Kayinda and Another v The Commissioner Customs (Uganda Revenue Authority) and Another (Civil Suit 51 of 2017) [2021] UGCommC 136 (31 March 2021)

## **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA SITTING AT KAMPALA (COMMERCIAL DIVISION)**

# **CIVIL SUIT No. 0051 OF 2017**

| 5 | 1. | KAYINDA JUMA | } | | |---|----|---------------------|---|---------------------------| | | 2. | MPUUGA PAUL HERBERT | } | …………………………………… PLAINTIFFS |

### **VERSUS**

### 10 **1. THE COMMISSIONER CUSTOMS } UGANDA REVENUE AUTHORITY } ………………………… DEFENDANTS 2. UGANDA REVENUE AUTHORITY }**

**Before: Hon Justice Stephen Mubiru.**

.

#### **JUDGMENT**

#### a. The plaintiff's claim;

- 20 The Plaintiffs' claim jointly and severally against the defendants jointly and severally is for recovery of electronic items impounded by the Customs Department of the 2nd defendant, general damages for wrongful detainer, interest and costs. The 1st plaintiff is a dealer in used electronic office equipment including desk-top computers (CPUs and Monitors), printers and the like. For storage, he rented premises from the 2nd plaintiff located at Kitetika, along Gayaza Road. On or about 15th 25 September, 2016 the defendants' Law Enforcement Officers raided the premises and impounded an assortment of electronic office equipment valued at approximately shs. 400,000,000/= initially the 2nd plaintiff claimed ownership of the property. The 2nd plaintiff was arrested and prosecuted for being found in possession of un-customed goods. Later the 1st plaintiff claimed the goods as his property. On or about 18th November, 2016 the 1st plaintiff produced 30 documentary evidence of purchase to support his claim, which documentation the defendants rejected. The 1st plaintiff contends that the defendants had no lawful justification for confiscating - the goods while the 2nd plaintiff contends he was unlawfully prosecuted.

#### b. The defence to the claim;

In their joint written statement of defence, the defendants denied the plaintiff's claim. They contended that the goods purchased locally by the 1st plaintiff were never seized. What was seized were un-customed goods imported from the United Kingdom by the 2nd 5 plaintiff. They impounded 644 pieces of used computer monitors, 398 pieces of used computer Central Processing Units, an assortment of 24 pieces of used television sets and 2 pieces of used 300 litre capacity freezers, all of which were prohibited items. They further impounded; 35 pieces of used projectors; 11 pieces of used car radios; 3 pieces of used car bonnets; 3 pieces of used car bonnet covers; 8 pieces of 10 used car doors; 9 pieces of used car bumpers; 3 pieces of used car dashboards; 3 pieces of used car radiators; 6 pieces of used car cross members; 1 piece of used car propeller; 1 piece of used lawn mower; an assortment of 15 pieces of used car headlights; 1 piece of used photocopier; 1 piece of used timber cutting saw; 5 pieces of used car engines; 2 pieces of used car gear boxes; 2 pieces of used car suspensions and 1 piece of used car deferential, all of which were un-customed.

#### c. The issues to be decided;

According to Order 15 rule 3 of *The Civil Procedure Rules*, the court may frame issues from all or any of the following materials; - (a) allegations made on oath by the parties, or by any persons 20 present on their behalf, or made by the advocates of the parties; (b) allegations made in the pleadings or in answers to interrogatories delivered in the suit; and (c) the contents of documents produced by either party. The court may amend issues or frame additional issues at any time, including during judgment (see *Oriental Insurance Brokers Ltd v. Transocean (U) Ltd S. C. Civil Appeal No. 55 of 1995; Odd Jobs v. Mubia [1970] E. A. 476* and *Norman v. Overseas Motor*

25 *Transport (Tanganyika) Ltd [1959] E. A. 131*). The following therefore are the issues to be decided by court.

- 1. Whether the used electronic office equipment impounded by officers of the defendants belonged to the 1st plaintiff. - 2. Whether the impounding and detainer of the said goods was unlawful. - 30 3. Whether the plaintiffs are entitled to the remedies sought.

d. The submissions of counsel for the plaintiff;

Counsel for the plaintiff, M/s Kafeero and Co. Advocates, submitted that the 1st plaintiff adduced evidence to show that he had purchased the items locally.

#### e. The submissions of counsel for the defendant;

Counsel for the plaintiff, The Legal Services and Board Affairs Department of the defendants, submitted that.

f. The decision;

#### **1 st issue**; whether the used electronic office equipment impounded by officers of the defendants belonged to the 1st plaintiff.

