GIZA Systems (U) Limited v Central Electricals International Limited (Civil Suit 531 of 2024) [2024] UGCommC 369 (20 November 2024)

# 5 **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (COMMERCIAL DIVISION) CIVIL SUIT NO. 0531 OF 2024 GIZA SYSTEMS (U) LTD :::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF** 10 **VERSUS CENTRAL ELECTRICALS INTERNATIONAL LTD ::::::::::::: DEFENDANT BEFORE: HON. LADY JUSTICE PATIENCE T. E. RUBAGUMYA**

### **JUDGMENT**

#### Introduction

15 The Plaintiff instituted this suit on 3rd May, 2024 against the Defendant seeking recovery of UGX 97,630,928/= (Uganda Shillings Ninety-Seven Million Six Hundred Thirty Thousand Nine Hundred Twenty-Eight Only) being the unpaid price for the goods supplied to the Defendant, an order for specific performance, special damages, general damages, interest and 20 costs of the suit.

#### Brief facts

The facts constituting the Plaintiff's claim are that on 25th August, 2020, in February and May, 2021 and on 16th May, 2022, the Plaintiff supplied the Defendant with electronic security systems equipment on the 25 Defendant's Carrefour Metroplex project. The Defendant was supposed to pay the money for the goods supplied to it in the following manner; 20% on order, 70% upon delivery and 10% on completion and handover. On 25th August, 2020, the Defendant ordered for the supply of various items under three separate purchase orders with each order costing UGX

- 5 309,945,572/=, UGX 229,097,225/= and UGX 136,282,924/= respectively. In February and May, 2021, the Defendant ordered for items costing UGX 13,628,292/= and UGX 4,690,963/= respectively. On 16th May, 2022, the Defendant further ordered for items costing UGX 15,895,050/=. All the orders made were dispatched and delivered by the - 10 Plaintiff as requested by the Defendant. The Defendant effected payment on some orders but it neglected or failed to pay the outstanding balance of UGX 97,630,928/= (Uganda Shillings Ninety-Seven Million Six Hundred Thirty Thousand Nine Hundred Twenty-Eight Only), hence this suit. - On 21st May, 2024 this Court issued the summons to file a defence in this 15 suit which were duly served onto the Defendant as evidenced by the affidavit of service deponed by Mr. Muthani Elon, an authorized Court process server working with M/s MACB Advocates. The summons were received and stamped by Ms. Racheal Gasinga on 28th May, 2024. However, the Defendant did not file a defence as required by law. On 27th 20 June, 2024 an interlocutory judgment was entered against the Defendant - and the matter was fixed for formal proof.

#### Representation

The Plaintiff was represented by **Counsel Arinda Allan** of **M/s MACB Advocates**. The Plaintiff had one witness, Mr. Kasibante Richard **(PW 1)** 25 and his witness statement was admitted as his evidence in chief. The Plaintiff also adduced documentary evidence contained in its trial bundle.

Counsel for the Plaintiff was directed to file his written submissions which he did and the same have been considered by the Court.

## 5 Issues for Determination

- 1. Whether the Plaintiff is entitled to general damages? - 2. Whether the Plaintiff is entitled to special damages?

## Issue No. 1: Whether the Plaintiff is entitled to general damages?

# Plaintiff's submissions

10 Counsel for the Plaintiff submitted that it was the evidence of **PW 1** that the total amount of money that is due and outstanding from the Defendant is UGX 97,630,928/=. That **PW 1** testified under paragraphs 14 and 15 of his witness statement that the actions of the Defendant amounted to breach of contract and that the Plaintiff has been greatly inconvenienced 15 and prejudiced by the Defendant's breach. That as a result of the said breach, the Plaintiff has suffered economic loss since it has been deprived of the benefit of the amount being sought.

Counsel further submitted that **Section 61(1) of the Contracts Act, 2010** (now **Section 60(1) of Cap. 284**) is to the effect that where there is breach 20 of a contract, the party who suffers the breach is entitled to receive compensation for any loss or damage caused to him or her. That as was held in the case of *Prof. Ephraim Rwabu Kamuntu Vs Attorney General HCCS No. 38 of 2016* general damages are meant to restore the wronged party into the position it would have been in if there had been no breach 25 of contract. Counsel also relied on the case of *Waiglobe (U) Limited Vs Sai Beverages Ltd HCCS No. 16 of 2017*

In relation to the matter at hand, Counsel contended that there was breach of the contract by the Defendant, a fact that was not disputed by the Defendant since it did not file a Written Statement of Defence despite being

5 served. That in the premises, the Defendant breached the contract as a result and therefore the Plaintiff is entitled to damages.

Regarding the quantum of the damages; Counsel relied on **Section 61(4) of the Contracts Act** (**now Section 60(4) of Cap. 284**) and the case of *Prof. Ephraim Rwabu Kamuntu Vs Attorney General (supra)* wherein

10 it was held that:

*"… the inconvenience or loss though not specifically proved can be inferred from circumstances adduced in evidence. That Courts are always guided mainly by the value of the subject matter, the general economic or social and/or other inconvenience and/or loss that the* 15 *party may have been put through at the instance of the opposite party, and the nature and extent of the breach or injury."*

Counsel contended that the Defendant unjustly and without reason denied the Plaintiff the monies due to it from as far back as August, 2020 to date despite the constant reminders and the involvement of its lawyers

20 yet the Defendant's clients had paid for the goods that the Plaintiff had delivered on behalf of the Defendant.

