The Commercial Case Law Index is a collection of judgments from African countries on topics relating to commercial legal practice. The collection aims to provide a snapshot of commercial legal practice in a country, rather than present solely traditionally "reportable" cases. The index currently covers 400 judgments from Uganda, Tanzania, Nigeria, Ghana and South Africa.
Get started on finding judgments that are relevant to you by browsing the topic list on the left of the screen. Click the arrows next to the topic names to reveal a detailed list of sub-topics. Most judgments are accompanied by a short summary written by subject-matter expert postgraduate students from the University of Cape Town.
The applicant is appealing the judgment in its favour from a civil suit it instituted against the respondent. The review was brought on the ground of mistake or error apparent on the face of the record.
The civil suit sought a declaration that the respondents’ auction of the applicants’ 6990 beds of sugar was unlawful, and the court held that it was. However, the court awarded damages for the sale 736 unaccounted bags instead of 6990 unaccounted bags, which was the evidence on record and finding of the court. The sales were in breach of s 57(2) of the East African Community Customs Management Act.
The respondents filed a notice of appeal against the judgment, and contended that there was no error apparent on the face of the record. The award for 736 bags was based on evidence in which the applicant acknowledged that the respondent had accounted for 6254 bags. It was held that the applicant was entitled to file an application for review pending the appeal by the respondent.
The issue for determination was whether there was an error or mistake apparent on the face of the record.
The court held that the judgment was reviewed to the extent that it was erroneous to order special damages for 736 bags, which number was correct. The correct order was the difference between the applicant’s claim and the amount at which the sugar was auctioned; not special damages. The court substituted the amount with the sum of the difference, which was approximate 190 million Ugandan shillings.
This case concerned an application for an injunction restraining the respondents from selling or enforcing a mortgage in respect of the applicant’s mortgaged properties, pending the determination of a civil suit.
A preliminary objection was raised that the second, third, fourth and fifth applicants’ application was not supported by affidavit evidence. The court held that the first applicant’s supporting affidavit and supplementary affidavit would remain intact, and the applicant’s case would survive. Striking out the second to fifth applicants would not do away with the substance of the application.
The grounds for granting an injunction are that the applicant must prove a prima facie case with a likelihood of success; the applicant is likely to suffer irreparable injury that would not be adequately compensated for by damages; and if the court is in doubt it will decide the matter on a balance of convenience. As regards the first ground the court held that there was no prima facie case or serious question to be tried that had the potential of avoiding realization of the outstanding loan amount. This ground was based on whether the contract between the applicant and first respondent was frustrated, in that the applicant was still awaiting payment for the petroleum products sold; the purchase of which was funded by a loan from the respondent. As a result, the applicant contended it could not repay the loan. Evidence showed that there was a delay in payment, and not frustration of contract.
The application for an injunction was dismissed.
The plaintiff brought an action for breach of contract, for the defendant to pay the balance of the money paid by the plaintiff to the defendant in terms of their contract, and for interest on the amount.
The sourt held that on the evidence the defendant failed to deliver all the sugar within the seven weeks. The defendants did not adduce any evidence to the contrary, and the plaintiff was entitled to refund of the money paid for the sugar. The issue was whether general damages ought to be awarded in addition to interest on the outstanding amount.
Section 50 of the Sale of Goods Act provided that the remedy for wrongful non-delivery was damages. The measure was the estimated loss directly and naturally resulting in the ordinary course of events from the seller’s breach of contract. General damages will usually be awarded to place the plaintiff in as close a position as possible they would have been had the injury not occurred. Where interest is awarded for deprivation of monies to be paid, then general damages will not be awarded in addition to interest. The award of interest would place the plaintiff in its original position.
The court held that the plaintiff did not adduce evidence of what loss was suffered to warrant an award of general damages. Interest was therefore awarded in lieu of general damages.
This was an action claiming monies allegedly siphoned from the plaintiff’s bank account with the participation and/or collusion of the defendant; and damages for the defendant’s breach of the fiduciary duty as branch manager. The defendant filed a counterclaim that his continued suspension and dismissal was unlawful.
