Wakilii

Nakunda Lillian v Musinguzi Mathew (Civil Suit 808 of 2022)

High Court · [2023] UGCOMMC 135 · 2023 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Formal proof of unliquidated claim following default judgment granted under Order 9 Rule 6 CPR
Decision
Judgment for the Plaintiff with general damages awarded and interest at reduced rates from date of cause of action to date of judgment and from judgment to full repayment

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that following default judgment on the liquidated claim, the plaintiff was entitled to general damages of UGX 3,000,000 and USD 2,200 for breach of an oral investment contract and a subsequent written undertaking to refund monies, calculated by reference to lost return on investment. The court declined to award punitive damages, finding no conduct sufficiently egregious to warrant such relief. The court reviewed the default judgment to reduce unconscionable pre-judgment interest from 84% to 20% and 10% per annum on respective amounts.

Outcome

Judgment for the Plaintiff with general damages awarded and interest at reduced rates from date of cause of action to date of judgment and from judgment to full repayment

Facts

The Plaintiff advanced USD 6,000 and UGX 16,000,000 to the Defendant in 2020 for joint investment in t-shirt printing and car wash businesses. The Defendant failed to invest the monies as agreed. On 21st December 2020, the parties executed an acknowledgement agreement whereby the Defendant undertook to repay the sums with interest at 7% per month by 30th March 2020 and pledged land as security. The Defendant paid only UGX 6,000,000 and failed to pay the balance. The Deputy Registrar granted default judgment on the liquidated claim on 1st December 2022, setting the matter down for formal proof of the unliquidated damages claim.

Issues

  1. Whether the Plaintiff is entitled to damages following default judgment on the liquidated claim.

Orders

  • The Defendant is hereby ordered to pay the sums of UGX 10,000,000 (Uganda Shillings Ten Million only) and USD 6,000 (United States Dollars Six Thousand) to the Plaintiff.
  • The Plaintiff is awarded interest on the sums in (a) above at a rate of 20% and 10% respectively per annum from the date of the cause of action up to the date of commencing this action.
  • The Plaintiff is awarded damages of UGX 3,000,000 (Uganda Shillings Three Million Only) and USD 2,200 (United States Dollars Two Thousand Two Hundred only).
  • The Plaintiff is awarded interest on the sums in (a) to (c) above at a rate of 20% and 10% respectively per annum from the date of judgment up to the date of repayment in full.
  • The Plaintiff is awarded costs of this suit.

Rules and key headnotes

Default Judgment — Liquidated and Unliquidated Claims — Scope of Determination
Where a plaint contains both a liquidated and unliquidated claim and the defendant fails to enter a defence, the court will grant default judgment on the liquidated claim and proceed only to take evidence on and determine the unliquidated claim. The court does not try the entire dispute following default judgment.
Breach of Contract — Double Breach — Investment Contract and Refund Undertaking
A defendant who breaches an oral investment contract by failing to invest monies as agreed and subsequently breaches a written undertaking to refund those monies has committed two breaches of contract, each entitling the plaintiff to appropriate compensation under Section 61(1) of the Contracts Act 2010.
General Damages — Calculation of Loss from Retention of Monies — Return on Investment Metric
Where parties originally agreed that monies would be invested but later executed an acknowledgement agreeing to refund, the appropriate measure of general damages for retention of those monies is not the expected earnings from the intended business, but the loss arising from retention calculated using a conservative return on investment metric of approximately 10% per annum, plus compensation for inconvenience and anguish.
Punitive Damages — Breach of Contract — Character of Claim versus Conduct of Defendant
The test for awarding punitive damages is not confined to the character of the claim (whether contractual or tortious) but depends on the conduct of the defendant. Punitive damages may be awarded for conduct that is criminal, malevolent, spiteful, high-handed, morally shocking, malicious, insulting or aggressive, and the court is empowered to grant such damages if the circumstances are deserving and the ends of justice require it.
Unconscionable Terms — Interest Rates — Court's Power to Review Default Judgment
Where a default judgment grants interest at an unconscionable rate (such as 84% per annum), the court may exercise its powers under Section 33 of the Judicature Act and Section 98 of the Civil Procedure Act to review the default judgment and revise the quantum of interest to a fair and reasonable rate, even after the judgment has been entered.
Interest — Liquidated Claim — Classification of Interest Claims under Order 9 CPR
A claim for contractual interest is by its nature a liquidated claim falling under Order 9 Rule 6 CPR and forms part of the liquidated claim on which default judgment may be granted, not part of the unliquidated claim requiring formal proof.