In conclusion, Counsel for the Plaintiff prayed to Court to award the Plaintiff general damages amounting to UGX 200,000,000/= for the loss and inconvenience suffered by the Plaintiff as a result of the breach.

25 Analysis and Determination

The Plaintiff filed this suit due to the Defendant's failure to pay the Plaintiff its balance of UGX 97,630,928/= arising from the supply of electronic security system equipment This amount was not challenged by the Defendant since a Written Statement of Defence was not filed.

- 5 Where the Court sets down a suit for formal proof after a default order has been made, the Plaintiff is under a duty to place before the Court, evidence to sustain the averments in his or her plaint as was held in the case of *Kirungi and Another Vs Kabiya and Others [1987] KLR 347*. - **Section 60(1) of the Contracts Act, Cap. 284** empowers this Court to 10 award compensation for any loss or damage caused to one party due to another person's breach of contract. As per **Section 60(4) of the Contracts Act**, in estimating the loss, the Court has to consider the means of remedying the inconvenience caused by the non-performance of the contract that existed at the time. - 15 In the case of *Kabandize John Baptist and 21 Others Vs Kampala Capital City Authority CACA No. 36 of 2016*, the Court of Appeal held that:

*"The general rule regarding the measure of general damages is that, the award is such a sum of money that will put the party who has* 20 *been injured or who has suffered as adjudged by Court in the same position as he or she would have been had he or she not sustained the wrong for which he or she is getting the compensation."*

According to the case of *Takiya Kashwahiri and Another Vs Kajungu Denis, CACA No. 85 of 2011*, general damages should be compensatory 25 in that they should restore some satisfaction, as far as money can do, to the injured Plaintiff. The Plaintiff should however lead evidence as to what damage he or she suffered at the instance of the Defendant. As was held in the case of *Uganda Commercial Bank Vs Deo Kigozi [2002] 1 EA 305*, while assessing the quantum of damages, Courts are mainly guided 30 by the value of the subject matter, the economic inconvenience that a party

5 might have been put through and the nature and extent of the breach or injury suffered.

In the instant case, **PW 1** testified that on six different occasions, the Plaintiff and the Defendant entered into contracts of sale and supply of goods wherein the Plaintiff supplied the Defendant with electronic security 10 systems equipment on the Defendant's Carrefour Metroplex project. **PW 1** further testified that on 25th August, 2020, the Defendant ordered for nineteen items vide purchase order GIZA/CEIL/CF-MET/CCTV/2020 costing UGX 309,945,572/=, twenty five items vide purchase order GIZA/CEIL/CF-MET/SS/2020 costing UGX 229,097,225/= and fifteen 15 items vide purchase order GIZA/CEIL/CF-MET/FA/2020 costing UGX 136,282,924/=. That in February and May, 2021, the Defendant further ordered for items costing UGX 13,628,292/= and UGX 4,690,963/= respectively and on 16th May, 2022, the Defendant also ordered for three items costing UGX 15,895,050/=.

20 In evidence, the Plaintiff adduced **PEX 1 - PEX 9**, copies of the local purchase orders, quotations and account statement as well as **PEX 10 – PEX 15**, copies of the e-invoices**. PW 1** further stated that on all the above occasions, the Plaintiff dispatched and delivered the goods as was requested by the Defendant. That the Defendant paid 90% of the purchase 25 orders that were made on 25th August, 2020 and that no payment was made for the goods that were delivered in February, 2021, May, 2021 and on 16th May, 2022 leaving an outstanding balance of UGX 97,630,928/=.

I have perused the evidence adduced by the Plaintiff and according to **PEX 9**, the Defendant's account statement issued by the Plaintiff, the 30 Defendant is indebted to the Plaintiff in the sum of UGX 97,630,928/=, which amount has never been cleared to date. **PW 1** testified under

- 5 **paragraph 16** of his witness statement that the Plaintiff has been greatly inconvenienced and prejudiced by the Defendant's breach which has resulted into economic loss since the Plaintiff was deprived of the economic benefit of the amount being claimed. - Considering the authorities citied above, the fact that there was non-10 payment for the goods that were supplied to the Defendant, which means that the Plaintiff was deprived of the economic benefit of the money from as far back as August, 2020 and was greatly inconvenienced as a result, I hereby award general damages of UGX 15,000,000/= (Uganda Shillings Fifteen Million Only) to the Plaintiff. - 15 In the premises, the Plaintiff is hereby awarded general damages amounting to UGX 15,000,000/= (Uganda Shillings Fifteen Million Only).

Issue No. 2: Whether the Plaintiff is entitled to special damages?