The party who bears the burden must produce evidence to satisfy it, or his or her case is lost. The probabilities must be high enough to warrant a definite inference that the allegations are true. In a civil suit, when the evidence establishes conflicting versions of equal degrees of probability, where the probabilities are equal so that the choice between them is a mere matter of conjecture, the 20 burden of proof is not discharged (see *Richard Evans and Co. Ltd v. Astley, [19U] A. C. 674 at 687*). The facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the trier of fact may reasonably be satisfied (see *Bradshaw v. McEwans Pty*

*Ltd, (1959) I0I C. L. R. 298 at 305*). The law does not authorise court to choose between guesses, where the possibilities are not unlimited, on the ground that one guess seems more likely than 25 another or the others.

A document of title to chattels is a document which relates to goods that are identified or are fungible portions of an identified mass, which in the regular course of business is treated as adequately evidencing that the person in possession of it is entitled to receive, hold and dispose of 30 the goods it covers. It may also be defined as a document used in the ordinary course of business

as proof of the possession or control of chattels, or a document authorising the transfer or receipt of the chattels mentioned in the document.

The document must contain information about the chattel such as a description by; colour, size, 5 dimension, quantity, weight, value of the goods or other measure; specifications such as serial number, make, model or any other information necessary to identify the goods. It must describe the goods covered by it so that they are identifiable. It is in essence a written description, identification, or declaration of goods authorising the holder to receive, hold, and dispose of the document and the goods it covers. Possession of a document of title is symbolic of ownership of 10 the goods that are described within it.

A fact can be inferred from circumstantial evidence, so long as it is the only reasonable inference, in order to satisfy the "more likely than not" evidentiary standard. If there is another conclusion which is also reasonably open from that evidence, then the fact is not proved. The finding can be 15 sustained only when it can be said as a matter of fact that no other reasonable conclusion is legally deducible from the evidence, and that any other finding would be so lacking in evidentiary support. The court is permitted to draw sensible conclusions from the evidence it accepts as reliable but must not engage in speculation or make guesses. Inferences must be based on specific facts. An inference is a deduction of fact that may logically and reasonably be drawn from another fact or 20 group of facts found or otherwise established in the suit. The inference must be reasonable, i.e. it must be more than surmise or conjecture, and must be based on probabilities, not mere possibilities. Inferences must also be reasonably and logically drawn and may not be based only on imagination, speculation, supposition, surmise, conjecture or guesswork. Accordingly, a factual inference must be based upon substantial evidence, not conjecture, and must be such that a rational, well-

25 constructed mind can reasonably draw from it the conclusion that the fact exists.

An inference that is contrary to the "usual propensities or passions of men," particular propensities or passions of person whose act is in question, course of business, or law of nature is not legal evidence (see *Griffin v. Irelan (1991) 194 Cal. App.2d 844*). It is not permissible to draw an 30 inference from a deduction which is itself purely speculative and unsupported by an established fact. An inference not supported by or drawn from a proven or known fact has no probative value.

An inference cannot be based upon evidence that is too uncertain or speculative or which raises merely a conjecture or possibility.

Inferences are based on analysis. They are statements of the unknown based on the known.

Where the goods claimed by the plaintiff may as reasonably not be among the ones which the defendant impounded as among the ones which were impounded, the plaintiff has not sustained the burden of showing that his goods were impounded by the defendants.

### 10

**2 nd issue**; whether the seizure and detainer of the said goods was unlawful.

According to section 157 (1) of *The East African Community Customs Management Act, 2004* a proper officer may, if he or she has reasonable grounds to believe that there are on any premises 15 any uncustomed goods or documents relating to any uncustomed goods, enter upon and search such premises by day or by night. Where, on the search of the premises, any uncustomed goods, or any documents relating to any uncustomed goods, are found, the proper officer may seize and carry away any such goods or documents (see section 157 (3) thereof). Section 213 (1) (b) of the Act authorises seizure and detainer of goods liable to forfeiture under the Act which the proper 20 officer has reasonable ground to believe is liable to forfeiture, regardless of the fact that any prosecution for an offence under the Act which renders that thing liable to forfeiture has been, or is about to be instituted. Section 222 of the Act authorises the seizure of anything liable to forfeiture under the Act, within five years of the date of the offence.

