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 appellant sought to overturn a taxation ruling of the Deputy Registrar, contending that the latter had erred in fact and law in coming to its decision. The order prohibited the appellant from charging its client certain fees for services rendered over and above the initial instruction costs.
The Registrar had found that the appellant was estopped from claiming the fees due to the allegedly misleading way it had conducted itself in respect of the client regarding the anticipated bill of costs. The appellate court upheld the challenge, finding that the provisions of the Advocates Act expressly regulated the exclusion of bills of costs, thereby limiting – in terms of s 14 of the Judicature Act – the High Court’s discretion to apply principles of equitability when adjudicating disputes of this nature.
Both legislation and case law affirmed the appellant’s right to taxation of its bill of costs against the respondent, as it had met the relevant statutory requirements.
This was an appeal from decision of the Court of Appeal on grounds that;
The Justices of Appeal erred in law and fact when they granted orders for
cancellation of the fifth appellant’s title to the suit property which was neither
sought nor pleaded by the respondents, thereby occasioning miscarriage of
The court considered an application under 0.37 rr.1 and 9 of the Civil Procedure rules (S.1,65-3) for a temporary injunction restraining the defendant from carrying out any work on the suit premises.
The applicant was the registered proprietor of the premises, although the leases had expired on the land, the title had not been cancelled.
The court found that granting a temporary injunction is an exercise of judicial discretion and the purpose of the granting is preserving matters in status quo until the question to be investigated can be finally disposed of.
The conditions for a grant of injunction are that there must be a prima facie (meaning on the face of it) case with a probability of success, if irreparable harm will be suffered which cannot be compensated adequately by an award for damages and if in doubt, it will be declined on a balance of convenience.
Irreparable injury does not mean there must not be physical possibility of repairing the injury, but that the injury is substantial or material.
The court found that if a prima facie case with a probability of success was proved, the plaintiff would be likely to suffer irreparable damages and the balance of convenience was in favour of the plaintiff as he was likely to suffer more damages than that of the defendant.
The matter involved an application for the setting aside of an order for default judgment and the order of execution of the default decree. It also involved an application for unconditional leave to defend the underlying suit that gave rise to the default judgment.
Substantively, the first issue was whether the applicant had been aware of the summons to defend the suit for the amount claimed. It was established that there was a serious flaw in the service by respondents particularly in the absence of a return of service summons. There was therefore no evidence of summons or a court order being served to the applicant on the court record and the application for leave to defend outside the stipulated timeframe could not be said to be in breach of a court order. Further, it was also held that the absence of effective summons justified the setting aside of the default decree.
Secondly, there was a question of the legality of the suit brought against the appellant for default as it was argued that the basis was an illegal instrument. As there was an argument that the cheque and acknowledgement the suit was based on were forged, the court reasoned that there was no difference between the signature on the cheque and on the acknowledgment. However, as there was no forensic evidence supporting this, the court offered the applicant conditional leave to defend the underlying suit against him. The court therefore concluded under a conditional pretext of the suit’s illegality and thus allowed the application for conditional leave to defend.
The court considered the conditions to grant a temporary injunction.
The application was brought by the applicants as a means to prevent the respondent from alienating and disposing of the land mortgaged by the applicants.
The court found that the conditions for the grant of a temporary injunction are: 1) show a prima facie (meaning on the face of it) case with a probability of success, 2) irreparable harm will be suffered without the possibility of adequate compensation for damages, and 3) a balance of convenience.
The court held that the grant of a temporary injunction is an exercise of the courts discretion as a means to maintaining the status quo until the question to be investigated is tried on the merits, and disposed of in finality.
The court found that the applicants hadn’t set out a prima facie case and the application lacked merits. However, as a result of procedural errors, the court found that a conditional injunction could be granted.
The applicant instituted a civil suit against the respondent in 2013 in a lower court. This suit was in relation to a consulting and ICT support services fees provided by the applicant for the respondent. With the applicant having not taken any step to prosecute the matter since 2013, the respondent applied to have the suit dismissed for want of prosecution. The court accordingly dismissed the suit.
In this court, the applicant sought an order to reinstate this civil suit and set aside the dismissal. The respondent contended that the applicant’s failure to take steps to prosecute the suit against the respondent for over three years, was justification for dismissal of want of prosecution. Furthermore, the applicant had not shown any justification for failure to take these requisite steps.
The respondent thus claimed that this application would prejudice him as he had been burdened by the suit since 2013.
This court held that the reinstatement of this civil suit would indeed prejudice the respondent. The application was dismissed on the grounds that it defeats the defence of limitation (as the claim or suit proceeded out of time) available to the respondent.
Trademark – Infringing mark resembles with the plaintiff’s mark – Infringement proved
The plaintiff supplier sued the defendant – its Local Technical Representative (LTR) in accordance with the National Drug Authority Act for the distribution of pharmaceutical products – for breach of contract. The defendant failed to pay the plaintiff for the assorted products it supplied. The plaintiff consequently claimed for loss of income, damages, interest and costs of suit. The defendant lodged a counter-claim alleging that the plaintiff/first counter-defendant had breached the memorandum of understanding concluded between the parties and had, through various means, attempted to cripple the defendant’s/counter-claimant’s enterprise. It alleged further, as the basis of its challenge to the legality of the arrangement between the first and second counter-defendants, that the just-mentioned parties had colluded in this endeavour so as allow the latter to become the new LTR.
