Wakilii

The Commissioner Customs Uganda Revenue Authority v Kirenga Fred (Civil Appeal No. 51 of 2014)

Court of Appeal · [2015] UGCA 2035 · 2015 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from a High Court decision granting relief under Article 50 of the Constitution and awarding damages
Decision
Appeal allowed; damages and interest awards set aside; matter directed to tax computation on market value of UGX 110,000,000

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The Court of Appeal allowed the appeal, setting aside awards of compensatory, general and exemplary damages against the Uganda Revenue Authority. It held that under s.214(2) of the East African Community Customs Management Act the appellant lawfully sold the perishable ethanol and retained the proceeds. Compensatory damages had not been pleaded. General damages could not be awarded because the respondent's agent had under-declared the goods' value and a party cannot benefit from his own wrong. Exemplary damages were unwarranted absent oppressive, arbitrary or unconstitutional conduct. Interest that was neither pleaded nor prayed for was set aside. Tax was to be assessed on the market value of UGX 110,000,000.

Outcome

Appeal allowed; damages and interest awards set aside; matter directed to tax computation on market value of UGX 110,000,000

Facts

The respondent was charged before the Chief Magistrate's Court of Nakawa with interfering with 160 drums of neutral portable ethanol seized by the Uganda Revenue Authority and with fraudulent evasion of tax. In June 2011 the court dismissed the charges and ordered release of the drums. The ethanol, being perishable, had already been sold by the appellant for UGX 110,000,000, and UGX 26,054,706 (the declared value) was banked on the respondent's account. The respondent, through his agent Malisu Appollo Investments Ltd, had declared the goods at UGX 26,054,706, a value the appellant contended was under-declared to evade tax. Following acquittal, the respondent pursued enforcement and later filed a constitutional application under Articles 26 and 50 alleging violation of his right to property. The High Court awarded compensatory damages of UGX 230,983,291, general damages of UGX 80,000,000, exemplary damages of UGX 150,000,000 plus interest. The appellant appealed against these awards.

Issues

  1. Whether the trial judge erred in awarding compensatory damages of UGX 230,983,291 for loss of 160 drums of ethanol where the appellant had lawfully disposed of the perishable goods.
  2. Whether the trial judge erred in awarding general damages of UGX 80,000,000 where the seizure and disposal were conducted in accordance with the law.
  3. Whether the trial judge erred in awarding exemplary damages of UGX 150,000,000 where there was no oppressive, arbitrary or unconstitutional conduct by the appellant.
  4. Whether the trial court properly awarded interest that had not been pleaded or prayed for.

Orders

  • The appeal succeeds except as to the amount the respondent is entitled to after sale and tax assessment.
  • The tax assessment or computation be made basing on the market value of shs.110,000,000/- in accordance with s.122 of the EACCM Act 2005, taking into account that shs.26,054,706/= had been banked on the respondent's Bank Account.
  • The awards of compensatory damages, general damages, exemplary damages and interest are set aside.
  • Costs of this Court and the Court below awarded to the appellant.

Rules and key headnotes

Customs — Seizure of Perishable Goods — Disposal Under s.214(2) EACCMA
Where seized goods are of a perishable nature, the Customs authority may lawfully sell them under s.214(2) of the East African Community Customs Management Act, retaining and dealing with the proceeds as if they were the seized goods; s.215 (release to the owner) applies only where the goods are not perishable and must be read subject to s.214(2).
Compensatory Damages — Award of Unpleaded Relief
A court cannot award compensatory damages that were not pleaded or prayed for by the party seeking them.
General Damages — Party Cannot Benefit From Own Wrong
General damages will not be awarded to a claimant whose own wrongful conduct, such as under-declaration of the value of goods to evade tax, gave rise to the loss, since a party cannot benefit from his own wrong.
Exemplary Damages — Categories and Restraint
Exemplary damages are awardable only where there has been oppressive, arbitrary or unconstitutional action by government servants, where the defendant's conduct was calculated to make a profit, or where authorised by law; they must not be used to enrich a claimant who is himself a victim of punishable behaviour, and cannot lie where the defendant acted in accordance with the law.
Interest — Relief Not Pleaded or Prayed For
A court may not award interest that was neither pleaded nor prayed for by the party in whose favour it is granted.
Customs — Liability of Owner for Agent's Declaration
Under ss.148 and 122 of the East African Community Customs Management Act, the owner of imported goods is liable for the acts and declarations of his clearing agent, and where an importer disputes valuation his remedy is a written request for explanation of how the customs value was determined, not premature recourse to court.

Legislation cited (13)

Cases cited (15)

  • British American Tobacco (U) Ltd v Shedrack Kubi (Civil Appeal No. 7 of 2012)
  • Uganda Revenue Authority v Wanume David Kitamirike (Civil Appeal No. 43 of 2010)
  • Banco Arabe Espanol v Bank of Uganda (Civil Appeal No. 8 of 1998)
  • Shah vs. Allu (1947) 14 EACA 45
  • Fredrick Zaabwe v Orient Bank (Civil Appeal No. 4 of 2006)
  • Housing Finance Bank v Edward Musisi (Miscellaneous Application No. 158 of 2010)
  • Makula International vs. His Eminence Cardinal Wamala Nsubuga (1982) HCB page 11
  • Storms vs. Hutchinson (1905) AC 515
  • Rookes vs. Bernard (1964) ALL.E.R. 367 at 410, 411
  • Kiwanuka vs. Attorney General, Visram and Karsan vs. Bhatt (1965) EA 789
  • Obonyo and Another vs. Municipal council of Kisumu (1971) EA 91
  • Ongom and another vs. Attorney General 1979 HCB 267
  • NW Mbadde vs. Mpigi District Administration (1983) HCB 44
  • Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
  • Pandya vs. R (1957) EA 336

Full judgment

↓ Download PDF

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

The Commissioner Customs Uganda Revenue Authority v Kirenga Fred (Civil Appeal No. 51 of 2014) [2015] UGCA 2035 (3 September 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.