Munobe v Commissioner Customs Uganda Revenue Authority (HCT-00-CV-CS-211-2017) [2021] UGHC 73 (14 October 2021)

Full Case Text

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# **THE REPUBLIC OF UGANDA**

# **IN THE HIGH COURT OF UGANDA AT NAKAWA**

#### **HCT-00-CV-CS-066-2111**

**MUNOBE SAMUEL::::::::::::::::::::::::::::::: PLAINTIFF**

**VERSUS**

**THE COMMISSIONER CUSTOMS**

**UGANDA REVENUE AUTHORITY :::::::::::::: DEFENDANT**

**BEFORE**

**HON. MR. JUSTICE WILSON MASALU-MUSENE**

**JUDGMENT**

# **JU PGM ENT**

The Plaintiff brought this Suit against the Defendant for a Declaration that the Defendant's acts were unlawful; an Order for compensation for loss of business, loss of profits, plus general damages and interest thereon, and Costs of the Suit.

The Plaintiff's case is that sometime back in 2008, the Plaintiff negotiated a salary loan from his bankers to import six Corona units for carrying out the business of special hire taxi. That the Plaintiff by the loan facility, subsequently imported (6) six units Chassis nos. ST 190-005718, ST 190-1088139, ST 190-4077777, St 190-4090197, ST 190-0076704 and St 190-0054804 in the month of October 2008 all in Container No. SCMU 430554316. The Plaintiff wrote to the Defendant on the 12th day of November 2008 requesting for re-verification and valuation, and release of the units.

THE Defendant's team of officers queried for Inspection of Motor Vehicles (IOV) report, and other documents on 1st July 2009, which were provided by the Plaintiff on the 20th July 2009 and 23rd July 2009. That the Plaintiff had on several occasions provided all the relevant documentation to the Defendant to support his declared transaction values which were rejected by the Defendant without any justification or basis for challenging the transaction value.

That after month of ignoring the Plaintiff's Application, an attempt to re-verify the units was moved by the Defendant's officers. That the Defendant's official's depreciation method to value the Plaintiff's damaged vehicles was challenged by the Plaintiff. That, the Defendant

was under a duty to take care in the making sure that the Plaintiff's vehicles were not vandalized in her custody.

An omission by the Defendant's officers to effect a directive by the Manager Customs dated 9th July 2009 to have the units released provisionally caused further material damage to the said suit units. The Plaintiff made several explanations and objections to the assessed values, which have been in essence rejected. **That the above culminated into a Suit against the Defendant vide Civil Suit No. 1383 of 2009.**

That subsequently, by consent Decree dated 21st December 2010, the Defendant issued a **Release Order** for the vehicles. That the Plaintiff, in the process of having his vehicles released, he discovered that the vehicles had been moved to Nakawa CBC yard, and the vehicles had extensively been vandalized. The Plaintiff further averred that the missing parts were but not limited to the car keys, tyres, side mirrors, indicator lights, batteries, car radios, electronic parts and other essential engine parts.

The Plaintiff's case is that he has not been given the lawful chance to have his goods released in good state inspite of his fulfillment of his legal obligation. The Plaintiff further averred that, as a result of the Defendant's actions, he has suffered great economic loss, inconvenience and damage in as far as the matter is concerned. He added that the Defendant's omissions and actions against the Plaintiff are unlawful and that the vandalism of the motor vehicles and damages were caused by the negligence and/or breach of duty by the Defendant, its servant and/or agents.

The Defendant filled a Defence denying the Plaintiff's claim and instead averred that the Plaintiff instituted Civil Suit No. 1383 of 2009 which was subsequently settled by Consent of both parties on terms that the values originally declared by the Plaintiff be used for assessing and clearing the vehicles and not release necessarily of the same.

The Plaintiff was advised to fulfill all the registration procedures in relation to clearance of the vehicles upon which release would be effected. The vehicles were subsequently moved to the NIP yard at Nakawa. However, the entries left Customs Business Centre on 14.02.2011 for the Motor Vehicle Registration Unit.

