Wakilii

Sembuya v All Ports Services (U) Ltd (Civil Appeal 23 of 1997)

Court of Appeal · [1998] UGCA 52 · 1998 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from High Court judgment entering judgment for the respondent for recovery of an outstanding balance for goods supplied
Decision
Appeal dismissed; High Court judgment and awards against the appellant upheld

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Cited — treatment unverified cited in 3 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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Holding

The Court of Appeal dismissed the appeal. While the court found no general legal partnership existed between the appellant and his co-defendant, it held that a particular partnership for the purchase and resale of cement was established, and in any event the appellant was liable under the doctrine of holding out (Partnership Act s.18) having represented himself as a partner in a non-existent firm to the respondent who gave credit on that faith. A contract for the supply of cement was proved. The special damages of Shs.147,000,000 were proved, the Shs.15,000,000 general damages for loss of use of money were reasonable, and the 22% interest was a proper exercise of discretion.

Facts

The appellant and his co-defendant were businessmen trading under the name Aero International (U) Ltd, an unregistered and in fact non-existent company. During 1993, at the instance of the appellant and co-defendant, the respondent delivered cement valued at Shs.200,000,000 to them, payment to be made after resale. The defendants issued a cheque for Shs.200,000,000 which was dishonoured. They later paid Shs.53,000,000, leaving a balance of Shs.147,000,000 outstanding. The respondent sued to recover the balance. Evidence showed the appellant played a prime role in negotiating the supply contract at his office at ATC Sembule, where the local purchase order (LPO) was prepared. The High Court found a particular partnership and a contract existed, entered judgment for Shs.147,000,000 with 22% interest from filing, plus Shs.15,000,000 general damages with 6% interest from judgment. The appellant appealed.

Issues

  1. Whether a partnership existed between the appellant and his co-defendant.
  2. Whether the appellant could be held liable under the doctrine of holding out where the firm through which he dealt was non-existent.
  3. Whether a contract existed between the appellant and the respondent for the supply of cement.
  4. Whether the award of Shs.147,000,000 as special damages was strictly proved.
  5. Whether the award of Shs.15,000,000 as general damages was excessive or without basis.
  6. Whether the trial judge properly exercised his discretion in awarding interest at 22% on the special damages.

Orders

  • Appeal dismissed with costs here and below.

Key headnotes

Partnership — Existence — Actual relationship over form
The existence of a partnership is determined not by the form adopted by the parties but by the actual relationship between them, namely whether they carry on business in common with a view to profit.
Partnership — Particular partnership — Single transaction or adventure
Persons who are not partners in any other business but who share the profit and loss of a particular transaction or adventure become partners as to that transaction, though not for any other purpose.
Partnership — Holding out — Liability by estoppel
Under section 18 of the Partnership Act, a person who by words or conduct represents himself, or knowingly suffers himself to be represented, as a partner in a firm is liable as a partner to anyone who, on the faith of that representation, gives credit to the firm, the doctrine being an illustration of estoppel by conduct.
Sale of Goods — Formation — Oral or implied contract
A contract for the sale of goods may be made orally, partly orally and partly in writing, or implied from the conduct of the parties.
Damages — General damages — Loss of use of money in commercial transactions
Where a commercial enterprise is deprived of the use of its money over a prolonged period due to breach of contract, the resulting inconvenience and loss in the value of money may sound in general damages, the assessment of which is within the discretion of the court.
Interest — Discretion under Civil Procedure Act s.26
Under section 26(2) and (3) of the Civil Procedure Act, the court has a discretion, to be exercised judicially, to order interest on the decretal sum, and where the decree is silent the sum is deemed to carry interest at 6%; the rate awarded may take account of the amount involved and the length of deprivation.

Legislation cited (5)

  • Partnership Act (Cap.86) s.3(1)
  • Partnership Act (Cap.86) s.4(3)
  • Partnership Act (Cap.86) s.18
  • Civil Procedure Act (Cap.65) s.26(2)
  • Civil Procedure Act (Cap.65) s.26(3)

Cases cited (6)

  • Adam v. Newbiggin, 13 App. Cases 308 at 315
  • Davis v Davis (1894) 1 Ch 393
  • Fraser, Ex parte Central Bank (1892) 2 QB 633
  • Lake v Duke of Argyll (1844) 6 QB 477
  • Banex Ltd v Gold Trust Bank Ltd (Civil Appeal No. 29 of 1993)
  • Interfreight Forwarders (U) Ltd v East African Development Bank (Civil Appeal No. 33 of 1992)
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