P&O Nedlloyd (U) Ltd v Tesco International Ltd (Civil Appeal No. 86/04) [2006] UGCA 60 (1 January 2006)

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

CORAM: HON. LADY JUSTICE A. E. N. MPAGI-BAHIGEINE, JA. HON. MR. JUSTICE S. G. ENGWAU, JA. HON. LADY JUSTICE C. K. BYAMUGISHA, JA.

## **CIVIL APPEAL NO.86/04**

### **BETWEEN**

P&O NEDLLOYD (U) LTD::::::::::::::::::::::::::::::::::::

$\mathsf{S}$

### AND

TESCO INTERNATIONAL LTD:::::::::::::::::::::::::::::::::::

Appeal from the judgment and orders of the High Court of Uganda at Kampala (Lugayizi J) dated $10^{th}$ $20$ September 2004 in HCCS No. 129/2003

#### **JUDGEMENT OF BYAMUGISHA, JA**

The respondent, who was the plaintiff in the lower court, brought an action

- against the appellant claiming the sum of US. \$ 78,000.00, damages, interest $25$ and costs of the suit. The facts that constitute the respondent's cause of action were stated in paragraph 4 of the plaint as follows: - (a) The defendant is and was at all material times a carrier of goods for hire. - (b) Sometime in August 2002 the defendant undertook to safely and securely - ship ten $(10)$ containers of batteries belonging to the plaintiff vide bill of lading No. PONLCANO 1100362 dated August 15/2002 from China to Kampala. - (c) In breach of the said agreement and in breach of duty the defendant did not safely and securely deliver the goods and on the arrival of the

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containcrs at Kampala Railway Goods shed, two containcrs were empty which matter was in turn brought to the attention of thc del-cndant.

- (d) l'hc del'endant responded through their lauryers that the matter was being investigated

a

.t (e) Despite numerous dcmands the def'endant has failcd. refused and/or neglected to pay the said sum.

It rvas claimcd that as a result of the matters stated abovc. thc plaintilThad bcen deprived of its goods. lost their value and had suffered loss and damage- hence t0 thc claim lbr the reliel-s alreadv statcd.

The appe llant/del'endant in its rvrilten statement of del'ence admincd in paragraph 4 that it undertook to ship the plaintiflf's containcrs and ship them to [)lr cs Salaanr eccorclius to thc []ill ol' I -atline. It rvas averrcd that it salell and

l5 securely delivered the said containers to the port ofdestination and handed them over to Altco Ltd, the plaintifls agent. It prayed for the dismissal of the suit lvith costs.

At the scheduling conference held on 1410712003 the fbllowing undisputed lacts 20 were recorded by the trial judge:

l. 'l'he det-cndant/appellant rvas a carrier ofgoods for hire.

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- 2. 'l'hat the contract of carriage was govcrned by Bill of Lading No o I'}ON4CAN-Ol 100362 datcd I5/0812002. - 3. 'l'hc def'cndant/appellant undertook to salbly and securely transport l0 containcrs said to contain batterics liom China to Dar-es. Salaam. - 5 4. 8 containers were sal-elv and securclv dclivered to Dar-es- Salaam. - 5. Altco rvas thc clearing and fbrrvarding agent acting for the plaintill'. - 6. l0 containcrs were delivered to Altco in Dar-es-Salaam - 7. Allcged emptiness of 2 containers was brought to thc altention olthe del'endant after the arrival of the containers in Karnpala - I0 8. l)el'endant's larvycr respondcd that it rvas investigating the matter, and that the plaintil'f has not been given the results of the above investigation. - 9. 'l'hc defcndant has not paid the plaintiff the sum demanded.

The following documents were admitted as exhibits:

15 1. The Bill of Lading as exhibit P.l.

> 2. A letter dated Novemb er 5th,2OO2 from Tanzania Intemational Container Terminal Services Ltd as Exhibit P.2.

- 3. Proof list discharge report dated 17109/2001 as exhibit D.1. - 20 At the trial two issues r.vcrc framed lbr court's determination namely: - l. Whcthcr or not thc dclcnclanl rvas in hreach ola dun' and /or hreach ol' contract to deliver the containers securely and salcly.

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### 2. Available remedies.

