Kibalama v Alfasan Belgie CVBA (Civil Suit No. 92 of 1998) [2000] UGHC 50 (2 October 2000)

Full Case Text

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THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA CIVIL SUIT NO. 92 OF 1998

EDWARD KIBALAMA PLAINTIFF

## VERSUS

ALFASAN BELGIE CVBA DEFENDANT

BEFORE THE HONOURABLE LADY JUSTICE C. A. OKELLO

## JUDGMENT

The plaintiff filed this suit against the defendant claiming for US \$ 15.000.00 or its equivalent in Uganda Shillings which the plaintiff claims is the value of drugs he ordered from the defendant and paid for on or about the 12.1.1996, but which the defendant failed to supply. The plaintiff further claims for general damages for breach of contract as well as interest and costs of the suit.

In its Written Statement of Defence/counter claim, the defendant denied the plaintiff's claims pleading that the plaintiff never placed any order for drugs as he claims it is the plaintiff instead, who at one time owed the defendant USD 34,590.90 . It was pleaded that the suit by the plaintiff to the defendant the plaintiff's indebtedness to the defendant leaving an outstanding debt of USD 19,590,90. The defendant counter-claimed from the plaintiff the said sum. The plaintiff denies the counter-claim pleading in his was as part of sum of money was paid the defence/counter-claim that the counter-claim reply to and that

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raised only because of the plaintiff's suit.

At the hearing of the suit, a number of issues were framed for determination by the court. They are the following:

- 1. Whether there was a contract between the plaintiff and the defendant for the sale of drugs worth USD 15,000,00. - 2 . If there was a contract, whether it was breached. - 3 . The remedies to which the plaintiff is entitled.

On the defendant's counter-claim two issues were framed, namely:

- 1. Whether there was any debt owed to the defendant/counterclaimant by the plaintiff. - 2 . If so, whether of USD 15,000 was meant the payment liquidate part of the debt.

Before I set out the evidence adduced in the suit and proceed to I would like the defendant/counter-claimant was represented by counsel during presentation of the plaintiff's evidence in the suit. In the early stages, the defendant/counter claimant was represented by Mr. Sekabanja Kato, a little later Mr. Mwebesa and Mr. P. Nyakana of M/S Mwesigwa Rukutana and Co. Advocates appeared for the defendant/counter claimant. However, rhe two advocates between determine the issues framed, to state that

them failed to adduce evidence both in defence of the defendant in the plaintiff's suit as well as in proof of the counter claim. specifically to enable counsel for the defendant/counter claimant adduce evidence in the suit as a whole. During his last defendant informed the court that he tracing the defendant, he was granted an adjournment to look for his client; to which the suit was adjourned (10.4.2000)*,* Mr. Nyakana did not turn up, nor did he send to court any information explaining his absence, there present any representative of the defendant. Mr. Urban Tibamanya the learned counsel for the plaintiff applied for a dismissal of the defendant's/counter claimants' claim against the plaintiff with costs under order 9 rule 19 of the Civil Procedure Rules. Counsel for the plaintiff also prayed to proceed with the plaintiff's case in the absence of the defendant (he said) under order 9 rule 17(1) (a) of the Civil Procedure Rules. The court did proceed with the suit in the absence of the defendant/counter claimant under order 15 rule 4 of the Civil Procedure Rules. The claim with costs to the plaintiff under order 9 rule 17(1) (a) of the Civil Procedure Rules. This was the case despite two adjournments that the court granted was having difficulties in appearance in court, on the 9th March 2000, Mr. Nyakana for the nor was but on the date court then dismissed the defendant's/counter claimants'

Having set out the history of the trial, I would now like to return to the evidence in the suit.

