Wakilii

Uganda Baati Limited v Abaliwano & Another (CIVIL SUIT NO. 149 OF 2010)

High Court · [2020] UGHCCD 161 · 2020 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit brought by summary procedure under Order 36 of the Civil Procedure Act for recovery of debt arising from breach of credit supply contract
Decision
Judgment entered for the plaintiff with orders for joint and several recovery of debt plus interest and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The court held that defendants who issued 45 cheques to secure payment for building materials supplied on credit but whose cheques bounced were liable for the full debt. The court rejected the defence that cheques were not meant to be banked and that payments had been made, finding no evidence of payment for the transactions underlying the dishonoured cheques. The plaintiff was entitled to recover the debt jointly and severally from both defendants with interest at 24% per annum.

Outcome

Judgment entered for the plaintiff with orders for joint and several recovery of debt plus interest and costs

Facts

In 2008, the first defendant, a director of the second defendant company, approached the plaintiff seeking credit supply of building materials. Materials were supplied over time on credit with cheques issued as security. The defendants would pay cash on delivery and retrieve cheques, or if cash was not paid, the plaintiff would bank the cheque. A dispute arose when the plaintiff discovered 45 bounced cheques representing unpaid consignments totalling UGX 574,503,990. The defendants claimed the cheques were only for booking merchandise not payment, alleged fraud by a plaintiff employee, and asserted over-payment. No counter-claim was filed and no evidence of payment for the 45 bounced cheques was produced.

Issues

  1. Whether the Plaintiff supplied building materials to the Defendants worth the value alleged by the Plaintiff in the suit claim.
  2. Whether the Defendants paid for all the building materials they received from the Plaintiff.
  3. What remedies are available to parties.

Orders

  • The Defendants jointly and/or severally owe the Plaintiff UGX 574,503,990/= for merchandise supplied and remains unpaid for.
  • The Plaintiff is entitled and shall recover the amount in (i) above jointly and/or severally from the Defendants.
  • Interest on (i) above at the commercial rate of 24% per annum from the date of filing this suit till payment in full is awarded.
  • The Plaintiff is awarded costs of the suit.

Rules and key headnotes

Credit Supply — Cheques as Security — Purpose and Effect
Where a customer issues cheques to a supplier in the context of credit supply transactions, the purpose of such cheques in normal business practice is to serve as security for payment for goods supplied, and the supplier is entitled to bank such cheques to recover payment for merchandise delivered if the customer fails to pay cash.
Burden of Proof — Payment of Debt
A defendant asserting payment of a debt bears the burden of proving such payment with credible evidence. General claims of payment and fraud without demonstrating actual payment for specific transactions underlying dishonoured cheques will not discharge this burden.
Recovery of Debt — Bank Charges on Dishonoured Cheques
A supplier is entitled to recover reasonable charges related to processing bounced cheques as part of the debt recovery, where such charges are related to expenses incurred in attempting to collect payment.
Counter-claims — Raising New Claims in Evidence
Where a defendant fails to file a counter-claim in the pleadings asserting over-payment by the plaintiff, the court is reluctant to entertain such claims when raised for the first time in evidence without supporting proof.

Legislation cited (1)

Full judgment

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

Uganda Baati Limited v Abaliwano & Another (CIVIL SUIT NO. 149 OF 2010) [2020] UGHCCD 161 (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.