registration plate for the suit motorcycle. DW1 stated that the delay was caused by the clearing agent and this was not contested in cross examination. PW1 admitted that he was the one who appointed the agent. The delay 21 therefore was caused by the plaintiff who delayed to appoint an agent and by the agent who used a different application process. DW1 stated that upon rectification

24 plates and the logbook (DE8). When the plaintiff was contacted to pick the same, he

of the process by the agent, the defendant went ahead and processed the registration


declined arguing that he would pick the same from court. I find that the plaintiff has failed to prove on balance of probabilities that the defendant breached the contract.

#### 3 *Issue No.2: Remedies*

The plaintiff's claim fails and is hereby dismissed with no orders as to costs. I have declined to award the defendant costs because the complexity of the registration

- 6 process of the defendant contributed to the delay and led to the frustration which drove the plaintiff to file the suit at hand. I thus order that each party shall bear their own costs. - 9 I so order.


Vincent Wagona 12 **Hig Court Judge FORTPORTAL DATE: 20/08/2024**