The defendants/counter-claimants successfully raised the procedural bar of res judicata – which prohibits judicially-decided matters from being heard afresh a second time – concerning the plaintiff’s claim, given that the matter of their indebtedness thereto had been resolved in the settlement of antecedent winding-up proceedings. To what extent ought the defendant’s/counter-claimant’s challenge have been raised as part of the previous lawsuit? Suggesting that res judicata was applicable to both parties’ claims, the court nevertheless considered the counter-claimant’s’ case in respect of the first and second counter-defendants and found no measure of illegality or bad faith on the evidence. The counter-claimant was additionally time-barred from seeking review of the National Drug Authority’s decision over the LTR change.
The plaintiff’s suit and defendants’ counter-claims were accordingly dismissed with costs.
The plaintiff contested the validity of the sale and transfer of its property by the first defendant, alleging the transaction was tainted by illegality and fraud. The mortgaged property was auctioned in a public sale pursuant to the terms of the credit facility agreement concluded between the parties.
The contract permitted that the first defendant could execute the property without application to a court if the plaintiff defaulted on payment. In accordance with this provision, the first defendant advertised and sold the plot in a public auction to the second defendant who made the purchase in good faith.
The plaintiffs challenged the first defendant’s actions on several grounds with no success before the High Court. It was argued that, because the sum advanced by the first defendant fell marginally short of the anticipated amount, it did not have to perform its obligation under the contract to pay the stipulated installments, despite having received and utilised the sum advanced by the first respondent.
The court dismissed this argument along with further technical attacks to the alleged unlawfulness of the advertisement of the auction, the sale agreement’s adherence to statutory formalities, and the first defendant’s failure to ‘release’ the plaintiff from the mortgage following the sale of the property to the second defendant.
The judge found in favour of the defendants, ruling that the advertisement, sale and transfer of the property had occurred lawfully and did not offend any aspects of the parties’ agreement.
The issues before the court were whether the registrar erred in law when he did not exercise his jurisdiction to refer the matter to a judge for a final disposal of issues he had found as contentious in his ruling; whether the learned registrar erred in law when he unilaterally dismissed the matter without determining the contentious issues raised therein and whether it is in the interest of justice that the appellant is granted leave to tax its Advocate-Client Bill of Costs.
The court stated that the claims did not arise out of a single transaction and the best way forward for the applicant was to file an action (civil suit) to recover these various claims.
The court came to the conclusion that the application was for recovery of costs and the registrar had no jurisdiction to entertain a dispute between advocate and client as to whether costs or fees were due. Secondly it is alleged that the bill is illegal or arises from an illegal contract. The court upheld the registrar’s decision not to entertain the bill and refer the parties to a suit with the only question remaining of whether he ought to have referred the parties to the judge for trial of the suit. The court reiterated that the registrar reached the right conclusion.
The matter of recovery of costs was contentious and the registrar had no jurisdiction to entertain it.
The court dismissed the appeal.
The application was based on the fact that the applicant had been prevented by sufficient cause from filing a defence in a civil suit which according to the court had a meritorious defence that had a high chance of success.
The main issue was whether the default judgment issued by the lower court pursuant to failure to file a written statement of defence should be set aside.
The court reiterated that the burden is on the process server to indicate whether a principal officer or director or secretary of the corporation has been served or to indicate whether he or she was unable to establish who was being served. The serving officer, in this case, was simply quiet about who was served notwithstanding that there is a stamp of the applicant on the signature of the person served. Moreover, the provisions as to service support are a fundamental rule of justice which is that of fair trial. Fair trial includes due notice of the summons on the defendant or persons sought to be summoned to appear in court.
The court held that due to the fundamental requirements of service of process on the secretary, director or other principal officer of the company, the default decree and judgment was set aside. The court held that civil procedure rules makes it necessary to identify the person served in the corporation sufficiently to fulfill the requirements for service on a corporation.
In this case the applicant wanted a writ of mandamus to compel the first respondent to pay the outstanding amounts with interest as ordered from the High Court. This case emphasizes that there must be a clear right in order to use a mandamus.
The court held that in order to obtain a writ of mandamus the following must be established: (1) a clear legal right and a corresponding duty in the respondent; (2) that some specific act or thing which the law requires that particular officer to do has been omitted to be done by him; (3) lack of any alternative, and (4) whether the alternative remedy exists but is inconvenient, less beneficial or less effective or totally ineffective.
The rights of the party seeking the writ of mandamus must not be doubtable. The court was not satisfied that the issues regarding the interest to be awarded and the amount due where properly determined. The court found that the applicant’s rights were doubtable. The court dismissed the application and advised the parties to seek an appropriate intervention to give proper interpretation of the trial judge’s judgment.
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
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 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 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 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.
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.