Majari Investments Limited v Betimo General Supplies Limited & Another (Civil Suit 562 of 2020) [2024] UGCommC 347 (31 December 2024)

Full Case Text

#### THE REPUBLIC OF UGANDA

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

#### CIVIL SUIT NO. 0562 OF 2020

## MAJARI INVESTMENTS LTD ::::::::::::::::::::::::::::::::::: **VERSUS**

#### 1. BETIMO GENERAL SUPPLIES LTD

#### 2. ANA MUMBUA NZOMO :::::::::::::::::::::::::::::::::::

#### (Before: Hon. Lady Justice Patricia Mutesi)

#### **JUDGMENT**

#### Background

- $1.$ The Plaintiffs filed this suit against the Defendants for the recovery of USD 154,929 being money had and received and / or the value of the converted assorted wine, general damages, punitive damages, interest and costs. - The Plaintiff's case is that, sometime in February 2018, the 2nd Defendant, as $\overline{2}$ . director in the 1st Defendant and a friend of the Plaintiff's director (Dorothy Anyango Wahutu) interested the Plaintiff in the business of importation and sale of assorted wines in Uganda. The 2nd Defendant assured the Plaintiff of ready market for the wines. The 2nd Defendant also informed the Plaintiff's director that she is in good contact with Truebell Marketing and Trading FZE ("Truebell") a company based in the United Arab Emirates trading in wines. She further said that Truebell was willing to open a credit line in the Plaintiff's favour after a purchase of at least one container of wines and spirits. - On 25th March 2018, the 2nd Defendant presented to the Plaintiff Invoice No. $3.$ 250318 issued to the 1st Defendant by Truebell for assorted wines of value USD 150,000 and requested the Plaintiff to purchase them through the 1st Defendant company on an understanding that the Plaintiff would own the wine while the 1st Defendant would subsequently benefit from the credit line

that was to be opened in its name and for their joint benefit thereafter. The 2nd Defendant promised to connect the Plaintiff to potential wine customers in Uganda which further motivated the Plaintiff to pay for the consignment. On 26th March 2018, the Plaintiff remitted to Truebell USD 147,929 from its account as payment for assorted wines under the Invoice. The consignment safely reached the 1st Defendant in Kampala in May 2018.

- Upon arrival of the consignment, 2nd Defendant requested the Plaintiff for an $4.$ additional USD 7,000 for renting storage space for it in Bukoto, Kampala. That money was sent to the 2nd Defendant's account. Around July 2018, the Plaintiff's director flew to Kampala to check on the status of the consignment that was expected to be in possession of the $1st$ Defendant. To their utter most horror, not even a single bottle of wine was found in the 1st Defendant's possession. On being confronted, the 2nd Defendant confessed that she had sold the entire consignment. She undertook to refund the Plaintiff's money amounting to USD 154,929 within two months. Despite several demands and reminders, the Defendants totally refused to refund the money. - 5. On the other hand, the 1st Defendant's case is that it carries on trade within Uganda and deals in the importation and sale of assorted wines and spirits usually shipped in from her suppliers internationally. The $1st$ Defendant asserts that it has never contracted and / or reached any agreement with the Plaintiff as is alleged, for the latter to pay for any of its consignments from Truebell on her behalf. The consignment of assorted wines that was supplied and delivered by Truebell belonged to the 1st Defendant who had paid for it following the issuance of Invoice No. BETI/22418 dated 22/04/2018. The 1st Defendant further denied knowledge or receipt of any goods in respect of Invoice No. 250318 dated 25/03/2018, as claimed on by the Plaintiff. - The 2nd Defendant similarly denied contracting with the Plaintiff. She asserts 6. that she has never contracted and / or interested the Plaintiff to pay and / or settle any trade expenses for the benefit of the 1st Defendant, particularly to Truebell. She denies contracting and / or reaching any agreement with the Plaintiff as alleged. She says that the allegations made by the Plaintiff are a

figment by the Plaintiff to falsely impute liability upon the 1st Defendant and herself upon a non-existent contractual and / or business relationship.

#### **Representation and hearing**

- At the hearing, the Plaintiff was represented by Mr. Kizito Kasirye of M/S $7.$ Tumwebaze, Kasirye & Co. Advocates. The Defendants were represented by Mr. Felix Ampaire and Mr. Portaz Byarugaba of M/S F. Ampaire Advocates & Solicitors. The Plaintiff led evidence through the oral and written testimony of Ms. Dorothy Wahutu, its director, and through 9 documents which were admitted and exhibited as $P. Ex.1 - P. Ex.9$ . On their part, the Defendants led their evidence through the testimony of Ms. Anna Mumbua Nzomo, the 2nd Defendant. The Defendants also adduced and relied on 2 documents which were admitted into evidence and exhibited as D. Ex.1 and D. Ex.2. - 8. In her testimony, Ms. Dorothy Wahutu (PW1) testified that she had been a friend to the 2nd Defendant for over 25 years. PW1 has always known the 2nd Defendant to be dealing in the business of importing and selling wines and spirits in Uganda under her company, the 1st Defendant. Around February 2018, the 2nd Defendant informed her that one of her suppliers based in the United Arab Emirates had given the 1st Defendant an offer to open a credit line where she would be supplied with goods on credit and pay after sale, only if she proved her credit worthiness by purchasing at least a full container of their supplies. The 2nd Defendant said she needed at least USD 150,000 to purchase a container but that the 1st Defendant did not have money at that moment. The 2nd Defendant requested her for USD 150,000 and proposed that when the consignment arrived in Uganda, it would belong to the Plaintiff and that the Defendants would then sell it on the Plaintiff's behalf to recoup the Plaintiff's money. The $2nd$ Defendant assured PW1 that she had many customers and that the Plaintiff's money would be recouped in no time. - PW1 testified that the $2^{nd}$ Defendant invited her to the $1^{st}$ Defendant's shops 9. at Forest Mall, Kampala and Shoprite, Victoria Mall, Entebbe. PW1 visited the shops in February 2018 and saw that business was going on well in the shops. On Saturday 24th March 2018, she told the 2nd Defendant that the Plaintiff

