Kumaki v Ruhaan Investment Limited (Civil Appeal 64 of 2022) [2023] UGHCCD 402 (18 September 2023)

#### THE REPUBLIC OF UGANDA

#### IN THE HIGH COURT OF UGANDA AT KAMPALA

#### (CIVIL DIVISION)

#### CIVIL APPEAL NO. 64 OF 2022

*(Arising from the Chief Magistrate Court of Nakawa at Luzira Civil Suit No. 65 of 2021)*

KUMAKI EMMANUEL ============================= APPELLANT

#### VERSUS

RUHAAN INVESTMENT LTD ====================== RESPONDENT

# **BEFORE: HON JUSTICE EMMANUEL BAGUMA JUDGMENT**

#### 1. **Background**

The Respondent formerly the Plaintiff sued the Appellant formerly the Defendant for recovery of 10,840,000/=, general damages, interests and costs of the suit. The Respondent/Plaintiff sold a motor vehicle to the Appellant/Defendant at 61,000,000/= and the Appellant/ Defendant paid 50,160,000/= and left a balance of 10,840,000/= and the Respondent/Plaintiff went to court for that claim. However, the trial Magistrate further found that the Appellant/Defendant made further payments after the suit was filed leaving a balance 2,000,000/= which the Respondent/Plaintiff was entitled to as un paid balance. The trial court awarded interest at 24% per annum from March, 2021 till payment in full, general damages of 1,000,000/= and costs of the suit.

2. The Appellant/Defendant being dissatisfied with the decision of the trial court, he appealed to this court on following grounds;

# 3. **Grounds of appeal.**

- 4. Counsel for the Appellant at the hearing abandoned ground one in the memorandum of appeal and agreed to argue grounds 2 and 3 as one and two respectively to wit; - *i. The learned trial Magistrate erred in law and in fact when he failed to consider the mediation report that was entered into by the parties to resolve the issues.* - *ii. The learned trial Magistrate erred in law and in fact when he asserted that the Defendant caused financial loss, damage and inconvenience without showing proof of the same.*

# 5. **Legal representation.**

Mr. Idambi Paul of Cumberland Advocates represented the appellant while Mr. Okello Alfred of Prudens Law Advocates represented the Respondent.

6. Both Counsel agreed to file written submissions whose details are on the court record.

# 7. **Duty of first Appellate Court**.

The duty of the first appellate court was stated in the case of **Kifamunte Henry Vs Uganda SC, (Cr) Appeal No. 10 of 2007,** where it was held that; *''…the first appellate court has a duty to review the evidence of the case, to reconsider the materials before the trial judge and makeup its own mind not disregarding the judgment appealed from but carefully weighing and considering it…''*

8. This Court therefore has a duty to re-evaluate the evidence to avoid a miscarriage of justice as it mindfully arrives at its own conclusion. I will therefore bear these principles in mind as I resolve the grounds of appeal in this case.

## 9. **Submissions by Counsel for the Appellant**

## **Ground No. 1.**

*The learned trial Magistrate erred in law and in fact when he failed to consider the mediation report that was entered into by the parties to resolve the issues.*

- 10. Counsel submitted that the parties to the suit opted for mediation where the Plaintiff now Respondent accepted full payment and disagreed on the costs and the same is reflected in the mediation report. - 11. Counsel submitted that the mediation report is a reflection of the party's true interest and guiding document to the judicial officers. He referred to the case of **Oola and 2 others Vs Lanen CA No. 18 of 2017** where it was held that; - "*Mediation works because parties can safely let down their guard; they can expose weakness, explore true interests, motivations and brainstorm creative solutions."* - 12. Counsel also referred to the **Regents of University of California Vs Summer 1996 42 Cal App 4th 1209** where it was held that; - *"Failure to object to admission or evidence of events occurring during a prior mediation is appropriately held to constitute admission".* - 13. He concluded that the trial magistrate erred when he neglected the contents and admission in the mediation report.

14.**Ground No. 2**

*The learned trial Magistrate erred in law and in fact when he asserted that the Defendant caused financial loss, damage and inconvenience without showing proof of the same.*

- 15. Counsel for the appellant submitted that damages are in respect of any unlawful act however the case before hand is one without any unlawful act from the appellant since he ably paid off the contractual sum agreed by oral agreement between the parties. To support his submissions counsel referred to the case of **Ashby VS White 92 ER 126** where court held that *"every injury imports a damage, though it does not cost the party a shilling and it is impossible to prove the contrary. Any injury imports damage when a man is hindered of his rights".* - 16. Counsel contended that since the Appellant has cleared the balance, it was wrong for the trial Magistrate to award damages of 1,000,000/= yet the Respondent suffered no known injury.

