Wakilii

Senabulya v Nyanza Textiles Industries Ltd (H.C.C.S. NO. 23 1992)

High Court · [1995] UGHCCD 7 · 1995 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 counterclaim for outstanding payment
Decision
Plaintiff awarded net judgment of UGX 1,239,060 after offset of counterclaim debt, with alternative remedy of delivery of 10 bales of cloth

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that the defendant breached the contract by failing to deliver 10 bales of cloth despite the plaintiff having deposited security and paid sales tax as required. The plaintiff proved payment of UGX 24,693,000 through receipts issued by the defendant's employees, even though not recorded in the defendant's books. The plaintiff was awarded general damages of UGX 1,000,000 for inconvenience and refund of UGX 354,000 paid to the Revenue Authority. The defendant's counterclaim succeeded only for UGX 114,940, being the admitted balance owed by the plaintiff.

Outcome

Plaintiff awarded net judgment of UGX 1,239,060 after offset of counterclaim debt, with alternative remedy of delivery of 10 bales of cloth

Facts

The plaintiff, Francis Senabulya trading as Junior Traders, entered into a credit supply agreement with the defendant Nyanza Textiles Industries Ltd (NYTIL). Under the agreement, the plaintiff deposited his land title as security and paid sales tax of UGX 354,000 to comply with the contract requirements. The plaintiff ordered 10 bales of cloth materials on credit. The defendant refused to deliver the 10 bales, citing that the plaintiff was in arrears for previous supplies totaling UGX 5,414,940. The plaintiff contended he had paid UGX 24,693,000 toward materials worth UGX 24,807,940, leaving only UGX 114,940 outstanding. The defendant disputed the payment, alleging the two receipts (dated 4-11-1991 and 19-11-1991) for the contested amount were forgeries as they did not match the company's receipt numbering system. The plaintiff had paid UGX 354,000 in sales tax as required by the agreement but could not conduct business when the materials were not delivered.

Issues

  1. Whether there was any breach of contract and if so, which party was in breach.
  2. Whether the amount of UGX 24,693,000 was paid by the plaintiff to the defendant.
  3. Whether the defendant is entitled to the counterclaim.
  4. Whether any party is entitled to damages and if so, how much.

Orders

  • Judgment entered for the plaintiff in the original claim for a sum of UGX 1,354,000 (UGX 1,000,000 as general damages and UGX 354,000 being the amount paid to Revenue Authority).
  • The plaintiff is to get costs for the original suit.
  • The decretal sum will carry interest at 40% per annum from the date of filing until payment in full.
  • In the alternative, the defendant is to deliver to the plaintiff 10 bales of cloth at the price prevailing when the plaintiff placed his order. Should the defendant choose this alternative, he will not be required to pay UGX 354,000 or any interest thereon.
  • Judgment entered for the defendant in respect of the counterclaim for UGX 114,940 with interest at 40% per annum from the date of filing until payment in full.
  • The plaintiff is to pay the defendant costs of the counterclaim.
  • The plaintiff's debt is to be offset by UGX 114,940, leaving the plaintiff with a net balance of UGX 1,239,060 payable by the defendant.

Rules and key headnotes

Contract Law — Breach of Contract — Credit Supply Agreement — Failure to Deliver Goods Despite Compliance with Security Requirements
Where a credit supply agreement requires the purchaser to deposit security and pay sales tax before goods are delivered, and the purchaser complies with these requirements, the supplier is in breach if he fails to deliver ordered goods solely on the basis that earlier debts remain unpaid, unless the contract has been validly terminated by written notice as required by its terms.
Evidence — Documentary Evidence — Receipts Issued by Company Employees — Liability for Employee Actions
Where receipts bear a company's stamp and heading and were issued by company employees in the course of their duty, the company cannot deny the validity of those receipts on the basis of internal numbering irregularities. A plaintiff who receives such receipts cannot be made to suffer for fraud committed by the defendant's employees.
Evidence — Special Damages — Requirement of Proof — House Rent as Special Damage
Special damages must not only be pleaded but must also be proved. Where a plaintiff claims house rent as a special damage, he must produce receipts from the landlord or call the landlord as a witness to prove the fact and amount of rent paid. Mere assertion of rent payments is insufficient.
Damages & Quantum — Mitigation of Loss — Duty to Mitigate — Continued Payment of Unused Rent
A plaintiff is under a duty to mitigate his losses. Where a plaintiff continues to rent premises after the defendant's breach has made use of those premises impossible or unnecessary, the plaintiff cannot recover rent for the period during which he failed to mitigate by terminating the lease or finding alternative use for the premises.
Damages & Quantum — Assessment of Damages — Loss of Profits — Requirement of Evidence
Claims for loss of profits must be substantiated by evidence. Profits cannot be imagined; they must be real. A plaintiff must provide evidence of actual profits earned per day or per month. Where no such evidence is adduced, the court cannot award damages for loss of profits based on speculation.

Cases cited (1)

  • Kampala City Council v Nakaye (1972)

Full judgment

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

Senabulya v Nyanza Textiles Industries Ltd (H.C.C.S. NO. 23_1992) [1995] UGHCCD 7 (17 February 1995)
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.