had some money. She asked for the 1st Defendant's bank details so that she deposits the money requested for. The 2nd Defendant told her to, instead, deposit the money directly to her supplier's bank account. On 26th March 2018, an invoice No. 250318 dated 25th March 2018 of assorted wines and spirits addressed to Betimo General Supplies Ltd of USD 150,000 was sent to her email address by Mr. Niranjala Perera of Truebell with the latter's bank account details. The email was copied to the 2nd Defendant.

- PW1 further said that, after verifying from the 2nd Defendant that the email 10. and the attached invoice had originated from the $1st$ Defendant's suppliers, she printed it out and presented it to the Plaintiff's bank for payment of USD 147,929 which was then remitted. She informed the 2nd Defendant about the payment and the 2nd Defendant thanked her for the assistance. Towards the end of May 2018, the 2nd Defendant confirmed that the consignment had safely arrived in Uganda but she stated that she needed extra storage space which was available at Bukoto. The 2nd Defendant requested for an extra USD 7,000 which PW1 promptly sent. - Finally, PW1 told the Court that, in July 2018, she met the 2nd Defendant at 11. Forest Mall. The 2nd Defendant gave her copies of the Bill of Lading and the Packing List for the received supplies, and told her that the consignment had been sold. The 2nd Defendant undertook to pay the Plaintiff's money within two months thereafter but all in vain despite repeated demands. Following PW1's request, the management of Truebell confirmed through its Mr. Pranav Kulkani, that on 27th March 2018, they received a payment of USD 147,929 on behalf of the 1st Defendant for invoice No. 250318. - In her testimony, the 2nd Defendant (DW1) stated that she does business in 12. Uganda under the 1st Defendant in which she is the managing director. She confirmed that she has previously dealt with Truebell in the 1st Defendant's purchase and importation of wines and spirits for its trade/business. She said that neither her nor the 1st Defendant is indebted to the Plaintiff as claimed in the plaint or at all. She affirmed that the alleged agreement between her and the 1st Defendant on one hand and the Plaintiff on the other hand does

not exist. She denied the allegation that she or the $\mathbf{1}^{\text{st}}$ Defendant have ever instructed the Plaintiff to pay for any of the 1st Defendant's supplies.

- The 2nd Defendant stated that, whereas PW1 is known to her as a long-time 13. friend, she has never sought the claimed sum from her. The 2nd Defendant maintained that the remittance of any monies by the Plaintiff to Truebell is, thus, unconnected to any of the Defendants. She thus affirmed that the suit was a mistake as all the Plaintiff's claims do not have any truth or merit. - 14. After the trial, counsel filed written submissions to reinforce their respective clients' cases. In their written submissions, counsel for the Defendants raised points of law against the suit. These points were responded to by counsel for the Plaintiff in his submissions in rejoinder. I have carefully considered those submissions, the laws and authorities cited therein and all other materials on the record in reaching this decision.

#### **Issues arising**

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- 15. The following issues have arisen for the Court's determination: - 1. Whether the Plaintiff's suit against the Defendants suit is incompetent for offending Section 10(5) of the Contracts Act Cap 284. - 2. Whether the Plaintiff departed from its pleadings at the trial. - 3. Whether the Plaintiff is entitled to recover the sum of USD 154.929 being money had and received from the Defendants. - 4. What reliefs are available to the parties.

#### **Resolution of Issues**

16. Section 101(1) of the Evidence Act Cap 8 provides that whoever desires a court to give judgment as to any legal right or liability that is dependent on the existence of facts which he or she asserts must prove that those facts exist. Additionally, Section 103 of the Evidence Act Cap 8 provides that the burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.

Furthermore, it is trite law that in civil cases of this nature, the burden lies 17. on the plaintiff to prove the existence of his or her rights, and the liability of the defendant for breach of those rights, on a balance of probabilities. In Miller v Minister of Pensions [1947]2 All ER 372, Lord Denning expounded on the meaning of the phrase "balance of probabilities" when he stated that:

> "... The degree is well settled. It must carry a reasonable degree of probability but not too high as is required in a criminal case. If evidence is such that the tribunal can say, we think it more probable than not, the burden of proof is discharged, but if the probabilities are equal, it is not." Emphasis mine.

I cite the above dictum with approval. I will be guided by these principles on 18. burden and standard of proof in evaluating the evidence in this case.

Issue 1: Whether the Plaintiff's suit against the Defendants is incompetent for offending Section 10(5) of the Contracts Act Cap 284.

