Wakilii

Triad Holdings Ltd v Networks Exports Pvt Ltd and Anor (HCT-00-CC-CS 358 of 2000)

High Court · [2005] UGCOMMC 46 · 2005 Preliminary Objection Upheld 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; defendants raised preliminary objection that plaint discloses no cause of action
Decision
Plaint struck out against 2nd and 3rd Defendants with costs; no order made as to 1st Defendant (against whom judgment in default had been previously entered)

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The plaint disclosed no cause of action against the 2nd and 3rd Defendants. The Plaintiff's claim was founded on an alleged breach of a pre-shipment inspection contract, but no direct contractual relationship existed between the Plaintiff and the 2nd and 3rd Defendants. The pre-shipment inspection arrangement arose from statutory requirements under the Bank of Uganda Pre-Shipment Inspection Regulations between BOU and the 3rd Defendant. The Plaintiff was a stranger to that contract. The pleadings did not support an alternative claim in negligence for breach of statutory duty. The plaint was struck out with costs to the 2nd and 3rd Defendants.

Outcome

Plaint struck out against 2nd and 3rd Defendants with costs; no order made as to 1st Defendant (against whom judgment in default had been previously entered)

Facts

Plaintiff contracted with the 1st Defendant to buy rice. Plaintiff claimed to have contracted the 2nd and 3rd Defendants to conduct pre-shipment inspection. The 2nd and 3rd Defendants issued a Clean Report of Findings. When the rice arrived in Kampala, it was declared unfit for human consumption and destroyed. Plaintiff sued the three Defendants jointly and severally for recovery of money lost and breach of contract. Judgment in default of defence had been entered against the 1st Defendant. The 2nd and 3rd Defendants raised a preliminary objection that the plaint disclosed no cause of action against them. The 3rd Defendant had been appointed by Bank of Uganda under statutory regulations to conduct pre-shipment inspection of imports. Plaintiff had filled the required Import Declaration Form (Form E) and paid the requisite fee to the 2nd Defendant. A survey report by McLarens Toplis attributed damage to the cargo to poor container condition, water ingress, and weather conditions during transit.

Issues

  1. Whether the preliminary objection that the plaint discloses no cause of action was res judicata.
  2. Whether the plaint discloses a cause of action against the 2nd and 3rd Defendants.
  3. Whether there was privity of contract between the Plaintiff and the 2nd and 3rd Defendants.
  4. Whether the 2nd and 3rd Defendants owed a contractual or statutory duty to the Plaintiff that was breached.

Orders

  • The points of law raised by the 2nd and 3rd Defendants are sustained.
  • The plaint is rejected and struck out in accordance with Order 7 rule 11(a) of the Civil Procedure Rules.
  • Costs of the suit awarded to the 2nd and 3rd Defendants.
  • No order as to the claim against the 1st Defendant.

Rules and key headnotes

Civil Procedure — Preliminary Objections — Cause of Action — Requirements
A plaint discloses a cause of action only if it shows that the plaintiff enjoyed a right, that the right was violated, and that the defendant is responsible for that violation and therefore liable.
Civil Procedure — Res Judicata — Requirements — Matter Must Have Been Directly and Substantially in Issue
To give effect to a plea of res judicata, the matter in issue must have been directly and substantially heard and finally decided in the former suit. Res judicata does not apply where a prior ruling dealt only with jurisdiction and did not address the issue of cause of action.
Contract Law — Privity of Contract — Stranger to Contract — Right to Sue
The general principle is that a stranger to a contract cannot sue upon that contract unless given a statutory right to do so. A party who is not privy to a contract between other parties has no cause of action for breach of that contract.
Statutory Interpretation — Pre-Shipment Inspection Regulations — Duty Not to Relieve Seller of Contractual Obligations
Pre-shipment inspection requirements under the Bank of Uganda Pre-Shipment Inspection Regulations do not act as a substitute for the ordinary contractual obligations of the seller to the buyer under common law or the Law of Contract. Regulation 9 expressly provides that nothing in the Regulations relieves any seller of his contractual obligations to the buyer.
Contract Law — Pre-Shipment Inspection — Statutory Compliance Distinguished from Contractual Relationship
Filling an Import Declaration Form and paying the requisite fee to pre-shipment inspection agents in compliance with statutory requirements does not per se create a contractual relationship between the importer and the inspection agents. Such compliance is a fulfillment of statutory requirements before payment can be made to the seller, not the formation of a separate contract.
Civil Procedure — Striking Out Pleadings — Plaint Disclosing No Cause of Action
Under Order 7 rule 11(a) of the Civil Procedure Rules, a plaint which discloses no cause of action must be rejected and struck out. Where pleadings do not support the averment that defendants were responsible for the violation alleged, the plaint discloses no cause of action and must be struck out.

Legislation cited (3)

  • Bank of Uganda Pre-Shipment Inspection Regulations 1982
  • Bank of Uganda Pre-Shipment Inspection Regulations 1989
  • Civil Procedure Rules O.7 r.11(a)

Cases cited (4)

  • Lt. David Kabareebe v Maj. Prossy Nalweyiso (CACA No. 34 of 2003)
  • Auto Garage & Others v Motokov (No. 3) [1971] EA 514
  • Halal Shipment Co. v Securities Bremmer [1965] EA 690
  • Kayanja v New India Assurance Company Ltd [1968] EA 295

Full judgment

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

Triad Holdings Ltd v Networks Exports Pvt Ltd and Anor (HCT-00-CC-CS 358 of 2000) [2005] UGCommC 46 (19 August 2005)
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.