25 Section 227 of the Act recognises reasonable grounds for acts of seizure and detainer as a defence. Courts usually find reasonable grounds exist when there is a reasonable basis for believing that the goods are uncustomed. Whether or not there were reasonable grounds typically depends on the totality of the circumstances, meaning everything that the proper officer knew or reasonably believed at the time the goods were seized. This requires the establishment of specific and 30 articulable facts taken together with rational inferences or any logical deductions from those facts, as opposed to inchoate and un-particularised suspicion or hunch or gut-feeling, showing that there

are reasonable grounds to believe that the goods were uncustomed. It is the quantum of knowledge capable of inducing an ordinarily prudent and cautious person under the circumstances to believe that the goods were uncustomed. It requires facts or circumstances that give rise to more than a bare, imaginary, or purely conjectural suspicion.

Thus, the officers, in a court of law, must be able to describe in detail what caused their ears to perk up and alert them to criminal activity. Generally, some of these factors are (i) concealment and disguise that could support the reasonable inference of an attempt to shield goods from the view of customs officers; (ii) flight on being challenged; (iii) suspicious movement; (iv) activity 10 that is inappropriate in its setting; (v) evasive answers, conflicting stories, refusal to answer; (vi) immediately verifiable information from an informant; (vii) visible apprehension at the sight of customs officers, and so on. The test is whether the facts available to the officer at the moment of the seizure or detainer warrant a person of reasonable caution in the belief that the action taken was appropriate.

According to section 159 (1) (b) of *The East African Community Customs Management Act, 2004* where goods have been seized under the Act, the proper officer may require the owner of the goods to immediately produce all books and documents, whether in written form or any other form of mechanical or electronic data retrieval mechanism relating in any way thereto. Section 214 (4) of 20 the Act permits the owner, by notice in writing to the Commissioner, to claim the goods within one month of the date of the seizure. The Commissioner may then permit the goods to be delivered to the person making a claim, subject to the claimant giving security for the payment of the value of the thing, as determined by the Commissioner in the event of condemnation of the thing (see

section 214 (6) thereof).

According to section 215 (2) (a) of *The East African Community Customs Management Act, 2004* where any person is prosecuted for an offence under the Act and any thing is liable to forfeiture by reason of the commission of such offence, then, on the acquittal of such person, the court may 30 order the thing to be released to the person from whom it was seized or to the owner thereof. When the court orders the release of chattels from lawful custody, they must be released to the person

who provides satisfactory evidence that he or she was legally entitled to have possession of the property immediately before its was seized.

#### **3 rd issue**; whether the plaintiffs are entitled to the remedies sought.

The insurer is fully liable towards the insured, if a valid insurance contract is executed, without any regard to the intervention of brokers. The extent of liability is determined by the contract and the circumstances of each particular case.

- 10 Since written notice does not take effect until it is communicated (see *Newcastle Upon Tyne Hospitals NHS Foundation Trust v. Haywood [2018] UKSC 22*), it follows that if a notice of cancellation is defective by reason of non-communication, the policy remains in effect. As corollary to this, a party is liable to perform agreed-to contract duties until or unless it is discharged or the contract is effectively cancelled. Under section 64 (1) of *The Contracts Act, 2010* where a - 15 party to a contract, is in breach, the other party may obtain an order of court requiring the party in breach to specifically perform his or her promise under the contract.

The primary remedy for breach of contract is damages. Damages for breach are assessed according to the principle that the innocent party is, as far as possible, put in the position in which it would 20 have been if the contract had been properly performed, subject to the usual rules on causation, foreseeability and mitigation (see *British Westinghouse Electric Co. Ltd v. Underground Electric Railways [1912] AC 673*). A party cannot recover damages for any part of a loss which could reasonably have been avoided. The duty to mitigate requires a party to act reasonably, which will depend on the individual circumstances of each situation. However, the claimant need only take 25 steps which are in the ordinary course of business and is not required to engage in commercially

risky conduct. Expenses, costs or further loss incurred in taking steps to mitigate the loss can be recovered.

#### 5,000,000/= GENRAL DAMAGES.

30 8

In conclusion, judgment is entered for the plaintiffs jointly and severally against the defendants jointly and severally, as follows;

- a) Specific performance. - b) General damages

- 5 c) Interest thereon at the rate of 8% per annum until payment in full. - d) The costs of the suit.

Dated at Kampala this 31st day of March, 2021 ……………………………………...

Stephen Mubiru 10 Judge, 31st March, 2021.