Webster Construction Equipment Co. Ltd v Nino Engineering Co. Ltd (HCT-00-CC-CS 324 of 2007) [2007] UGCommC 90 (11 November 2007)

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)}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid4290895 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\insrsid6046788\charrsid4290895 \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid4290895 {\b\insrsid8926865\charrsid4290895 THE REPUBLIC OF UGANDA \par \par IN THE HIGH COURT OF UGANDA AT KAMPALA \par (COMMERCIAL COURT DIVISION) \par \par HCT-00-CC-CS-0324-2007 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid4290895 {\b\insrsid8926865\charrsid4290895 \par WEBSTER CONSTRUCTION EQUIPMENT \par CO. LTD ::::::::::::::::::::::::::::: PLAINTIFF \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid4290895 {\b\insrsid8926865\charrsid4290895 VERSUS \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid4290895 {\b\insrsid8926865\charrsid4290895 \par NINO ENGINEERING CO. LTD :::::::::::::::::::::::::: DEFENDANT \par \par \par BEFORE: }{\b\ul\insrsid8926865\charrsid4290895 THE HONOURABLE MR. JUSTICE YOROKAMU BAMWINE}{\b\insrsid8926865\charrsid4290895 \par \par }{\b\ul\insrsid8926865\charrsid4290895 J U D G M E N T}{\b\insrsid8926865\charrsid4290895 : \par \par }{\insrsid5703027\charrsid4290895 The plaintiff\rquote s case against the defendant is that it (the plaintiff company) entered into a hire agreement wi th the defendant company in which the plaintiff company hired out its motor grader to the defendant company at a cost of Shs.9,000,000= for 15 days. That at the signing of the agreement the defendant paid half the agreed sum and the balance was to be pai d after the first seven days of the agreed 15 days. That the defendant was required under the agreement to pay the operator fees and the cost of transporting the grader to and from the site. The suit is for recovery of outstanding moneys on that contract .}{\insrsid8926865\charrsid4290895 \par }{\insrsid5703027\charrsid4290895 \par The suit was filed here on 10/5/2007. When the matter came up for hearing on 20/8/2007, I made an order for fresh service of summons on the defendant. This was because in the first affidavit of service the process server had not indicated where he went to serve the defendant and yet according to the second affidavit, the service was effected by substituted means. In view of this anomaly, I directed that the defendant be served again. \par \par According to the affidavit of service of one Jude Oduri Ojiambo dated 19/10/}{\insrsid14645553\charrsid4290895 2007;}{\insrsid5703027\charrsid4290895 the defendant was served through a one Katto Patrick. Still the defendant did not respond. Judgment was therefore entered in default of filing the defence and the matter has been placed before me for formal proof to assess damages.}{ \insrsid6958199\charrsid4290895 }{\insrsid5703027\charrsid4290895 \par }{\insrsid6958199\charrsid4290895 \par As to whether there was a contract between the plaintiff and the defendant, there is evidence that there was. The Agreement for hire of a grader is on record as Exh. P1. \par \par As to whether the defendant breached it, the consideration for the hire of the plaintiff\rquote s }{\insrsid858354\charrsid4290895 G}{\insrsid6958199\charrsid4290895 rader is stated as Shs.9}{\insrsid14645553\charrsid4290895 , 000,000}{ \insrsid6958199\charrsid4290895 =. The hire period was 15 days, effective the next working day after the Grader has arrived on site in Rukungiri. For any extra day agreed upon by the parties, the defendant was to pay a fee of Shs.600}{ \insrsid14645553\charrsid4290895 , 000}{\insrsid6958199\charrsid4290895 =. \par \par From the evidence of PW1 Luwalala Solomon and PW2 Sendawula, the Grader was delivered on site on 28/10/2006 and work commenced on 29/10/2006. \par \par From the agreement, half the contract price was paid on execution of the agreement and the balance was payable after the e xpiry of the first half hiring period and the owner was to issue a receipt for the payment. According to evidence of PW1 Luwalala, after the contractual period of seven days, he demanded for the balance of Shs.4}{\insrsid14645553\charrsid4290895 , 500,000}{\insrsid6958199\charrsid4290895 = but the defendant refused, ignored or neglected to pay it. \par \par There is a copy of a demand }{\insrsid858354\charrsid4290895 letter}{\insrsid6958199\charrsid4290895 on record. There is no}{\insrsid10684574\charrsid4290895 evidence of compliance with it. Given that work started on 29/10/2006, the 15 days ended on 12/11/2006. The unpaid balance in respect of this period is Shs.4}{\insrsid14645553\charrsid4290895 , 500,000}{\insrsid10684574\charrsid4290895 =. From the evidence of PW1 Luwalala and PW2 Sendawula, work went on till 17/11/2006, an extra 5 days (not 10 days as claimed by the plaintiff). According to PW1 Luwalala, after the expiry of the first seven days, the defendant refused to pay the balance a nd refused to take back the Grader to the source. For a number of days, the machine remained at the site. From the evidence of this witness, the extra time beyond the contractual 15 days was unwarranted. The plaintiff had studied the conduct of the def e ndant and decided to take a risk. Certain factors must be considered before damages in a case of this nature can be calculated. One such factor is the role of the injured party following the breach of the contract: he is expected to do what he can to lo ok after his own interest. The injured party must mitigate his loss. It was, in my view, up to the plaintiff to terminate the contract upon the defendant\rquote s failure to pay the balance on the contract price. The plaintiff took an unnecessary risk to continue serving a party who had exhibited proclivity to breach the contract at such an early stage. I\rquote m accordingly inclined to disallow the plaintiff \rquote s claim for the extra period beyond the contract }{\insrsid14645553\charrsid4290895 period of}{\insrsid10684574\charrsid4290895 15 days. Under this head the plaintiff is decreed a sum of Shs.4}{\insrsid14645553\charrsid4290895 , 500,000}{ \insrsid10684574\charrsid4290895 = only, being the balance on the contract price.