[2022] UGCommC 63

# THE REPUBLIC OF UGANDA THE HIGH COURT OF UGANDA AT KAMPA (COMMERCIAL DIVISION) HIGH COURT CIVIL SUIT No. 995 of 2020

#### VIVA GENERAL MERCHANDISE LIMITED::::::::::::::::::::::::::::::::::::

#### **VERSUS**

# **RAILEY MEDIA** LIMITED::::::::::::::::::::::::::::::::::::

### **BEFORE: HON. JUSTICE CORNELIA KAKOOZA SABIITI**

### **JUDGMENT**

The Plaintiff instituted a suit against the defendant for breach of contract, unjust enrichment and for the recovery of UGX 290,937,000 (Uganda Shillings Two hundred ninety million nine hundred thirty-seven thousand only) being an outstanding balance for goods purchased by the defendant from the plaintiff. The Plaintiff further sought, general damages, interest and costs.

The facts giving rise to the plaintiff's claim are that the Plaintiff is a company that deals in general merchandise including materials of different kinds that are used in construction. Between July 2016 to May 2017, the Defendant under four transactions purchased goods worth UGX 59,000,000, UGX 98,334,000, UGX 91,728,000 and UGX 41,875,000 all totaling to the sum of UGX 290,937,000. However, this money was not remitted to the plaintiff and it is now outstanding and due.

The defendant in the written statement of defence denied the claims of the plaintiff and stated that between the years 2016 to 2017 the defendant purchased numerous $\mathcal{C}$ and stated that between the years account basis and not on credit as alleged by the

plaintiff and that at all times paid for the goods purchased in cash. That since 2017 the plaintiff had never demanded or any payment of any kind until August 2020 and the defendant does not know of any outstanding sums owed to the plaintiff. The defendant denied that there was breach of contract or unjust enrichment and prayed that the plaintiff's claims be dismissed with costs.

# **Representation**

The Plaintiff was represented by M/s Yiga Advocates while the Defendant as represented by M/s Abbas Advocates.

The parties were given schedules to file written submissions which the court has taken into consideration although they were filed outside the provided timelines.

#### **Issues**

The court adopted the following issues from the Joint Scheduling Memorandum agreed by the parties

- (a) Whether the defendant is indebted to the plaintiff? - (b) What remedies are available to the parties?

## Hearing

At the hearing the Plaintiff led one witness, namely Kironde Emmanuel, PWI the Accountant of the plaintiff who gave evidence by both witness statement and oral testimony. The Defendant led one witness Tinkamanyire Richard, DWI, one of the Directors of the Defendant company.

# **RESOLUTION**

# *Issue I: Whether the defendant is indebted to the plaintiff?*

In order to resolve this issue, it is important to establish whether a contract for the exp contract for the purchase $\frac{1}{6}$ whether it was breached by the defendants. contract for the purchase of the merchandise existed between the parties and if so

Counsel for the plaintilf submitted that there is no doubt that there was a transactlon between the parties. as the det'endant under paragraph 7 the written statement of defence acknowledges purchasing the said goods in the same years of 201 6 and 2017 and claims to have paid lbr such goods but did not present any proofofpayment. That for sales at the plaintiffs hardware. it could system generated receipts to customers who actually paid fbr goods. I'he goods taken by the del-endant were fbr construction and the plaintiff presented a schedule of indebtedness liom hcr system that werc not paid fbr by the del'endant hence breach ola contract of sale ol'goods as deflned under Section 2 ol the Sale ol'Goods and Supply of Services Acl 2017 and the casc of Ronald Kasibante v. Shell (U) Ltd HCCS No. 542 of 2006 to mean the breaking of the obligation of a contract imposed which cont'ers a right ol action to the aggrieved party fbr damages.

Counsel for the plaintifT lirrther submitted that PWI whose duties involved looking at the plaintiff s creditors and debtors' performance testitied that the delendant compan)' used to purchase goods on credit from the plaintill'and that the plaintiffrvould prepare invoices, which would be recorded in a Tax Invoice Book against invoices issued to the defendant. That PWI adduced evidence though PExh.1 that was an extract ofthe unpaid invoices of the def'endant amounting to UGX 290,937.000. PWI also stated that the delbndant claimed fbr VAT from URA on the goods received from the plaintifT and that repeated demands were made to the def'endant lbr payment in vain.

