Wakilii

Mutekanga v Equator Growers (U) Limited (Civil Appeal 7 of 1995)

Supreme Court · [1996] UGSC 28 · 1996 Appeal Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court judgment dismissing a suit for conversion and breach of contract
Decision
Appeal allowed; trial judgment set aside and substituted with awards of special and general damages, with interest and costs, to the appellant

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Holding

The Supreme Court allowed the appeal. Where a defendant fails to enter appearance or file a defence and an interlocutory judgment is entered against it, the trial judge should not permit the defendant's counsel to participate at the formal-proof hearing or cross-examine the plaintiff's witnesses, and liability (here, breach of contract) is no longer in issue. The trial judge erred in reopening breach and dismissing the suit. However, special damages and loss of profit must still be strictly proved even on formal proof. The Court found most special-damages items proved, awarding UGX 5,678,800 special damages and UGX 1,000,000 general damages with interest, while rejecting unproved heads.

Facts

Under a 1983 agreement the appellant leased the respondent's coffee factory for three years and began processing coffee there. In November 1983 the appellant was arrested and detained at Luzira Prison until 1987. About a month later, officials of the respondent company chased the appellant's workers from the factory, leaving behind quantities of coffee, gunny bags, a lorry tyre and other property which the appellant never recovered. In 1988 the appellant sued the respondent for conversion, claiming the value of the converted property, loss of profit and general damages for breach of contract. The respondent neither entered appearance nor filed a defence, and an interlocutory judgment was entered for the appellant. At the formal-proof hearing the trial judge nonetheless allowed the respondent's counsel to participate and cross-examine, then dismissed the suit for failure to prove the case. Several witnesses, themselves former directors of the respondent company, testified that the appellant's workers were expelled by company officials.

Issues

  1. Whether the trial judge erred in allowing the respondent, which had neither entered appearance nor filed a defence, to participate in the formal-proof proceedings and to cross-examine the appellant and his witnesses.
  2. Whether the trial judge erred in disregarding the interlocutory judgment and reopening the question of breach of contract.
  3. Whether the appellant proved his claim for special damages and loss of profit.
  4. Whether the appellant was entitled to general damages for breach of contract.

Orders

  • Appeal allowed to the extent indicated.
  • Judgment and orders of the trial judge set aside.
  • Special damages of shs 5,678,800 awarded for items (a)–(e) in paragraph 6 of the plaint.
  • General damages of shs 1,000,000 awarded.
  • Interest at 12% per annum on the decretal amount.
  • Costs of the suit and of the appeal awarded to the appellant.

Key headnotes

Civil Procedure — Default Judgment — Participation of Defendant After Interlocutory Judgment
Where a defendant neither enters appearance nor files a defence and an interlocutory judgment is entered against it, the defendant is not entitled to participate in the formal-proof hearing or to cross-examine the plaintiff and his witnesses.
Civil Procedure — Interlocutory Judgment — Effect on Issues at Formal Proof
An interlocutory judgment conclusively establishes the defendant's liability, so that liability (including breach of contract) is no longer in issue at the formal-proof hearing, which is confined to the assessment of damages; a trial judge errs in reopening the question of liability.
Damages — Special Damages — Pleading and Strict Proof
Special damages and loss of profit must be specifically pleaded and strictly proved, and the burden and standard of proof on the plaintiff are not diminished merely because the defendant has failed to enter appearance or file a defence and the suit proceeds on formal proof.
Damages — General Damages — Assessment for Breach of Contract
General damages need not be specifically pleaded and are assessed by the court according to the opinion and judgment of a reasonable person where no precise measure exists; a party in breach of contract is liable to the innocent party in general damages.
Evidence — Admissions — Weight Against a Party
An admission by a party in a suit is the best evidence against him.

Legislation cited (3)

  • Civil Procedure Rules O.9 r.6
  • Civil Procedure Rules O.9 r.10
  • Rules of the Supreme Court r.97

Cases cited (5)

  • Attorney General of Uganda v Charles Sengendo (Civil Appeal No. 14)
  • Kanji v Jiwabhai (1934) 1 EACA 87
  • Ratcliffe v Evans (1892) 2 QB 524
  • Monarch SS Co v Karlshamns Oljefabriker (1949) AC 196
  • Prehn v Royal Bank of Liverpool (1870) LR 5 Ex 92
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.