The In-charge Customs warehouse then released the vehicles and consequently issued a release Order on 4th February 2011. That the Plaintiff however, requested the motor vehicles to be taken to Inspector of Vehicles on 14th February 2011 and the permission subsequently was granted.

It was further pleaded that the Plaintiff's clearing Agent J & P General Agencies declined to remove the vehicles claiming that the units were vandalized from N I P yard and consequently demanded for compensation. In response to the above, the In-charge Customs Warehouse was compelled to clarify on the status of the units indicating that the units were received without the said parts.

The parties filed a joint-scheduling memorandum which included agreed issues.

# **Agreed Issues:-**

- (1) Whether the Plaintiff's six motor vehicles were vandalized; - (2) Whether the Defendant was liable for the alleged vandalism caused to the Plaintiff's six units of motor vehicles; - (3) What remedies are available to the parties; - (4) Costs

# **Resolution of Issues:**

**Issue 1:** whether the Plaintiff's six motor vehicles were vandalized;

whether the Defendant was liable for the alleged vandalism caused Issue 2: to the Plaintiff's six units of motor vehicles.

As far as the $1^{st}$ and $2^{nd}$ issues are concerned, Counsel for the Plaintiff attached the bill of lading No. NGOK30950, Invoice,

Customs documents, Export Certificates on the Plaintiff's Trial Bundle

and PW1's Witness Statement and marked B1-B9, as evidence that the

Plaintiff's six motor vehicles were imported in good condition as used

motor vehicles.

Paragraphs 4 & 5 of PW2's Witness Statement on Oath which was

admitted as her evidence in Chief stated that:-

"to fit in the container, some parts of the units of motor vehicles such as the cars' bumpers, the tyres of all the units, and other external items of the units were removed on packaging and placed back on delivery of the units at the point of destination. Some of the motor vehicles' parts had been removed upon packaging, and were being kept in the motor vehicles' **respective boots."**

DW1, Francis Onya Okolong in his own evidence confirmed to having made the verification, and further confirmed that the verification forms (attached to PW1 Munobe Samuel's Witness Statement marked ("B10") as having been authored by him. It is clear that by the Defendant's own Motor Vehicle Verification forms serial No. 346366, 346369, 346368, 346365 and 346373 all dated 05/11/2008 that the Plaintiff's Motor Vehicles were alright.

The general remarks were as follows:-

Serial No. 346365; "Vehicle damaged on top, (roof curved inside, windscreen damaged), front bumper and radiator."

Serial No. 346366: "Vehicle ok"

Serial No. 346367: "the whole top of car damaged. Plus the screen."

$25$

$\mathcal{S}$

$10$

$20$

Serial No. 346368: "Vehicle Ok"

Serial No. 346369: "Roof the car damaged"

Serial No. 346373: "Damaged on top, broken windscreen"

Therefore that it is notable that none of the above mentioned DWTs observation showed that there were any missing parts.

PW1 Sam Munobe, in paragraph 5 of his written statement on oath and the oral testimony, clearly testified that for his goods to fit in the container, some parts of the Motor Vehicles such as cars' bumpers, tryes and some other external parts had been removed on packaging but were placed back upon unloading of the units in Kampala.

PW2 Ritah Munobe in paragraph 4 and 5 of her written statement on oath further corroborated the same evidence when she confirmed the position that some parts of the motor vehicles had been removed at packaging so that they could fit in the container. That the same parts were kept in each respective vehicles boots. The same external parts had been placed back upon the vehicles being offloaded from the container. He stated that the above is supported by the Motor Vehicle verification forms made by the URA (the defendant) which did not depict the motor vehicles as being in the unfortunate state the defendant is laboring to prove to court.