# 17.**Submissions by counsel for the Respondent**

## 18.**Ground No.1**

*The learned trial Magistrate erred in law and in fact when he failed to consider the mediation report that was entered into by the parties to resolve the issues.*

- 19. Counsel for the respondent referred to **rule 3 of the Judicature (mediation) rules 2013** which defined mediation to mean;-*'the process by which a neutral third person facilitates communication between parties to a dispute and assists them in reaching a mutually agreed resolution of the dispute'.* - 20. He also referred to **rule 16 of the mediation rules** which provides for signing a mediation agreement where parties agree. He argued that it is very clear in law that in order for any settlement to be concluded, the parties must voluntarily sign an agreement which is later endorsed by a judicial officer and in the absence of the same there is no settlement.

# 21.**Ground No. 2**

- *22. The learned trial Magistrate erred in law and in fact when he asserted that the Defendant caused financial loss, damage and inconvenience without showing proof of the same.* - 23. Counsel submitted that the appellant did not fulfill the undertaking of paying the Respondent/Plaintiff the said amount as agreed under the contract. The contract clause 3(c) showed that the balance was to be paid within 5 months from the date of signing the contract that was 28th September 2020. By the time of filing the case, the Appellant had only paid 50,160,000/= and a balance of 10.840, 000/= after one year meaning that the defendant/Appellant was in breach. - 24. Counsel referred to the case of **Harry Ssempa Vs Kambagambire David HCCS No. 408 of 2014** where court while citing the case of *Bank of Uganda Vs Fred William Masaba & 5 others SCCA* held that; *"the damages available for breach are measured in a similar way as loss due to personal injury. You should look into the future so as to forecast what should have been likely to happen if he never entered into the contract".* - 25. Counsel concluded that the breach of the contract regarding the time of payment of the balance justified the award of damages of 1,000,000/=

# 26.**Analysis of court.**

## 27.**Ground No. 1**

*The learned trial Magistrate erred in law and in fact when he failed to consider the mediation report that was entered into by the parties to resolve the issues.*

# 28.**Rule 16 of the Judicature (Mediation) Rules of 2013** provides that;

- 1. Where parties resolve some or all of the issues that are subject of mediation, the parties shall enter an agreement setting out issues on which they agree. - 2. The Agreement under sub rule 1 shall be in writing signed by the parties. - 3. The Agreement shall be filed with the Registrar, Magistrate or authorized officer responsible for mediation in court. - 4. The Agreement filed with the Registrar, Magistrate or authorized officer responsible for mediation under sub rule 3, shall be endorsed by court as a consent judgment. - 5. Where there is no agreement on all the issues subject for mediation, the mediator shall refer the matter to court. - 29. In the instant case, the alleged report of the mediator was not signed by the parties. There is no evidence to show that the parties entered into a written agreement settling the dispute between them. What is on the court record is a mere report that does not bind the parties. There is no agreement signed by the parties to bind them. - 30. I therefore agree with the finding of the trial court when it said that the mediation report which was not signed by the parties was not binding since there was no written agreement between them. - 31. In light of the above analysis, I have no reason to interfere with finding of the trial court on this ground. - 32. Ground No. 1 of the appeal fails.

## 33.**Ground No. 2.**

*The learned trial Magistrate erred in law and in fact when he asserted that the Defendant caused financial loss, damage and inconvenience without showing proof of the same.*

- 34.**Section 61 (1) of** *The Contracts Act***, 7 of 2010**, provides that; *"where there is a breach of contract, the party who suffers the breach is entitled to receive from the party who breaches the contract, compensation for any loss or damage caused to him or her"* - 35. The rule of the common law is to the effect that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. **(See** *Kibimba Rice Ltd v. Umar Salim, S. C. Civil Appeal No. 17 of 1992***).** - 36. In the instant case, the Appellant/Defendant failed to pay the balance in time as agreed by the parties which caused loss by reason of breach of the contract and inconvenienced the Respondent/Plaintiff's business. - 37. It was within the discretion of the trial court to award general damages of 1,000,000/= which in my view was not excessive.

Ground No.2 of the appeal fails.

# 38.**Conclusion.**

In the final result, this appeal fails with the following orders;-

- i. The appeal is hereby dismissed - ii. The lower court decision and orders are upheld. - iii. Since the Appellant/Defendant showed commitment to pay even when the matter had been instituted in the lower court, no order as to costs in this appeal.

Dated, signed, sealed and delivered by email on this **18th** day of **September**, 2023.

Emmanuel Baguma Judge