Wakilii

Steel & Tube Industries v Mwesigwa Titus (High Court Civil Suit No. 446 of 2010)

High Court · [2012] UGCOMMC 30 · 2012 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for recovery of money and breach of contract, heard ex parte after defendant failed to appear
Decision
Judgment entered for plaintiff for UGX 47,098,000 with contractual and statutory interest

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where a defendant issues cheques in payment for goods supplied on credit and those cheques are dishonoured, the plaintiff is entitled to judgment for the face value of the dishonoured cheques plus contractual interest at 3% per month from the date of dishonour to filing, and statutory interest thereafter. A cheque is an unconditional promise to pay and dishonour gives the holder an immediate right of recourse against the drawer.

Outcome

Judgment entered for plaintiff for UGX 47,098,000 with contractual and statutory interest

Facts

The plaintiff, a hardware supplier, sold goods on credit to the defendant over a period of time. The defendant received goods invoiced between March and May 2010 totalling UGX 59,796,500. The defendant issued four post-dated cheques drawn on Diamond Trust Bank to pay for the goods, totalling UGX 47,098,000. All cheques were dishonoured when presented for payment between June and August 2010, marked 'refer to drawer'. The credit terms provided for payment within two weeks and stipulated 3% monthly interest on outstanding amounts. The plaintiff notified the defendant of the dishonours and sent a demand letter in August 2010. The defendant filed a written statement of defence alleging payment in cash to cover the dishonoured cheques but failed to appear at trial.

Issues

  1. Whether the defendant is indebted to the plaintiff for goods supplied on credit and payment by dishonoured cheques.
  2. What remedies are available to the plaintiff.

Orders

  • Judgment entered for the plaintiff.
  • Defendant to pay UGX 47,098,000 being the face value of dishonoured cheques.
  • Interest at 3% per month from August 2010 to December 2010.
  • Interest at 8% per annum from date of filing suit to date of judgment.
  • Interest at 21% per annum from date of judgment until payment in full.
  • Costs of the suit awarded to the plaintiff.

Rules and key headnotes

Bills of Exchange — Cheques — Legal nature and effect of dishonour
A cheque is a bill of exchange constituting an unconditional order of payment. When a cheque is dishonoured by non-payment, the holder has an immediate right of recourse against the drawer under section 46 of the Bills of Exchange Act.
Bills of Exchange — Treatment as cash — Right to judgment on dishonour
A bill of exchange is to be treated as cash. Unless exceptional grounds are shown, when a cheque is dishonoured, the holder is entitled to judgment for the face value. The existence of a cross-claim by the defendant does not prevent judgment on the dishonoured cheque.
Sale of goods on credit — Proof of debt — Contractual interest
Where goods are supplied on credit terms that stipulate interest on outstanding amounts, and payment is made by cheques that are subsequently dishonoured, the supplier is entitled to recover the debt plus contractual interest calculated from the date of dishonour.
Documentary evidence — Electronic records — Account ledgers generated through computer systems
An account ledger generated through an electronic accounting system (such as 'Tally System') is admissible in evidence if it satisfies the requirements of the Electronic Transactions Act 2011.
Ex parte proceedings — Proof of service — Right to proceed
Where a defendant has been duly served through counsel and fails to appear for hearing, the court may proceed to hear the suit ex parte under Order 9 Rule 20(1)(a) of the Civil Procedure Rules, provided service is proved by affidavit.

Legislation cited (5)

Cases cited (3)

  • Sembule Investments Ltd v Uganda Baati Ltd (Misc. Application No. 0664 of 2009)
  • Kotecha v Mohammad [2002] 1 EA 112
  • Maersk Uganda Ltd v First Merchant International Trading Ltd (Civil Suit No. 143 of 2009)

Full judgment

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

Steel & Tube Industries v Mwesigwa Titus (High Court Civil Suit No. 446 of 2010) [2012] UGCommC 30 (19 April 2012)
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.