Counsel for the Plaintiff further submitted that the Plaintiff imported six vehicles and the same had been verified as road worthy, and had passed the inspection process. **(Export certificates were attached to PW1's Witness Statement and marked No. "B4", " B5", "B6", "B7", "B8", " B9").** That it is on the same basis that a dispute arose as to vehicles actual values when they got involved in an accident en- route to Kampala from Mombasa with the defendant insisting that the accident damage on the vehicles was not large enough to reduce their values. And that it is the same defendant that is in this particular suit claiming that the subject motor vehicles were imported without almost every spare part.

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Furthermore, DW1 Francis Ony/ in his cross examination testified that Kenfreight and URA were both in charge of the cars from the time of verificatidm That Mr. OnyartUrther testified thaft, he was the opfe who made ttte verification reports. He also testified that he was also/cresent the safne day when kenfreight made Hteir alleged inspection. But could ifot explain the/easons for thymajor difference^in the two reporte/and he c^uld 5 not explain why he^id not sigh or/the Kenfreight retorts. He could no/give any reasons why the dates Oh the Kenfrei^nt forms were altered, but testified^that the Kenfreight reports and the URA verification forms were to' serve thp same purpose.

GUtdOo? Counsel for the Plaintiff that upon the instance and consent of the parties, a visit to the Locus in quo was duly made by this Court and the following clear \*0 observations on the status of the six motor vehicles were found;

- 1. The motor vehicles had been parked in the open backyard, in a fully grown bush - 2. They were exposed to conditions favourable for rusting, and the different weather conditions in that open bushy backyard had greatly taken a toll on the vehicles. - 3. The motor vehicles were open, easily accessible by the defendant's officials and security guards. - 4. The motor vehicle's bonnets were open, and thus it was easy for us to notice the vandalized parts of the engine, such as missing batteries, and the unscrewed engine parts. - 5. The motor vehicles car parts such as tyres, radios, door knobs, most of the external and internal lights, side mirrors, chair cushions, and many removable parts of the different cars clearly long been removed.

In reply Counsel for the Defendant submitted that the Plaintiffs motor vehicles were received and deposited at the Defendant's customs warehouse on 29th day of September 2010 in whist damaged with the alleged missing parts. Counsel further submitted that although the Plaintiff is attempting to challenge the Kenfreight vehicle inspection reports and vehicle inspection reports from the police (I. O. V) dated 5 November 2008 and 31sl December 2008 respectively, these documents form part of the Plaintiffs evidence which he presented in the lower court in Civil Suit No. 1383 of 2008 in which the Chief Magistrate's Court at Nakawa to prove his case. He added that it is absurd that the Plaintiff is now challenging his own evidence as the reports clearly show the status in which the vehicles were in. and that the Plaintiffs should not be allowed to approbate and reprobate his own documents

He referred to Section 5 of the Evidence Act. It provides that;

**"Facts which, though not in issue, are so connected with a fact in issue as** / **to form part of the same transaction are relevant, whether they occurred at the same time and place or at different times and places."**

Counsel further submitted that the allegation by the Plaintiff that DW1 Francis Onya Okolong admitted in his evidence that some of the URA verification forms indicated that the vehicles were OK hence reaching a conclusion that the vehicles had no missing parts is not true . That DW1 clearly explained that the verification forms URA only provide general remarks and not detailed information. He added that dw1 further explained that a detailed report indicating the status of the motor vehicles has to be prepared by the shippers of the importer who in this case were Ken- Freight (U) Ltd.

Counsel further submitted that the Plaintiff allegation in paragraph 4 (m) and (n) of the plaint that six motor vehicles were vandalized after being moved to the Defendant's yard and that the vehicles had missing parts like indicator lights, car radios, batteries, side mirrors, electronic parts and other essential engine parts is not true because that the six motor vehicles were received and deposited in the defendants customs warehouse on 29th day of September 2010, two years after the same had been parked at Ken- freight. That the Plaintiffs six motor vehicles however entered Uganda on the 31st October 2008 and on 5th November, 2008 Kenfreight offloaded the container in presence of PW2 and reports were prepared showing the status of the vehicles.