The issues for consideration were whether the defendant caused financial loss to the plaintiff; whether the suspension and/or dismissal was lawful; and the available remedies.
Regarding the first issue, the court held that the suit rested on the allegation that the defendant kept 26 cheques. The court held that it was not proved that the defendant kept the cheques beyond the three days alleged by the plaintiff; however the court found that the defendant knew the cheques were kept beyond the three days. As a result, the defendant was jointly liable with a Mr Patrick Kigongo.
On the second issue, the court held that the plaintiff was entitled to suspend the defendant as he was charged with a criminal offence. Management may dismiss an employee who was facing criminal prosecution if their continued employment would prejudice the interests of the bank. However, the defendant was suspended without pay contrary to regulation 30 of the terms and conditions of service; and the termination was without notice of disciplinary action, without a right of defence, and was thus unlawful.
The plaintiff was awarded general damages. The defendant was awarded his full salary from the date of suspension until the date of termination.
This was an application for leave to appear and defend a summary suit brought under the provisions of Order 36 rule 1 and Order 52 rule 3 of the Civil Procedure Rules.
The main issue before the court was whether the applicants’ defence was genuine and in good faith to warrant the leave. The respondents raised a preliminary objection to the application claiming that the application was filed out of time. They also accused the first and fourth applicants of forgery and submitted that representation by the applicants’ counsel was illegal since she had signed the supporting affidavit.
The court held that the application was filed in time due to lack of evidence to prove a false endorsement or forgery of the filed application. The court relied on Rule 9 of the Advocates (Professional Conduct) Regulations SI 267 – 2 in holding that the rule was not violated since the court was addressed in written submissions and this reduced the likelihood of counsel for the applicants to appear as a witness in the case. The court also applied the principle of company law that shareholders are separate from the company and declared that there was a misjoinder of the first to fourth applicants.
In conclusion, the court held that the application succeeded since the applicants raised a plausible defence to the claim. Accordingly, the applicants were given an unconditional leave to file a defence against the respondent’s suit within 14 days from the date of the order.
The Uganda Land Commission transferred a
parcel of land to the first respondent in 2005,
which leased the land to the second
respondent. In 2006, the appellant wrote to
the Ugandan Land Commission and received
a lease offer for the same land that had
already been transferred to the first
respondent. Both the respondents and the
appellant have been issued a certificate of
title for the same property. In first instance,
the trial judge ruled in favour of the
respondents. The appellant then filed an
appeal.
The appellant was dissatisfied with the
decision and orders of the court of appeal
hence this appeal on the grounds of the right of
appeal from the orders under arbitration and
conciliation, reliance on the commission of
inquiry report, decision to set aside the
decision of the high court.
The background is that the appellant had a
contract to construct an annex to the existing
Mbale Resort. The construction wasn’t
complete and the matter was referred to
arbitration and several orders and awards were
made. The arbitral award was contested and at
appeal, an objection on a point of law was
raised that there was no right of appeal as the
award arose out of arbitration.
The court was called upon to determine the authority of the Uganda Revenue Authority to transfer tax liability and collect money from bankers holding money for alleged offenders under the VAT Act.
The court decided 2 of 5 agreed points of law. Firstly, the court considered whether the defendant's decision to impose and transfer a tax liability of Uganda Shillings 5,553,634,271/= from SureTelecom Uganda Limited to the 1st plaintiff was legal. The court held that the purported transfer of liability from SureTelecom Uganda Limited was unlawful because it infringed the right of the first Plaintiff to be charged and tried before a court of law or an independent tribunal for the offence which the penal tax was imposed. The court agreed with the defendant that it was acceptable for a director of a company to be held liable for the offences of a company in absence of proof that they lacked knowledge of the offence or had tried to stop the commission thereof. However, the court noted that the Commissioner had compounded the offence prior to court proceedings without having an admission from the first plaintiff and thus violated his fundamental right to a fair hearing as envisaged by section 28 of the Constitution. Accordingly, the court found in favour of the first plaintiff. Secondly, the court considered whether the defendant’s act of issuing agency notices to and subsequently collecting USD 800,000 from the 2nd Plaintiff’s bankers in respect of the 1st Plaintiff’s tax liability is lawful or legal. Based on the determination of the previous issue, the court found in favour of both plaintiffs in this issue.