}{\insrsid6958199\charrsid4290895 \par }{\insrsid10684574\charrsid4290895 \par The plaintiff also prays for a sum of Shs.300}{\insrsid14645553\charrsid4290895 , 000}{\insrsid10684574\charrsid4290895 = being expenditure on the Grader Operator and turn boy;}{\insrsid9991173\charrsid4290895 and Shs.}{\insrsid11747294\charrsid4290895 1 }{\insrsid14645553\charrsid4290895 , 800,000}{\insrsid11747294\charrsid4290895 = being the cost of transporting the Grader from Rukungir i to Kampala. From the contract document, the hirer was to be responsible for the remuneration of the driver/operator and turn boy for the Grader. The defendant was also responsible for the cost of transporting the Grader to Rukungiri and back to Kampal a. From the evidence of PW1 Luwalala, however, not only did the defendant fail to pay for the operator, it also failed to meet the cost of transporting the Grader back to Kampala. The return leg was met by the plaintiff at a cost of Shs.1}{ \insrsid14645553\charrsid4290895 , 800,000}{\insrsid11747294\charrsid4290895 = according to PW1. }{\insrsid10684574\charrsid4290895 \par }{\insrsid11747294\charrsid4290895 \par I have seen no reason to disallow these two claims. I allow them. \par \par The plaintiff\rquote s other prayer is for general damages. These are at large, meaning that the quantum is within the discretion of the Court. The plaintiff claims that it suffered inconvenience and loss of work due to the defendant\rquote s actions. I believe it did. The general principle is that general damages are awarded to compensate the plaintiff, not to punish the defendant.}{\insrsid11468915\charrsid4290895 The plaintiff proposed a figure of Shs.1}{ \insrsid14645553\charrsid4290895 , 000,000}{\insrsid11468915\charrsid4290895 = in the plaint.}{\insrsid11747294\charrsid4290895 \par }{\insrsid11468915\charrsid4290895 \par Working on the assumption that the plaintiff is entitled to general damages for the breach and doing the best I can in the circumstances of this case, I would award it general damages assessed at Shs.500,000= (five hundred thousand only). I do so. \par \par The plaintiff\rquote s other prayer is for interest. \par \par Interest is a discretionary remedy in a case of this nature. It is awarded whenever a }{\insrsid14645553\charrsid4290895 wrong doer}{\insrsid11468915\charrsid4290895 deprives the other of money which he needs to use in his business. An order for interest would compensate the plaintiff for the loss of use of its money from the time the suit was filed. Mere recovery of the principal }{\insrsid858354\charrsid4290895 sum }{\insrsid11468915\charrsid4290895 is not enough. \par \par For the reasons stated above, the award of }{\insrsid858354\charrsid4290895 special }{\insrsid11468915\charrsid4290895 damages amounting to Shs.}{\insrsid858354\charrsid4290895 6}{\insrsid14645553\charrsid4290895 , 600,000}{ \insrsid11468915\charrsid4290895 = shall attract interest at Court rate as prayed from the date of filing the suit till payment in full. \par \par The plaintiff shall also have the taxe}{\insrsid858354\charrsid4290895 d}{\insrsid11468915\charrsid4290895 costs of the suit. \par \par In the result, judgment is entered for the plaintiff against the defendant as follows: \par }\pard \qj \fi-720\li720\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid4290895 {\insrsid11468915\charrsid4290895 (i)\tab }{\insrsid858354\charrsid4290895 Special d}{\insrsid11468915\charrsid4290895 amages}{ \insrsid858354\charrsid4290895 :}{\insrsid11468915\charrsid4290895 Shs.}{\insrsid858354\charrsid4290895 6}{\insrsid14645553\charrsid4290895 , 600,000}{\insrsid11468915\charrsid4290895 = (}{\insrsid858354\charrsid4290895 six}{ \insrsid11468915\charrsid4290895 million }{\insrsid858354\charrsid4290895 six}{\insrsid11468915\charrsid4290895 hundred thousand only). \par }{\insrsid858354\charrsid4290895 (ii)\tab General damages: Shs.500}{\insrsid14645553\charrsid4290895 , 000}{\insrsid858354\charrsid4290895 = (five hundred thousand only). \par }{\insrsid11468915\charrsid4290895 (ii}{\insrsid858354\charrsid4290895 i}{\insrsid11468915\charrsid4290895 )\tab Interest on (i) above at Court rate from the date of filin}{\insrsid858354\charrsid4290895 g the suit till payment in full; and interest on (ii) at the same rate from the date of judgment till payment in full.}{\insrsid11468915\charrsid4290895 \par (i}{\insrsid858354\charrsid4290895 v}{\insrsid11468915\charrsid4290895 )\tab Costs of the suit. \par \par }{\insrsid2312481\charrsid4290895 \par }{\insrsid11468915\charrsid4290895 Yorokamu Bamwine \par }{\b\insrsid11468915\charrsid4290895 J U D G E \par }{\insrsid11468915\charrsid4290895 12/11/2007 \par \par 12/11/2007 \par Mr. Mugerwa Vincent for plaintiff. \par Parties absent. \par \par }{\b\insrsid11468915\charrsid4290895 Court:}{\insrsid11468915\charrsid4290895 Judgment delivered. \par \par Yorokamu Bamwine \par }{\b\insrsid11468915\charrsid4290895 J U D G E \par }{\insrsid11468915\charrsid4290895 12/11/2007 \par }}