Wakilii

Karim v Gloveg Agri (U) Limited & 2 Others (Civil Suit 593 of 2023)

High Court · [2024] UGCOMMC 153 · 2024 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract, default judgment entered after defendants failed to file defence
Decision
Judgment entered for plaintiff against 1st Defendant company for recovery of investment amounts plus general damages and interest; claims against 2nd and 3rd Defendants dismissed

Observed later treatment

Cited — treatment unverified cited in 1 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

No adverse treatment recorded Cited 1 time with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The court found the 1st Defendant company breached a corporate farming contract by failing to provide investment returns. The plaintiff invested UGX 297,596,810 and USD 20,000 for rice cultivation across two seasons. The 1st Defendant failed to provide farming updates, remit profits, or return the capital. Judgment entered against the 1st Defendant only, as the plaintiff failed to prove grounds for piercing the corporate veil to hold the individual directors personally liable.

Outcome

Judgment entered for plaintiff against 1st Defendant company for recovery of investment amounts plus general damages and interest; claims against 2nd and 3rd Defendants dismissed

Facts

In 2019, the plaintiff, a businessman, was approached by the 2nd and 3rd defendants representing the 1st Defendant company to invest in corporate farming. The plaintiff invested UGX 297,596,810 and USD 20,000 across two farming seasons (January–July 2020 and July–September 2020) for rice cultivation on 100 and 150 acres respectively. The 1st Defendant undertook to provide regular updates, manage farming operations, and pay profits estimated at UGX 1,950,000 per acre. The defendants failed to provide updates or remit any profits. After the first season, the defendants claimed COVID-19 affected proceeds and offered only UGX 123,795,000 instead of the expected UGX 195,000,000, but paid only UGX 30,000,000. No money was paid for the second season. Despite repeated demands over four years, the defendants failed to pay. The defendants did not file a defence or enter appearance, and default judgment was granted.

Issues

  1. Whether there was a breach of contract?
  2. Whether the Defendants are indebted to the Plaintiff?
  3. What remedies are available to the Parties?

Orders

  • There was a breach of contract by the 1st Defendant Company.
  • The 1st Defendant Company is indebted to the Plaintiff in the amount of UGX 297,596,810 and USD 20,000.
  • The Plaintiff is entitled to recover UGX 297,596,810 and USD 20,000 from the 1st Defendant company.
  • The Plaintiff is awarded General damages of UGX 50,000,000.
  • Interest of 15% per annum on the Uganda shillings amount and 10% on the United States dollar amount in the recovery from the date of filing this suit until payment in full.
  • Further interest of 10% per annum on general damages from the date of this judgment until payment in full.
  • The Plaintiff is awarded the costs of the suit against the 1st Defendant company.
  • As between the Plaintiff and the 2nd and 3rd Defendant each party shall bear their own costs.