The plaintiff instituted an action against the defendant to recover a sum of money owed to the plaintiff for the construction of a television complex constructed by the plaintiff on the defendant’s premises. The defendant submitted a counterclaim.
The court was faced with a number of issues to resolve, namely: whether the deed of variation entered into by the parties was void for illegality; whether the plaintiff breached he contract; whether the plaintiff is entitled to any remedies and whether the defendant is entitled to their counter claim.
The court held that (i) the deed of variation was enforceable; (ii) the plaintiff was not in breach of contract; (iii) the counter claim by the defendant must fail and that the plaintiff was entitled to remedies for the sum withheld.
The court relied on existing legislation to distinguish between variation and amendment- the former dealt with changes in the contract relating to the price, completion date or statement of requirements of the contract and the latter related to changes in terms and conditions of the awarded contract. The court relied on witness testimonies from which it determined that the plaintiff was not in breach of contract.
The defendant’s counterclaim was dismissed, and the plaintiff awarded Shs 749,884,386 being the money owed to it by the defendant. Interest was set at 19% p.a. Costs were ordered in favour of plaintiff.
The court considered whether the petitioner was unable to pay his debts, a bankruptcy order could be granted and whether the petitioner had any properties to be administered by a trustee in bankruptcy.
The court held that a petitioner must prove that he is unable to pay his debts exceeding Uganda Shillings fifty million in terms of Insolvency Act s 3. Further, once a debtor files a petition the court has the jurisdiction to determine the matter as it deems fit and order is granted where the petitioner has filed a statement of affairs with the official receiver in terms of s 4 of the act.
The court found that the petitioner had shown that he was unable to pay his debts by attaching his statements of account. The petitioner also did not file his statement with the official receiver.
Accordingly, the court dismissed the petition.
The court made a ruling on a preliminary objection raised against a suit filed by the respondent to review a consent judgment executed between the applicants and the Uganda Revenue Authority. The applicants submitted that the respondent lacked locus standi to make the application according to Order 46 rule 1 of the Civil Procedure Rules.
The court went into some detail and examined who a ‘person aggrieved’ is. It was held that the expression referred to a person who suffered a legal grievance. However, the court in its interpretation followed English law and held that the expression cannot be restricted to definite categories with sharp definitive lines (restrictive interpretation). Consequently, the court held that the expression would also cover public interest litigation as embodied in the Ugandan Constitution, to include a member of the public who brings an action to ensure that the law is enforced or upheld.
The court noted that the objection was procedural and that the respondent’s application for review was procedurally incorrect since it was framed as a public interest litigation application. The court therefore determined that the main issue before it was whether a wrong procedure invalidates the proceedings. The court relied on article 126(2)(e) of the constitution in making a holding that the court had jurisdiction to determine the matter without undue regard to the technicalities.
Accordingly, the court dismissed the application with costs.
This was a ruling on an application for a temporary injunction to restrain the respondent from using or trading in goods bearing the applicant’s registered trademark (moon with a logo).
The competitors in this case were in the same industry trading in textile materials and goods under the logos ‘Purple Moon Uganda Limited’ established in Uganda (applicant) and ‘Z moon Purple moon’ established in China (respondent). The court applied the principle of territoriality and held that the applicant was the registered owner of the trademark in dispute and had the right to stop the respondent from using the mark.
The court held that the respondent’s mark was infringing since it was similar in wording (moon) to the applicant’s registered mark in Uganda and was likely to deceive customers in the course of trade.
The court also determined whether the respondent had the capacity (locus standi) to challenge registration of a trademark in Uganda. The court applied the rule that an agent of an owner of a registered mark in a Paris Convention member country had such capacity. The court observed that the respondents were not agents of the two companies that had registered the trademark in China thus lacked capacity.
Accordingly, the court issued the injunction as prayed for and costs of the application subject to the outcome of the main suit.
The plaintiff instituted a civil action against the defendant for breach of contract and sought the following remedies: an order for specific performance, special damages, general damages and interest.