Counsel further stated that it is astonishing to see the Plaintiff alleging that the Defendant vandalized his motor vehicles at the time when they were parked at the Defendant's Customs warehouse\T>rV^^h^^^ir^btA3

I have carefully considered the submissions on both sides and the pleadings on record. I have no doubt whatsoever that the Customs Department has responsible and well trained officers whose responsibilities are clearly stated under the Law, including the **East African Community Customs Management Act, 2004.**

What is clear and not disputed from the pleadings is that:

The Plaintiff in Civil Suit No. 1383 of 2009 filed in the Chief Magistrate's Court at Nakawa was challenging the valuation and depreciation method by the Defendant for the same said six vehicles on grounds that they had been extensively damaged as a result of an accident between Mombasa to Kampala.

In that Civil Suit No. 1383 of 2009 which was before the lower court, the Plaintiff relied on Exh. DD1 to DD20 i.e. the Vehicle Inspection Reports from Ken-Freight (U) Ltd dated 5th November 2008, Vehicle Inspection Reports from the Police (I. O. V) dated 31st December 2008 and photographs to justify the extent of damage and to prove that the vehicles were not roadworthy to pay the normal tax assessed by the Defendant.

A Consent was entered into between the parties on the 10th December 2010 where the Defendant paid to the Plaintiff UGX 10,800,000= as General damages, UGX 6,600,000= as Demurrage and UGX 2,000,000= costs (Refer to Exh. DD32 a copy of the Consent).

The Plaintiff was then requested to pay the revised taxes for the vehicles so that he is cleared by the Defendant (Refer to Exh. DD33 a Defendant's letter dated 25th January 2011). It is at this stage that the Plaintiff later alleges vandalism of his vehicles by the Defendant.

It is also not in dispute that the Plaintiff's vehicles were received and deposited at Defendant's Customs Warehouse on 29.09.2010, after the damage in Chief Magistrates' Civil Suit No. 1383 of 2009 had been settled. And as Counsel for the Defendant submitted, the Plaintiff's vehicles were received in the Defendant's Customs Warehouse on 29.09.2010. That was two years after the same had been parked at Ken-Freight. And according to the letter of the Defendant dated 03.03.2011, signed by Sarah K. Mwesigye (Mrs), the said vehicles were delivered in customs ware house while in a deplorable state and not in a running condition. They were stated to have been damaged with parts missing. **The letter is attached as G2 PWl's witness Statement.;** And the vehicle Inspection reports (Exh. DD1 to DDA) prepared on 05.11.2008 shows that the said vehicles were damaged. That was before they were received by the Defendant on 29.09.2010.

For avoidance of doubt, I shall reproduce the reports as follows:-

- 1. **Exh. DD1 for Motor Vehicle (ST190-4077777)** indicates that 28 parts were missing which included; *Radio Ariel/Antenna, Radio knob, Ashtray, Cigarette lighter, Clock, Floor Mats, Tail gate Chain, Key holder, Radio/Tane, Tin pain/wax, Books, Fire Extinguisher, Sport lights, Hub caps, Car moldings, Jack/CRIC, Jack Handle, Tool kits, Wheel spanner, Pressure pipe, Inspection light, Foot pump, Triangle, Self-starter, Alternator, Horn, First Aid Kit, Stickers.* - *2.* **Exh. DD2 for Moro Vehicle (ST190-0057618)** indicates that 30 parts were missing which included; *Radio Ariel/Antenna, Radio knob Ashtray, Cigarette lighter, Clock, Floor Mats, Tail gate Chain, Key holder, Radio/Tane, Tin pain/wax, Books, Fire Extinguisher, Sport*

*lights, Hub caps, Car moldings, Jack/CRIC, Jock Handle, Tool kits, Wheel spanner, Pressure pipe, Inspection light, Foot pump, Triangle, Self-starter, Alternator, Horn, Battery, First Aid Kit.*