Legislation cited (8)

Cases cited (33)

  • Hall Brothers SS Co. Ltd v Young [1939] 1 KB 748
  • Valery Alia v Alionzi John (High Court Civil Suit No. 157 of 2010)
  • Lloyds Forex Bureau v Securex Agencies (U) Limited (High Court Civil Suit No. 358 of 2012)
  • Dembe Trading Enterprises Ltd v Uganda Confidential Ltd & Anor (High Court Civil Suit No. 612 of 2006)
  • Waiglobe (U) Ltd v Sai Beverages Limited (High Court Civil Suit No. 16 of 2017)
  • Bhadelia Habib Ltd v Commissioner General, URA [1997-2001] UCL 202
  • Ssendi Edward v Crown Beverages Ltd [2005] 2 ULSR 7
  • Karim Hirji v Kakira Sugar Works Ltd [2005] 2 ULSR 60
  • Kibimba Rice Ltd v Umar Salim (Supreme Court Civil Appeal No. 17 of 1992)
  • Maruri Reddy & Ors v Bank of India (Uganda) Ltd (High Court Civil Suit No. 804 of 2014)
  • Uganda Commercial Bank v Kigozi (2002) 1 EA 305
  • Ronald Kasibante v Shell Uganda Ltd (High Court Civil Suit No. 542 of 2006)
  • Sarah Kyarimpa v Harriet Kasozi (High Court Civil Suit No. 794 of 2016)
  • Mogas (U) Limited v Benzina (U) Ltd (High Court Civil Suit No. 88 of 2013)
  • Mwesigye Warren v Kiiza Ben (High Court Civil Suit No. 320 of 2015)
  • Bank of Uganda v Fred William Masaba & 5 Others (Supreme Court Civil Appeal No. 3 of 1998)
  • Esso Petroleum Co Ltd v Mardon [1976] QB 801
  • Butterworth v Butterworth [1920] P 126
  • Sentongo Jimmy v J Kabugo Limited & Ors (High Court Civil Suit No. 342 of 2014)
  • Ahmed El Termewy v Hassan Awdi & Ors (High Court Civil Suit No. 95 of 2012)
  • Uganda Revenue Authority v Wanume David Katamirike (Supreme Court Civil Appeal No. 3 of 1993)
  • Transtel Limited & Anor v Mahi Computers & Appliances Ltd & Anor (High Court Miscellaneous Application No. 397 of 2015)
  • 3WM Uganda Limited v Loadwell Freight Logistics Ltd & Ors (High Court Civil Suit No. 299 of 2015)
  • Bookbinding Ltd and Another v Marden [1978] 2 All ER 489
  • Muljibhai Madhvani & Anor v Francis Mugarura & Ors (High Court Civil Appeal No. 13 of 2006)
  • Francis Kiyaga v Josephine Segujja & Anor (High Court Civil Appeal Nos. 76 and 37 of 2010)
  • Bob Kabuye v Kim Bowerman (High Court Civil Suit No. 535 of 2007)
  • Charles Athembu v Commercial Microfinance Limited (High Court Miscellaneous Application No. 1 of 2014)
  • 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)
  • Ahmed v Car & General Ltd (Supreme Court Civil Appeal No. 12 of 2002)
  • Kengrow Industries Ltd v C.C. Chandran (Supreme Court Civil Appeal No. 7 of 2001)
  • Harry Ssempa v Kambagambire David (High Court Civil Suit No. 408 of 2014)

Full judgment

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Nakunda Lillian v Musinguzi Mathew (Civil Suit 808 of 2022) [2023] UGCommC 135 (18 August 2023)
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.