Wakilii

Mercy Commercial Agencies Ltd v Mayuge District Local Government (Civil Suit No. 6 of 2025)

High Court · [2025] UGHC 1190 · 2025 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 with default judgment entered for formal proof
Decision
Judgment entered for plaintiff with monetary awards totaling Ug. Shs. 323,550,497/= plus interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where a contractor fully performs a construction contract but the contracting local government fails to pay despite issuing an interim payment certificate, the contractor is entitled to the full contract price, accumulated loan interest incurred to execute the contract, proven special damages for recovery expenses, and general damages for inconvenience. The burden of proof in civil proceedings lies on the plaintiff even where default judgment is entered, but once the plaintiff establishes the claim, the evidential burden shifts to the defendant.

Outcome

Judgment entered for plaintiff with monetary awards totaling Ug. Shs. 323,550,497/= plus interest and costs

Facts

On 23 December 2020, the defendant contracted the plaintiff to construct two classroom blocks and a five-stance line block at Nakazigo Primary School for Ug. Shs. 176,012,694/=. The plaintiff obtained a loan of Ug. Shs. 150,000,000/= from Bank of Baroda to execute the contract. Upon completion on 13 October 2021, the defendant issued an interim payment certificate for Ug. Shs. 158,400,000/= but failed to honour it. The defendant's non-payment caused the plaintiff to default on the loan, resulting in accumulated interest of Ug. Shs. 126,537,803/=. The plaintiff made numerous demands for payment and incurred fuel expenses traveling to Mayuge District offices. The defendant did not file a defence, and default judgment was entered on 31 October 2024, with the matter set down for formal proof.

Issues

  1. Whether the plaintiff is entitled to the remedies sought?

Orders

  • Defendant to pay plaintiff Ug. Shs. 176,012,694/= being the contract price.
  • Defendant to pay plaintiff accumulated interest on loan from Bank of Baroda amounting to Ug. Shs. 126,537,803/=.
  • Defendant to pay plaintiff special damages of Ug. Shs. 1,000,000/= for fuel expenses.
  • Defendant to pay plaintiff general damages of Ug. Shs. 20,000,000/=.
  • Interest at court rate on contract price and general damages from date of judgment until payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Civil Procedure — Burden of Proof — Default Judgment — Requirement for Formal Proof
Even where a defendant fails to enter appearance and default judgment is entered, the plaintiff bears the burden to prove their case on the balance of probabilities at formal proof.
Contract Law — Breach of Contract — Payment Obligations — Interim Payment Certificate as Acknowledgment of Debt
Where a contracting party issues an interim payment certificate acknowledging a debt for works completed, that debt is acknowledged as outstanding and requires no further proof beyond the certificate itself.
Damages & Quantum — Special Damages — Loan Interest — Causation
Where a contractor obtains a loan to execute a contract and the contracting party's failure to pay causes the contractor to default on the loan, the accumulated interest on that loan is recoverable as special damages provided the causal link is established by documentary evidence.
Damages & Quantum — Special Damages — Pleading and Proof — Speculative Claims
Special damages must be explicitly pleaded and specifically proved with documentary evidence. Claims for loss of income from other contracts that are unsupported by documentary evidence are speculative and will be disallowed.

Legislation cited (5)

Full judgment

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

Mercy Commercial Agencies Ltd v Mayuge District Local Government (Civil Suit No. 6 of 2025) [2025] UGHC 1190 (28 October 2025)
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.