- *3.* **Exh. DD3 for Mortor Vehicle (ST190-4088139)** indicates that 26 parts were missing which included; *Radio Ariel/Antenna, Ashtray, Cigarette lighter, Clock, Floor mats, Tail gate Chain, Key Holder, Tin pain/wax, Books, Fire Extinguisher, Sports lights, Hub Caps, Car moldings, Jack/CRIC, Jack handle, Tool kits, Wheel Spanner, Pressure pipe, Inspection light, Foot pump, Triangle, Self-starter, Injector pump, Horn, First Aid Kit, Stickers.* - *4.* **Exh. DD4 for Motor Vehicle (ST190-4090197)** indicates that 30 parts were missing which included; *Radio Ariel/Antenna, Ashtray, Cigarette lighter, Clock, Floor mats, Tail gate Chain, Key Holder, Tin pain/wax, Books, Fire Extinguisher, Sports lights, Hub Caps, Car moldings, Jack/CRIC, Jack handle, Tool kits, Wheel Spanner, Pressure pipe, Inspection light, Foot pump, Triangle, Self-starter, Injector pump, Horn, First Aid Kit, Stickers.* - 5. **Exh. DD5 for Motor Vehicle (ST190-0076704)** indicates that 30 parts were missing which included; *Radio Ariel/Antenna, Ashtray, Cigarette lighter, Clock, Floor mats, Tail gate Chain, Key Holder, Tin pain/wax, Books, Fire Extinguisher, Sports lights, Hub Caps, Car moldings, Jack/CRIC, Jack handle, Tool kits, Wheel Spanner, Pressure pipe, Inspection light, Foot pump, Triangle, Self-starter, Injector pump, Horn, First Aid Kit, Stickers.*

6. **Exh. DD6 for Motor Vehicle (ST190-0054804)** indicates that 25 parts were missing which included; *Radio Ariel/Antenna, Ashtray, Clock, Floor mats, Tail gate Chain, Key Holder, Tin pain/wax, Books, Fire Extinguisher, Sports lights, Front lights, Hub Caps, Car moldings, Jack/CRIC, Jack handle, Tool kits, Wheel Spanner, Pressure pipe, Inspection light, Foot pump, Triangle, Self-starter, Injector pump, Horn, First Aid Kit, Stickers.*

The Report of the Inspector of vehicles was that all the vehicles were unfit for road use and required comprehensive repairs before registration of PW2, Plaintiff's wife, she confirmed that the Vehicles were in bad condition, and extensively damaged.

So to the extent that the vehicles were already damaged with spares missing by the time they were handled over to the Defendant's custody, then the Defendant cannot be said to be responsible for that damage. And even when this court visited locus in Quo, that visit could not substitute the damage which had been done to the vehicles before 29.09.2010. The Defendant owed no duty of care to the Plaintiffs by them, hence no test of negligence.

I therefore agree with Counsel for the Defendant that Plaintiff's submissions that the Defendant owed the Plaintiff a duty of care since November, 2008 when the vehicles entered Uganda is misconceived.,

From date of importation, the vehicles were in the premises of KEN-Freight (U) Uganda LTD, the shippers of the Plaintiff. By the time the vehicles came in possession of Uganda, Revenue Authority, they were already in damaged conditions, and that is why the Plaintiff sought to

**A**

• pay less taxes on them in Nakawa Chief Magistrate's Court Civil Suit No. 1383 of 2009.

Issues No. 1 and 2 are resolved in the negative.

On the issue of remedies, having resolved the 1st and 2nd issue in the negative, then I do not need to go into the detailed submissions on remedies.

*io*

*O* I find and hold that the Defendant is not liable in damages or any of the remedies sought.

Finally, although costs follow the event, I shall exercise this Court's discretion and inherent powers to Order that each Party meets their own costs.