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> The trial judge answered the first issue in the affirmative and entered judgment in favour of the plaintiff. He awarded the sum of US. \$ 78,000 as special

- damages with interest at 15% p.a. from the date of the arrival of the 2 empty $\mathsf{S}$ containers in Dar- es- Salaam till payment in full; 10 million Uganda Shillings as general damages with interest at court rate from the date of judgment till payment in full. The defendant to pay the costs of the suit. - Being dissatisfied with the above orders, the appellant filed the instant appeal. A $10$ memorandum of appeal filed in its behalf contained 10 grounds. However, at the scheduling conference with the Registrar of this Court, the appellant abandoned grounds 8, 9, and 10. The grounds that were argued before us were the following: - 1. The learned trial judge erred in law when he failed to consider the 15 submissions of the appellant. - 2. The learned judge erred in law when he failed to properly evaluate the evidence on record and when he made findings without evidence on record to support them. - 3. The learned judge erred in law misrepresenting some of the evidence $20$ on record and relying on evidence from the bar thus coming to the wrong conclusions.

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- 4. The learned judge erred in law and fact when he shifted the evidential burden of proof from the respondent to the appellant. - 5. The learned judge erred in law and fact by basing his judgment on conjecture and or inferences without considering and or taking into account primary evidence inconsistent with the said inferences. - 6. The learned judge erred in holding that the appellant interfered with or stole the respondent's goods and thus failed to deliver the goods safely and securely in Dar-es-Salaam in breach of contract. - 7. The learned judge erred in law and fact in holding that the appellant was liable to pay damages to the respondent.

It was the appellant's prayer that the appeal be allowed with costs.

When the matter came before us for final disposal, Mr Ojambo- Mugeni,

- learned counsel for the appellant, commenced his submission with the second 15 ground of appeal that concerned the evaluation of evidence by the learned trial judge. He submitted that the burden was on the respondent to prove that the containers were empty when they arrived in Dar-es-Salaam. He pointed out that the respondent is using the alleged loss in Dar-es-Salaam to infer loss in - Kampala. He referred to the report from the Tanzania Port Services (Exhibit 20 D.1) which stated that no 20 feet containers were empty and the clearing agent handled 10x20 feet containers. He cited the case of *Management Training*

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$10$

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### &Advisory Centre v Patrick Kakuku Ikanza –Civil Appeal

$\cdot\,$

*No.6/85*(unreported) in which the court held that an inference cannot be readily drawn from proved primary facts if there are other co-existing facts which weaken or destroy that inference. He contended that the appellant proved that it

$\mathsf{S}$ handed the goods to the respondent and there was no breach.

In reply, Mr Kiryowa-Kiwanuka, learned counsel for the respondent, referred to the agreed facts and stated that the emptiness of the containers was discovered in Kampala although 8 of them had arrived in Dar-es-Salaam safely. He pointed

out that the two containers had different seal numbers from the rest. This is not $10$ correct because the trial judge found that all the 10 containers had different seal numbers from those that were stated in the bill of lading.

He conceded that the respondent had to prove that the loss occurred when the goods were still in control/possession of the appellant. He also conceded that

$15$ liability ends with delivery but delivery per se does not take away accrued liability. It was his contention that even if the loss was discovered in Kampala and the respondent proved that the loss occurred before Da-es-Salaam, the appellant would still be liable. He cited the case of *London and Northern* Western Railway Company v Richard Hudson&Sons Ltd [1920] A. C 324 for that proposition. $20$

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On the evidence that rvas adduced at the trial. he relerrcd llrst to the bill of O lacling and the lctlcr liom thc Tanzania Port Authorily (llxhibit p.2) that stalcd thc seal numbcrs that were fbund in Dar-cs-Salaam. This letter also statcd the r,veight of each container on arrival. Learned counsel submitted that the

- .t tcstinrony ol'Naki1-ingi ILcbccca (D. W.l) rvas to thc ellcct that an enrpty container rvcighs about 2.4. Kgs. I Ic also pointed out that therc rvas nn evidcr.tcc of interlbrence r.vith the containers from Dar-es-Salaam to Kampala. IIe claimed that the seals were intact. - ll) From the submissions made by both counsel I think there is no dispute that the appellant rvas a carrier lbr hire. It was contracted by the respondent to transport l0 containers ol'10x20 feet liom China to the port ol'Dar-es-Salaam. The contract of carriage rvas govemed by the bill of lading (exhibit P. I ). According to the contents of the exhibit, the respondent imported l1.000 cartons of - l5 batteries rveighin-e about 265,000 Kgs and measuring 294.50 Cubic metres. When thc containcrs arrived at the port of discharge. the -l'anzanian Customs officials affixed their orvn seals on the containers in addition to those of the shipper. 'fhc containers were later cleared by Altco. a clearin-u and forwarding company on behallol'the respondent. 'l'he clearing and fbrrvarding company - 20 contracted another carrier, Uganda Railways Corporation, rvhich transpofted the containers to Kampala. On arrival in Kampala and on verillcation which appcars to havc bccn clonc ir.r thc absence of thc rcsptlndcnt. it \*'as cliscovcrcd