19. Section 10(5) of the Contracts Act Cap 284 provides that:

> "A contract the subject matter of which exceeds twenty-five currency points shall be in writing." Emphasis mine.

According to the Schedule to the Contracts Act Cap 284, a currency point is equivalent to UGX 25,000. The Archive of Bank of Uganda Foreign Exchange Rates for 26th March 2018 when the Plaintiff says it made the transfer of the USD 147,929 to the Defendants' supplier, Truebell, shows that on that day, USD 1 was selling for UGX 3,671.79. This means that, on that day, the Plaintiff transferred an equivalent of UGX 543,164,222 under the impugned contract. Additionally, the Plaintiff says that it transferred an additional USD 7,000 to the 2nd Defendant on 25th July 2018. At the same rate above, that sum would have been equivalent to UGX 25,702,530.

20. As such, the combined claim in the plaint is in the region of UGX 568,866,752 which is well above the acceptable value for informal/ unwritten contracts prescribed by Section 10(5) of the Contracts Act Cap 284. Counsel disagreed on the ramifications of offending Section 10(5) of the Contracts Act Cap 284.

- $21.$ Counsel for the Defendants relied on the case of **Karangwa Joseph v Kulanju Willy, HCCA No. 03 of 2016** to submit that the requirement in Section 10(5) of the Contracts Act is mandatory and that it has to be complied with at all times. Counsel for the Defendants further argued that non-compliance with that Section renders the resultant contract void and unenforceable. On the other hand, counsel for the Plaintiff clarified that the Plaintiff's claim in this case is for money had and received, which is not, and need not be, based on any contractual relationship. Counsel for the Plaintiff also relied on Stanbic Bank (U) Ltd v Ssenyonjo Moses & Anor, CACA No. 147 of 2015 to submit that a judicial finding that a contract was void does not bar any of the parties to receive back or pay back the value that had changed hands. - I am inclined to agree with counsel for the Plaintiff on this question. A literal 22. reading of paragraph 4 of the plaint shows that the Plaintiff's suit against the Defendants is not based on breach of contract as a cause of action. The suit is based the equitable doctrine of restitution which allows an aggrieved party to recover money had and received for no value at all. Since it is trite that equity cannot bear a wrong to be without a remedy, it would simply be unfair for a person to receive and keep money without giving any value to it. This is the rationale for recovering money had and received through a civil action of this nature. In such instances, equity steps in to assume that there was an implied promise to re-pay/refund the money. - Recovering money had and received is also based on the law against unjust 23. enrichment. (See Jamba Soita Ali v David Salaam, HCCS No. 0400 of 2005). If a person has received money which, in all justice and equity, rightly belongs to another, allowing that person to keep the money would simply be allowing unjust enrichment at the expense of that other person. Again, since equity delights in fairness and abhors injustice against all persons, it cannot bear or endure to see such unjust enrichment to proceed unabated. - As counsel for the Plaintiff rightly pointed out, the common law rule against 24. unjust enrichment is encapsulated in the express wording of Section 54(1) of the Contracts Act Cap 284. This provision anticipates a situation in which a

contract is void ab initio or when a contract becomes void after formation. It stipulates that, in such cases, a person who received any advantage under that contract is bound to restore it or to pay compensation for it to the one from whom he or she received the advantage. This position has further been reinforced by the Court of Appeal in Stanbic Bank Uganda Ltd v Ssenyonjo Moses & Anor CACA No. 147 of 2015 and by the Supreme Court in Formula Feeds Ltd & 3 Ors v KCB Bank Ltd, SCCA No. 13 of 2020.

It, therefore, appears to me that counsel for the Defendant misconstrued the 25. true essence of the Plaintiff's suit. The suit is not based on breach of contract per se as the Plaintiff is not necessarily seeking to enforce its alleged contract with the Defendants. The suit seeks equitable restitution by way of recovery of money had and received. This issue is, thus, answered in the negative with the finding that non-compliance with Section 10(5) of the Contracts Act Cap 284 does not render the Plaintiff's suit against the Defendant's incompetent.

### Issue 2: Whether the Plaintiff departed from its pleadings at the trial.

- Order 6 Rules 6 and 7 of the Civil Procedure Rules prohibit departure from 26. one's pleadings. These Rules bar any party from introducing a new fact in his or her evidence at the trial if it was not pleaded. In Interfreight Forwarders (U) Ltd v East African Development Bank, SCCA No. 33 of 1992, the Supreme Court explained that the system of pleadings operates to define and deliver the real matters in controversy between parties with clarity and precision. It thus serves the double purposes of informing each party of what is the case of the opposite party which will govern the interlocutory proceedings before the trial and which the court will have to determine at the trial. The Court also clarified that issues are formed on the case of the parties so disclosed in the pleadings and evidence is directed at the trial to the proof of the case so set and covered by the issues framed therein. - In the present case, Counsel for the Defendants contends that the Plaintiff 27. pleaded one case and then proved another. Counsel pointed out that, in the plaint, the Plaintiff averred that it was the one that sent the claimed sum to the Defendants' supplier while PW1 testified at the trial that she is the one who lent the Defendant's the claimed sum. In reply, counsel for the Plaintiff refuted the alleged departure from pleadings at the trial. Counsel for the Plaintiff maintained that all the evidence adduced by the Plaintiff was within the confines of the pleadings and the issues framed and agreed upon by the parties at the scheduling conference.

