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Osman v Century Bottling Company Limited (Civil Appeal 10 of 2020)

Supreme Court · [2024] UGSC 12 · 2024 Appeal Dismissed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second civil appeal to the Supreme Court from a Court of Appeal decision dismissing an appeal against a High Court award of special damages for breach of contract
Decision
Appeal dismissed; concurrent findings of the lower courts upheld and no special damages awarded

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Holding

The Supreme Court dismissed the second appeal. Special damages must be specifically pleaded and strictly proved by evidence that the loss was incurred and was the direct result of the defendant's conduct; the appellant adduced no cogent evidence for any head claimed. The suit had been founded on Bombo Wholesalers, a business name that had ceased to exist, and on the 1999 agreement which was inoperative; a non-existent entity cannot maintain a cause of action, and Article 126(2)(e) of the Constitution cannot cure that defect. The Court of Appeal had properly re-evaluated the evidence, and the Supreme Court declined to disturb the concurrent findings of the two lower courts.

Facts

In 1999 a partnership trading as Bombo Wholesalers executed an exclusive agency agreement with the respondent, Century Bottling Company Limited, to distribute its products. In 2005 a related entity, Top Bombo Wholesalers, executed a Manual Distribution Centre (MDC) agreement with the respondent. Bombo Wholesalers registered a cessation of business in July 2005 and ceased to exist, after which Bombo Wholesale Limited was incorporated. In 2006 the appellant, suing as a beneficiary of the estate of the late Kassim Ramathan trading as Bombo Wholesalers, instituted HCCS No. 431 of 2006 claiming general and special damages of UGX 404,720,567 for breach of contract, including refunds, VAT payments, lost profit, salaries, payment in lieu of notice and loss of future earnings. The High Court found the 1999 agreement inoperative, that the relationship was governed by the 2005 MDC agreement, awarded limited general and special damages, but declined the balance for want of proof. The Court of Appeal dismissed the appellant's appeal.

Issues

  1. Whether the Court of Appeal erred in law in holding that no evidence was adduced to support the appellant's claim for special damages for lost revenue and income.
  2. Whether the Court of Appeal, as the first appellate court, failed to subject the evidence to fresh scrutiny and thereby arrived at an erroneous decision.

Orders

  • Appeal dismissed.
  • Costs of the appeal awarded to the respondent.

Key headnotes

Special Damages — Pleading and Strict Proof
Special damages relate to past pecuniary loss calculable at the date of trial and must be specifically pleaded and strictly proved by evidence that the loss was incurred and that it was the direct result of the defendant's conduct; they are not presumed to flow from the defendant's alleged acts.
Parties — Capacity to Sue — Non-existent Entity
A non-existent entity cannot maintain a cause of action because it has no legal existence; a business name that has ceased to operate is a mere name that cannot be used as the foundation of a suit or relied on as evidence.
Article 126(2)(e) — Substantive Justice and Technicalities
Article 126(2)(e) of the Constitution, requiring substantive justice without undue regard to technicalities, applies subject to the law and is no license to ignore or circumvent existing law; suing in the name of a non-existent entity is not a mere technicality curable under that provision.
Appeals — Second Appellate Court — Concurrent Findings of Lower Courts
Except in the rarest of cases a second appellate court does not re-evaluate evidence like a first appellate court but decides whether the first appellate court applied the correct principles; it will not interfere with concurrent findings of two lower courts unless wrong principles of law were applied or the findings are not supported by evidence.
Expert Evidence — Audit Report — Evidential Value
Expert evidence must be independent, unbiased, impartial and based on reliable principles; an audit report prepared during the pendency of the suit, relating to a period when the claimant entity was non-existent and lacking a before-and-after comparison of trading performance, is of little or no evidential value and may be rejected.

Legislation cited (2)

  • Civil Procedure Rules Order 1 rule 9
  • Constitution of the Republic of Uganda 1995 Article 126(2)(e)

Cases cited (16)

  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Kampala City Council v Nakaye (1972) EA 446
  • Victoria Laundry (Windsor) Ltd v Newman Industries Ltd & Coulson & Co Ltd (1949) 2 All ER 528
  • Joseph Musoke v Departed Asians Property Custodian Board (Civil Appeal No. 1 of 1992)
  • Muluta Joseph v Katama Sylvano (Civil Appeal No. 11 of 1999)
  • Narsensio Begumisa & 3 Others v Eric Tibegega (Civil Appeal No. 17 of 2002)
  • Kagina V Kagina and another No.300 of 2013
  • Galleria in Africa Limited v Uganda Electricity Distribution Company Limited (Civil Appeal No. 8 of 2017)
  • Makubuya Enock William (T/A Polla Plast) v UMEME (U) Limited (Civil Appeal No. 1 of 2019)
  • Mulindwa George William v Kisubika Joseph (Civil Appeal No. 12 of 2014)
  • Selle v Associated Motor Boat Co [1968] EA 123
  • Sanyu Lwanga Musoke v Galiwango (Civil Appeal No. 48 of 1995)
  • Banco Arabe Espanol v Bank of Uganda (Civil Appeal No. 8 of 1998)
  • Patrick Mukasa v Andrew Douglas Kanyike (Civil Appeal No. 13 of 2022)
  • The Estate of the Late Charles James Mark Kamoga & Anor v Attorney General & 7 Others (Civil Appeal No. 1 of 2022)
  • Maddumba v Wilberforce Kuluse (Civil Appeal No. 9 of 2002)
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.