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Premier Commodities Uganda Limited v Kiir For Services & Construction Co. Limited and Others (Civil Suit 126 of 2019)

High Court · [2021] UGCOMMC 140 · 2021 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of debt arising from alleged breach of contract for supply of produce and groceries
Decision
Judgment entered in favour of the plaintiff against the 1st and 4th defendants jointly and severally for US$ 2,500,000 with interest. Suit dismissed against 2nd and 3rd defendants in their personal capacity.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that where a creditor establishes a prima facie case of debt through evidence of contract and delivery, the evidential burden shifts to the debtor to prove payment. The 1st and 4th defendants failed to discharge this burden and were held jointly and severally liable for the outstanding balance. The 2nd and 3rd defendants, having acted as disclosed agents, were not personally liable on the contract. The plaintiff's claim for fraudulent misrepresentation failed due to lack of proper pleading and proof. Special damages were rejected as unpleaded.

Outcome

Judgment entered in favour of the plaintiff against the 1st and 4th defendants jointly and severally for US$ 2,500,000 with interest. Suit dismissed against 2nd and 3rd defendants in their personal capacity.

Facts

The plaintiff and 1st and 4th defendants entered into a memorandum of understanding dated 22 October 2014 for supply of produce and groceries worth US$ 7,327,750 to be delivered by 31 March 2015. The plaintiff delivered goods to that value. The defendants paid US$ 2,327,750 initially, leaving US$ 5,000,750 outstanding. During litigation, the 4th defendant made two further payments totalling US$ 2,500,000 (US$ 1,000,000 on 1 May 2015 and US$ 1,500,000 on 3 September 2020), leaving a balance of US$ 2,500,000 unpaid. The 2nd and 3rd defendants negotiated the contract as agents of the 1st and 4th defendants respectively. The plaintiff alleged the 2nd and 3rd defendants should be personally liable based on representations made during negotiations. All defendants denied liability; the 1st and 2nd defendants denied executing the contract and claimed forgery; the 3rd and 4th defendants denied representations and claimed full payment.

Issues

  1. Whether there was a breach of the contract for the supply of foodstuffs and if so, by whom?
  2. Whether the defendants are indebted to the plaintiff in the sum of US$ 5,000,000?
  3. What remedies are available to the plaintiff?

Orders

  • Judgment entered for the plaintiff against the 1st and 4th defendants jointly and severally.
  • Interest awarded on partial payment of US$ 1,000,000 at 6% per annum from 31 March 2015 until 3 February 2020.
  • Interest awarded on partial payment of US$ 1,500,000 at 6% per annum from 31 March 2015 until 3 September 2020.
  • Award of US$ 2,500,000 being the outstanding balance on the contract price.
  • Interest on the outstanding balance at 6% per annum from 31 March 2015 until payment in full.
  • Costs of the suit awarded to the plaintiff.
  • Suit against the 2nd and 3rd defendants in their personal capacity dismissed.

Rules and key headnotes

Contract Law — Breach of Contract — Burden of Proof — Evidential Burden
In civil litigation for breach of contract, the initial burden rests on the plaintiff to establish on a balance of probabilities the existence of a contract and its essential terms, a breach of duty imposed by the contract, and resultant damages. Once a prima facie case is established, the evidential burden shifts to the defendant to controvert the plaintiff's case.
Evidence — Documentary Evidence — Forgery — Burden of Proof
The burden rests on the party propounding a document to establish that it was validly executed. Once an attesting witness or a witness with personal knowledge proves execution, the primary onus shifts to the defendant who claims forgery. Where a party alleges forgery but fails to adduce evidence to prove it, the court will accept the document as genuine.
Contract Law — Payment — Proof of Payment — Evidential Burden
Where the existence of a debt is fully established by evidence, the evidential burden of proving that it has been extinguished by payment devolves upon the debtor. The general rule that a party is not called upon to prove his negative averments applies, as it is often impracticable to prove non-payment with satisfactory evidence.
Contract Law — Agency — Disclosed Principal — Personal Liability of Agent
When an agent discloses his agency and the name of the principal at the time of contracting, the principal is the real party in interest and the agent will normally not be held personally liable for commitments undertaken within his authorised agency.
Company Law — Separate Legal Personality — Piercing the Corporate Veil — Conditions
Shareholders and directors are not usually liable for company debts beyond the nominal value of their shares or personal guarantees. Courts will only pierce the corporate veil when there is evidence that the corporate structure was used purposely to avoid or conceal liability, by showing fraudulent misuse of the company structure and that wrongdoing was committed dehors the company.
Contract Law — Fraudulent Misrepresentation — Pleading Requirements — Burden of Proof
In cases where fraud is alleged, particulars with dates must be stated in the pleadings pursuant to Order 6 rule 3 of the Civil Procedure Rules. The standard of proof is higher than the balance of probabilities required in ordinary civil cases. A party must prove that the defendant made a false representation of fact, knowing it was false, intending to induce reliance, that the plaintiff relied on it, and suffered damage as a result.
Civil Procedure — Special Damages — Pleading and Proof
Special damages must be specifically pleaded and strictly proved. Where special damages are not pleaded, the defendant is denied the opportunity to traverse or admit them in pleadings, and the claim for such damages will be rejected regardless of whether evidence is led at trial.

Legislation cited (4)

Cases cited (15)

  • Salomon v A Salomon and Co Ltd [1897] AC 22
  • Merchandise Transport Ltd v British Transport Commission [1962] 2 QB 173
  • Trustor v Smallbone (No 2) [2001] 1 WLR 1177
  • DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852
  • Antonio Gramsci Shipping Corp v Stepanovs [2011] 1 Lloyd's Rep 647
  • Sebuliba v Cooperative Bank Limited [1987] HCB 130
  • M Kibalya v Kibalya [1994-95] HCB 80
  • British Westinghouse Electric Co Ltd v Underground Electric Railways [1912] AC 673
  • Sowah v Bank for Housing & Construction [1982-83] 2 GLR 1324
  • Borham-Carter v Hyde Park Hotel [1948] 64 TLR
  • Masaka Municipal Council v Semogerere [1998-2000] HCB 23
  • Musoke David v Departed Asians Property Custodian Board [1990-1994] EA 219
  • Kyambadde v Mpigi District Administration [1983] HCB 44
  • Haji Asuman Mutekanga v Equator Growers (U) Ltd (Supreme Court Civil Appeal No. 7 of 1995)
  • Gapco (U) Ltd v AS Transporters (U) Ltd (Court of Appeal Civil Appeal No. 18 of 2004)

Full judgment

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Premier Commodities Uganda Limited v Kiir For Services & Construction Co. Limited and Others (Civil Suit 126 of 2019) [2021] UGCommC 140 (20 May 2021)
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.