Wakilii

Hash Security Company Limited v Roko Construction Limited (Civil Suit No. 39 of 2022)

High Court · [2024] UGCOMMC 377 · 2024 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 breach of contract for security services, with counterclaim for damages for negligence and breach
Decision
Plaintiff's claim substantially allowed with award of UGX 438,517,687 special damages, UGX 50,000,000 general damages plus interest and costs. Defendant's counterclaim partly allowed with award of UGX 1,891,500 special damages and UGX 1,000,000 general damages plus interest but no costs of counterclaim.

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Holding

The High Court Commercial Division found the defendant construction company liable for UGX 438,517,687 for unpaid security services but rejected most of the defendant's counterclaim for negligence. The court held that contracts renewed by conduct where parties continued performance beyond expiry and that failure to pay within thirty days constituted breach. On counterclaim, the court found the security company negligent only in limited theft incidents and awarded special damages of UGX 1,891,500. Plaintiff awarded general damages of UGX 50,000,000 plus interest.

Outcome

Plaintiff's claim substantially allowed with award of UGX 438,517,687 special damages, UGX 50,000,000 general damages plus interest and costs. Defendant's counterclaim partly allowed with award of UGX 1,891,500 special damages and UGX 1,000,000 general damages plus interest but no costs of counterclaim.

Facts

Hash Security Company Limited contracted with Roko Construction Limited to provide security services at multiple construction sites from 2018 onward. The plaintiff deployed 119 guards and supervisors as agreed and issued invoices for services rendered. The defendant made partial payments leaving a balance of UGX 861,983,710 at suit filing, later reduced to UGX 438,517,687 after further payments during litigation. The defendant counterclaimed that the plaintiff deployed insufficient guards, failed to prevent theft of property at various sites, and illegally terminated the contracts. Written contracts dated October 2018 were for one year but both parties continued performance beyond expiry. Multiple theft incidents occurred at guarded sites including fuel, manhole covers, cables, and construction materials. The plaintiff withdrew services in January 2020 after the defendant remained in default of payment for over thirty days.

Issues

  1. Whether the Defendant was in breach of the Contracts for the provision of security services by the Plaintiff and if so, whether it is indebted to the Plaintiff in the amount claimed in the plaint?
  2. Whether the Plaintiff was in breach of the Contracts for the provision of security services to the Defendant and if so, whether it is indebted to the Defendant in the sum claimed in the counterclaim?
  3. Whether the Plaintiff illegally terminated the Contracts for the provision of security services?
  4. What remedies are available to the parties?

Orders

  • The Plaintiff is awarded special damages of UGX 438,517,687 as money owing for the provision of security services to the Defendant.
  • The Defendant is awarded UGX 1,891,500 as special damages for items that were stolen.
  • The Plaintiff is awarded general damages of UGX 50,000,000.
  • The Defendant is awarded general damages of UGX 1,000,000.
  • Interest is awarded on the special damages awarded to the Plaintiff at the rate of 20% per annum from the date of filing the suit until payment in full.
  • Interest is awarded on the special damages awarded to the Defendant at the rate of 20% per annum from the date of filing the counterclaim until payment in full.
  • Interest is awarded on the general damages awarded to both parties at the rate of 6% per annum from the date of judgment until payment in full.
  • Costs of the suit are awarded to the Plaintiff.
  • Each party shall bear its costs of the counterclaim.