The court had to consider whether the plaintiff had a cause of action, whether the defendant was in breach or failed to perform and whether the plaintiff was entitled to any relief.
The court held that a cause of action existed and that the defendant was indeed in breach as he failed to perform his part of the bargain, consequently the plaintiff was entitled to relief.
The court stated that where a plaintiff has a liquidated demand, there is no need to assess the demand where no defense is presented. The court relied on previous judgments that made a distinction between a liquidated demand and pecuniary damages. With further reliance on existing civil procedure legislation, the court found that the plaintiff was entitled to judgement based on the liquidated demand.
The court awarded judgment in favour of the plaintiff for the amount on the liquidated demand. Due to no evidence being led, relief in the form of special and general damages was not awarded. The court granted the plaintiff 10% interest on the amount in the liquidated demand.
The plaintiffs sued the defendant for breach of contract. The first plaintiff claimed US $190,747 for services rendered to the defendant. The second plaintiff claimed US $3,085 being the outstanding balance for provision of services to the defendant before their contract was terminated. The plaintiffs each reached a settlement agreement in which the defendant was going to pay a portion of the claimed amount.
The plaintiffs later claimed they concluded the first payment under duress, and sought the full amounts originally claimed plus interest.
The defended raised a defence of res judicata on the grounds that the case was premised on a subject matter which has been previously decided. It produced letters of acknowledgment of full payment.
The court dismissed the res judicata defence on the basis that this was a different case because there were new parties and that the plaintiffs were now seeking interest. However, the court held that there was no evidence of duress and if the plaintiffs were assaulted they should have made a police report. The court ruled that it cannot ignore the letter of acknowledgement of full payment on the grounds that a contract entered by parties should be respected.
The case was dismissed with costs.
The first issue was whether the defendant was immune from suit. The court established from legislation that protection applied against legislative and executive actions of member states and did not extend to private parties bringing a suit. It reasoned that fairness and public policy demanded for individual parties contracting with the defendant to have recourse when there is breach. Third parties could therefore sue.
The second question was whether interest rate revisions made without notice were unlawful and amounted to breach. The court observed there was no evidence of formal service of written notification for the revised rates. It also reasoned that the subsequent service would not amount to a retrospective application of the rates. It thus concluded that the interest rates prior to the notification were unlawful and in breach and, to compensate for the unlawful deprivation, ordered the refund of the unlawfully paid amounts plus general damages and interest costs.
Finally, the court had to decide whether the interest upon default penalty imposed on the applicant were harsh and unconscionable and therefore unlawful. From assessing legislation and case law the court found that generally interest upon penalty is considered legitimate to compensate better for pre-estimated damages from default. However, it is required that it be genuine and reasonably relative to the legitimate enforcement of the primary obligation so as to not impose a disproportionate detriment to the defaulter. Since the plaintiff had failed to prove unreasonableness and harshness of interest rates, the court could not find reason to declare them unconscionable.
The matter arose from a dispute about the detention of goods belonging to the second plaintiff by the defendant.
The first issue was whether the detention was lawful. Section 214 of the East African Community Customs Act required notice of detention to owners when known. As ownership was not clear, the court observed that notice was not necessary. It also further reasoned that the conduct of the defendant did not amount to seizure as the goods were already in their hands with the knowledge of owners before they were impounded. The court thus held lack of notice did not breach the legislation and therefore not unlawful.
On whether the goods were wrongfully detained, the court reasoned that the act of holding out representation of title by the second plaintiff and the allegations of fraud was cause for investigation by the defendants and consequent detention pending investigation of ownership. Further, the defendant was legally obliged to hold on to the goods as a lien pending the demand of payment of tax. The detention was therefore lawful.
Lastly, the court considered whether the MoU entered into by the plaintiffs and defendant was entered into by duress. Citing Pao On v Lau [1979] 3 ALL ER 65 for factors to prove duress, the court noted that the plaintiffs protested and denied indebtedness arising from the memorandum of understanding (MoU) but did not necessarily repudiate immediately or seek redress. It thus reasoned that the actions of the plaintiff did not show duress and therefore held the MoU was entered without duress.
