Wakilii

Microstar Computers (U) Limited v IT Office (U) Limited (Civil Suit 718 of 2022)

High Court · [2024] UGCOMMC 36 · 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, heard ex parte after defendant failed to file defence
Decision
Defendant found in breach of contract and ordered to pay special damages, general damages, interest and costs to the Plaintiff

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court found the defendant in breach of contract for failing to pay for computer components and accessories supplied in October and November 2020. The court awarded special damages of UGX 107,506,998 for the unpaid goods and bank surcharge for dishonoured cheques, plus general damages of UGX 7,000,000. Interest of 8% per annum on special damages from date of filing suit and 6% per annum on general damages from date of judgment were awarded, together with costs.

Outcome

Defendant found in breach of contract and ordered to pay special damages, general damages, interest and costs to the Plaintiff

Facts

In October and November 2020, the Plaintiff supplied computer components and accessories (desktops and laptops) to the Defendant at a total consideration of UGX 106,866,998. The Defendant issued cheques totalling UGX 72,860,000 as part payment. Upon presentation at the bank, all cheques were dishonoured with the notation 'Refer to Drawer', and the Plaintiff was charged a bank surcharge of UGX 640,000. The Plaintiff notified the Defendant and demanded payment of the entire sum, but the Defendant failed to pay. The Defendant was served with summons but failed to file a written statement of defence. The matter proceeded ex parte under Order 9 Rule 10 of the Civil Procedure Rules. The Plaintiff's evidence included purchase orders, delivery notes, tax invoices, and copies of the dishonoured cheques.

Issues

  1. Whether the Defendant is in breach of contract?
  2. What are the available remedies?

Orders

  • The Defendant is in breach of its contractual obligations for failure to pay for the computer components and accessories supplied by the Plaintiff.
  • The Defendant shall pay the Plaintiff UGX 107,506,998/= being the outstanding sum for the supplied computer components and accessories and the bank surcharge for the bounced cheques.
  • General damages of UGX 7,000,000/= shall be paid by the Defendant to the Plaintiff.
  • Interest of 8% per annum on the sum in (2) above from the date of filing the suit until payment in full.
  • Interest of 6% per annum on general damages from the date of Judgment until payment in full.
  • Costs of the suit are awarded to the Plaintiff.

Rules and key headnotes

Contract Law — Breach of Contract — Failure to Pay for Goods Supplied
Where a defendant makes purchase orders, receives goods, acknowledges receipt by issuing cheques for part payment, and subsequently the cheques are dishonoured, the defendant's failure to pay for the goods supplied constitutes a breach of contract. The issuance of cheques is an acknowledgement of the amounts due and evidence of commitment to pay.
Contract Law — Elements of a Valid Contract
A contract is an agreement made with the free consent of parties with the capacity to contract, for a lawful consideration and with a lawful object, with the intention to be legally bound. Once valid, it creates reciprocal rights and obligations between the parties.
Damages & Quantum — Special Damages — Requirement of Specific Pleading and Strict Proof
Special damages must be specifically pleaded and strictly proved. However, proof need not necessarily be documentary or physical in nature. Where a plaintiff proves supply of goods through purchase orders, delivery notes, and tax invoices, special damages representing the unpaid consideration are recoverable.
Damages & Quantum — General Damages — Principles of Assessment
General damages are awarded at the discretion of the Court to restore the aggrieved person to the position they would have been in had the breach not occurred. In assessing general damages, the Court should be guided by the value of the subject matter, the economic inconvenience suffered, and the nature and extent of the injury.
Damages & Quantum — Interest on Damages — Just and Reasonable Rate
Where interest was not agreed upon by the parties, the Court should award interest that is just and reasonable under Section 26 of the Civil Procedure Act. The rate should take into account inflation and currency depreciation, but claimed rates of 30% per annum on special damages and 20% per annum on general damages may be unjustified and very high. A rate of 8% per annum on special damages from date of filing suit and 6% per annum on general damages from date of judgment may be sufficient.
Civil Procedure — Ex Parte Proceedings — Effect of Failure to File Defence
Where a defendant is properly served with summons but fails to file a written statement of defence, the court may proceed ex parte under Order 9 Rule 10 of the Civil Procedure Rules. However, the onus under Sections 101-103 of the Evidence Act remains upon the plaintiff to adduce evidence to prove its case on the balance of probabilities.

Legislation cited (5)

Cases cited (19)

  • Cargo World Logistics Ltd v Royale Group Africa Ltd (Civil Suit No. 157 of 2013)
  • Ronald Kasibante v Shell (U) Ltd (HCCS No. 542 of 2006)
  • Nakawa Trading Co. Ltd v Coffee Marketing Board (Civil Suit No. 137 of 1991)
  • William Kasozi v DFCU Bank Ltd (HCCS No. 1326 of 2000)
  • W.M Kyambadde v Mpigi District Administration [1984] HCB
  • Bonham Carter v Hyde Park Hotel Ltd [1948] 64 TL P. 177
  • Hassan v Hunt [1964] EA 201
  • Kainamura Melvin Consultant Engineering & 7 Ors v Connie Labada (S.C.C.A No. 61 of 1992)
  • Mugabi John v Attorney General (Civil Suit No. 133 of 2002)
  • Takiya Kashwahiri & Anor v Kajungu Denis (CACA No. 85 of 2011)
  • Hadley v Baxendale [1854] 9 ExCh 341
  • Kibimba Rice Ltd v Umar Salim (S.C. Civil Appeal No. 17 of 1992)
  • Uganda Commercial Bank v Deo Kigozi [2002] 1 EA 305
  • Mohanlal Kakubhai Radia v Warid Telecom Uganda Ltd (HCCS No. 224 of 2011)
  • Protea Chemicals East Africa Limited v KAC Chemicals and Paints (U) Limited (HCCS No. 0470 of 2016)
  • Dodika Limited & Others v United Luck Group Holdings Limited [2020] EWHC 2101 (Comm)
  • Milly Masembe v Sugar Corporation (U) Ltd and Anor (S.C.C.A No. 1 of 2000)
  • Wallesteiner 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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Microstar Computers (U) Limited v IT Office (U) Limited (Civil Suit 718 of 2022) [2024] UGCommC 36 (12 January 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.