Esco Uganda Limited v Kasangaki (Civil Suit 20 of 2022) [2024] UGHC 1143 (6 December 2024)

Full Case Text

## THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT HOIMA CIVIL SUIT NO. 20 OF 2022

#### (Formerly MSD Civil Suit No.69 of 2022)

ESCO (U) LTD :::::::::::::::::::::::::::::::::::

#### **VERSUS**

MICHAEL KASANGAKI ::::::::::::::::::::::::::::::::::::

#### Before: Hon. Justice Byaruhanga Jesse Rugyema

#### **JUDGMENT**

- [ The Plaintiff filed this suit against the Defendant, seeking inter alia, Special damages of Ugx 90,517,215/=, General and exemplary damages, interest and costs of the suit. - It is the Plaintiff's case that that as a company engaged in the business of $[2]$ processing cocoa, vanilla and chillies for export operating in Western and Central Uganda, it employed the Defendant as a Branch Manager at its branches in Hoima and Kagadi Districts. - That the Defendant's principal roles were to conduct oversight of branch $[3]$ operations and stewardship of the Plaintiff's resources and conduct the purchase of cocoa and vanilla from the farmers in the field and pay money to the farmers upon delivery of produce. - The Plaintiff averred that contrary to the Plaintiff's policy, the Defendant $|\pm|$ paid money to the farmers in advance and the farmers to whom money was paid without authorisation from the Plaintiff neither delivered the cocoa nor returned the money. 2ndly, that the Defendant paid money to fictitious farmers which led to siphoning of funds thus breaching his fiduciary duties owed to the Plaintiff. As a result of the breach of the contractual fiduciary duties by the defendant, the Plaintiff has suffered financial and reputational loss for which it holds the Defendant liable.

- [5] Upon the plaintiff failing to serve the defendant through the ordinary mode of service of process because he could not be easily located, the Defendant was served with the summons and plaint by way of substituted service in New Vision Newspaper on the 19th day of April, 2023 as per the affidavit of service on record dated 2nd May 2023 deponed by a court process server, Kisa Benjamin. No defence was filed by the defendant and as result, on the 12th day of July 2023, this court issued directions to the parties to file a joint scheduling memorandum, witness statements and trial bundles and the matter was fixed for hearing *exparte* on the $14th$ day of November 2023. - Issues for determination. $[6]$ - 1. Whether the Plaintiff is entitled to special damages of Ugx $90.517.215/=$ . - 2. What are the available remedies.

# **Counsel legal representation**

The Plaintiff was represented by Mr. Mark Kiiza of M/s Origo Advocates, $[7]$ Kampala who filed written submissions for consideration in the determination of this suit.

# **Burden and Standard of proof**

- In Civil suits, the burden of proof lies with the Plaintiff who has to prove $[8]$ his or her case on the balance of probabilities; Sebuliba Vs Coop. Bank Ltd [1982] HCB 130. Under S.103 of the Evidence Act, the burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person. He who asserts must affirm, See also Jovelin Barugahare Vs A. G, SCCA No.28/1993. - In this suit, the Plaintiff claimed against the defendant inter alia, special $[9]$ damages of Ugx 90,517,215/= arising out of the negligence and fraud attributed to the Defendant during the execution of his duties as Branch Manager in Hoima and Kagadi Branches of the plaintiff company. It follows therefore that the burden is on the plaintiff to prove the special damages.

## **Merits of the suit**

Issues 1: Whether the Plaintiff is entitled to special damages of Ugx $90,517,215/=$ .

- [10] It is trite that special damages must be specifically pleaded and proved on the balance of probabilities whether the suit proceeds inter parties or exparte as in the instant case, See Kyambadde Vs Mpigi District Administration [1983] HCB 44 and Hajji Asuman Mutekanga Vs Equator Growers (U) Ltd, SCCA No.7/1995. - [11] The Plaintiff's claim against the Defendant in the plaint is inter alia, special damages of Ugx 90,517,215/=, general and exemplary damages. Counsel for the Plaintiff submitted that the Plaintiff led evidence showing that it paid money to the Defendant for the purchase of cocoa and no cocoa was bought which evidence was not disputed at the trial. That the Defendant made a commitment to refund any money he was given for which he never delivered cocoa. - [12] The Plaintiff adduced evidence through its witness Acire David (PW1) a supervisor of the Plaintiff's Hoima and Kagadi Offices who stated in his witness statement that the Plaintiff advanced funds to the Defendant for the purpose of making advance payments for purchasing cocoa from the farmers in the field (P. Exh.15). According to PW1, the Defendant requisitioned large amounts of money and made no accountability. A warning letter was issued to the defendant and he made a commitment to refund the money in the event of failure of the farmers to deliver the cocoa (P. Exh.9). The plaintiff carried out investigations and came up with 2 lists of uncollected debts in Kibaale (Kagadi) and Hoima totalling up to Ugx 90,517,215/= marked P. Exhs.11 & 12 respectively. These lists were not in any way disputed at the trial. - [13] In the instant case, the Defendant was duly served with summons to file a defence but never filed any. It was held in Agadi Didi Vs James Namakajo, HCCS No.1230 of 1998;

"failure to file a defence raises a presumption or constructive admission of the claim made in the plaint

and the story told by the plaintiff, in absence of the defence to contradict it, must be accepted as the truth, see Wilson Ag. J. in Karji Devji Vs Juabhai & Co. (1934) 1 EACA 87."

