Lira Pentecostal Assembly v Sam Engola (Civil Suit No. 464 GF 1989) [1990] UGHC 48 (8 June 1990)

Full Case Text

IN THE HIGH COURT OF UGANDA.

## AT IGINFALk;

## CIVIL SUIT MO. 464 GF 1989#

LIRA PENTECOSTAL ASSEMBLYPLAINTIFF VERSUS

SAM ENGOLA::DSFENDAKTT;

Before: The Honourable Mr. Justice G. M. Okello\*

## JUDGMENT, JUDGMENT. "

This is a case of breach of contract of sale. In it the plaintiff claims:

(a) General and aggravated damages for non delivery of the vehicle the subject matter of the contract,

(b) General and aggravated damages for loss of use of the sail motor vehicle.

(d) Interest at the rate of 20% p,a on the- decretal amount from' the date of judgment till payment in full,

' (e) costs of the suit.

The circumstances which gave rise to this action are clear and simple. The plaintiff is a registered Church Organisation, The defendant imports for sale reconditioned motor vehicles. In 1984, the plaintiff entered into verbal contract with the defendant wherein the defendant agreed to sell to the plaintiff a reconditioned Toyota Hilux pick-up at the cost of Uganda shs. 2,2000,000/= and the plaintiff agreed to pay that amount. The terms of payment was by instalment and that the defendant would deliver the motor vehicle to the plaintiff when the latter paid the last instalment. To the defendants'' knowledge, the plaintiff required that -?ick-up to raise funds for running projects for orphans and widows in Lira District.

The plaintiff paid in~full'"'the contract .price of the motor vehicle but the defendant never honoured his part of the contract by delivering to the plaintiff. the ^motor-vehicle, Hence this suit.

The defendant .was duly served with .summons to enter appearance but he never entered the necessary appearance nor filed in a Written I statement\*of Defence. After filing proof of.service,- the plaintiff obtained a default Judgment against the defendant on 2/11/89 under 09 r6 OPR. The case came before me for assessment of damages only..

At the hearing, the plaintiff called a total of five witnesses who testified on the existence of the contract, payment by the plaintiff of the fftll'contract price of the motor vehicle, loss"\*'\*--- of profit suffered by the plaintiff and the current cost of a recondit tioned Toyotpta Hilux Pick-up in Kampala.

In his address to me, Mr. Owiny Dollo who held the brief for Mr, Opoka ior the plaintifi, submitted that the unchallenged evidence on record shows that the plaintiff has carried out his side of the contractual bargain by paying in full the contract price of the motor vehicle. He relied in this submission on exh. P.-1-5. He submitted further that the'defendant however, failed to honour his side of the contractual bargain by failing to deliver to the plaintiff the motor vehicle, the subject matter of the contract. That the failure of the defendant to deliver the motor vehicle to the plaintiff as agreed in the contract amounted to a breach ox tne contract by the defendant and that this entitles the plaintiff to damages,

A contract is a bargain entered into freely by the parties thereto. They are bound by their own agreement. An.ypo.rty who fails to carry out his dside of the bargain commits a breach of the Contract and for that breach.the other party is entitled to damages which may fairly and reasonably be considered either arising naturally fre.j nich a breach of the contract itself or as may reasonably be supposed to have been in the contemplation of both parties at

the time t:-.yr made the contract as the probable result of the breach of it\* (Hadley v\* Baxendale (135^) 9^+ Ch. 3^)

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In the instant case, there is ample evidence that there was a contract of sale between the parties\* That under the contract the defendant agreed to sell to the plaintiff a reconditioned Toyota Hilux Pick-up at the cost of Ug. shs. 2,2000,000/= and to delver the vehicle to the plaintiff if the latter paid the agreed price. The evidence further shows that the plaintiff accepted to buy the motor vehicle at that price and did- pay the full contract price of 'the motor vehicle (see c-xlr. P.1- 5)\* This evidence. was not disputed and since there is nothing inherently false with it',' pdo'belive it. From that I find as a fact that plaintiff » fulfilled hife part of contract when he, paid the full contract'price of the motor vehicle. ' •' ...

