Motor Marts Uganda Limited v Lugazi General Contractors Limited (Civil Appeal 27 of 1997) [1998] UGCA 29 (18 May 1998)

## THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA

# **HOLDEN AT KAMPALA**

### CORAM:

HON. MR. JUSTICE C. M. KATO, J. A. HON. MR. JUSTICE S. G. ENGWAU, J. A. HON. MR. JUSTICE A. TWINOMUJUNI, J. A.

### CIVIL APPEAL NO.27 OF 1997

#### MOTOR MARTS [U] LTD.::::::::::::::::::::::::::::::::::::

#### **VERSUS**

### LUGAZI GENERAL CONTRACTORS LTD::::::::::::::::::::::::::::::::::::

[Appeal against the judgment and order of the High Court (I. Mukanza J.) in Civil Suit No.724 of 1992, dated $13/9/96$ ].

# JUDGMENT OF ENGWAU, J. A.

The respondent company sued the appellant for the recovery of the market value of their Bedford J6 lorry Registration Letters and No. UXM 893; general damages; loss of income at Shs.120,000/= per day from 1st January, 1988 until finalisation of the suit with interest at court rate and costs of the suit.

Brief facts of the case are follows: On or about 15th December, 1987 the respondent delivered their above mentioned lorry and necessary spares at the appellant's workshop for repairs and the appellant company accepted the said lorry together with the spares and agreed to repair it as per "Job Card No.1436" marked $"A"$ .

$\mathbf{1}$

The respondent's agent was supposed to collect the lorry after one month. The agent on several occasions checked at the appellant's workshop to find out the progress of the repairs but the servants of the appellant company made slow progress as they were also assembling tractors for the government.

In their letters dated 11/10/90 marked "B" and "C" respectively, the appellant without any warning to the respondent, instructed Court Brokers in the names of $\mathrm{M}/\mathrm{S}$ Eddie & Sophie Enterprises to dispose of the lorry by auction. The respondent learnt of the intended sale of the said lorry and contacted the appellant over the matter. Instead of settling the matter, the agent of the appellant company framed the respondent with fraud. The respondent was investigated by police and was cleared.

The appellant company has since not returned the lorry in question to the respondent. In fact, according to the pleadings, the appellant plainly denied having received the said lorry together with spare parts for repair in their workshop or at all. So they denied being in breach of the contract to repair the lorry and they also denied having sold the said lorry.

The trial Judge awarded to the respondent general damages of Shs.80 million with interest at 6% from the date of judgment till payment in full. He also made an order for costs of the suit, hence this appeal. The grounds of appeal are as hereunder:-

- $[1]$ "The learned Judge erred in law and fact when without evaluating the evidence came to the wrong conclusion that the lorry was sold when it was not and is still within the possession of the appellant. - The learned Judge erred in law and on $[2]$ the facts to hold that since the

$\overline{2}$

vehicle was sold which was not the case the respondents were entitled to an award of general damages of Shs.80m/= which was neither proved nor **was** evidence adduced to justify that quantum of damages.

The learned Judge erred in law to rely $[3]$ on evidence which was neither tendered nor made part of the pleadings to arrive at the quantum of damages of Shs. $80m/=$ ."

In ground 1 of this appeal, learned counsel for the appellant submitted that the trial Judge erred in law and on the facts when he held that the lorry was sold. Learned Counsel contended that there was no evidence of sale of the said lorry in the proceedings. According to him, the trial Judge relied on Exh. P3 and Exh. P4 to come to the conclusion that there was a sale of the lorry, yet a close look at those exhibits shows that those were instructions by the appellant to the Court Bailiffs to either return the vehicle to the original owners (respondent) upon recovering the amount of money due and owing or to auction the lorry to recover the amount outstanding. It was his argument that no evidence other than this was adduced at the trial to prove that there was a sale by auction or that the vehicle was returned to the owner.

Learned Counsel further strongly attacked the trial Judge for holding that since the appellant did not contact the respondent before, the lorry must have been sold off on the basis of Exh. P3 and Exh. P4. He vigorously contended that there was no evidence upon which the court could arrive at such a conclusion because in the Plaint, according to him, it was not pleaded that the vehicle was disposed of by either sale or an auction. Reliance was placed on the evidence of both PW1 and PW2.

$\mathfrak{Z}$

It was the contention of the learned Counsel that PW1 in his testimony never stated anywhere that the lorry was sold off. In the same vein PW2 did not mention either the sale of the vehicle or that it was auctioned. Looking at Exh. P3 and Exh. P4 closely, they were written on $11/10/90$ and $24/10/90$ respectively by the Financial Controller of the appellant company to the Court Brokers instructing them either to return the lorry to the respondent on payment of the amount due or, if the original owners were unable to pay, then the Court Brokers were to dispose of the lorry by auction to recover the amount outstanding. PW<sub>2</sub> who was at one time an employee of the appellant company, confirmed that before he left the company in 1991, the lorry was still there although instructions were given in 1990.