The plaintiff was a registered owner of "Feathers" sanitary pads and claimed that the defendant imported "Featlhers" sanitary pads to be sold in Uganda. The court considered whether the plaintiff had exclusive use of a trademark which was infringed by importation and sale of a product.
The court held that s 36 of the Trade Marks Act grants exclusive use of a mark, which is infringed if a person who is not the owner of that mark uses it and causes confusion to average consumers. Civil proceedings may be instituted in terms of s 79(1). According to ss 79(3) and (4), the grant of an injunction does not affect a claim of damages, direct loss of sales and consequent loss of profits as well as the depreciation of the goodwill. Section 81(1) provides that one available form of relief is an account of profits to the plaintiff.
The court found that the plaintiff had exclusive use of the trademark. Despite the minor differences the goods were the same visually, conceptually, phonetically and belonged to the same class of goods. Therefore, concluded that the goods would likely confuse reasonable consumers. The defendants were guilty of infringement of the trademark by selling and importation of the sanitary pads. The plaintiff did not deal with the actual loss of sales, and no evidence was adduced to show that the counterfeit goods were circulating in Uganda.
The plaintiff's complaints were upheld. The court granted costs, ordered the destruction of the impounded goods, permanent injunction and general damages.
This is a case relating to to a contractual dispute where the plaintiff was suing the defendant for breach of contract.
The defendant had been contracted by the Uganda Revenue Authority to construct a border post. The defendant then sub-contracted the plaintiff to perform certain work under three contracts. The plaintiff alleged that the defendant unlawfully terminated one of the contracts after they demanded payment. The defendant contended that it was the plaintiff who unilaterally terminated the contract by halting work at the site resulting in the defendant taking over the work. The defendant further counter-claimed that the plaintiff used some of their equipment and as result the plaintiff owes them compensation.
The court held that there were disparities between the plaintiff’s witnesses and that the defendant did not unilaterally terminate the contract. It ruled that the defendant could not be held liable for any sum of money beyond payment for work the plaintiff had actually performed. The court also found that there was no evidence to show that the amount of work done was to a value in excess of what was paid.
The case was dismissed. The counter-claim was equally dismissed for lack of evidence
The issue was whether an arbitrator has power to amend a contract.
The applicant was challenging an arbitral decision arguing that the composition of the arbitration tribunal and the award itself were wrong. It argued that the arbitrator dealt with an issue which was not contemplated by the parties and that he amended the subject contract in contravention of clause 10 of the contract. The applicant further alleged that the conduct of the arbitrator showed bias in favor of the respondents.
The respondent on the other hand argued that there was no evidence to show that the arbitrator was partial. They further contended that there was no contravention of clause 10 because the amendments were made in terms of clause 13 of contract.
In deciding the case, the court held that amendments to the contract cannot be made without consensus of each party. It ruled that an amendment in terms of clause 13 required an arbitrator appointed in accordance with that provision. It further held that the clause 10.2 of the contract only allowed an amendment by agreement in writing by both parties which was not the case in the matter before the court.
On allegations of partiality of the arbitrator, the court found that communication between the applicant and respondent shows likelihood of bias. The court further ruled that the composition of the tribunal was not in accordance with the contract. All these amounted to breach of the Arbitration and Conciliation Act. The arbitration award was set aside.
The dispute emanated from the arrest of the plaintiff’s workers on the instruction of defendant, the National Forestry Authority on allegation of illegally felling trees. This was despite the fact that the plaintiff was licensed to harvest the trees. The plaintiff was forced to pay 150 000 shillings for the tools and logs impounded by the police.
The plaintiff claimed compensation amounting to 3 million shillings for mistreatment, mental health and psychological torture at the hands of the defendant. She further claimed special damages for loss of income. The plaintiff submitted that the defendant breached the license awarded to the plaintiff to harvest abandoned logs
The defendant contended that that the plaintiff breached her license by illegally harvesting timber beyond what was permitted by the license. It argued that the plaintiff’s claim was outrageous in view of the fact that she abandoned the license and that the allegations of mistreatment was frivolous. On special damages, the defended argued that the plaintiff failed to produce evidence to show any loss.