The general rule therefore is that failure to file a WSD operates as an admission of the facts alleged by the plaintiff.

[14] From the totality of the above, I find that the evidence as adduced by PW1 is not denied by the Defendant. In absence of any evidence to the contrary, I find that the Plaintiff is has proved the special damages and is therefore entitled to recover the same.

# **Issue No.2: What remedies are available.**

#### **Special damages**

[15] According to P. Exh.9 dated 22/10/2019, the Defendant undertook to recover all the advances given to the farmers and in the alternative, bear the responsibility to pay to the plaintiff the balance which to date, he has not paid. The plaintiff is therefore awarded the claimed special damages of Ugx 90,517,215/=.

#### **General damages**

[16] It is trite that general damages are awarded at the discretion of court and are intended to place the plaintiff in the position he would have been had the wrong complained of not occurred, Blackburn M. Livingstone Vs Rawyards Coal Co, [1880] 5 AC 2539. This court is also aware that

"in assessment of the quantum of damages, courts are mainly guided by the value of the subject matter, the economic inconvenience that a party may have been put through and the nature and extent of the breach or injury suffered,"

The plaintiff has been deprived of the use of its money i.e proceeds and the money advanced to farmers who failed to deliver cocoa and also could not be traced for the purpose of returning the money which was capital for the business for close to 5 years, i.e from 22nd October 2019 when the Defendant undertook to recover the money advanced to the farmers or bear the responsibility to pay the balance to the Plaintiff to date.

Considering the inconvenience, stress, trauma occasioned to the Plaintiff - as a result of the Plaintiff's loss not limited to its efforts to recover the lost money, I find that an award of damages amounting to $Ugx$ 15,000,000/= as requested by the Plaintiff is appropriate. In the premises, I award the plaintiff $Ugx 15,000,000/=$ as general damages for the inconveniences and to restore the plaintiff to the position it would have been in had the wrong not occurred.

# **Exemplary damages**

- [17] These are intended to punish, deter, express outrage of court at the defendant's malicious conduct, Uganda Revenue Authority Vs Wanume David Kitamirike, C. A No.43 of 2010. In Apire Michael Vs A. G, HCCS No.92 of 2004; it was held that, - "Exemplary damages are not meant to enrich the plaintiff. They are punitive in nature as a deterrent to future acts of the defendant."

The plaintiff prayed for Ugx 15,000,000/=. The plaintiff however, in this case adduced no evidence to justify the award and as a result, none is awarded.

## **Interest**

[18] The Plaintiff prayed for interest of 25% p.a on the decretal sums to cushion it on the inflationary nature of money. As per the authority of Harbutt's Plasticide Ltd Vs Wyne Tank & Pump Co. Ltd [1970] 1 QB 447 an award of interest is discretionary. Considering the circumstances of this case, I award the plaintiff interest on general damages at a rate of 18% p.a from the date of judgment until full payment and 24% p.a on special damages from the date of breach i.e $22^{nd}$ October 2019 when the Defendant undertook to pay the balance but ignored and/or failed to pay until full

# payment.

Costs [19] As per Section 27(1) CPA, costs are awarded at the discretion of court and as per the authority of Mungecha Vs AG [1987] HCB 55, costs follow the event unless Court orders otherwise. In the present case, I accordingly award the Plaintiff costs of the suit as the successful party.

[20] In conclusion, judgment is entered for the Plaintiff against the Defendant • in the following terms:

- a) The Plaintiff is awarded special damages of Ugx Ugx 90,517,215/ $=$ - b) The Plaintiff is awarded general damages of UGX 15,000,000/= for the loss it suffered as a result of the Defendant's actions. - c) The Plaintiff is awarded interest of 18% p.a on general damages from the date of judgment until full payment and 24% per annum on Special damages from the date of the breach i.e, 22nd October 2019 when the Defendant undertook to pay the balance but ignored and/or failed to pay until full payment. - d) The Plaintiff is awarded costs of the suit

Dated at Hoima this $6th$ day of December, 2024.

Byaruhanga Jesse Rugyema IUDGE.