Counsel for the appellant submitted that the trial Judge, erred in law and fact when he held that the said vehicle was sold off by the appellant when that was not the case. If the trial Judge had evaluated the evidence of PW1 and PW2, and he had also considered the contents of Exh. P3 and Exh. P4 critically, he would have come to a different conclusion that the lorry was not sold. In any case, under Section 100 of the Evidence Act, the burden was upon the respondent to prove on the balance of probabilities that the lorry had been disposed of by the appellant which burden was not discharged. According to the Counsel, the determination on the matter was very crucial to other issues framed in the case at the trial.

On the other hand, learned Counsel for respondent argued that there was sufficient evidence on record to justify the finding that the lorry was sold. First, the learned Counsel referred to the pleadings: In the Amended Plaint paragraph 3 thereof reads:-

> The plaintiffs were at all material $''3.$ times the owners of a Bedford J6 Lorry Registration Letter and Nos. UXM 893."

Paragraph 5 reads:-

$\overline{4}$


On or about 15th December 1987 the $"5.$ plaintiffs delivered their above mentioned Bedford lorry and necessary spares at the defendants' workshop for repairs and the defendants accepted the said lorry together with the spares and agreed to repair the said lorry as per the defendants' Workshop Job Card No.1436 attached hereto marked $H \Delta H$ . $H$

In the Written Statement of Defence, paragraph 3 thereto reads:-

The Defendant admits the content of $''3.$ paragraph 4 but shall put the plaintiff to strict proof of ownership of the Bedford J6 Lorry alleged in paragraph 3."

Paragraph 4 reads:-

"4. Paragraph 5 of the Plaint is denied in toto the 'Defendant' shall be put to strict proof of the allegations contained therein." $[sic]$

According to the above pleadings, Counsel for respondent submitted, rightly in my view, that the appellant company had denied that the respondent was the owner of Bedford J6 Lorry, the subject matter in dispute. The appellant also denied being in possession of the lorry or even having received it. But evidence of PW1 and PW2 dispels those denials. Both PW1 and PW2 testified that the lorry in question was delivered and it was in the possession of the appellant. PW1 went to the appellant's garage several times but could not see the lorry. That evidence was not challenged in cross-examination or controverted in any way.

Learned Counsel further submitted that Annextures, Exh. P3 and Exh. P4 inclusive, contained instructions of the appellant company

$\mathsf{S}$

to the Court Bailiffs that they should return the said lorry to the original owner, the respondent, on payment of the amount due or, if the respondent was unable to pay, then the lorry should be sold or auctioned to recover the amount outstanding. In the premises, it was inconceivable for the appellant company to deny being in possession of the lorry or even denying having received it, the learned Counsel submitted.

My observation of Annexture Exh. P1 is that it is a photo copy of Registration Book No.181987. Clearly, on 2/12/86 the respondent company was registered as the first owner in Uganda of the Bedford Lorry UXM 893 vide Receipt No. 757424. The respondent was not challenged on that piece of evidence in any way. Therefore, the respondent had proved on balance of probabilities that they were the owners of the lorry in dispute.

It was the contention of Counsel for respondent that since the appellant a bailee who failed, refused and/or neglected to return to the respondent the lorry which he was handed for repair, this was a proper case in detinue. It would have also been a case in conversion but the choice was with the respondent. The respondent as the bailor could, in such circumstances, elect to sue in detinue (at any rate where he was not aware of the conversion at the time), and there is no reason why the value of the goods in fact converted should be assessed on a different basis from the value of the goods which the bailee has not converted but which for some other reason he failed to re-deliver as in this case.

In support of his argument, the learned Counsel cited: Rosenthal V. Alderton and Sons, Limited [1946]K. B 374 at page 379. In that case it was held that

> "in an action of detinue, the value of the goods to be paid by the defendant to the plaintiff in the event of the defendant failing to return the goods to the plaintiff

> > $\mathbf{6}$

must be assessed as at the date of the verdict or judgment in his favour and not at of the defendant's refusal to return the goods, and the same principle applies whether the defendant has converted the goods by selling them or has refused to return them for some other reasons."

Learned Counsel asserted that the principle stated above also applies in the instant case. In fact PW1 on several occasions checked on the appellant garage but found there was slow progress on the repair work on the lorry. Despite that set back the appellant company instructed the Court Bailiffs to sell or auction the lorry in the event of the respondent failing to pay the amount outstanding. It was the appellant who failed to return the vehicle and was therefore in breach of bailment. PW1 never found the lorry at the garage. Thus the respondent could sue in detinue notwithstanding that the appellant was not in actual possession of the chattel at the time of the demand: General & Finance Facilities Ltd Vs Cooks Cars (Romford) Ltd [1963] IW. L. R. 664 at page 649.

