Wakilii

Simba Telecom Ltd v Karuhanga & Anor (HCCS 242 of 2011)

High Court · [2015] UGCOMMC 81 · 2015 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit with counterclaim for breach of contract arising from commercial distributorship agreement
Decision
Plaintiff's suit dismissed. Defendants awarded Uganda shillings 22,428,081/= with interest and costs.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where parties consent to reference of accounts to independent auditors under section 27 of the Judicature Act and adduce evidence to the auditors, the resulting audit report becomes part of the court's findings. The court will not reopen matters already determined by the auditors except on limited statutory grounds for setting aside an award, which include misconduct, corruption or fraud. A party cannot rely on the audit report for certain findings while simultaneously seeking to disregard other findings of the same report that are adverse to their interests. The plaintiff's suit was dismissed and the defendant's counterclaim was allowed for the balance of Uganda shillings 22,428,081/= established by the auditors.

Outcome

Plaintiff's suit dismissed. Defendants awarded Uganda shillings 22,428,081/= with interest and costs.

Facts

The plaintiff appointed the second defendant as exclusive sub-distributor of MTN products for Nakulabye territory in Kampala under an agreement dated 27 June 2008, effective 1 July 2008. The second defendant was required to achieve monthly sales targets of Uganda shillings 1,000,000,000/= and quarterly targets of Uganda shillings 3,000,000,000/= and was entitled to compliance commission of 1% monthly plus an additional 0.5% on attaining quarterly targets. The contract was performed until October 2010. The plaintiff claimed the defendants owed Uganda shillings 151,625,029/= for unpaid products supplied, specifically 12,000 pieces of assorted goods ordered around 30 October 2010. The defendants denied the claim and counterclaimed for Uganda shillings 278,075,481/=, alleging they had earned commissions and bonuses, and had overpaid the plaintiff. By consent of the parties under section 27 of the Judicature Act, Ernst & Young Certified Public Accountants were appointed to reconcile accounts for the period January to October 2010. The auditors' report established that the plaintiff owed the defendants a net balance of Uganda shillings 22,428,081/=, being the difference between sales due to the plaintiff of Uganda shillings 99,305,805/= and commission due to the defendants of Uganda shillings 121,823,886/=.

Issues

  1. Whether the defendants owe the plaintiff Uganda shillings 151,625,029/=?
  2. Whether the counterclaimant is entitled to the prayers in the counterclaim?
  3. What remedies are available to the parties?

Orders

  • Plaintiff's suit dismissed with costs.
  • Defendants jointly awarded Uganda shillings 22,428,081/=.
  • Interest at 20% per annum awarded from 1 January 2011 to 6 July 2011.
  • Interest at 20% per annum awarded from filing of suit (6 July 2011) to date of judgment.
  • Interest at 20% per annum awarded on aggregate sum from date of judgment until payment in full.
  • Costs of the suit awarded to the defendants jointly.

Rules and key headnotes

Civil Procedure — Reference to Auditors — Binding Nature of Auditor's Report — Judicature Act s.27
Where parties consent to reference of accounts to auditors under section 27 of the Judicature Act, the auditor's report becomes part of the court's findings and constitutes a trial of the referred matters. The court shall not, except in the manner and to the extent provided by law, deal with the matter referred to the auditors.
Civil Procedure — Reference to Auditors — Grounds for Challenging Auditor's Report
An audit report made pursuant to section 27 of the Judicature Act can only be challenged on the limited grounds provided under Order 47 rule 15 of the Civil Procedure Rules, which include misconduct, corruption, fraudulent concealment by a party, or the making of the award after the court proceeded with the suit. General dissatisfaction with the auditors' findings or methodology does not constitute grounds to set aside or reopen the report.
Civil Procedure — Pleadings — Proof of Claims as Pleaded
A plaintiff cannot prove what has not been pleaded or claimed. Where a plaint specifically claims special damages for a particular itemised transaction, the plaintiff cannot seek to establish a different quantum or introduce additional claims not pleaded without amendment. All facts necessary to establish the cause of action must be alleged in the plaint, and a necessary fact not pleaded cannot be implied.
Civil Procedure — Reference to Auditors — Parties Cannot Accept Favourable Findings While Rejecting Adverse Findings
Both parties to a reference to auditors cannot, on the one hand, rely on the audit report for findings favourable to them and, in another breath, disregard findings adverse to their interests. Parties cannot have their cake and eat it at the same time.
Contract Law — Interest on Debt — Breach of Contract to Pay Money
Upon breach of a contract to pay money due, the amount recoverable is normally limited to the amount of the debt together with interest from the time when it became payable. The basis of an award of interest is that the defendant has kept the plaintiff out of his money and the defendant has had the use of it, so he ought to compensate the plaintiff accordingly.

Legislation cited (6)

Cases cited (5)

  • Kimani v Republic (2002) EA 417
  • Harbutt's Plasticine Ltd v Wayne Tank and Pump Co Ltd
  • PCCW (Hong Kong) Ltd v Gemtel Limited (HCCS No. 304 of 2010)
  • Jefford v Gee [1970] 1 All ER 1202
  • Sullivan v Alimohamed Osman [1959] 1 EA 239

Full judgment

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

Simba Telecom Ltd v Karuhanga & Anor (HCCS 242 of 2011) [2015] UGCommC 81 (15 May 2015)
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.