The evidence further shows that the defendant ha.s since not delivered the motor vehicle to the plaintiff though he had handed to the plaintiff the key of the vehicle (exh. P.6). This part of the evidence too was not disputed and since it is also not inherently false I believe it. From it I find as a fact that the defendant has failed.to carryo out his part of the contractual bargain. In failing to carry out his part of the bargain under the'^ebntract, the defendant has committed a breach of the contract.

Haying found that the defendant has committed a breach of the contract what relief if any is the plaintiff entitled to.

In his address to mo, counsel for the plaintiff piayed • for a specific performance or payment of a sum of money as would purchase a similar type of vehicle now. . In making this prayer counsel relied on the case of Alexander Sv/ambale v. Spea,r Motors Ltd H. C. C. S. Mo. 690/88 (unreported).

In that case the parties had entered into a contract whereby the defendant agreed to sell to the plaintiff a Mcrcodez Benz

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vehicle bvr. the defendant on his part failed to deliver the motor vehicle to the plaintiff.

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In an action in breach of contract the plaintiff prayed interalia for specific performance or payment of a sum of money that would fetch for him a similar motor vehicle.

The court allowed the prayer and ordered for specific performance or payment of such sum of money as would be able to fetch for the plaintiff a similar Mercedes Benz Lorry plus its trailor. In doing so, the learned Principal Judge relied on the case of Henry Munyaw hganizi - vs General Machinery Ltd HCCCS No. 468/8?♦ In that case Allen J. as he then was held that Section 52 of the Sales of^Gop.ds Act (Cap 79) gives Court wide discretion in whether or not to order a specific performance. That under that section Courts can now order specific performance as well as general damages, a thing which could not be done in equity. He pointed out that in practice however courts usually do not order specific performance as well as general damages. That specific performance cannot be ordered where courts cannot ensure compliance with its order.

In that case, the learned Judge ordered specific performance or payment of such sum of money as would fetch to the plaintiff the tractor because the subject matter was an ordinary item of commerce which could be obtained in open market.

A similar view was taken by the leanred P. J. in Banyankole Kweterana Growers Co-operative Union Ltd vs. Spear Motors Ltd HCCS No. 24-7/88.

I respectfully agree with the decisions in those cases and with the reasons for them.

The court has wide discretion in whether or not to order a specific performance. The principle behind this order like in award of damages is to put the plaintiff to a position he would have been had he received the goods of the specific quality at the

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time and'plc-.cc- contracted for., (.'Jce Swatnbale v, Sy ar Motor Ltd) above \*

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In the instant case all that the plaintiff requires is a reconditioned Toyota Hiluz pick-up or such sum of money as would enable him to purchase a reconditioned Toyota Hilux pick-up. . In my view this is a nropcr case in which to exercise my drscreuion to order specific performance or payment of such sum of money as would enable the plaintiff to buy a reconditioned Toyota Hilux pick-up,, I think so because this is an ordinary item of commerce which can be obtained in open market. There is evidence (exh. P.8) which shows that such a motor vehicle is available in open market **in** Kampala.-.at the cost of Uganda shs. 7 (seven) millions.