It is trite that parties are bound by their pleadings. In the instant case the respondent claimed ownership of a Bedford J6 Lorry Registration Letter and No. UXM 893. The appellant company denied having knowledge of that averment. As a result the respondent tendered Exh. P1 - The Registration Book No.181987 which proved conclusively that the respondent was the original and only owner of that lorry in Uganda. In addition, the respondent pleaded that that lorry was delivered to the appellant's garage together with the necessary spares. The appellant accepted the said lorry with spares into their workshop vide Workshop Job Card No.1436 marked "A".

The appellant company in their Written Statement of Defence denied having possession of that lorry and even denied having received it. They also denied having instructed the Court

$\overline{7}$ Bailiffs to sell or auction the lorry despite the contents of Exh. P3 and Exh. P4. It is remarkable to note from The Memorandum of Appeal that the lorry in question was allegedly not sold and that it was still in the possession of the appellant even at that eleventh hour! So the appellant contended that the trial Judge erred in law and fact to find that the lorry was sold when it was not the case. I find that argument hard to believe in view of the pleadings and evidence. The appellant company denied ever being in possession of the said lorry and also denied having received it. How come it is now in their possession? It was a departure from their pleadings which was binding on them and could not be acceptable unless there was an amendment to the said pleadings. Like the trial Judge, I find that the lorry was in fact sold. Accordingly, the first ground of this appeal fails.

Learned Counsel for appellant argued grounds 2 and 3 of the appeal together. It was his contention that this suit was not instituted in detinue on a bailee-bailor relationship. If that was the case, then detinue should have been specifically pleaded as the cause of action and evidence would have been led to prove failure on the part of the appellant to return the chattel (lorry). In his view, the respondent pleaded "loss" of their Bedford lorry J6. No mention was made in the Plaint of any sale, disposal or destruction of the lorry. According to the Counsel, there was no evidence that the appellant had refused to return that lorry.

Learned Counsel contended further that even if there was cause of action in detinue, the trial Judge had the duty of assessing the value of the lorry as at the date of judgment and not at the time of the appellant's refusal to return the goods. It was also incumbent upon him to determine the damages separately, if any. He relied on: General And Finance Facilities Ltd [Supra] for those propositions. He argued further that evidence of PW1 showed that his opinion of the value of the same type of vehicle was the result of an inquiry which he had made on 20/8/82 from Akamba Motor Co. Ltd. The trial Judge should not have relied on

that document as it was not tendered in court nor was Akamba Motor Co. Ltd. asked for an opinion. So referring to the holding in Rosenthal's [Supra], it was his contention that the trial Judge erred in law and facts in his assessment of the damages.

The legal basis for assessing damages in detinue and conversion was by assessing the market value or cost of replacement, the learned Counsel submitted. When there was doubt about its value, the appellant ought to have either produced the lorry or accounted for its non-production. Then on failing to do so, an assessment would be made. That would be the basis of arriving at an assessment of damages as per Salmond and Heuston on Torts, 18th Edition at page 526, he emphasised. It was his contention therefore that the trial Judge did not do any of the above to arrive at his award and that was an error in law. In addition, since the trial Judge found that the lorry was not repaired in breach of contract, he could not hold that its value was as good as the value of a brand new lorry.

Learned Counsel for respondent supported the award of general damages by the trial Judge at Shs.80 million. He said that in awarding the general damages the trial Judge considered and included the value of that lorry; general damages for loss of income, breach of contract, the inconvenience and embarrassment which the respondent suffered. Learned Counsel stated that an action in detinue may result in a judgment in one of three different forms: [1] For the value of the chattel as assessed and damages for its detention; or [2] For return of the chattel or recovery of its value as assessed and damages for its detention; or [3] For return of the chattel and damages for its detention.

In the instant case, learned Counsel submitted that the trial Judge rightly chose the first form above, that is, he awarded damages for the value of the lorry as assessed and damages for its detention. In that way an order assessing a single sum of money would be justifiable as the trial Judge did in the present

case. It was not necessary to determine the damages separately. He conceded, however, that there was no valuation report made on the lorry, but that the trial Judge relied on the evidence of PW1. The witness made inquiries and established that the price of a new lorry of the same make was at Shs.60 million. His lorry was second hand and it was 10% less the price of a new lorry which would make it worth Shs.54 million. The respondent was never challenged by the appellant on that evidence. In any case the value of the lorry was assessed as at the time of judgment and not at the time of conversion or detention. See: Esso Standard Ltd V. Semu Amanu Opio, SCC No.3/93 [1993] VIKALR. 69, where it was held inter alia that:-

> "the tort of detinue is a continuing tort and damages therefore are assessed as at the date of judgment as equivalent to the value of the chattel in issue as at the date of judgment." [sic].