The plaintiff called two witnesses including himself in proof of

his case. The evidence. somewhat summarised was as follows:

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The plaintiff Edward Kibalama (PW1) had a number of business transactions with the defendant/counter claimant which started in and went on up to 1996 . The transactions involved to order from the defendant/counter claimant. The drugs were for sale in Uganda. The plaintiff was introduced to the defendant's Manager for the Middle East*,* Eastern and Southern Africa region a Mr. Ddyvamoudemdij ick. A Mr. Rakesh was the one who introduced the plaintiff. Mr. Rakesh who was carrying on similar business with the defendant, was operating from Nairobi Kenya and the plaintiff at first ordered drugs through him prior to direct dealings with the defendant. The transactions with the defendant were a result of a verbal contract between the plaintiff and Mr. Ddyvamoudemdijick the defendant's Manager. The contract was that the plaintiff would place his orders for drugs and pay for the The arrangement agreed upon worked in respect of a number of orders including the following: 1993 Veterinary drugs which the plaintiff used drugs before they were shipped to him.

- **i)** 16/6/1995 when USD 18.000 was transferred to the defendant. Drugs worth that much money were later shipped to and received by the plaintiff. - ii) 13.7.1995 USD 5.000 was transferred to the defendant. The drugs ordered were also sent to the plaintiff.

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- 11,500; iii) 24.7.1995 the amount transferred to the defendant was USD - iv) 7/6/1995 USD 12.900 was transferred. The drugs paid for in (iii) and (iv) were received.

On the 12/1/1996, the plaintiff, as usual, transferred to the defendant USD 15,000, however, the drugs have never been received by him despite demands made by telephone and in writing as well as a personal visit the plaintiff and his brother made to Belgium at the invitation of Mr. Ddyvamoudemdijick. When all failed, rhe plaintiff filed this suit. The plaintiff prayed that the court should order the defendant to pay him back the USD 15.000 with interest at bank rate. He also prayed for general damages for breach of contract; cost of his travel to Belgium and costs of this suit.

counter claim is concerned, the plaintiff testified that the He stated that he never ordered any drugs from the defendant on credit. The plaintiff also denied that the vouchers annexed to the defence/ counter claim was ever brought to his attention. He contended that the debts recorded in the invoices would have been off-set against money transfers he made to the defendant/counter-claimant about that period; i.e between January 1995 to March 1995. The plaintiff testified that this counter claim was brought to his attention after he filed this suit. In as far as the defendant's claim is not known to him.

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The plaintiff testified that at one time he assisted some Rwandese send money toto the defendant through DHL. The Rwandese also wanted to import drugs to Rwanda, thus that order had nothing more to do with him after he dispatched the money (drafts). He later never came to learn of anything wrong with the drafts i.e until the defendant filed the counter claim. The plaintiff admitted that he was indebted to Mr. Rakesh. His indebtedness stood at USD 4,000 by April 1996 but that he paid Rakesh shs. 700.000 and shs. 750.000. The plaintiff stated that the money he owed Mr. Rakesh was on account of commission earned by Mr. Rakesh on purchases the plaintiff made after he (the plaintiff) was introduced to the defendant by Mr. Rakesh. The plaintiff*'* s further evidence was Rakesh some money for drugs to be ordered through Lords Pharmacy as well as from South Africa. He also testified that the drugs from South Africa have not been received. This is basically the testimony of the plaintiff as PW1. that he sent Mr.

The plaintiff's second witness was one Josephine Byegonza, an . Assistant Manager with Uganda Commercial Bank [UCB] International Division. She testified that the plaintiff is known to her as a customer who used to transfer money outside Uganda to Alfasan Belgie CVBA (the defendant). That the plaintiff made the following transfers:

On the 3.5.1995 USD 10.500.00 transferred to the **i)** was account of Alfasan B. V. International, account No. 464693632. The witness tendered the transaction voucher

for this transaction which was marked exh P1.