Rules and key headnotes

Contract Law — Contract Renewal — Renewal by Conduct of Parties
Where a contract expires and parties continue to perform their obligations under it without express renewal agreement, the law will deem the contract extended on the same terms and conditions where there is mutuality of performance and the parties' actions demonstrate an intention to continue the contractual relationship.
Contract Law — Breach of Contract — Failure to Pay Within Agreed Time
Under a contract providing for payment within thirty days of invoice, failure to pay within that period constitutes breach of contract entitling the non-breaching party to discontinue services without notice and to claim the outstanding sum as special damages.
Contract Law — Departure from Pleadings — Evidence on Unpleaded Matters
Not every inconsistency between pleadings and evidence constitutes a departure from pleadings. A court may decide an unpleaded matter if parties have led evidence and addressed the court on it, so as to arrive at a correct decision and finally determine the controversy between the parties.
Evidence — Witness Statements — Personal Knowledge and Direct Evidence
A witness statement must contain facts within the personal knowledge of the witness and reflect the witness's own version in their own words. Witnesses should not be allowed to give evidence of matters they do not have direct knowledge of by reference to documents they have read. Such witness statements are an abuse and run the danger of perverting justice.
Tort Law — Negligence — Vicarious Liability of Security Company
A security company contracted to provide guarding services owes its client a duty of care to reduce the risk of loss and damage to property to the extent that is reasonable and practical. The company will be vicariously liable for theft occurring due to breach of that duty by its guards, but not for theft by the client's own employees or theft at locations where guards were withdrawn at the client's request.
Damages & Quantum — Special Damages — Proof of Special Damages
Special damages must be specially pleaded and strictly proved, but strict proof does not mean proof must always be documentary. Special damages can be proved by direct evidence including testimony of persons who received or paid, or testimonies of experts conversant with the matters in issue.
Damages & Quantum — Interest — Rate of Interest on Contract Debts
In awarding interest on decretal sums, courts should exercise discretion judiciously taking into account all circumstances including inflation and depreciation of currency. The rate should not neglect the prevailing economic value of money but should insulate the plaintiff against economic vagaries where money is not promptly paid when due.

Legislation cited (14)

Cases cited (27)

  • Kabaco (U) Limited v Turyahikayo Bonny (Civil Suit No. 14 of 2021)
  • Annette Tumusiime v Luis Gugones Aranel & Another (Civil Suit No. 269 of 2005)
  • William Kasozi v DFCU Bank Ltd (HCCS No. 1326 of 2000)
  • Kabagambe Mathias v Kahire Nobert (Civil Suit No. 389 of 2016)
  • Ongwen Anthony and Anor v Ocaya Micheal (Civil Appeal No. 012 of 2017)
  • Kitaka Peter & 12 Others v Mohamood Thobani (HCCA No. 20 of 2021)
  • Nagoya Co. Ltd v The Registered Trustees of Kampala Archdiocese (HCCS No. 707 of 2015)
  • Pro-Line Soccer Academy Limited v MTN Uganda Limited & 2 Others (HCCS No. 317 of 2011)
  • Sinba (K) Ltd & 4 Others v Uganda Broadcasting Corporation (SCCA No. 03 of 2014)
  • John Bwiza v Patrick Yowasi Kadama (Court of Appeal Civil Appeal No. 35 of 2011)
  • Meridiana Africa Airlines (U) Ltd v Avmax Spares (EA) Ltd (HCCS No. 111 of 2017)
  • Omega Bank Plc v O.B.C. Limited [2005] 8 NWLR (pt.928) 547
  • Fina Bank Ltd v Spares and Industries Ltd [2000] 1 EA 52
  • Acaa Bilentina v Okello Micheal (HC Civil Appeal No. 53 of 2015)
  • Blyth v Birmingham Waterworks Company [1856] 11 Ex Ch 781
  • Donoghue v Stevenson [1932] AC 562
  • Evarest Banyenzaki T/A African Pot Restaurant v Naome Kibaaju (HCCS No. 278 of 2017)
  • Mugabi John v Attorney General (HCCS No. 133 of 2002)
  • W.M. Kyambadde v Mpigi District Administration [1983] HCB 44
  • Gapco (U) Ltd v A.S Transporters (U) Ltd (CACA No. 18 of 2004)
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (SCCA No. 7 of 1995)
  • Kabandize John Baptist and 21 Others v Kampala Capital City Authority (CACA No. 36 of 2016)
  • Takiya Kashwahiri & Another v Kajungu Denis (CACA No. 85 of 2011)
  • Milly Masembe v Sugar Corporation (U) Ltd and Another (SCCA No. 1 of 2000)
  • Mohanlal Kakubhai Radia v Warid Telecom Uganda Ltd (HCCS No. 224 of 2011)
  • Wallersteiner v Moir [1975] 1 All ER 849
  • Uganda Development Bank v Muganga Construction Co. Ltd [1981] H.C.B 35

Full judgment

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Hash Security Company Limited v Roko Construction Limited (Civil Suit No. 39 of 2022) [2024] UGCommC 377 (20 December 2024)
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.