The plaintiff further prayed for loss of profit. The evidence shows that the plaintiff intended to put the vehicle into business to raise money to run projects for orphans and widows in Lira Districts. Counsel argued that the vehicle would have earned to the plaintiff an average net profit of shs. 20,000/= a day\* That for the period when the defendant should have delivered the vehicle to the plaintiff (1984) to date, the plaintiff would have earned a profit of over 5 millions shillings. He pointed out however that due to other impoiM.dojpdblQsthe plaintiff claims a lump sum of. shs. 5\*5 millions under this heading\*

There is evidence by PV/5 showing the profit earning of a similar motor vehicle as the one which the plaintiff contracted for with the defendant. The witness testified that his motor vehicle of a similar.type is hired, daily save on Sundays to take fish from Jinja to ribale at a net profit of 4d,OO6/= per day. Counsel for the plaintiff based his assessment of the plaintiff's profit loss on this evidence. But there is no:' evidence as to what **•r** type of business to which the- plaintiff intended to put his vehi#%o to nor where in this country it would be used. For that reason "

**/6**

I think to say that the vehicle was expected to sern share $20,000/$ = net profit a day is being highly speculative. It is true that the vehicle would have been put to some kind of business and was expected to carn some income. But I think the type of business to which the vehicle was intended to be but to earn that profit should have been clearly stated. When I say this I do not mean to demand from the plaintiff a strict proof of his profit loss. It is how that profit would have been carried that should be stated. At the end of it all, the court has discretion whether or not to award damages under this heading and as to the amount to be awarded. $\ensuremath{\mathbf{I}}$ have no doubt in my mind that the vehicle was wanted for business to raise funds to run projects for orphans and widows in Lira District. I therefore agree that it would have earned some.

profit. So I allow damages under this heading.

As regards the amount however, doing the best I can, in this regard, I consider an award of shs. 500,000/= under this head is reasonable. So I order that amount.

The plaintiff also prayed for general and exemplary damages. He asked for a lump sum of one million shillings for these two heads. Mr. Owiny-Dollo argued that the plaintiff asked for exemplary damages because of the conduct of the defendant. That the defendant deliberately refused to deliver the motor vehicle in order to make profit for himself because he sold it to a third person. Counsel submitted that this conduct attracts an award of exemplary damages.

Exemplary damages is punitive and can be awarded where the conduct of the defendant has been calculated by him to make a profit for himself (see Kyambadde v. Npigi District Adm. (1983) HCB 44)

In the instant case, there is evidence which I believe that the defendant sold the vehicle to a third party even after he had handed the key to the plaintiff. Why did he do that for? It is probable that he wanted to make profit for himself. Such a conduct attracts a punitive damages.

An award of General and exemplary damplesere not to be made

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separately where exemplary damage is found appropriate - (See Kyambadde v. Mpigi District/!dministration abo ve\_).. Only one figure is to be made to satisfy both.

In the instant case, I consider -shs. 500,000/= is a suitable award for exemplary damages. (This includes general damages)b

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The plaintiff also prayed for interest at the rate of 26% per annum on the decretal amount from the date of judgment until payment in full.

Interest is a matier of discretion of the court. It is a matter of discretion of the court whether to award interest or not. Normally courts award interest,where the defendant is responsible for delay in ; payment.

In the instant case, the defendant is clearly responsible for the delay in the delivery of the motor vehicle to the plaintiff. The delay was deliberate and without any justifiable reason. It is therefore an appropriate case to award interest on the decretal amount. I accordingly allow interest at rate of 26% on the decretal amount from the date of judgment until payment in full. It is important tha.t such payment of the decretal amount should be made promptly to enable the plaintiff purchase the type of motor vehicle on that amount in open market.

I also allow the plaintiff cost of the action.

In summary the defendant is

(1) ordered to deliver to the plaintiff a reconditioned Toyota Hilux pick-up or shillings seven millions being the current price of that type of motor vehicle in open market in Kampala. In case of payment of the money, the amount will have to be paid promptly when it can still fetch that type of motor vehicle.

- (2) To pay shs. 500,000/= being loss of earning. - (3) To pay shs. 300,000/= being exemplary damages. (This includes general damages)t

(4) Interest on the decretal amount at the rate of 20% from date of

G. H. Okello,

Judge 8/6/90

8/6/90: Judgment delivered in presence of Mr. Owiny - Dollo.

G. M. Okello,

Judge.

8/6/90