In deciding the matter, the court held that the defendant was in breach of its obligations towards the plaintiff and awarded damages of 3 million shillings for breach of the contract, lost opportunities and inconveniences suffered. The claim for special damages was dismissed.
The issue was whether a failure to comply with court rules directing a witness to file statements in time affects the litigation process.
The plaintiff claimed US $14,000 being money paid to the defendant for an apartment. The plaintiff rescinded the agreement and claimed a refund. The defendants raised an objection to one of witness statements arguing that it was filed out of time limits set by court rules. The defendants’ objection was based on the grounds that admitting the statement was prejudicial to the defendant’s case.
The plaintiff opposed the preliminary objection arguing that statement was filed to expedite the hearing rather than to leave the witness out of court, and the witness’ statement was not part of civil procedure. The plaintiff argued that there was no prejudice caused because the statement was not different substantially from the one submitted by the plaintiff.
The court held that rule 6(4) of the Constitution (Commercial Court) Practice Directions sets time limits that should be adhered to; extensions should be granted in special circumstances. It ruled that in the interest of justice the plaintiff’s witness should be heard and must be granted leave to file the witness statement out of time.
This case looked at the whether the veil of incorporation could be lifted and the defendants held liable for the debt of the company. The court looked at the instances when lifting of the corporate veil was applicable. There are three instances when the veil of incorporation can be lifted. 1) when a court in construing a statute, contract or other documents; 2) when the court is satisfied that the company is a mere façade concealing the true facts and 3) when it is established that the company is an authorized agent of its members/directors.
Further, the veil of incorporation can be lifted when the veil of incorporation is used as an instrument of fraud. The standard of proof required in cases of fraud is more onerous that the ordinary balance of probabilities. Section 20 of the Companies Act (‘the act’) empowers a court to lift the veil of incorporation against directors where there is any involvement in fraud by the directors. Fraud was defined to mean any act of dishonesty or actual fraud.
The court found in this case that the plaintiff was barred from instituting action against the defendants. Accordingly, the claim was dismissed with costs.
The plaintiff was contracted to supply a fleet of vehicles to the defendant. The parties agreed that the plaintiff would supply the vehicles on the specified date of the launch of a fundraising drive; as the cars were required as prizes in a lottery. Upon delivery, the defendant was to ensure that 100% of the purchase price was paid within two weeks after the launch.
The plaintiff supplied four vehicles timeously but the remaining were allegedly delivered late. The defendant subsequently failed to make payment for the vehicles. The plaintiff filed an action for breach of contract. The issue before the court was whether the defendant was liable for breach of contract and whether the plaintiff was entitled to the remedies sought.
This court held that the loss which the plaintiff claimed to have incurred was self-inflicted. This court found the plaintiff’s suit had no merit and suite was dismissed. The reason being that the plaintiff’s evidence was said to not proven supply of vehicles and breach of contract on the defendant's part.
The defendant procured the services of the plaintiff for upgrades to some of the city’s drainage sites. Following the defendant’s non-payment – pursuant to the issuing of several interim payment certificates by the project manager – the plaintiff terminated the contract, upon which time a final certificate was issued by the project manager for work hitherto completed, in observance of the agreement’s termination procedure. The defendant objected to the payable figures outlined in the final certificate due to its apparent failure to factor in alleged performance anomalies on the part of the plaintiff. The defendant unilaterally reviewed the certificates before issuing a final certificate with a reduced outstanding fee. Establishing which set of certificates was legally enforceable formed the heart of the dispute.
The court ruled in favour of the plaintiff, finding the defendant’s claims to be substantially impaired on several grounds. The regulations impacting the issue and review of payment certificates came into force after the conclusion of the contract, so general legal principles and the agreement’s terms took precedence in the court’s analysis. The defendant’s unilateral amendment of the final certificate did not accord with the parties’ General Conditions of Contract; it was not delivered to the plaintiff nor agreed to in writing thereby.
The issuing of final certificates creates a liquid debt – discrepancies ought to have been raised prior to certification and resolved by adjudication or arbitration as per the parties’ agreement. Failing this, the court found that the set-off sought by the plaintiff ought to have been raised in the current suit via counter-claim and not through unilateral adjustment of the final certificate.