- My observation is that in the plaint, the Plaintiff said that the $2nd$ Defendant 28. interested it in getting involved in the business of importation and sale of assorted wines in Uganda in February 2018. The Plaintiff stated that the 2nd Defendant told the Plaintiff's director that she (the 2nd Defendant) is in good contact with Truebell (the 1st Defendant's supplier) and that the latter was willing to open a line of credit in the Plaintiff's favour. The Plaintiff also said that, on 25th March 2018, the 2nd Defendant presented to it an invoice from Truebell with a proposal that, if the Plaintiff covered the invoiced sum, the consignment in respect of which it had been issued would be owned by the Plaintiff while the 1st Defendant would benefit from the credit line that would be opened in its name. - 29. On the other hand, PW1 testified at the trial that, around February 2018, the 2nd Defendant told her that one of her suppliers (Truebell) had given the 1st Defendant an offer to open a credit line. She said that the 2nd Defendant told her that she (the 2nd Defendant) needed at least USD 150,000 to assure Truebell of its creditworthiness which the 1st Defendant did not have at the time. She stated that the 2nd Defendant then asked her for the money with the proposal that the consignment for which the money was needed would belong to the Plaintiff and that it would be sold so that the money is returned in a short time. She testified that she received an invoice from Truebell which she confirmed with the 2nd Defendant and later presented it to the Plaintiff's bankers for payment. She also testified that the 2nd Defendant later asked her for USD 7,000 which was sent in May 2018. - 30. The Plaintiff further adduced the evidence of money transfer vide P. Ex.3 and P. EX.4. These show that it was the Plaintiff, and not PW1, who sent the USD 147,929 to Truebell on 26th March 2018. The Plaintiff further adduced P. Ex.7

which is a notification of funds transfer of K.shs. 700,000 (equivalent to USD 7,000 at the time) on 25th July 2018 from PW1 to the 2nd Defendant. In the plaint, it had been pleaded that this sum was for storage costs for the wines and spirits consignment in Bukoto.

- It should be noted that, at all material times, PW1 was acting for, and on 31. behalf of the Plaintiff in her interactions with the 2nd Defendant. In my view, the Plaintiff's evidence substantially agrees with the contents of the plaint. Even in referring to her actions and communications with the Defendants at the time, it is not disputed by the Defendants that PW1 was acting for and on behalf of the Plaintiff as its director, a fact which is well disclosed in both the plaint and the Plaintiff's evidence. A wholesome reading of the plaint and the evidence of the Plaintiff leaves no doubt as to what the Plaintiff's case is regarding who extended the claimed sum to the Defendant's supplier. - 32. The only rather controversial piece of evidence is the proof of K.shs. 700,000 (USD 7,000) sent by PW1 to the 2nd Defendant. In the plaint, it was not stated that the sum was paid in Kenya shillings. It was stated that the sum was paid in USD. Additionally, P. Ex.7 shows that the said sum was sent from PW1's personal bank account, and not from the Plaintiff's bank account, with a narration that it was a "friend soft loan refund". In my considered view, this contradiction goes to the weight to be attached to P. Ex.7 and the testimony provided towards the said USD 7,000 payment. For purposes of the claim of departure from pleadings, I find that in the plaint, the Plaintiff averred that USD 7,000 was sent to the 2nd Defendant on her request without specifying who sent it. At the trial, both PW1's testimony and P. Ex.7 confirm that it was PW1 who sent it. - 33. To the contrary, it is actually the Defendants whose pleadings and evidence labour from obvious shortcomings in law. My observation is that the written statements of defence of both Defendants were largely general and evasive, providing no real or substantive explanation for the Plaintiff's claims in the plaint but simply denying the alleged contract, understanding and, or,

dealing with the Plaintiff. This manner of pleading appears to me to be offensive to Order 6 Rules 8 and 10 of the Civil Procedure Rules.

- $34.$ More notably, it is the Defendants whose evidence at the trial departed from their pleadings in a very clear and significant way in regard to their previous dealings with Truebell. In paragraph $5(a)$ of the 1st Defendant's defence, it was alleged that the 1st Defendant seldom ships its stock from its international suppliers like Truebell. However, in her testimony, the 2nd Defendant said, in no uncertain terms, that the Defendants have often dealt with Truebell in the past as one of their suppliers. - For these reasons, I do not find merit in the Defendant's contention that the 35. Plaintiff departed from its pleadings at the trial and this issue is answered in the negative.

## Issue 3: Whether the Plaintiff is entitled to recover the sum of USD 154,929 being money had and received from the Defendants.

- I reiterate the earlier restatement of the law on a claim for money had and 36. received. In the case of Formula Feeds Ltd & 3 Ors v KCB Bank Ltd (supra), the Supreme Court dealt with a dispute about a loan facility extended on the security of a legal mortgage over land held under mailo tenure. It was later discovered that the registered proprietors of the mortgaged land were noncitizens, a discovery which rendered their ownership of that land and the mortgage over it illegal. The question before the Court was whether or not the outstanding loan amount was recoverable in view of the illegal mortgage that had secured repayment of the loan. - The Supreme Court distinguished between the loan contract and the related 37. mortgage/security agreements. It held that the loan contract was valid and separate from the security agreement that supported it. As such, since the loan contract provided for different forms of security, the unenforceability of one of those securities could not invalidate the loan contract per se, if at all. The implication of this decision is that, even if a transaction is deemed void, one who received money or any other benefit from it has to make good the loss of that money or other benefit to the one who gave it to him or her.

