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Technology Associates Limited v Wafuta & Another (CIVIL SUIT NO. 294 OF 2017)

High Court · [2020] UGHCCD 162 · 2020 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of indemnification and guarantee agreements, decided on default judgment with formal proof
Decision
Default judgment entered in favour of the plaintiff with joint and several liability imposed on both defendants for the unpaid balance, general damages, interest, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court Civil Division entered default judgment against both defendants for breach of an indemnification agreement and guarantee arising from the first defendant's embezzlement of USD 21,010 in immigration funds while employed as HR manager. The court ordered joint and several recovery of USD 19,451 balance plus general damages of UGX 15,000,000 with 18% annual interest from date of filing and costs.

Outcome

Default judgment entered in favour of the plaintiff with joint and several liability imposed on both defendants for the unpaid balance, general damages, interest, and costs

Facts

The first defendant was employed by the plaintiff as human resource manager and was entrusted with USD 43,303 for immigration expenses relating to work permits. An audit by Hen Associates revealed that USD 21,010 was unaccounted for. The matter was reported to police as CRB 963/2016. On 7th November 2016, the parties entered into an indemnification agreement whereby the first defendant undertook to repay the embezzled funds in instalments, with the second defendant standing as guarantor. The first defendant paid only UGX 5,600,000, leaving a balance of USD 19,451. Despite service on multiple occasions, neither defendant filed a defence or appeared in court. The suit was set down for formal proof after default judgment was entered for the liquidated sum on 28th November 2018.

Issues

  1. Whether the first Defendant is in breach of the indemnification agreement executed on 7th November 2016.
  2. Whether the second Defendant is in breach of the guarantee agreement executed on 7th November 2016.
  3. What quantum of damages and interest should be awarded to the Plaintiff.

Orders

  • The Plaintiff is directed to recover the decretal sum of USD 19,451 from the Defendants jointly and/or severally.
  • The Plaintiff is awarded general damages of UGX 15,000,000.
  • Interest of 18% per annum is awarded on the decretal sum and general damages from the date of filing the suit till payment in full.
  • The Plaintiff is awarded costs of the suit.

Rules and key headnotes

Contract Law — Indemnification Agreements — Breach — Recovery of Embezzled Funds by Employee
Where an employee embezzles funds entrusted to him in the course of employment and subsequently enters into an indemnification agreement to repay the embezzled amount in instalments, failure to complete the agreed payments constitutes breach of the indemnification agreement entitling the employer to recover the outstanding balance.
Contract Law — Guarantee Agreements — Enforcement Against Guarantor — Joint and Several Liability
A guarantor who undertakes in a guarantee agreement to pay a debt if the principal debtor defaults becomes jointly and severally liable with the principal debtor upon the principal debtor's failure to discharge the obligation, and the creditor may recover the full debt from either or both parties.
Civil Procedure — Default Judgment — Liquidated Demands — Requirements Under Order 9 Rule 6
Where a plaint claims a liquidated demand and the defendant fails to file a defence, the court may pass judgment for any sum not exceeding the sum claimed together with interest at the rate specified or, if no rate is specified, at 8 percent per year to the date of judgment and costs.
Damages & Quantum — General Damages — Breach of Indemnification Agreement — Assessment
In addition to recovery of the liquidated sum representing the unpaid balance under an indemnification agreement arising from embezzlement, general damages may be awarded to compensate the plaintiff for loss, inconvenience, and expenses incurred in pursuing recovery of the embezzled funds.

Legislation cited (2)

Full judgment

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

Technology Associates Limited v Wafuta & Another (CIVIL SUIT NO. 294 OF 2017) [2020] UGHCCD 162 (11 June 2020)
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.