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that two of the containers whose particulars were stated in the plaint were O empty. It u,as also not disputcd that the seals on all the containcrs werc dill'erent tiom those that were stated in the bill of lading but they were intact whcn the containers arrived in Dar-es-Salaam. 'fhere was no cvidcncc adduccd by thc

- .t respondent to show that the trvo containers were empty r,vhen they arrived in Dar-cs-Salaam which rvas the por"l ol'discharge. 'Ihc only anomaly that rvas noticed in Dar-es-Salaam was that seal numbers r.vere dil-ferent liom those appcaring in the bill of lading. - t0 'l he lcarned trial .judgc in dcaling \*,ith the s,idcr-rcc of the allcgcd cmpliness ol' thc containers stlted thus:

t5 "Putting together oll the above facls Court lhinks lhat they lead to this logical condusion. The lefendanl is the one lhol inlerfered wilh or stole lhe plaintiffs goods. It must hove done so either before or ufter the dispatch of lhe tontoiners from China. As a result, it dil not deliver the said goods sufely ond securelf irr Dtr-es- Sdaom us agreed. Needless to so!:, the ocl of interfering with the gootls in question or "lheft" thereof was not in complitnce with the controct, bul u hreaclt of it. For lhol reoson, Court has no hesitntion in finding thal the defenclant wos in hreuclt rtf the contracl to 20 cleliver the conluiners in question sufell'and securell,.

In ordcr lbr the court to reach the ahove conclusion. it had to evaluate the evidence ofalleged" thefi" that was adduced at the trial. The starting point is the bill ol'lading (exhibit P. I ). It stated the total nunrber of cartons imported by the 25 respondent was I 1.000. There rvas exhibit D.l that rvas issued by the Tanzanra lnternational Containcr'l-ernrinal services Ltd. [t r.vas datcd l7109/2002. It stated

that thcrc were no enrpty containcrs in the category olsize 20 \*,hich conlained

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the goods of the respondent. The second point which I consider crucial in determining the alleged theft by the appellant is that the containers were not in physical or constructive control of the appellant from Dar -es-Salaam to Kampala. The evidence of Busingye Ronald who cleared the containers in Dar-

- es-Salaam was also important. He testified that when he was presented with bill $\mathfrak{s}$ of lading and he discovered that the seal numbers were different from what the appellant had on their manifest, he contacted the respondent. The respondent told him that he should not have the goods released and wanted the verification done in Dar-es-Salaam. He stated that the defendant assured him that the goods - could be in good order and they should be verified in Kampala. This $10$ conversation, if it occurred, was outside the terms of the contract of carriage because the port of discharge as we have already seen was Dar-es-Salaam. - Uganda Railways Corporation which was the second carrier for hire was not 15 transporting the goods as an agent of the appellant. I think, therefore that it was important for the verification exercise to take place in Dar- es-Salaam before handing over the containers to another carrier that had similar obligation as the appellant to transport the same safely and securely to Kampala. P. W.1, in his - evidence, stated that he did not think that Tanzania Customs officials would 20 have affixed their seals if there were problems with the containers. P.w.4 on his part stated that he released the containers to Uganda Railways when all the seals

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were intact. He did not state that two of the containers were empty. Uganda O Railrvays Corporation which rvas thc second carrier did not testify as to what cargo it transported lbr thc appellant and whether any ofthe containers werc cmpt),

-)

When the containers arrived in Kampala they were off-loaded by Bemard Kamugisha (P. W.2). He stated that he participated in the verification exercise and thcv lbund trvo of thc containers ernpty after removing the seals. 'l'he veriflcation exercise took place in the abscnce ofthc appellant- an indication t0 that it rvas no longcr rcsponsiblc for thc containers.

In lau,. the bill of lading is a documcnt of title and it represents the goods and therefbre possession olthe same places the goods at thc disposal ol-thc buyer. In the matter now before us, the bill ollading was in the hands of the respondent.