The defendant was found further to have misrepresented a final certificate of completion to the plaintiff, following the project manager’s issuing thereof, and consequently estopped from raising the erroneous conduct of its project manager as a justification for its non-payment. The plaintiff was awarded damages with interest reflecting the conventional rate for commercial banking.
The plaintiff’s action against the defendant is for a declaration that the defendant breached the contract executed with the plaintiff for the supply of 1000 metric tons of bitumen.
The issue was whether the defendant breached the contract entered with the plaintiff. The court held that it amounted to a breach of a contract whilst reiterating that the plaintiff made it impossible for the defendant to perform the contract.
The court considered whether the defendant breached the contract for the agreed timeline or the plaintiff breached the contract by failure to take the supply of what the plaintiff ordered hence the counterclaim. It was then a question of fact as to whether any contract is frustrated by any even or factor looking into the obligations of the parties. In this case the frustrating event advanced by the defendant is blockage of its money.
The court explained the principle of frustration. Section 66 (1) of the Contracts Act 2010 provides for discharge of parties to a contract from future performance of the contract unless the opposite party assumed the risk of impossibility. It simply means that both parties ought to be discharged of their obligations for the future performance of the contract. In other words the defendant is discharged from the supply obligation as much as the plaintiff is discharged from the obligations of a buyer.
The court ruled that the contract had not been frustrated and the defendant was in breach of contract.
The dispute related to a piece of land that was held by the applicant as tenants in common who thereafter entered into an agreement to sell the land to the respondent. The agreement included terms for initial payment and payment of the balance when handing over the property.
The respondent took possession of the land after paying the balance when he signed the land transfer form. However, the respondent averred that title to the land was never transferred. The appellants contended that the respondent failed to pay the remaining amount so sold it to a third party.
After several delays, the appellant’s lawyers did not appear at trial, and the court heard the matter and entered ex parte judgment in favour of the respondents. The appellants contended that a hearing notice to proceed without the appellants (ex parte) was not served on them.
The Court of Appeal held that an ex parte judgment can only be set aside if there is a sufficient cause and the failure to serve the notice for hearing is not one of the grounds for setting aside the ex parte judgment. The court held that the ex parte judgment could not be set aside.
The dispute related to a piece of land that was held by the applicant as tenants in common who thereafter entered into an agreement to sell the land to the respondent. The agreement included terms for initial payment and payment of the balance when handing over the property.
The respondent took possession of the land after paying the balance when he signed the land transfer form. However, the respondent averred that title to the land was never transferred. The appellants contended that the respondent failed to pay the remaining amount so sold it to a third party.
After several delays, the appellant’s lawyers did not appear at trial, and the court heard the matter and entered ex parte judgment in favour of the respondents. The appellants contended that a hearing notice to proceed without the appellants (ex parte) was not served on them.
The Court of Appeal held that an ex parte judgment can only be set aside if there is a sufficient cause and the failure to serve the notice for hearing is not one of the grounds for setting aside the ex parte judgment. The court held that the ex parte judgment could not be set aside.
In 1998 the appellant filed a suit against the respondent, to which the responded reacted with a counter-claim. The appellant’s claim was withdrawn in 2006 but the respondent’s counter-claim was not. The trial judge ruled in favour of the respondent. The appellants were dissatisfied with the decision and filed an appeal.
The Court of Appeal considered whether the burden of proof of fraud alleged in the counter-suit rested on the appellants. The court held that the burden of proof rests on the party who alleges that fraud was committed. In this case, the appellants had withdrawn their case against the respondent and only the respondent’s counter-claim remained. Consequently, the court upheld the appellant’s complaint and placed the burden to prove that fraud was committed on the respondent.
The court then considered whether the lease of the suit property to the first appellant was fraudulent and reviewed the lower court’s order in cancellation. The court held that fraud must be specifically pleaded and strictly proved and cannot be left to be inferred from the facts. Neither party attempted to prove fraud against the other. Therefore, the courts held that the lease of the suit property to the first appellant was not fraudulent and that the trial judge should not have cancelled the first appellant’s certificate of title.