- Similarly, Post Bank (Uganda) Ltd v Henry Ssali, HCCS No. 729 of 2016, the 38. defendant had borrowed UGX 90,000,000 from the plaintiff bank upon the security of a mortgage over his land. When he failed to fully repay the loan and the plaintiff attempted to sell the land, his wife filed a suit in the Land Division of the High Court claiming that the mortgage was illegal for having been entered without spousal consent. The plaintiff later filed a suit in this Court to recover the outstanding sum. In response, the defendant contended that the legality of the mortgage was under scrutiny in the earlier suit filed by his wife, and that if that suit succeeded, the outstanding loan sum would not be recoverable as it would be based on an illegal contract. - 39. At the hearing of the case, the plaintiff bank admitted to not having obtained spousal consent before the mortgage. The Court, in dealing with the issue of whether or not the outstanding loan amount was recoverable, clarified that a claim based on money had and received is an equitable relief available to parties whose money has been advanced to another but the same cannot be recovered under the law governing the transaction between the parties. The Court found that, notwithstanding the illegality of the mortgage, the money due on the loan is recoverable as money had and received. Relying on the Indian case of Mahabir Kishore & Madhya Pradesh 1990 AIR 313, the Court then prescribed that, for one to succeed on this type of claim, one had to prove that:

"First that the Defendant has been enriched by the receipt of a benefit, secondly that this enrichment is at the expense of the Plaintiff and thirdly that the retention of the enrichment is unjust."

The Plaintiff has averred that its suit against the Defendants fulfils the said 40. criteria. The starting point for assessing a claim of this nature is ascertaining whether or not money was had and received. (See Jamba Soita Ali v David Salaam, (supra)). At the trial, PW1 testified that the 2nd Defendant has been her long-time friend. PW1 testified that, in February 2018, the 2nd Defendant informed her (as a friend and as a director in the Plaintiff) about an offer to open a credit line from Truebell and asked her for money to buy a container

of wines and spirits from Truebell to secure that credit line. She also stated that the 2nd Defendant asked her to send the money direct to Truebell's bank instead of sending it to any of the Defendants.

- It was also PW1's testimony that, on 26th March 2018, she received Invoice 41. no. 250318 dated 25th March 2018 from Truebell for assorted wines and spirits. She confirmed the contents of the invoice with the 2nd Defendant and then presented the invoice to the Plaintiff's bank for payment. The payment was effected on the same day. She further testified that, in May 2018, when the consignment arrived in Uganda, the 2nd Defendant asked her for another USD 7,000 which was equally sent. - The Plaintiff also adduced P. Ex.1 which is the email from Truebell forwarding 42. Invoice no. 250318 to PW1. It also shows that the 2nd Defendant was copied into that email. Invoice no. 250318 was exhibited as P. Ex.2. It is addressed to the 1st Defendant and it seeks payment of USD 147,900 for assorted wines and spirits and USD 2,100 being freight charges. It also provided Truebell's bank account details. P. Ex.3 was the approved remittances application form from the Plaintiff's bank. It shows that on 26th March 2018, the Plaintiff sent USD 147,929 to Truebell's bank. P. Ex.4 was the SWIFT notification confirming the transfer of USD 147,929 from the Plaintiff's bank to Truebell's bank on 26th March 2018. P. Ex.5 was the Packing list for the consignment issued by Truebell. It bears an inconsistency as it shows that the consignment was in respect of invoice no. BETI/22418 and that the date of that invoice was 22nd April 2018. - Furthermore, P. Ex.6 is the bill of lading no. 964801828 for the consignment. 43. while P. Ex.7 is the funds transfer form for K.shs. 700,000. As I noted earlier, P. Ex.7 shows that the details of that payment were "friend soft loan refund". P. Ex.8 was a request via email by the Plaintiff to Truebell for confirmation of the details of the payment. Finally, P. Ex.9 is the confirmation from Truebell that the USD 147,929 payment was received by Truebell from the Plaintiff for invoice no. 250318 against Bill of Lading No. 962109521 on 27th March 2018 on behalf of the 1st Defendant.