In response. counsel lbr the defendant submittcd that in the written statement 01' defence under paragraphs 4, 6, 7, 8 and 9 denics being indebted to the plaintilf and did not make any admission of indebtedness since the law requires an admission to be unequivocal and clear as stated in the case of Agricultural Finance Corporation Versus Kenya National Assurance Company Civil App No.27ll1996. That DWI' who was the director ol'the dcl'endant company in charge ol'the daily opcrations and supervision stated that the delbndant received and paid fbr the goods fiom the plaintifl'

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and does not know the specific goods the plaintiff claims were not paid lbr. That the plaintiff's l-ailure to identify and prove the specific goods purchased and not paid for as it claimed and the dates of those purchased clearly indicate that the plaintiff does not know what it is claiming for and is only on a fishing expedition thereby abusing the court proccss.

Counsel fbr the defendant furthcr submitted that the plaintiff is attempting to shiti the burden of prool from itself as the plaintiff to the defendant. which, contravenes the rules of evidence. 'Ihat it was up to the plaintill to provide evidence ol'the specific transactions claimed indeed took place and not paid for by the defendant and when the same took place which the plaintitThad failed to do thus affirming that plaintifl's claim is baseless and misconceived.

I have caref'ully reviewed the above submissions of the parties. Breach of contract is dellned in Black's Law Dictionary 5'h Edition pg 171 as simply where one parry' b a contractfails lo carry out a lernr. Furlhet, in the case ol'Nakana Trading Co. Ltd Vs Colfee Morketing Board Civil Suil No. 137 of 199,1 court deflned a breach ol'contract as 'where one or both parties.fail to fiifil the obligations imposed by lhe terms of controa'1.

The ptaintitls claim is that they supplied goods on credit to the del'endant liom July 2016 to May 2017 all totaling to the sum of UGX 290.937.000 and that this money was not remitted to the plaintill'and it is now outstanding and due. Whereas counsel for the plaintiffaverred that there was an admission olthe contract by the delbndant ^I have reviewed the written statement of def-encc and find that there is no equivocal admission by the defendant who has specilically denied thc indebtedness and stated that they had transactions based on cash basis and not credit.

The plaintiffs case is that the transactions were based on a credit arrangement but did not adduce the actual source documents liom which the contractual obligations are alleged to arise. There were no tax invoices adduced or credit ledgers showing that ti-lri

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the defendant operated a credit arrangement with the plaintiff. There were no terms presented of the credit arrangement as to the number of days the defendant was to pay for the goods. Counsel for the plaintiff submitted that court should take notice of the common Ugandan practice of taking goods on credit and paying later. This argument can only be sustained where there is credible or documentary evidence of such an arrangement. PW1 testified that the plaintiff entered all transactions into a tax invoice book as well as an accounting system. However, none of the hard copies of the tax invoices were adduced in court or at least print outs from the plaintiff's accounting system. The extract PExh.1 adduced in court related to VAT allegedly claimed by the defendant from URA. However, this document was not authored or signed and no official from URA was brought to explain how it related to the dispute before court.

In the present case the goods have not been ascertained the court has been left in the dark of the specific items and their prices of the merchandise alleged to have been purchased to justify the amounts claimed in the plaint. Under cross examination PW1, apart from mentioning that the goods related to construction materials could not specify the actual goods purchased by the plaintiff. Section 26 (a) of Sale of Goods and Supply of Services Act 2018, states that property in ascertained goods in a deliverable state passes to the buyer when the contract is made.

The contention by the plaintiff requiring the defendant to avail proof of payment for the said goods through payment/cash sale receipt, bank deposit, bank/ mobile money transfer is a shift of the legal evidential burden in Section 101 of the Evidence Act Cap 6. This being a civil suit the burden of evidence lies on the plaintiff who is required to furnish evidence whose level of probity is such that a reasonable man might hold more probable even where the defendant has not adduced any evidence. Requiring the defendant to present proof of payment by cash would only be considered by the court where a credible case has already been presented by the plaintiff but in the instant case this cannot be sustained given that the plaintiff has not

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adduced any evidence as to the goods in issue, when the claimed purchases were made and when property in the claimed goods passed.

I find that the plaintiff has f'ailed to discharge the legal burden that a contract existed between the parties. As such it lbllows that the plaintiff has lailed to prove on the balance of probabilities that it supplied goods worth UGX 290.937.000 to the defendant and that the defendant is indebted to the plaintifTfbr the same.

Issue No. I is answered in the negative.

# Issue II: ll/hal remedies are available lo the parties

Having lbund under Issue No.l that the plaintif'f has lailed to prove its case against the def'endant. this suit is dismissed with costs to the del'endant.

It is so ordcred.

<\_./1 S---l\*r^+ CORNELIA KAKOOZA SABIITI

JUDGE

Date: l6th Augnst2022