Rules and key headnotes

Formation of Contract — Series of Transaction Documents
A court can find the existence of a contract in more than one way other than a single contract document. A series of transaction documents outlining principally the ingredients of a contract form a contract. Whether there is a binding contract depends not upon the parties' subjective state of mind, but upon a consideration of what was communicated between them by word or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all terms regarded or required by law as essential for formation of legally binding relations.
Breach of Contract — Definition and Elements
Breach of contract is the breaking of the obligation which a contract imposes, which confers a right of action for damages on the injured party. It is a violation of a contractual obligation by failing to perform one's own promise, by repudiating it, or by interfering with another party's performance. Where a defendant fails to file a defence and enter appearance, this constitutes constructive admittance of the allegations, though the court retains a duty to evaluate evidence to the standard of balance of probabilities.
Corporate Personality — Separate Legal Entity Principle
A company is a separate legal entity distinct from its shareholders, members, and directors. The personal liability of shareholders and directors arises only when the corporate veil is pierced, where the plaintiff pleads and proves that the company did not operate as a legal entity separate and apart from the officers, directors, and shareholders such that the company was actually the alter ego of the shareholders and not a separate legal entity. A party intending to lift the corporate veil must show that the corporation was used to defeat public conscience, justify wrongs, protect against fraud, and defend against crime.
Default Judgment — Effect of Failure to File Defence
A defendant who fails to file a defence puts himself out of court and no longer has any locus standi to be heard. Failure of appearance in a court matter not only leaves the other party's claims uncontested but also constitutes a constructive admittance of the allegations therein. However, the court still has the duty to evaluate the evidence adduced to the required standard of a balance of probabilities.
Pleadings — Departure from Pleadings Prohibited
No pleading shall, except by way of amendment, raise any new ground of claim or contain any allegation of fact inconsistent with the previous pleadings of the party pleading. Parties in civil matters are bound by what they say in their pleadings and the court itself is also bound by what the parties have stated in their pleadings. No party can be allowed to depart from its pleadings without an application for amendment.
General Damages — Assessment in Breach of Contract
General damages in breach of contract are what a court may award when it cannot point out any measure by which they are to be assessed, except in the opinion and judgment of a reasonable man. The principle of restitutio in integrum governs the award of general damages, envisaging the court using its discretionary powers to restore the plaintiff to the position he would have been in, or nearly to it as possible. Where a plaintiff shows loss suffered and inconvenience caused by breach, general damages are awardable.
Punitive Damages — Not Awardable for Breach of Contract Alone
Punitive or exemplary damages are awardable in respect of tort, not breach of contract. In cases of breach of contract, punitive damages are awardable only where the breach involves a tortious act. Punitive damages are awarded to punish, deter, and express outrage at egregious, high-handed, malicious conduct, and are typically reserved for improper interference or illegalities by public officials or big corporations.

Legislation cited (11)

Cases cited (23)

  • Kanji Devji v Damodar Jinabhai & Co (1934) 1 EACA 87
  • Miller v Minister of Pensions [1947] 2 All ER 372
  • RTS Flexible Systems Ltd v Molkerei Alois Muller GMBH & Co KG [2010] 2 All ER
  • Microstar Computers (U) Limited v IT Office (U) Limited (Civil Suit No. 718 of 2022)
  • Ronald Kasibante v Shell Uganda Ltd (Civil Suit No. 542 of 2006)
  • Jani Properties Ltd v Dar es Salaam City Council [1966] EA 281
  • Struggle Ltd v Pan African Insurance Co Ltd (1990) ALR 46
  • Salomon v A Salomon & Co Ltd [1897] AC 22
  • Beatrice Odongo & Anor v Tamp Engineering Consultants Ltd (Court of Appeal Civil Appeal No. 8 of 2020)
  • HL Bolton (Engineering) Co Ltd v TJ Graham & Sons Ltd [1956] 3 All ER 624
  • Gunning v Naguru Tirupati Ltd (High Court Miscellaneous Application No. 232 of 2018)
  • ABSA Bank Uganda Limited v Enjoy Uganda Ltd and 2 Others (High Court Miscellaneous Application No. 1243 of 2023)
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Storms v Hutchinson [1905] AC 515
  • Uganda National Farmers Federation Ltd v Cooper Motor Corporation (Civil Suit No. 467 of 2016)
  • Mugabi John v Attorney General (Civil Suit No. 133 of 2022)
  • Obongo v Municipal Council of Kisumu [1971] EA 91
  • Uganda Revenue Authority v Wanume David Katamirike (Supreme Court Civil Appeal No. 3 of 1993)
  • Premchandra Shenoi & Anor v Maximov Oleg Petrovich (Supreme Court Civil Appeal No. 9 of 2003)
  • Sietco v Noble Builders (U) Ltd (Supreme Court Civil Appeal No. 31 of 1995)
  • Harry Ssempa v Kamabagambire David (High Court Civil Suit No. 408 of 2014)
  • Lyamuleme David v Attorney General (Supreme Court Civil Appeal No. 4 of 2013)
  • Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873

Cases citing this judgment (1)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

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Karim v Gloveg Agri (U) Limited & 2 Others (Civil Suit 593 of 2023) [2024] UGCommC 153 (24 May 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.