- On the other hand, the 2nd Defendant testified that she and the 1st Defendant 44. do not know the transaction alleged by the Plaintiff. She generally denied the claimed indebtedness to the Plaintiff and said that she has never sought any financial assistance from the Plaintiff or PW1 for any of the 1st Defendant's purchases from its suppliers. She added that the said transaction between the Plaintiff and Truebell is strange to her. - 45. The Defendants further adduced the packing list for the consignment which was exhibited as D. Ex.1. It confirms that the consignment was in respect of invoice no. BETI/22418 and that the date of that invoice was 22nd April 2018. The Defendants also adduced a copy of the bill of lading for the consignment vide no. 864801828. - Having analysed all the above evidence in its totality, I am persuaded that 46. the Plaintiff's claim for money had and received must substantially succeed. There is no doubt that the Plaintiff transferred USD 147.929 to Truebell on 26th March 2018. All that is in dispute is whether the Plaintiff transferred that money to Truebell on the Defendants' behalf or not. In my considered view, P. Ex.1 corroborates PW1's account. It confirms her story that the payment was to be made to Truebell on the 1st Defendant's behalf. - There is no logical explanation for Truebell sending an invoice addressed to 47. the $1^{st}$ Defendant to the Plaintiff, with the $1^{st}$ Defendant's director in copy. except the Plaintiff's account. The 2nd Defendant made no attempt to explain to the Court why an invoice addressed to her company was emailed to the Plaintiff, with her in copy. If the Plaintiff's account had been untrue, the 2nd Defendant would and should have responded to the email by complaining about the inclusion of the PW1 in the email correspondence. Her silence over the Plaintiff's inclusion in the correspondence makes it more probable than not that, just as PW1 testified, she knew that Truebell was sending the 1st Defendant's invoice with its (Truebell's) bank account details to the Plaintiff so that the Plaintiff can pay the invoiced sum directly to Truebell. - Counsel for the Defendant contested the weight of the correspondence that 48. was attributed to Truebell by the Plaintiff vide P. Ex.9. Counsel argued that

the Plaintiff failed to adduce oral evidence from the Truebell's official who allegedly authored the said correspondence. This correspondence is an email and a letter from Truebell confirming that Truebell received payment of USD 147,929 from the Plaintiff on the 1st Defendant's behalf in respect of invoice no. 250318 for wines and spirits.

- I find this concern to be without merit. Bringing the official of Truebell who 49. authored P. Ex.9 to testify to the contents of the document would definitely have furthered the Plaintiff's case but failure to do it does not significantly impugn or discredit it, if at all, either. P. Ex.9 simply reaffirmed the contents of P. Ex.3 and P. Ex.4 that prove the Plaintiff's bank transfer to Truebell. There is also P. Ex.1, into which the 2nd Defendant was copied, presenting an invoice (for the amount confirmed in P. Ex.9) that was addressed to the 1st Defendant but sent to the Plaintiff. Even if P. Ex.9 is severed from the Court record, the Defendants have still not presented any logical explanation as to why their long-time supplier sent their invoice to the Plaintiff with them in copy. - P. Ex.9 confirms what is already on record which is that Truebell sent the 1st 50. Defendant's invoice to the Plaintiff with the 2nd Defendant's knowledge, and had later received payment from the Plaintiff in respect of that invoice. As such, failure to present the author of P. Ex.9 to testify at the trial was not fatal to P. Ex.9. Besides, since the Plaintiff was the addressee of P. Ex.9, its director (PW1) was capable of testifying to the contents of P. Ex.9 and of assuring the Court of their truthfulness. - Counsel dedicated considerable portions of their submissions on the issue of 51. agency. Counsel for the Plaintiff submitted that there was an implied agency between the 1st Defendant and Truebell to the extent that Truebell was the receiving agent for the money on the 1st Defendant's behalf. Counsel for the Defendant argued that the agency argument was an unpleaded afterthought and that, in any case, no such agency existed. - It should be clarified that one need not state the legal implication of a fact in 52. one's pleading. In fact, according to Order 7 Rule 1(f) of the Civil Procedure Rules, a plaint should contain the facts constituting the cause of action and

when it arose and not the legal arguments arising from those facts. One only needs to plead the facts which justify his or her claim. The legal significance of those facts is to be determined by the Court after they have been proved at the trial.

- It is a misconception, therefore, in my view, for counsel for the Defendant to 53. insinuate that the Plaintiff had to have expressly pleaded the word "agency" in the plaint in order to raise the agency argument in its submissions. I find it adequate that the Plaintiff pleaded that the $\mathbf{1}^{\text{st}}$ Defendant presented it with an invoice addressed to the 1st Defendant for payment of money to Truebell for a consignment due to the 1st Defendant and that the Plaintiff actually paid that sum. Those facts are adequate to establish an implied agency claim in accordance with Section 122(1) of the Contracts Act CAP 284. Also see Zura Mohammed Nasim v Latim Andrew, HCCA No. 27 of 2017. - The demeanour of the $2^{nd}$ Defendant and PW1 at the trial was very telling. 54. The 2nd Defendant was visibly evasive during her testimony at the trial. She was non-committal in many of her answers to the questions put to her. She even denied parts of the Defendants' evidence, like the Packing list (D. Ex.1), whenever it became inconvenient for her to rely on it or to answer questions on it. My impression was that she was an untruthful witness who lied to the Court by editing the truth to fit her narrative at the trial. On the other hand, PW1 appeared to be a forthright witness who was not shy about admitting the gaps and contradictions in her testimony but also followed up any such admissions with her simple, though straightforward, explanations. - If court has to decide whether to believe a forthright witness or an inveterate 55. liar, that decision is bound to be a very easy one as the logic behind it is so simple. A witness is expected to tell the truth in his or her testimony. If he or she starts being evasive and non-committal, the natural deduction is that he or she has something to hide from the Court which he or she is trying to cover up. Often, this is indicative of deliberate distortions and misrepresentations by a witness in a bid to mislead the Court and avert the course of justice. (See Namatovu Margaret v Tom Kaaya & Anor, HCCS No. 432 of 2005). For that reason, I have attached very little evidential weight to the testimony of the 2nd Defendant.