- I5 It handed the sanre to the clearing agent to clcar the consignmcnt at Dar-cs-Salaam rvhich rvas done. The agent cleared all the ten containers and not eight l'he Customs ofllcials afllxed their seals and allowcd the containers to go. llthe appcllant had not dclivercd all thc ten containers salbly ancl sccrrrely as contracted. thc clearing a-ecnt rvould not havc clcarccl all ol'thcnr and hand thcm - 20 over to anothcr canicr lbr onlvard carriage to Kampala. I do not believe the tcstimony of Busingye Ronald (P. W.4) that the appellant persuaded him to clear

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the containers and then wait for verification to be done in Kampala. He must have been aware that the port of discharge was Dar-es-Salaam.

Mr Kiryowa-Kiwanuka's reliance on the contents of exhibit P.2 as evidence that

- two of the containers were empty on Dar-es-Salaam is not tenable, in my view. $\mathsf{S}$ This is so because the exhibit has two columns showing the weight of each container. The first column shows the weight of each container. There is a second column showing another different weight although it is not stated whether the weight is in Kgs or not. The figures in the first column would - indicate that container No. POCUO12525-2 weighed 2.4. In the second column $10$ it weighed 20. The second container No. POCU 002744-6 weighed 3.0 and 10 respectively. There was no explanation about the figures in both columns it would not be safe to rely on them in determining emptiness of the containers in question. Moreover, if the testimony of D. W.1 is accepted with regard to the weight of an empty container, the figures in the first column show that at least 7 15 out of 10 containers were empty.

After an appraisal of the evidence as a whole it is my considered opinion that the respondent failed to prove theft of the goods while the same were in the

control of the appellant. The evidence establishes that when the containers $20$ arrived, they were cleared by Customs officials at the port. The respondent instructed its clearing agent to clear the containers and hand them over to

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another carrier. To me, this shows that the respondent did not treat the seal numbers as a fundamental breach of the contract of carriage. The evidence also did not rule out the possibility of theft having occurred between Dar-es-Salaam and Kampala. Therefore, the learned judge was, with respect, wrong to find and

hold that the appellant stole the respondent's goods before the same arrived in $\mathfrak{s}$ Dar-es-Salaam. I would answer the second ground of appeal in the affirmative.

The above holding more or less disposes of the entire appeal. The respondent having failed to prove that the containers were empty when they arrived at Dar-

es-Salaam, it failed to prove loss and therefore was not entitled to any damages. $10$ Consequently, the damages awarded by the trial court would be set aside. The appeal would be allowed with costs to the appellant both here and in the court below.

Dated at Kampala this...7......day of. A. A. A.2006. $15$

C. K. Byamugisha **Justice of Appeal**

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

CORAM: HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, JA V HON. JUSTICE S. G. ENGWAU, JA HON. JUSTICE C. K. BYAMUGISHA, JA

CIVIL APPEAL NO. 86 OF 2004

### BETWEEN

### P & O NEDLLOYD (U) LTD. ::::::::::::::::::::::::::::::::::::

#### AND

### TESCO INTERNATIONAL LTD. :::::::::::::::::::::::::::::: RESPONDENT

[An appeal arising from the judgment and orders of the High Court of Uganda at Kampala (Lugayizi, J) dated 10<sup>th</sup> September, 2004 in HCCS No. 129 of 2003]

### JUDGMENT OF ENGWAU, JA

I have had the benefit of reading, in draft, the judgment of Byamugisha, JA and agree with her findings and orders made therein. I have nothing more to add.

Dated at Kampala this 7th day of August 2006.

S. G. Endwau JUSTICE OF APPEAL.

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

# CORAM: HON. LADY JUSTICE A. E. N. MPAGI-BAHIGEINE, JA HON. MR. JUSTICE S. G. ENGWAU, JA HON. LADY JUSTICE C. K. BYAMUGISHA, JA

### CIVIL APPEAL NO. 86/04

### **BETWEEN**

$P\&O$ NEDLLOYD (U) LTD ::::::::::::::::::::::::::::::::::: $10$

### **AND**

TESCO INTERNATIONAL LTD ::::::::::::::::::::::::::::::::::

[Appeal from the judgement and orders of the High Court of Uganda at Kampala (Lugayizi J) dated 10<sup>th</sup> September 2004 in HCCS No. $129/2003$

### **JUDGEMENT OF HON. JUSTICE A. E. N. MPAGI-BAHIGEINE, JA**

I read in draft the lead judgement of Byamugisha, J. A.

I agree that the appeal should succeed. 20

$\mathsf{S}$

Since Engwau, JA also agrees, it is hereby allowed with costs here and below as proposed by Byamugisha, JA.

Dated at Kampala this .................................... 25

A. E. N MPAGI-BAHIGEINE

**JUSTICE OF APPEAL**

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