The court also considered whether the respondent’s lease agreement was breached because the first appellant denied the respondent possession of the suit land and reviewed the lower court’s order to extend the respondents lease. The court found that the respondent was in breach of contract and, therefore, had no right of possession and overturned the trial judge’s order to extend the respondent’s lease because the respondent had failed to request it in due course.
All grounds of the appeal succeeded.
The matter involved a dispute over the charging of taxes on the plaintiff on imports of sugar under a duty-free license.
The main issue was whether the sugar was imported after expiry of the six-month license. The court considered the definition of ‘import’ in the East African Community Customs Management Act (EACCMA) and established that since importation was allowed under East African Community Law the definition covered bringing of the goods into a Partner State. It also looked at the time of importation in the act which it gave as the point at which the goods come within the boundaries of the Partner States. Having looked at the powers that enabled the granting of the licenses to import by the Minister of Trade, Industry and Co-operatives as being sourced from East African Community law, the court thus reached that the goods had been imported within the period of granting of the license when they arrived in Mombasa in October 2011. Since the sugar in question was imported within time it was concluded to have been part of the sugar exempted from customs duty by East African Community law. Held the assessment for import duty of the plaintiff by the defendant was wrongful.
The court thus allowed for a refund of duties charged on sugar sold within Uganda with interest costs but denied all other damages arising from goods re-exported to other countries on the reasoning that the re-exports contravened the terms of the license.
In this case the plaintiff claimed for special and general damages against the defendant for fraud and conversion of the plaintiff’s petroleum products. The case deals with fraud, where the party that benefited was not a bona fide purchaser of the products in this case. The court considered whether the defendant had good title for the products sold to him by the third party. Whether the defendant had a claim against the third party and whether there were remedies available to the parties.
In dealing with the first issue the court considered whether the defendant had acquired a better title than the mysterious seller had because the mysterious seller did not have any title to the good. The court applied the general rule in the latin maxim nemo dat quod non habet which was reflected in section 22 (1) of the Sale of Goods Act. The court found that the mysterious seller had no title to pass to the defendant and thus the defendant never acquired good title to the property. Therefore, the defendant was liable to make good any loss suffered by the plaintiff as a result of the conversion of the plaintiff’s goods.
In considering the second issue, the court found that the defendant had proved the transaction it had made with the third party and was therefore indemnified against the third party.
In considering the remedies available to the parties, the court held that general damages are compensatory to fulfil the principle of restitution in integrum which aims at restoring the plaintiff as nearly as possible to the position he or she would have been had the injury not occurred.
Therefore, the court upheld the plaintiff’s claim with costs.
The court also held that for the indemnity suit against the third party, the third party was to settle all liabilities ordered against the defendant less the amount against the defendant.
The defendant had rejected a claim of a certain amount as allowable tax deductions by the plaintiff. This case reconciles the different calculations for bad debts used according to the Financial Institution Act and the 2005 regulations on the other hand the Income Tax Act (ITA) International Financial Reporting Standards (IFRS).
The court considered whether the assessment followed by the defendant was unlawful.
The court held that it was not required to determine which methodology was more consistent with the ITA section 24. The rationale for accounting methods should not depart from what is provided under the ITA, which is the parent act. Therefore, the definition of a bad debt should be based on the ITA under. The court considered the practice note which had the interpretation of the Commissioner General and held that section 160 of the ITA must be followed because the practice note is only binding on the Commissioner General and her personnel. The court held that section 24 deals with deductions of bad debts and the conditions to be fulfilled for deduction must apply. Thus, the court held that a bad debt under section is allowable as a deduction under section 24.
The court held that the plaintiff was obliged to make provision for bad debts which meet the criteria under section 24 of the ITA and the practice note issued by the Commissioner, file accounts with the Bank of Uganda and be up to standard under the IFRS.
The court also considered whether the plaintiff had to comply with the Bank of Uganda Circular that regulated deductibility of bad debts for income tax. The court held that the circular was not binding because it does not deal with whether a bad debt is an allowable deduction or not.
The court was satisfied that the above sum was a bad debt that is supposed to be an allowable deduction under section 22 and 24 of the ITA.