- Additionally, I have attached little evidential weight to P. Ex.5, P. Ex.6, D. Ex.1 56. and D. Ex.2. These all constitute and, or, bear a major inconsistency which has not been satisfactorily explained away by the parties. The exhibits seem to be unrelated, or at best, peripheral to the Plaintiff's claim. These exhibits are in respect of a supply for Invoice No. BETI/22418 and do not mention Invoice No. 250318 for which the Plaintiff made the impugned payment. Specifically, the Packing List vide P. Ex.5 and D. Ex.1 also shows that invoice was issued on 22nd April 2018, yet Invoice No. 250318 for which the Plaintiff made the impugned payment was issued on 25th March 2018. None of the parties has explained why the Packing list and Bill of Lading bear an invoice number and date that are different from the number and date of the initial invoice for which the impugned payment was made. - More notably, there is a major contradiction/inconsistency in P. Ex.7 which, 57. in effect, negates the Plaintiff's claim for the additional USD 7,000. As I noted earlier, P. Ex.7 shows that PW1 sent K.shs. 700,000 to the 2nd Defendant. The narrative or explanation for payment is unconnected to the transaction for which the earlier payment to Truebell had been made. P. Ex.7 shows that the payment was a 'friendly soft loan refund'. In cross examination, PW1, despite maintaining a forthright demeanour, failed to explain why money she claims she sent to the 2nd Defendant for storage fees for the consignment would be described to her bank as a friendly soft loan refund. - I do not agree with counsel for the Plaintiff that the Defendants did not prove 58. any such friendly loan agreement. Since it is the Plaintiff who had the burden to prove that it is entitled to the entire claimed sum, the Plaintiff was bound to adduce evidence showing that it is the one that transferred the said USD 7,000 to the Defendant. P. Ex.3 and P. Ex.4 (the evidence of funds transfer to Truebell) speak for themselves to the extent that they clearly show the funds had originated from the Plaintiff's bank. P. Ex.7 does not speak for itself Since it does not show that it is the Plaintiff who sent the K.shs. 700,000 to the 2nd

Defendant. Worse still, PW1 failed to satisfactorily justify why she is the one who sent the money from her personal account and not from her company's account or why the description of the transfer said was that it was a friendly soft loan refund and not storage fees for the consignment.

- Following this analysis, I find that Truebell received USD 147,929 from 59. the Plaintiff on the instructions and, or, with the consent of the Defendants. That money was for the purchase of the impugned consignment. The money was sent by the Plaintiff directly to Truebell on account of the 1st Defendant. In receiving that money, Truebell was in essence receiving it, first, on the 1st Defendant's behalf as its apparent agent and, second, in its own right as the seller of the assorted wines and spirits. It is trite that he who acts through another acts himself. The evidence has showed that the 1st Defendant acted through Truebell as its apparent agent. Accordingly, the Plaintiff is entitled to recover USD 147,929 from the 1st Defendant as money had and received. The Plaintiffs claim for an additional USD 7,000 alleged to have been sent to the 2nd Defendant in respect of storage fees fails as the Court is not convinced on a balance of probabilities that the Plaintiff is the one who sent it. - It should be clarified that the USD 147,929 is to be recovered from the 1st 60. Defendant only and not from both Defendants. Since it is the 1st Defendant in respect of whom that amount was paid to Truebell, I find that the Plaintiff does not have a right of claim against the 2nd Defendant personally. P. Ex.2 and P. Ex.9 confirm that the supplies paid for belonged to the 1st Defendant and not the 2nd Defendant. Although the 2nd Defendant was heavily involved in negotiating the transaction, she did so not in her personal capacity but in her capacity as director in the 1st Defendant. If she had acted in in her own personal capacity, P. Ex.2 would have been issued to her in her name or in the names of both Defendants. Indeed, P. Ex.9 confirmed that the claimed was paid on behalf of the 1st Defendant and not both Defendants. - Accordingly, the Court finds that the Plaintiff is entitled to recover the sum 61. of USD 147,929 from the 1st Defendant as money had and received.

## Issue 4: What reliefs are available to the parties.

Having found that the Plaintiffs suit substantially succeeds as against the $1^{st}$ 62. Defendant, the Court shall now deal with the different reliefs which were prayed for in the plaint.

# **Recovery of Money had and received**

The Court reiterates its finding in Issue 3 above to the effect that the Plaintiff 63. is entitled to recover USD 147,929 from the 1st Defendant as money had and received.

#### **General damages**

- General damages refer to the losses which flow naturally from a defendant's 64. breach. They are what the law presumes to be the direct, natural or probable result of a defendant's breach (See Opia Moses v Chukia Lumago Roselyn & 5 Ors, HCCS No. 0022 of 2013). They are also said to be the immediate, direct and proximate result, or the necessary result, of the wrong complained of. - The evidence adduced at the trial proved that the 1st Defendant, through its 65. director, the 2nd Defendant, negotiated with the Plaintiff for the Plaintiff to provide it with financial support to pay for a container of assorted wines and spirits from Truebell. Again, through the 2nd Defendant, the 1st Defendant asked the Plaintiff to send the financial support directly to Truebell and the Plaintiff obliged. The 1st Defendant secured the container and sold off the goods without the Plaintiff's knowledge. The 1st Defendant, through the 2nd Defendant, then pledged to refund the Plaintiff's money but all in vain. - Instead of coming clean and negotiating a payment plan for the money when 66. this suit was filed, the 1st Defendant elected to file a general and evasive defence. It then deployed its director, the 2nd Defendant, to take the witness stand at the trial to mislead the Court by lying and evading the questions put to her. As such, in addition to refusing to repay the Plaintiff's money, the 1st Defendant has also employed underhand methods to pervert the course of justice in the matter. The Plaintiff has been forced to wait for its money for over 6 years now as the 1st Defendant continues to enjoy the benefits of that money with impunity.

