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Afro Kai Limited and Another v Kiir For services and Construction Co. Limited (Civil Suit 492 of 2015)

High Court · [2022] UGCOMMC 142 · 2022 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of debt arising from supply of foodstuffs on credit; interlocutory judgment entered after defendant failed to file defence; suit set down for formal proof
Decision
Judgment entered for the plaintiffs; defendant ordered to pay outstanding debt of US$6,879,222 with interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the defendants had no legal obligation to account to the plaintiffs under the memoranda of understanding, as the term requiring accountability was not expressly stated in the written contracts and could not be implied. However, the plaintiffs established a prima facie case for recovery of the purchase price of foodstuffs supplied on credit. The defendants, having failed to file a defence or prove payment, were found jointly and severally liable for US$6,879,222 with interest at 8% per annum from 3 August 2015. General damages for breach of contract were denied as the common law does not award such damages for delay in payment of a debt.

Outcome

Judgment entered for the plaintiffs; defendant ordered to pay outstanding debt of US$6,879,222 with interest and costs

Facts

The plaintiffs supplied foodstuffs on credit to the defendant pursuant to memoranda of understanding dated 23 July 2014 and 22 October 2014. The defendant had secured a tender to supply foodstuffs to the government of South Sudan. The plaintiffs supplied 3,350 metric tonnes of maize grain, 2,771 metric tonnes of beans, 5,607.4 metric tonnes of maize flour, 3,720 metric tonnes of rice, and 983.29 metric tonnes of cooking oil. At a reconciliation meeting on 3 August 2015, the parties established that goods worth US$12,988,362 had been delivered, of which the defendant had paid only US$6,109,140, leaving an outstanding balance of US$6,879,222. The defendant failed to respond to a formal demand letter dated 14 October 2015 and did not file a defence to the suit. Interlocutory judgment was entered on 21 June 2018.

Issues

  1. Whether the defendants are under an obligation to account to the plaintiff.
  2. Whether the plaintiffs are entitled to recover the price of the foodstuffs supplied to the defendants.
  3. Whether the plaintiffs are entitled to the rest of the remedies sought.

Orders

  • Judgment entered for the plaintiffs against the defendant.
  • The defendant to pay the outstanding balance of US$6,879,222.
  • Interest thereon at the rate of 8% per annum from 3rd August 2015 until payment in full.
  • The defendant to pay the costs of the suit.

Rules and key headnotes

Contract Law — Parol Evidence Rule — Exclusion of Oral Terms Not Reflected in Written Contract
Where the terms of a contract have been reduced to writing and the contract value exceeds the statutory threshold requiring written form, no evidence of any oral agreement or statement shall be admitted for the purpose of contradicting, varying, adding to or subtracting from the written terms, unless there is evidence of fraud, duress, or mutual mistake.
Contract Law — Implied Terms — Test for Implication of Terms
A term will be implied into a contract only if it is necessary to give business efficacy to the contract, goes without saying, and is a term which the parties must have intended to form part of their contract. It is not enough that the term would be reasonable; it must be necessary to avoid a failure of consideration that reasonable businessmen cannot have intended.
Civil Procedure — Suits for Account — Distinction from Debt Recovery Actions
A suit for an account is a special form of suit where the defendant stands in a fiduciary or similar relationship to the plaintiff (such as agent, bailee, receiver, trustee, partner, or mortgagee) and is under a legal obligation to render accounts. A pure trade transaction between buyer and seller for recovery of a fixed ascertained sum is not a suit for account, even if accounts must be examined to verify the amount due.
Evidence — Burden of Proof — Proof of Payment by Debtor
Once a plaintiff establishes a prima facie case that a debt is due, the evidential burden shifts to the defendant to prove payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment, rather than the creditor having to prove non-payment.
Contract Law — Interest on Debt — Entitlement to Interest on Wrongfully Withheld Sums
Where a party does not pay a sum when it falls due, the aggrieved party is entitled to interest from the time payment is due to the time of actual payment. Interest compensates for the loss of use of money and represents either the profit the plaintiff might have made if he had had the use of the money, or the loss he suffered because he did not have that use.
Contract Law — Damages for Breach — No General Damages for Delay in Payment of Debt
The common law does not award general damages for delay in payment of a debt beyond the date when it is contractually due. General damages for breach of contract are awarded only in special circumstances where the loss did not arise from the ordinary course of things and the defendant had actual knowledge of such special circumstances.

Legislation cited (6)

Cases cited (25)

  • Evans v Roe and Others (1872) L.R. 7 C.P. 138
  • Jacob v Batavia and General Plantations Trust [1924] 1 Ch 287
  • Muthuuri v National Industrial Credit Bank Ltd [2003] KLR 145
  • Robin v Gervon Berger Association Limited and Others [1986] WLR 526
  • Bank of Australasia v Palmer [1897] AC 540
  • Trollope and Colls Limited v North West Metropolitan Regional Hospital Board [1973] 1 WLR 601
  • London, Chatham & Dover Railway Co v South Eastern Railway Co (1892) 1 Ch 120
  • Carmichael v Caledonian Railway Co (1870) 8 M (HL) 119
  • Riches v Westminster Bank Ltd [1947] 1 All ER 469
  • Dodika Limited & Others v United Luck Group Holdings Limited [2020] EWHC 2101 (Comm)
  • Mohanlal Kakubhai Radia v Warid Telecom Ltd (H.C. Civil Suit No. 234 of 2011)
  • Kinyera v The Management Committee of Laroo Boarding Primary School (H.C. Civil Suit No. 099 of 2013)
  • James Fredrick Nsubuga v Attorney General (H.C. Civil Suit No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and Another (H.C. Civil Suit No. 177 of 2003)
  • Hadley v Baxendale (1854) 9 Exch 341
  • Charles Acire v M Engola (H.C. Civil Suit No. 143 of 1993)
  • Kibimba Rice Ltd v Umar Salim (S.C. Civil Appeal No. 17 of 1992)
  • Storms v Hutchinson [1905] AC 515
  • Kabona Brothers Agencies v Uganda Metal Products & Enamelling Co Ltd [1981-1982] HCB 74
  • Kiwanuka Godfrey T/a Tasumi Auto Spares and Class Mart v Arua District Local Government (H.C. Civil Suit No. 186 of 2006)
  • Hungerfords v Walker (1989) 171 CLR 125
  • President of India v La Pintada Compagnia Navigacia SA [1985] AC 104
  • Jennifer Rwanyindo Aurelia and Another v School Outfitters (U) Ltd (C.A. Civil Appeal No. 53 of 1999)
  • National Pharmacy Ltd v Kampala City Council [1979] HCB 25
  • Uganda Development Bank v Muganga Constructions [1981] HCB 35

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Afro Kai Limited and Another v Kiir For services and Construction Co. Limited (Civil Suit 492 of 2015) [2022] UGCommC 142 (4 July 2022)
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.