Wakilii

DMW (U) LTD v Attorney General & Another (CIVIL SUIT NO. 24 OF 2019)

High Court · [2020] UGHCCD 112 · 2020 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for compensation arising from breach of wetland resource use permits
Decision
Judgment entered for the plaintiff with compensation of UGX 178 billion for loss of business, special damages of UGX 3 billion, general damages of UGX 1 billion, interest, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that NEMA unlawfully halted the plaintiff's sand mining permits based on erroneous inspection reports and parliamentary pressure rather than proper consultation with a lead agency as required by regulation 14 of the Wetlands Regulations. The halting constituted breach of contract entitling the plaintiff to compensation for loss of business, special damages for construction costs, and general damages for dashed legitimate expectations.

Outcome

Judgment entered for the plaintiff with compensation of UGX 178 billion for loss of business, special damages of UGX 3 billion, general damages of UGX 1 billion, interest, and costs

Facts

NEMA issued three wetland resource use permits to DMW (U) Ltd in 2015 and 2016 for sand mining and fish farming totalling over 119 hectares in Kalungu District. The plaintiff contracted Victoria Construction Company Ltd to build access roads as required by the permit conditions and obtained supply contracts worth billions. In October 2016, following parliamentary pressure, NEMA inspected the sites and issued notices halting all sand mining on grounds that affected areas had not been restored. The plaintiff responded that no restoration was needed as only access roads were being built. A December 2016 inspection confirmed the plaintiff had never actually mined sand and was only constructing access roads. Despite this, NEMA never responded to the plaintiff's explanations and denied access to the sites. The permits expired unused.

Issues

  1. Whether the defendants' actions amounted to breach of the permit rights.
  2. Whether the plaintiff suffered loss.
  3. Whether the defendants are liable for the plaintiff's loss.
  4. What remedies are available to the parties?

Orders

  • Compensation awarded to the plaintiff in the sum of UGX 178,000,000,000 (one hundred seventy-eight billion shillings) for loss of business and earnings, to be paid by the defendants jointly and severally.
  • Special damages awarded to the plaintiff in the sum of UGX 3,000,000,000 (three billion shillings).
  • General damages awarded to the plaintiff in the sum of UGX 1,000,000,000 (one billion shillings).
  • Interest on compensation at 10% per annum from the date of halting the permits until payment in full.
  • Interest on special and general damages at 10% per annum from the date of judgment until payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Wetlands Regulation — Revocation of Permits — Consultation with Lead Agency
Under regulation 14 of the National Environment (Wetlands, River Banks and Lake Shores Management) Regulations, the Executive Director of NEMA may revoke a permit only after consultation with the lead agency. Parliament and its committees are not 'lead agencies' within the meaning of regulation 2, and reliance on parliamentary pressure to halt permits is erroneous and illegal.
Natural Justice — Right to Be Heard — Permit Revocation
Where an administrative authority conducts an inspection that forms the basis for adverse action against a permit holder, natural justice requires that the inspection be conducted in the permit holder's presence or that the permit holder be given an opportunity to respond before final action is taken. Inspections conducted without the permit holder's knowledge, followed by immediate adverse action without proper consultation, violate principles of fairness.
Breach of Contract — Regulatory Permits — Legitimate Expectation
A validly issued regulatory permit creates contractual rights and legitimate expectations in the permit holder. Where the issuing authority unlawfully halts the permit before expiry without lawful justification, the permit holder is entitled to compensation for breach of contract under section 61 of the Contracts Act 2010, including compensation for loss of business expectation during the unexpired term of the permit.
Legitimate Expectation — Regulatory Promises — Protection
Legitimate expectations may include expectations which go beyond strict legal rights, provided they have some reasonable basis. When a public authority has promised to follow a certain procedure or granted a permit, it is in the interest of good administration that the authority act fairly and implement its promises so long as implementation does not interfere with its statutory duty.
Compensation for Lost Business — Assessment of Future Loss
Where future loss of business cannot be assuredly proved due to premature termination of a commercial venture, the court must make a broad estimate taking into account all proved facts and the probabilities of the particular case, including geological reports valuing recoverable resources, the unexpired term of permits, and contracts already secured with third parties.
Special Damages — Proof by Cogent Oral Evidence
Special damages must be pleaded and strictly proved, but need not always be proved by documentary evidence. Cogent verbal evidence can suffice. Where a contract is produced and witnesses from both contracting parties confirm payment and commencement of work, the absence of a receipt or bank transfer does not defeat the claim if the evidence is otherwise credible and uncontroverted.

Legislation cited (6)

  • National Environment (Wetlands, River Banks and Lake Shores Management) Regulations No.3/2000 reg.14
  • National Environment (Wetlands, River Banks and Lake Shores Management) Regulations No.3/2000 reg.2
  • Contracts Act No.7 of 2010 s.61(1)
  • Contracts Act No.7 of 2010 s.61(3)
  • Civil Procedure Act Cap 71 s.26
  • Civil Procedure Act Cap 71 s.27(2)

Cases cited (9)

  • Hajj Kaala Ibrahim v Attorney General and Commissioner General of URA (High Court Miscellaneous Cause No. 23 of 2017)
  • Associate Professor Charles Niwagaba vs. Makerere University HCMC No…2019
  • Council of Civil Service Unions v Minister for Civil Service [1984] All ER 935
  • Uganda Petroleum Co Ltd v Kampala City Council (High Court Civil Suit No. 250 of 2005)
  • Erukana Kuwe v Isaac Patrick Matovu and Another (High Court Civil Suit No. 177 of 2003)
  • Robert Coussens v Attorney General (Supreme Court Civil Appeal No. 8 of 1999)
  • Livingstone v Rawyards Coal Co (1880) 5 App Cas 25
  • Gapco (U) Ltd v AS Transporters Ltd (Supreme Court Civil Appeal No. 7 of 2007)
  • Kampala City Council v Nakaye (1972) EA 446

Full judgment

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

DMW (U) LTD v Attorney General & Another (CIVIL SUIT NO. 24 OF 2019) [2020] UGHCCD 112 (20 May 2020)
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.