The ordinary, natural and probable result of the 1st Defendant is conduct is 67. that, firstly, it caused financial loss and hardship to the Plaintiff who paid for the 1st Defendant's consignment over 6 years ago with the promise that its money would be repaid but all in vain. Second, it caused inconvenience and disturbance to the Plaintiff who has been kept out of its business capital for all these years. For all this injury, the Court awards general damages of UGX 40,000,000 to the Plaintiff and it is recoverable from the 1st Defendant.

#### **Punitive damages**

- Punitive damages may be awarded not merely to compensate a plaintiff for 68. his loss or injury but also to punish the defendant and to mark the court's displeasure at his outrageous conduct. (See Daniel Oboth v The New Vision Printing and Publishing Corporation, SCCA No. 12 of 1990). These damages are awarded only in cases where the Court is convinced that the defendant's conduct was egregious, highhanded, vindictive and, or, malicious in nature. The intention behind the award of punitive damages is to warn society that similar conduct will always be an affront to society and to the court's sense of diligence and decency. (See Ahmed El Termewy v Hassan Awdi & 3 Ors, HCCS No. 95 of 2012). - Court has already highlighted its displeasure at the 1st Defendant's conduct 69. in this matter. The $2^{\mathsf{nd}}$ Defendant who is the $\mathbf{1}^{\mathsf{st}}$ Defendant's director took undue advantage of her long-term friend PW1 when she requested for funds to pay for the consignment without any real intention of returning them. When the 1st Defendant received the consignment following the Plaintiff's provision of those funds to Truebell, it sold off the consignment without the Plaintiff's knowledge and has since refused to remit any of the funds to the Plaintiff. For the last 6 years, the Plaintiff has been kept out of the use of its capital while the 1st Defendant continues to prosper with impunity. - To make matters worse, even after this suit was filed, the 1st Defendant has 70. continued its impunity by evasively addressing the Plaintiff's claims without any real specificity as required by law. This impunity climaxed at the trial when the $2nd$ Defendant (the $1st$ Defendant's only witness) did everything in

her power to evade the questions put to her in a bid to deceive the Court and assist the $1^{st}$ Defendant to evade justice.

This kind of conduct is deplorable and egregious. It not only shows that the 71. 1st Defendant has no respect for its business arrangements with others but that it is willing to go the extra mile to cheat those that it deals with, even if that necessitates deceiving the Court and perverting justice. In the premises, the Court deems it fair, just and reasonable to award the Plaintiff punitive damages of UGX 20,000,000 as against the 1st Defendant as a result of the 1st Defendant's deplorable, vindictive and egregious conduct.

## **Interest**

- 72. Section 26(2) of the Civil Procedure Act Cap 282 accords this Court the power to award interest on damages awarded in a decree. Ordinarily, a successful plaintiff is entitled to interest at a rate that would not neglect the prevailing economic value of money but which would also insulate him or her against further economic vagaries, like inflation and depreciation of the currency, in the event that the money ordered to be recovered is not paid promptly when it falls due. (See Mohanlal Kakubhai Radia v Warid Telecom Uganda Ltd, HCCS No. 0224 of 2011). - 73. In view of these principles, the Court deems it fair, just and reasonable to award interest on the money had and received (USD 147,929) at the rate of 18% per annum from the date of payment (26th March 2018) until payment in full and on the general and punitive damages, respectively, at the rate of 15% each, from the date of judgment until full payment.

## Costs of the suit

Section 27(1) of the Civil Procedure Act Cap 71 gives this Court the discretion 74. to award the costs in a suit before it. The general rule is that costs follow the event. This means that an award of costs will generally flow with the result of litigation and that a successful party is entitled to costs, unless the Court, for good reason, orders otherwise (See Kwizera Eddie v Attorney General, Supreme Court Constitutional Appeal No. 01 of 2008).

Having analysed this case, I see no reason to deny the Plaintiff (the successful 75. party) the costs of the case. Accordingly, the costs of the suit are awarded to the Plaintiff.

**Reliefs**

- Consequently, the Court enters judgment in favour of the Plaintiff against 76. the $1$ st Defendant on the following terms: - The Defendant shall pay USD 147,929 being money had and received to Ĭ. the Plaintiff. - The Defendant shall pay UGX 40,000,000 being general damages to the ii. Plaintiff. - iii. The Defendant shall pay UGX 20,000,000 being punitive damages to the Plaintiff. - The Defendant shall pay interest to the Plaintiff, on the special damages iv. in (i) above at the rate of 18% per annum from 26th March 2018 until full payment, on the general damages in (ii) above at the rate of 15% per annum from the date of judgment until full payment and on the punitive damages in (iii) above at the rate of 15% from the date of judgment until full payment. - Costs of the suit are awarded to the Plaintiff. v.

Patricia Mutesi JUDGE $(31/12/2024)$