Therefore, the damages to be awarded to the respondent for their detained lorry would be the value of the lorry as at the date of judgment. I agree and that is the law.

Learned Counsel further submitted rightly, in my view, that where the property is not available, the value is assessed against the defendant on the highest value. According to Salmond and Heuston on Law of Torts, 18th Edition at page 526, it is stated thus:

> "When there is a doubt about the value of a chattel which has been converted the defendant must either produce it or account for its non-production. If he does not do so, it will be assumed against him that it was of the highest possible value".

In their Written Statement of Defence, the appellant company denied having the lorry, but in The Memorandum of Appeal they

said they had it. It was the contention of the learned Counsel for the respondent that during the trial, the highest value was already put to the lorry.

As regards special damages, learned Counsel for the respondent conceded that they should have been specifically pleaded and proved, which was not the case here. However, he submitted that where no proof is made, court may use common sense and award general damages. He also submitted that where non-use of the lorry was not specifically pleaded, as in the present case, but evidence was led on it, court may award general damages. Even any injury to the feelings, insults, indignities suffered may be considered for an award in general damages. For all these principles, the learned Counsel cited:- Kibimba Rice Co. Ltd V. Umar Salim Civil Appeal No.7/83, Supreme court [1992] V. KA'LR 17. Accordingly, in his view, the trial Judge after considering all those principles, made an appropriate award of general damages at Shs.80 million inclusive of the price for the lorry.

With due respect to the learned trial Judge, I think it was not proper to award general damages which were equivalent to the price of a brand new lorry of the same make being claimed by the respondent. I would in the circumstances apply the same principles already stated above and award general damages in the tune of Shs.65 million with the price of the lorry inclusive. In other words I would put the price of the lorry at Shs.54 million and Shs.11 million as general damages under different heads already discussed in **Kibimba Rice case [supra].**

In the result, I would dismiss the appeal with costs to the respondent here and in the Court below.

Dated at Kampala, this. $154$ day of ...................................

. Timmer S. G. ENGWAU JUSTICE OF APPEAL

#### THE REPUBLIC OF UGANDA

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

CORAM:

HON. MR. JUSTICE C. M. KATO, J. A. HON. MR. JUSTICE S. G. ENGWAU, J. A. HON. MR. JUSTICE A. TWINOMUJUNI, J. A.

#### CIVIL APPEAL 27/97

MOTOR MARTS (U) LTD. ........................ APPELLANT

#### - VERSUS -

LUGAZI GENERAL CONTRACTORS LTD. ......... ... RESPONDENT

(Appeal against the judgment and order of the High Court (I. Mukanza J.) in Civil Suit No.724 of 1992, dated 13-9-96).

#### JUDGEMENT OF C. M. KATO, J. A.

This is an appeal against the judgment of the High Court dated 13-9-96. The facts of the case in the nutshell are that the respondent on or about 15-12-87 took its lorry Reg. No. UXM 893 to the appellant for repairs. The appellant did not repair the lorry as agreed and did not return it to the respondent. The respondent filed this suit to recover either the lorry or its value. The learned trial judge entered judgment in favour of the respondent and awarded it 80,000,000/= being the value of a new lorry. The appellant being dissatisfied with that judgment appealed to this court.

I have had the benefit of reading the judgment of Engwau, J. A. in draft, as Twinomujuni, J. A. agrees, I also agree with it and the orders proposed by him.

In the result the appeal must be dismissed with costs to the respondent here and in the court below.

Dated at Kampala this ....................................

**KATO** $C. M.$ JUSTICE OF APPEAL

### THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA

### AT KAMPALA

C. M. KATO, J. A., S. G. ENGWAU, J. A. AND CORAM: A. TWINOMUJUNI, J. A.

### CIVIL APPEAL NO. 27/97

# MOTOR MARTS (U) LTD....................................

VS

## LUGAZI GENERAL CONTRACTORS LTD................. RESPONDENTS

(Appeal against the judgement and order of the High Court (I. Mukanza, J.) in Civil Suit No. 724 of 1992 dated $13/9/96$

### JUDGMENT OF TWINOMUJUNI, J. A.

I have had the benefit of reading the Judgement of S. G. Engwau in draft. agree with it and the orders proposed therein. I would dismiss the $\mathbf{I}$ appeal with costs to the respondent here and in the court below.

Dated at Kampala this $15^{12}$ day of $124$ 1998.

euno $A.$ TW JUSTICE $\epsilon$