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- ii) On the 12.4.1995 another sum of USD 21,400 was transferred to the same account (exh P2). - iii) On the 7.6.1995 the sum transferred to the account was USD $12,900$ (exh P3). - iv) On the 16.6.1995 Alfasan International account No. 721540484694 was credited with another transfer of USD $18,000$ (exh P4). - On the 24.7.1995 the defendant's accounts mentioned in (i) $v$ ) - (iii) was sent another transfer of USD 11,400 (exh P5). - vi) On the 31.7.1995 another transfer of USD 5000 was made to account No. 464693632 (exh P6). - $vii$ ) The next transfer to the same account as in (vi) in the sum of USD 8,000, was sent on the 18/8/1995. The transaction voucher was tendered as exh P7. - A voucher for the transfer of USD 10,000 was not viii) available, but a photocopy was tendered for identification and marked ID1.

ix) The last transaction was on the 1.2.1996 when the sum of $ix$ **97**

USD 15,000 was transferred to the account of Alfasan International account No. 7215404846940 as shown by photocopy of the transaction voucher (ID2).

Explaining the documents tendered in evidence during cross examination and re-examination. PW2 testified that a transaction voucher is the first document made when money is transmitted followed later by an Intra Day report. She further testified that the vouchers she had tendered in evidence were those she gave the plaintiff after the transactions; and that the Bank's office copies were in the archives. Lastly, the witness testified that the plaintiff never complained to UCB afterwards about the money transfer transactions. She understood that the money reached the destination.

As I have already stated in the earlier part of this judgment. the defendant's/counter claimant's claims contained in the counter-claim was not prosecuted. The same was dismissed with costs to the plaintiff. What remains for determination is the plaintiff's claims against the defendant only. I shall next proceed to determine the issues, and in the course of so doing shall address the submissions made by counsel for the plaintiff.

The first is issue whether there was a contract between the . plaintiff and the defendant for the sale of drugs worth USD 15,000.

Mr. Urban Tibamanya for the plaintiff in his submissions gave a

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brief history of the case, including failure by the defendant to adduce any evidence in its defence to the plaintiff's claims; as well as the dismissal of the counter-claim.

The learned Mr. Tibamanya then submitted that there was a practice between the plaintiff and the defendant in the suit transaction. By that practice, the plaintiff placed orders for goods by T. T. through UCB. then dispatched together with invoices bringing the contract to conclusion. Counsel argued that the plaintiff used this established practice on the 12.1.1996 to place an order for drugs worth USD 15.000. The order, as usual, was paid for on annexture ' E' to the plaint, but the goods have never been sent to the plaintiff despite a visit the plaintiff made to Belgium to process this order. The learned counsel urgued the court to find that there was a contract based on the evidence adduced. — The goods were

From the evidence adduced for the plaintiff, I am satisfied that the plaintiff had some dealings with the defendant in the year 1995 to early 1996. This much is clear from the money transfers made through UCB during that period. What is not at all clear however, is whether the dealings were in pursuance of a contractual relationship between the parties which the parties thereto intended to be binding at law. The plaintiff apparently expects this court to find that because he defendant on various dates in the year 1995, this court should find that he sent the money in persuance of a verbal contract or a series of verbal contracts by the terms of which he bought from sent money to the

the defendant veterinary drugs by placing verbal orders followed by remittance of money through bank transfers. The plaintiff thereafter expects this court to infer that since he had successfully completed the contract or contracts*,* with the defendant before, the money transfer he made to the defendant in a similar verbal contract for the sale and purchase of veterinary drugs as the previous completed deals had been. Although I am satisfied from the evidence adduced on behalf of the plaintiff context of a legally binding contractual relationship. The grave doubts I entertain is the result of total lack of any written document to stain the allegation of the dealings in the context of a contractual relationship. Even if it is granted that the parties did agree that the terms governing their relationship was to remain verbal, one would nevertheless, expect that there would be some documents or record of the transaction considering that they are supposed to have been transacting with each other for atleast a year. One would have expected some proforma invoices *r* of the drugs involved in each transaction. One would have expected some record of the type of drug, the quantity and the cost per unit and total cost of drugs involved in each of the transactions concluded in 1995. One would have expected shipping documents as well as clearing documents to be available. There would be copies of customs documentation. In the absence of any other proof of the previous purchases, there is only the money transfers through UCB. The transfers by themselves have not that he had some dealings with the defendant in the year 1995, January 1996, was likewise in pursuance of or under the terms of I am not prepared to find that the dealings were within the