## Plaintiff's submissions

Counsel for the Plaintiff submitted that in the case of *Besimira Moses Vs* 20 *Attorney General HCCS No. 143 of 2015,* it was held that it is trite law that special damages must not only be specifically pleaded but they must also be proved. That the Plaintiff under paragraph 9 of its plaint, pleaded for special damages amounting to UGX 5,000,000/= for procuring services of a lawyer and led evidence, **PEX 18**¸to prove the same.

25 In conclusion, Counsel for the Plaintiff submitted that the Plaintiff is entitled to the special damages being sought.

## 5 Analysis and Determination

In the case of *Mugabi John Vs Attorney General HCCS No.133 of 2002*, special damages were defined as damages that relate to past expenses and loss of earnings which arise out of special circumstances of a particular case. In the case of *W. M Kyambadde Vs Mpigi District Administration*

10 *[1983] HCB 44*, it was held that the guiding principle is that special damages must be specially pleaded and strictly proved. The evidence can be documentary or otherwise provided evidence is led to prove the special damages so sought.

In the matter at hand, the Plaintiff seeks special damages of UGX 15 5,000,000/= for procuring services of a lawyer as per **PEX 18**.

I have perused **PEX 18** and it is a receipt dated 20th March, 2024 from M/s MACB Advocates acknowledging payment of UGX 5,000,000/= by the Plaintiff as consultation in relation to its unpaid monies by Central Electricals International Limited, the Defendant.

20 **Hon. Justice Stephen Mubiru,** while resolving whether the expenses incurred prior to the filing of the suit but related to the claim before Court are special damages or costs; held in the case of *Abraham Yohannes Vs Absa Bank HCCS No. 402 of 2022* that:

*"Costs incurred in the reasonable attempts to find solutions to* 25 *problems arising between the parties in connection with issues to be decided in contemplated or pending litigation clearly fall within the definition of costs of the litigation … A Court's order for 'the costs of' Court proceedings, by virtue of Section 27(1) of the Civil Procedure Act extends in any case to costs 'incidental to' litigation without any* 30 *requirement for specific wording to that effect."*

5 I concur with the holding of **Hon. Justice Stephen Mubiru** above and as a result, the sum of UGX 5,000,000/= being sought herein is hereby denied since the same will be recovered as part of the costs of the suit.

## Interest

The Plaintiff also prayed for interest of 20%, on the sum of UGX 10 97,630,928/=, general and special damages from the date of filing the suit until payment in full.

**Section 26 of the Civil Procedure Act, Cap. 282** is to the effect that the Court can award interest that is just and reasonable. As was held in the case of *Milly Masembe Vs Sugar Corporation (U) Ltd and Another SCCA*

15 *No. 1 of 2000* the guiding principle is that interest is awarded at the discretion of the Court but the Court should exercise the discretion judiciously taking into account all the circumstances of the case.

Further, in the case of *Mohanlal Kakubhai Radia Vs Warid Telecom Uganda Ltd HCCS No. 224 of 2011* it was held that in determining a just 20 and reasonable rate, Courts take into account the following:

*"the ever rising inflation and drastic depreciation of the currency. A Plaintiff is entitled to such rate of interest as would not neglect the prevailing economic value of money, but at the same time one which would insulate him or her against economic vagaries and* 25 *the inflation and depreciation of the currency in the event that the money awarded is not promptly paid when it falls due."*

I find the claimed interest rate to be reasonable. I accordingly award interest at the rate of 20% per annum on the decretal sum of UGX 97,630,928/= from the date of filing the suit until payment in full. I also

5 award interest at the rate of 6% per annum on general damages from the date of Judgment until payment in full.

Costs

**Section 27(2) of the Civil Procedure Act** provides that costs of any cause follow the event unless otherwise ordered by Court. Further in the case of

10 *Uganda Development Bank Vs Muganga Construction Co. Ltd [1981] H. B 35,* **Hon. Justice Manyindo** (as he then was) held that:

*"A successful party can only be denied costs if it is proved, that but for his or her conduct, the action would not have been brought, the* 15 *costs will follow the event where the party succeeds in the main purpose of the suit".*

The Plaintiff being the successful party in this case is therefore entitled to costs of this suit.

- 20 In the final result, Judgment is entered for the Plaintiff against the Defendant in the following terms: - 1. The Defendant shall pay the Plaintiff a sum of UGX 97,630,928/= (Uganda Shillings Ninety-Seven Million Six Hundred Thirty Thousand Nine Hundred Twenty-Eight Only) being the outstanding 25 sum owed by the Defendant arising from the supply of electronic security systems equipment by the Plaintiff. - 2. The Defendant shall pay the Plaintiff general damages amounting to UGX 15,000,000/= (Uganda Shillings Fifteen Million Only). - 3. The Defendant shall pay interest at the rate of 20% per annum on 30 the sum in (1) above from the date of filing the suit until payment in full.

- 5 4. Interest is awarded on the sum in (2) above at the rate of 6% per annum from the date of Judgment until payment in full. - 5. The Defendant shall bear the costs of the suit.

I so order.

Dated, signed and delivered electronically via ECCMIS this **20th** day of

10 **November**, **2024.**

Patience T. E. Rubagumya **JUDGE** 20/11/2024

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