Wakilii

Magellan Worldwide inc & Anor v Coetzee Natural Products (U) Ltd & Anor (HCT-00-CC-CS 318 of 2009)

High Court · [2016] UGCOMMC 224 · 2016 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of contract price and damages for breach of contract, with counterclaim
Decision
Plaintiffs' suit dismissed with costs. First Defendant's counterclaim allowed with damages and interest awarded.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court found that the plaintiffs breached the contract by failing to deliver vanilla beans conforming to the approved sample specifications. The claim against the first defendant was dismissed, and the suit against the second defendant in his personal capacity was dismissed on the ground that he executed the contract as director on behalf of the company, not personally. The first defendant's counterclaim succeeded with special damages awarded for export and re-import costs, and general damages for economic loss.

Outcome

Plaintiffs' suit dismissed with costs. First Defendant's counterclaim allowed with damages and interest awarded.

Facts

The first plaintiff supplied 2,100 kg of vanilla beans to the first defendant under a commercial invoice dated 22 July 2008 for USD 45,300, with payment due by 25 July 2008. The first defendant exported the goods to a client in Germany (Florapharm) who rejected 2,000 kg on grounds that the cutting size did not conform to specifications. The first defendant returned 100 kg to the plaintiffs but retained the 2,000 kg and refused payment, claiming breach of contract. The plaintiffs sued for the contract price. The first defendant counterclaimed for the costs of export and re-import and for economic loss. Evidence established that the plaintiffs had submitted a sample which the first defendant approved, but the bulk consignment did not conform to that sample. The goods were required to be cut to 5 mm specifications for use in tea bags.

Issues

  1. Whether the contract was breached? If so, by whom?
  2. Whether the 2nd Defendant is liable under the contract?
  3. What remedies are available?

Orders

  • Judgment entered in favour of the 1st Defendant/Counterclaimant against the Plaintiffs.
  • Special damages of USD 20,203.43 awarded to the 1st Defendant.
  • Interest on special damages at 10% per annum from date of judgment until payment in full.
  • General damages of UGX 25,000,000 awarded to the 1st Defendant.
  • Interest on general damages at court rate from date of judgment until payment in full.
  • Costs awarded to the 1st Defendant.
  • Suit against the 2nd Defendant dismissed with costs.

Rules and key headnotes

Contract Law — Sale of Goods — Conformity with Sample — Breach Where Bulk Does Not Match Approved Sample
Where a seller submits a sample for approval and the buyer approves it, the seller is bound to supply goods that conform with the approved sample. A failure to deliver goods conforming to the approved sample constitutes a breach of contract by the seller.
Contract Law — Principles — Parties Bound by Their Bargain
People who freely negotiate and conclude a contract should always be held to their bargain.
Company Law — Separate Legal Personality — Liability of Directors
A limited liability company is an entity separate and distinct from its shareholders and directors. A director who executes a contract on behalf of the company in his capacity as director does not thereby incur personal liability, and it is wrong to sue the director personally in respect of that contract unless there is an express personal guarantee.
Damages & Quantum — Special Damages — Proof and Particulars
Special damages cannot be recovered unless they have been specifically claimed and proved, or unless the best available particulars have, before trial, been communicated to the party against whom the claim is made.
Damages & Quantum — General Damages — Compensatory Principle
Damages are, in their fundamental character, compensatory, not punitive. Their primary function is to place the aggrieved party in as good a position as he would have been had the breach not occurred, to the extent that money can do so.
Damages & Quantum — Interest — Discretion of Court
An award of interest is discretionary. The basis of an interest award is that the plaintiff has kept the defendant out of his money and had use of it, so he ought to compensate the defendant accordingly. Where special damages are awarded in a currency protected from inflation, a lower interest rate may be justified.

Cases cited (7)

  • Stockloser v Johnson [1954] 1 All ER 630
  • Nsangiranabo Erasmus t/a Nsangira Auctioneers and Court Bailiffs v Messieurs Associated Properties Ltd and Others (HCMA No. 953 of 2001)
  • Uganda Telecom Ltd v Tanzanite Corporation (SCCA No. 17 of 2004)
  • James Fredrick Nsubuga v Attorney General (HCCS No. 13 of 1993)
  • Erukana Kuwe v Isaac Patrick Matovu and Another (HCCS No. 177 of 2003)
  • Bhadeha Habib Ltd v Commissioner General URA [1997-2001] UCL 202
  • Harbutts Plasticine Ltd v Wayne Tank & Pump Co Ltd [1970] 1 Ch 447

Full judgment

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

Magellan Worldwide inc & Anor v Coetzee Natural Products (U) Ltd & Anor (HCT-00-CC-CS 318 of 2009) [2016] UGCommC 224 (28 October 2016)
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.