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sufficiently proved the existence of a previous contract or contracts. In fact, on the evidence it is possible to infer that transfers made in 1995 could well have been made on behalf of some third person, especially as the plaintiff did testify that he once assisted some Rwandese to send some money by drafts to the defendant. It is possible that the transfers on behalf of party. would explain the absence of any form of of the money from the defendant. The best interpretation I can put on the previous money transfers is that they were made in pursuance of some dealings between the parties but without there being in existence a legally binding contract between them (see the analogous J. R. Crompton and Brothers Ltd and others [1932] 2 KB261). he made in 1995 could have been made **Lihat** acknowledgment the money some third case of Rose and Frank Co. vs

Not only has the plaintiff failed to prove previous course of contractual dealings from which court could infer that the suit transactions was contractual. 'The plaintiff has also failed to prove that he actually sent the suit sum of money (USD 15,000,00) to the defendant in January 1996. The transaction voucher on which the plaintiff relies upon to prove that he transferred the suit money to the defendant, was not tendered in evidence. Instead, it was onl py-of the transaction voucher that The evidence. Lastly on this document, the learned counsel for the plaintiff did not apply to tender the identified photocopy in phot oco' offered in court why the voucher was not available for use ^original voucher was not exhibited, was tendered and even then it was only for identification. nor was there explanation as *J*

The result is that there is no proof of the USD evidence. 15.000.00 having been sent to the defendant.

The plaintiff's evidence does not prove this issue on the balance of probabilities. I therefore find in answer to the first issue that there was no contract between the plaintiff and the defendant. The first issue is answered in the negative.

Having determined the first issue in the negative, I do not find it necessary to consider the remaining two issues on whether the defendant breached the contract and the reliefs the plaintiff is entitled to. Be that as it may, I would like to make a few remarks on the third issue.

As has already been stated, the third issue is the remedies to which the plaintiff is entitled.

The plaintiff had prayed for orders that the defendant pays him or refunds him the USD 15,000,00 with interest at bank rate. He also prayed for the costs of his travel to Belgium.

In as far as the latter prayer is concerned, one would have expected the plaintiff to go further than merely stating that when the order placed with the transfer of USD 15.000.00 was not shipped to him, he travelled to Belgium at the invitation of the defendant's representative to discuss the order, among other matters.

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The court expected the plaintiff to prove this claim by producing evidence of his travel to Belgium. Some of the evidence would have concerned the means by which the plaintiff travelled, the cost of the return ticket to Belgium; his passport to prove his entry and exit from some port in Belgium and the total expenses he incurred while in Belgium. No evidence whatsoever was adduced to prove the trip was ever made as the plaintiff claims.

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As regards the claim for interest at bank rate, the plaintiff equally failed to convince the court that interest at bank rate was justified. In his evidence in chief, the plaintiff stated that he 'got' the money to send to the defendant from a bank. No evidence was led to establish when he got the money, on what terms the money was availed to him, which bank lent him the money, and what liability he had incurred to the bank as a result of the defendant's failure to ship the goods. These two prayers would have been rejected for lack of proof even if the first issue had been decided in the plaintiff's favour.

The plaintiff has failed to prove his claims against the defendant. His suit is dismissed with costs to the defendant.

In summary the following orders are made:

The plaintiff's suit is dismissed with costs to the al defendant.

The defendant's/counter-claimant's counter claims against $b$ ]

the plaintiff is dismissed with costs to the plaintiff.

JUDGE. 2/10/2000. C. A. OKEJfjLO

## 2/10/2000 2.45. p. m.

Mr. Urban Tibamanya for the plaintiff. Plaintiff also in court. Mr. Nkuubi Court Clerk.

## Court

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Judgment signed, dated and delivered in open court.

C. A. OKELLO

JUDGE. 2/10/2000.